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Sustainable Development Sustainable Development Strategies 1997-2000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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IC-SD Strategy 1997-Marketplace Climate3.1 Marketplace Climate
3.1.1 Marketplace Rules and ServicesKnowledge-and technology-based innovation requires a marketplace climate that is stable, predictable, efficient and responsive. A healthy marketplace climate attracts investment and facilitates trade, which in turn stimulates the wealth and innovation that can be used to support sustainable development. The micro-economic rules that govern the way businesses operate - for example, those addressing incorporation, competition, bankruptcy, labelling, advertising and intellectual property - play an important role in influencing the marketplace climate. The nature of these rules and how they are administered have an important impact on investment decisions. Firms need a marketplace climate that encourages innovation and the kind of long-term investment decisions required to develop and use new technologies and approaches that create wealth and jobs. The resulting prosperity can contribute to sustainable development. Industry Canada's Role Industry Canada has the primary responsibility within the federal government for setting marketplace rules and ensuring that they are implemented and enforced. The department administers some 20 business- and consumer-related laws, including the Bankruptcy and Insolvency Act, the Canada Business Corporations Act, the Competition Act and the Consumer Packaging and Labelling Act, and provides related services to ensure a fair, efficient and competitive marketplace. Through its marketplace framework responsibility, Industry Canada affects a wide range of business activities, and influences the way firms and consumers make decisions. The department can help to create a marketplace climate that enables companies to invest in innovations that improve their business performance and their ability to address growing environmental challenges. As part of its broader marketplace legislative reform agenda, Industry Canada has reviewed various statutes where discrete environmental issues were raised. For example, reforms to two of the department's marketplace framework statutes - the Bankruptcy and Insolvency Act (BIA) and Companies' Creditors Arrangement Act (CCAA) - advance sustainable development objectives by promoting the clean-up of environmentally contaminated properties of bankrupt debtors or debtors reorganizing under the BIA or CCAA. These reforms will help to avoid "orphan site" problems, alert environment ministries quickly to environmental problems and provide available funds from the estate to help finance the clean-up. The reforms to the BIA and CCAA demonstrate an innovative approach to integrating economic and environmental considerations. Marketplace framework laws can work for or against sustainable development. Industry Canada is continuing its efforts to examine framework legislation and rules to ensure that they support sustainable development objectives. The ongoing review of the many complex statutes under the Minister of Industry's responsibility is a challenging task. It is driven by a range of factors, including concerns about the inefficient operation of markets, international developments in framework law and technological change. An important step is to better understand the links between marketplace framework legislation and sustainable development.
3.1.2 Reasoned Advocacy to Shape Sustainable Development PolicyEnvironmental pressures and the response of governments, business and consumers to these pressures have an increasing impact on the marketplace. Governments have a responsibility to ensure that the views and activities of business and consumers are represented in policy development. Both groups have important perspectives to contribute. Their views can help to shape environmental policy into a positive force that contributes to sustainable development and encourages innovative approaches to meeting environmental objectives. Business, for example, looks to government to: set clear priorities among environmental issues and between these issues and other priorities related to job creation and economic growth; formulate environmental regulations that do not hinder competitiveness; and create a stable, predictable environmental regulatory climate that gives business the incentive and flexibility it needs to develop long-term, innovative approaches to managing environmental pressures.
