Thank you so much, Mr. Chairman and members of the committee. Thank you for having me. It's an honour to be back in Ottawa.

I congratulate the chairman and the committee for taking on a really important topic. I'm really pleased to be here with you today. I'm going to read from my notes. I know we have seven minutes, so I'm going to fly.

I want to talk to you about a subject that covers nearly every aspect of modern life, everything we build and use each day, yet it's virtually never discussed in policy circles—standards.

What do I mean by standards? It’s the set of voluntary guidelines that everyone uses to create, manufacturer, buy, and sell everything from electrical outlets to shower valves to water heaters or zippers on blue jeans. These are things we take for granted in our daily lives that work perfectly well, and we have no idea how it all comes together. It's through an amazing web of voluntary standards set by public and private collaboration, which are set in every sector in every region, and which provide the map for how things get made.

Standards help ensure that a light bulb fits in the socket, that you can take money out of an ATM anywhere in the world, and that plugs for electrical appliances fit outlets.

In the U.S. alone, there are more than 100,000 standards at work across all industry sectors. These include standards for products, things like washing machines and banking cards; standards for performance, as in toy safety and greenhouse gas emissions; standards for certification of personnel, such as food handlers and crane operators; standards for construction of buildings and systems—for example, building, electrical, and plumbing codes.

Why am I raising the issue? Here in North America we have so many conflicting standards in so many areas that it is becoming incredibly expensive and inefficient to make things, and we are getting outsmarted by our competitors around the world.

I should just pause to say that these are the kinds of things we raise at the Canadian American Business Council. These are the issues we raise to the policy-makers attention so that you can look at them and shine a spotlight on them, because you have the power to do that and the ability to convene.

It’s a sleeper issue. People aren't really talking about it, but they should because it will impact our economic success in a major way in the years to come. I know that's important to this committee.

In the face of near economic collapse in 2008, along with a resurgent Europe and a growing Asia, it's imperative that Canada and the U.S. get our acts together when it comes to things that make us less competitive in the global marketplace. I know that's the subject of this committee. Canada and the U.S. have to become much more efficient in the way we build things together. In simple terms, we need to find better ways to build it here and sell it there.

How do we do that? What role can you as policy-makers play in enhancing the platform on which we in business conduct our business?

As you know, NAFTA was a cutting-edge idea at the time it was launched 20 years ago, but it is now outmoded. Our continent is at a competitive disadvantage with others in the world because of the way we don't collaborate on key issues, such as regulatory misalignment and the patchwork of standards-setting and conformity-assessment programs.

I should just pause and say Canada has really led the way on the U.S.-Canada Regulatory Cooperation Council. We can talk about that, but your own Bob Carberry, who's an official here in Canada, is the person who has driven both the U.S. and the Canadian regulatory alignment. That covers only government-to-government federal issues and isn't as comprehensive as what we in the U.S. would like to see.

The Standards Council of Canada, in its report last week on enhancing North American competitiveness, stated that standards and conformity assessment underpin economic growth and free trade, and that similarly duplicative standards, testing, and certification act as a barrier to trade and hinder productivity and competitiveness. It went on to note that differences in standards and regulations within Canada and between Canada and its trading partners can cost the Canadian economy billions of dollars per year, and exacerbates the price gap on consumer products between Canada and the U.S.

On the U.S. side of the border, according to standardsboostbusiness.org, the U.S. Department of Commerce estimates that standards and conformity assessment impact more than 80% of all global commodity trade—80%. From design and manufacturing to distribution and marketing, all the aspects of an industry’s products and services are affected at some point by standardization.

Let me give you a specific sense of what I'm talking about, the impact of it. The U.S. Department of Defense projected a $789-million savings, cost avoidance, in just one program by focusing on parts and process standardization. Another example is the fire safety industry, where the U.S. electrical manufacturers, the underwriters lab, and the fire safety associations worked to prevent more than 40,000 home fires, 350 deaths, and more than 1,400 injuries each year by collaborating on standards.

What's the current state of play between Canada and the United States? Only about 10% of standards are harmonized between Canada and the U.S.

Manufacturers of water heaters are another example. Seventy-seven per cent of their certification costs come from inspection for their products, as they must use 19 different testing bodies to comply with the requirements of the North American markets they sell to. As another example, the total cost of product testing and certification for the North American plumbing and heating industry is $3.2 billion to $4.5 billion per year. At least 10% of this cost is the result of duplicative requirements.

According to Michel Girard of the Standards Council of Canada—I was talking to him about this in detail in preparation for today—in Europe, by contrast, the standards system is more streamlined and better coordinated than in North America.

In Europe, if there is a need for a new standard, jurisdictions make the request through the European Commission. There's a presumption of conformity. All 28 member states must adopt the same standard. Competing or duplicative standards must be removed from the regulations of all member states. Therefore in Europe, there is one standard, one test, and access to a common market of more than 600 million consumers.

Here in North America we have different technical standards in Canada, the U.S., and Mexico for electrical, plumbing, gas, buildings, fires, bridges, etc., and most of them are in fact not harmonized. I would also say that in China standardization is now seen as a key to achieving national priorities. They are projecting a single market of 1.3 billion customers, following the EU model.

I have three recommendations for your consideration, and then I'll pause for your interrogation.

The first recommendation we'd like to make is that you as policy-makers and as leaders would decide that it is in our mutual national interest for Canada and the U.S. to work together to ensure that North American interests are advanced in international platforms such as the International Organization for Standardization and the International Electrotechnical Commission. That's the first recommendation.

The second recommendation we would like to introduce today is that you would consider creating a North American standards strategy. It would build on the first-ever national standards strategy for the United States that was created 15 years ago through a collaboration among many federal agencies, including the Departments of State, Commerce, Defense, and Energy, as well as regulators and standards-setting organizations.

This strategy would confirm Canadian and U.S.—and perhaps Mexican, if you want to make it trilateral—commitments to internationally accepted principles of standardization endorsed by the World Trade Organization. They are something that I think everybody can agree on: transparency, openness, impartiality, effectiveness, relevance, consensus, performance-based, coherent, due process, and technical assistance.

It is important for you as policy-makers to recognize that standards developers are experts who work cooperatively to enhance quality of life and improve the competitiveness of businesses that function in a globalized marketplace. I had the honour of meeting last week in Toronto with the Standards Council of Canada and its American counterparts to discuss North American alignment. The Canadian American Business Council is embarking on an effort to raise the profile of these issues. We believe they are extremely important yet little understood, and thus my testimony today.

Let me conclude with a statement from the American National Standards Institute, which I've modified a little bit to take into account the Canada-U.S. approach. Here it goes. It reads:

The decentralized, flexible, sector-based, and market-driven standards system is extremely responsive to changing market demands. It guides the energy of [North American] innovation and enhances the global competitiveness of business while at the same time improving [our] quality of life. It is an outstanding example of how a strong, dynamic partnership between the private sector and government can help the nation achieve its economic and societal goals.

Thank you very much.

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