Cost Recovery Initiative: Consultation Document
7. CFIA approach to cost recovery

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One of the objectives of the first phase of consultations on cost recovery is to seek input on the appropriate level of cost sharing between regulated parties and taxpayers. A discussion on this subject (see Section 10) would benefit by first outlining CFIA's overall approach to cost recovery and the fee setting process.

As noted earlier, CFIA's cost recovery regime has not changed in twenty years. Currently, less than 10% of CFIA's costs are recovered through fees charged to regulated parties. Increases in costs related to equipment, rents, salary, and other inflationary factors have resulted in higher costs to deliver services without a corresponding increase in fees.

The CFIA's intent is to move towards fees that are more reflective of the cost of CFIA activities. The objective is to ensure a fair distribution of costs between taxpayers and regulated parties.

Other federal departments and agencies have also updated their cost recovery regimes in recent years. For example, in June 2016, the Health Canada's Pest Management Regulatory Agency (PMRA) published a proposal in Canada Gazette Part I to revise fees with respect to pest control products. PMRA's current fees have not changed since 1997. The proposal includes an annual adjustment to increase fees by 2% in future years. Health Canada's Health Products and Food Branch introduced updated fees for drugs and medical devices in 2011, which also included a 2% annual increase in fees. These fees had previously been unchanged since 1995.

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