Consumers are concerned about health and safety related to the use of products and services; the effect of environmental pressures and policies on the economy and jobs; the availability of reasonably priced products and services; and the broader socio-ethical implications of advanced technologies. Canadian environmental policy continuously evolves as it seeks to facilitate solutions to a broad range of environmental issues. Governments recognize that it is largely industry and consumers that will generate the innovation needed to tackle these tough challenges. Leading companies are turning risks into opportunities as they learn that innovative, cost-effective ways to improve environmental performance are also good for business. Stronger consumer involvement with business and government in managing environmental issues is building support for non-regulatory approaches. Combined, these business and consumer endeavours feed back into policy development and reinforce a more efficient, effective blend of performance-based regulations, market-based instruments and voluntary approaches. Industry Canada's Role Industry Canada plays an important advocacy role in bringing business and consumer perspectives and activities to federal policy development. The department pursues a reasoned advocacy role to shape sustainable development policy. It works with Environment Canada and other federal departments to ensure that trade and competitiveness matters, private-sector innovation and consumer perspectives are taken into account in the formulation of environmental policies. The department will continue these endeavours, building especially on leading business practices and consumer efforts to manage environmental challenges and promote sustainable development.
Canada's resource-intensive, export-oriented economy is vulnerable to international competitiveness pressures. Business must have the flexibility it needs to take cost-effective action to limit greenhouse gas emissions and the incentive to take advantage of current and emerging climate change-related market opportunities both at home and abroad. Industry Canada will continue to focus on ensuring that trade, competitiveness and marketplace factors are reflected in federal climate change policy and program considerations and that business perspectives are brought to policy development on the basis of substantive analysis and knowledge. Sectoral analysis to inform policy makers - Industry Canada works with several industrial sectors to maintain and improve their competitiveness. Many of these sectors - for example, the automobile, paints and coating, plastics, metal smelting, and pulp and paper industries - face environmental challenges. The department develops Sector Competitiveness Frameworks1 which create a strong knowledge base from which the department can assess the implications of specific environmental regulations at the sectoral level.2
Effective use of policy instruments - Industry Canada supports the use of a range of policy instruments to meet its objectives. These include regulations, market-based instruments, information, voluntary approaches and strategic investments. The department advocates using the best mix of policy instruments to achieve the maximum societal benefit at the least cost. It concentrates on finding innovative ways to improve the effectiveness of the policy instruments used to serve economic, environmental and social objectives. It focuses particularly on the following areas: Assessment and reform of environmental regulations - Industry Canada recognizes the importance of including well-designed environmental regulations in the mix of instruments. Both existing and proposed environmental regulations must be assessed on an ongoing basis to ensure that the management of environmental problems also addresses economic, environmental and social objectives. It is important to involve business in the development and assessment of environmental regulations to ensure a better understanding of how the regulations will affect business and competitiveness and to engage the private sector in developing innovative new approaches to managing environmental issues. Industry Canada has focused on encouraging an effective business-oriented analysis of regulatory proposals and on developing market-based and voluntary approaches as complements or alternatives to regulations. It encourages the use such micro-economic tools as the Business Impact Test (BIT), which identifies the impacts of regulatory initiatives on Canada's physical, intellectual, industrial and capital resources. Market-based environmental policy instruments - Industry Canada supports the use of market-based instruments and has concentrated recently on promoting emissions trading. Analytical work demonstrates that the abatement cost differences among sectors in Canada are large enough to provide companies with the incentive to trade. Industry Canada and Environment Canada have worked together on such projects as studying the feasibility of emissions trading in Atlantic Canada and the co-sponsorship of a report on emissions-trading case studies. Industry Canada is also participating in the Pilot Emission Reduction Trading (PERT) project, a multi-stakeholder examination of the environmental and economic impacts of, and important design issues related to, an emission-reduction trading system for oxides of nitrogen and volatile organic compounds in the Windsor-Cornwall corridor. Voluntary approaches for environmental management - Voluntary approaches are increasingly accepted as a complement or alternative to other policy approaches. The department works to expand the knowledge base for voluntary policy instruments and seeks new opportunities to support their application. In particular, Industry Canada is pursuing opportunities to use new tools and practices such as those relating to eco-efficiency and environmental management systems, through voluntary approaches (see Section 3.2 for more detail.) Information - Industry Canada recognizes the importance of keeping Canadians aware and informed about sustainable development matters so that they can integrate economic, environmental and social considerations into their decision making. The department supports the use of a wide range of information and awareness tools that improve decision making. These include labelling initiatives, technology development and sharing, sustainable development indicators, quality standards and research. Industry Canada also supports the sharing of this knowledge and information through the most effective communication avenues available, including Internet Web sites and publications.
