Cutting Through the Bureaucratic Red Tape

Key Takeaways:

• Interprovincial standardization drives innovation and facilitates trade by enabling interoperability
• Standards are critically important to the competitiveness of every sector in the economy
• Canada’s regulators are mishandling the strategic value of standards, threatening the country’s economic resilience and prosperity
• Standardization contributes up to 28 per cent of the growth in gross domestic product
• Canada needs a more agile, efficient, and effective regulatory system to keep up with the fast-paced age of digital technologies

Introduction to the Importance of Standards
The concept of internal trade barriers in Canada often brings to mind issues such as the transportation of goods, pipelines, and trucking. However, beneath the surface lies a more complex issue – the mismatched spools of red tape in every province and territory. A solution to this problem lies in the implementation of standards. Standards may not be a glamorous topic, but they are crucial to the competitiveness of every sector in the economy. Canada’s regulators are currently mishandling the strategic value of standards, both federally and subnationally, which poses a threat to the country’s economic resilience and prosperity.

A Historical Perspective on Standardization
A historical tale from early Canada highlights the importance of standardization. Prior to Confederation, the colonies had different standards for the distances between railway tracks, resulting in the need to offload and reload freight and passengers at intercolonial junctions. The implementation of interprovincial standardization enabled interoperability, leading to immense savings and productivity gains. This example demonstrates the significant impact that standardization can have on the economy. The benefits of standardization are not limited to the past; they continue to be relevant today, particularly in the fast-paced age of digital technologies.

The Current State of Standardization in Canada
Despite the importance of standardization, Canada’s approach to regulation has not kept up with the times. The country’s regulators are struggling to keep pace with the rapid advancements in technology, resulting in a regulatory system that is no longer agile, efficient, or effective. This has led to calls for reform from across the country. One potential solution is to update the federal rulebook for making rules, the Statutory Instruments Act (SIA), to make explicit that compliance with consensus-based standards will be the primary means of enforcing compliance with legislation. This change would bring Canada in line with global best practices and allow the country to keep pace with the rest of the world.

The Benefits of Standardization
Standardization has numerous benefits for the economy. It drives innovation by capturing and disseminating cutting-edge technology and know-how, facilitates internal and international trade by enabling interoperability, and promotes economic exchange by providing credible signals of quality that reassure buyers. The data supports this intuition, with economic research indicating that standardization contributes up to 28 per cent of the growth in gross domestic product. Furthermore, standardization can help to break down internal trade barriers, which is a key step in the larger march toward broader regulatory interoperability.

Modernizing Canada’s Standards Development Institutions
In addition to updating the SIA, Canada’s standards development institutions also need to be modernized. The Standards Council of Canada (SCC), a federal Crown corporation, oversees Canada’s standardization system, but it has a conflict of interest between its for-profit and not-for-profit arms. To address this issue, the SCC should be overhauled by stripping out its for-profit function, bringing Canada in line with modern models in Australia, Britain, and the United States. This change would help to create a more efficient and effective regulatory system, which is essential for driving innovation and economic growth.

Conclusion and Future Prospects
In conclusion, standardization is a critical component of a competitive economy, and Canada’s approach to standardization has a significant impact on the country’s future prosperity. By making a few modest modernizations to the regulatory system, Canada can create a solid foundation for economic growth and development. The implementation of standards can help to drive innovation, facilitate trade, and promote economic exchange, all of which are essential for a prosperous economy. As Canada works to strengthen its economic outlook and break down internal barriers, the modernization of the standards system will play a crucial role in achieving these goals.