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CFIB’s Dan Kelly: The cost of following thousands of regulations is a ‘hidden tax.’ (Tim Fraser for The Globe and Mail)
CFIB’s Dan Kelly: The cost of following thousands of regulations is a ‘hidden tax.’ (Tim Fraser for The Globe and Mail)

Canada Competes

Who’s regulating the regulators? Small businesses want to know Add to ...

Who’s showing some leadership in terms of cutting red tape?

There’s quite a bit happening on the federal government’s part. On the challenge of regulatory creep – when new regulations come into effect but old ones never go away – the federal government has passed a one-for-one policy. So for every new regulation, the department or agency has to find one to scrap. And that really does help. We’re trying to effect a cultural change within the civil service, so that they’re not just regulation makers, but regulation managers. B.C. has really been the leader on this front. A decade or so ago, they put into place a two-for-one ratio – so they had to scrap two regulations for every new one that came into being. Now, just in terms of clarifying the size and scope of the problem, when Gordon Campbell became Premier of B.C. in 2001, the Liberals became the first government in Canada to actually count the number of regulatory requirements they had. Guess how many they came up with, for the B.C. government alone?

How many?

Three hundred and seventy-five thousand. The line I use is that if a business owner could understand and fully implement 375 regulatory requirements, I’d be really impressed. I’d say bravo. But they don’t have 375 requirements to implement. They have a good chunk of 375,000.

B.C. has reduced that by 40 per cent, and they’ve kept to a one-to-one ratio ever since, so it hasn’t been allowed to creep back up to the bad old days.

The Ontario government has done some really intense deep dives in certain sectors.

One of the governments we’ve been most disappointed with is Alberta. They’ve done a lot of good things on the fiscal side, but not so much on the regulatory side.

It really is a tough one to get at because regulatory reform is about as unsexy as it gets. There aren’t a lot of ribbons to cut.

But small business owners are such a huge constituency, you’d think there would be more interest in solving the problem.

There is, but it happens in fits and starts. You’ll get a government or particular politician excited about the issue, and they’ll launch a big task force and they’ll invite the business community to name the problematic regulations. And the task force – all earnest, hard-working people – may work for six months or a year on six regulations and, with big fanfare, decide to scrap or change those six. But in the meantime, 600 new regulations have come up.

What needs to happen?

We need better regulation-making processes, and we need to actually legislate them. We need to regulate the regulators. So policies like a one-for-one rule can really help. Counting regulations is a huge step, tracking them over time, and putting in place a target for reduction. We’re winning more battles than we’re losing, but it is a sustained and often very tedious exercise.

We’re starting to see it at the international level, with Canada and the U.S. negotiating efforts to harmonize the rules and regulations between Canada and the U.S. But one of the areas where not much has happened at all is interprovincial regulatory differences. If you’re taking hay across the B.C.-Alberta border, the hay needs to be stacked differently on the truck depending on what side of the border you’re on. I think that one has been fixed, but that’s a real example.

Are there any nations that should be a model for Canada?

There’s been some good work in the U.K. on this front. When they’re passing a regulation, they have to think about how it applies to a small business first, as opposed to the largest operations. They also put in place sunset clauses, so regulations expire after a certain amount of time, forcing the government to keep them fresh. They also put a policy in place where all new rules and regulations come into effect at the same time. One of the challenges our members have is that, with 50 different agencies and departments, there’s a new regulation every week. The U.K. policy means that all regulations go into effect on, say, July 1, and therefore entrepreneurs can pay attention on July 1 to see what’s new.

They all seem like simple changes.

It doesn’t have to be rocket science to fix these things, but what it needs is sustained interest and some ground rules. It’s surprisingly tough.

 

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