Bloomberg‘s Gerrit De Vynck and WS‘s Claire Brownell explore how Canada’s more stringent tomato juice regulation is keeping a Leamington Heinz factory open.
De Vynck and Brownell call this regulatory kink a “failure by the U.S. and Canadian governments to deliver on repeated commitments to harmonize food regulations” as part of the Beyond the Border agreement.
While a case study in how Canada-U.S. agricultural regulation do not currently align, this story doesn’t highlight failure; rather, it emphasizes just how difficult a task cross-border regulatory alignment can be.
To get a sense of just how large the regulatory world is, check out the 2012 progress report of the Regulatory Cooperation Council (RCC)–the vehicle Canada and the United States are using to align regulatory standards.
Check out Sunday’s article here:
A Canadian regulatory quirk that insists tomato juice must come from “sound, ripe, whole” tomatoes may help keep the Leamington Heinz plant from closing.
A group of Ontario investors announced last month they plan to run the century-old plant and take over producing and distributing tomato juice for Heinz in the Canadian market. If negotiations go well, the move may spare 250 of the 740 workers slated to lose their jobs.
Under the Canadian Agricultural Products Act, tomato juice must be made from whole tomatoes and not from concentrated paste as it is at Heinz plants in the U.S.
“It would never work out if the law wasn’t there because then you could locate yourself anywhere,” said Pradeep Sood, a former chairman of the Ontario Chamber of Commerce and one of the investors who formed Highbury Canco Corp. to take over the Heinz plant.
Sandra Pupatello, CEO of the WindsorEssex Economic Development Corporation, downplayed the role the regulation played in the Heinz-Highbury Canco deal. She said Heinz tomato juice production had to stay in Canada because of the regulation, but it didn’t necessarily have to stay in Leamington.
The differing standards point to a failure by the U.S. and Canadian governments to deliver on repeated commitments to harmonize food regulations. The two countries announced in 2011 the Beyond the Border agreement, pledging to eliminate the inefficiencies of competing regulations and smooth cross-border travel, burdened by post-Sept. 11, 2001 security requirements.