This approach has led to important consumer contributions in several areas. They include: the review of the Canadian Environmental Protection Act; climate change policy developments; the renewal of the National Biotechnology Strategy; the regulation of sulphur in gasoline; and the establishment of environmental codes of practice. The department also provided technical and financial support to develop an environmental labelling system in Canada. Industry Canada will continue to work with the consumer movement to select where and how consumer analyses and perspectives can be brought to the government's policy formulation process. Some of the priorities being discussed - such as the environmental issues mentioned above - have strong links to sustainable development. Others represent issues whose links to sustainable development are largely unexplored but are matters of concern to consumer groups. These include electronic commerce, privacy issues and access to the Internet, regulatory reform in telecommunications and electricity, the Agreement on Internal Trade, and new approaches to consumer policy and law in a knowledge-based economy. In particular, Industry Canada's work on voluntary environmental codes of practice emphasizes the need to have all relevant stakeholders, including consumer and environmental groups, at the table when such codes are being developed and implemented. This work has successfully brought consumer, business and environmental groups together to share information and expertise.
3.1.3 Consumer Choice and the MarketplaceUltimately, it is the consumer - in Canada and abroad - who will decide the fate of environmentally friendly products and technologies and the rate of progress toward sustainable development. Consumers are frequently at the forefront of generating change. In addition to fair, efficient and competitive markets, consumers must have access to credible information and effective feedback mechanisms to sellers, producers and the science and technology community working on sustainable development.Surveys over the past decade show that people will do their part to protect the environment as long as the claims behind the product or service are credible, and the price, quality and product features are comparable. The success of the blue box program is one example of how the interests of consumers and industry can be satisfied concurrently. However, consumers have become more sophisticated in demanding clear, accurate information about goods and services, and may be unwilling to pay a premium for items or services to support sustainable development goals. This is the result of many years of little or no growth in household incomes, rising consumer debt, record levels of consumer bankruptcies and the need to be reassured that "green products" are truly valid. Consumers are more likely to consider information credible if it is validated by more than one group (e.g. government, industry, the academic community or public-interest organizations). Multistakeholder networks, partnerships and voluntary arrangements thus become critical in raising consumer awareness and acceptance and developing two-way information exchanges. Industry Canada's Role Industry Canada will continue to raise awareness and provide information to consumers so that they can make informed decisions that contribute to sustainable development. This involves making existing information more readily available; establishing a mutual understanding of the kind of information consumers need and who can best provide it; and bringing consumer, business and environmental groups together to share knowledge and expertise. Industry Canada will continue to explore new ways to get information to consumers, both electronically and in print. Industry Canada plans to build on the experience it gained in the Biotechnology, the Consumer and the Canadian Marketplace research program3 to find the best ways to reach consumers with information about advanced technologies and products. Such areas might include the commercial use of the Internet; the application of electronic commerce to banking, other financial services and government services; and environmental technologies, products, services and related issues.
1 Please see Sector Competitiveness Frameworks in Section 3.2.1 for more details. 2 For example, Industry Canada contributed to the work of the Task Force of the Canadian Council of Ministers of the Environment to reduce transportation fuel emissions and to set minimum standards for modified fuels by evaluating the refinery modifications and costs necessary to manufacture nine different scenarios of gasoline and diesel fuel quality. These results were later used in assessing the relative costs and benefits of these quality improvements. The cost-benefit analysis is being updated as part of the multi-stakeholder Sulphur in Fuels Joint Study. 3 This program helped to identify the information needed by consumers to raise awareness and understanding of biotechnology, and its applications, which groups can best provide this information, and effective mechanisms for stimulating the flow of information among consumers, consumer groups and other stakeholders.
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