When Prime Minister Stephen Harper announced the Red Tape Reduction Commission in 2011, he accurately described red tape as a “silent killer of jobs.” Treasury Board President Tony Clement has released the government’s response to the commission’s recommendations, labelling it the Red Tape Action Plan.
He is determined to make red-tape reform a “game changer” for Canada.
The Red Tape Action Plan embraces most of the commission’s recommendations, published earlier this year, which addressed both specific irritants (symptoms of the problem) and the need for more accountability and culture change in Ottawa (the cause). Mr. Clement will be overseeing six major reforms.
Some of the broader ones are already in progress, including the one-for-one rule: for every new regulation, the government must eliminate an existing one. A small-business lens with a checklist that is meant to “hardwire sensitivity to small business into the regulatory process” will be mandatory for new regulations and it will be made public.
Business owners often report receiving confusing or contradictory information from regulators. Departments will now be required to explain how they interpret regulations on their websites.
Service standards will be set for licenses, certifications and permits. Standards and progress toward meeting them will be public.
Several other reforms tackle government accountability. An annual scorecard will report publicly on the implementation of the reforms. This scorecard will be reviewed by an external advisory committee and it will be made available to the Auditor General. The government is also committed to creating an inventory of regulatory requirements that will be tracked over time.
In addition to the structural reforms, government departments will be taking action on 90 changes suggested by businesses during the commission’s consultations last year.
Specific departmental initiatives include reducing the burden of Statistics Canada surveys on business, simplifying the border-crossing process for low-risk, pre-approved companies, and improving the website and training of call-centre agents at the Canada Revenue Agency.
An initiative to make it easier to file an online Record of Employment (ROE) will save business owners an estimated $37 million a year. That’s $37 million that will now be available for more productive uses such as investing in new equipment, providing additional employee training or increasing salaries.
Research from the Canadian Federation of Independent Business (CFIB) shows that complying with regulation from all levels of government costs Canadian businesses more than $30 billion a year. It hits smallest firms hardest. A startling statistic from CFIB’s latest survey found that one-third of small-business owners are now reporting they may have avoided going into business if they had known how difficult it would be to comply with all the rules.
Canada has a serious problem. Red tape is an insidious drain on entrepreneurial spirit, business expansion and income growth. We can’t afford that at the best of times, and economically speaking, now is not the best of times.
It’s not a problem that most governments care to face up to. It’s tough slogging to get serious about reducing red tape – it crosses all government departments and encompasses everything from dumb rules to poor government customer service.
When Mr. Harper announced the Red Tape Reduction Commission there was justifiable skepticism. The history of regulatory reform in this country is littered with blather and failure. But from the beginning this initiative looked different. It had the clear commitment from the prime minister. That’s big.
Minister of State for Small Business and Tourism Maxime Bernier chaired the commission and he was dedicated to understanding the frustrations of small businesses and to making permanent changes. In his words: “treating the symptoms, which are the irritants, are not sufficient. A deeper, long-term approach is necessary.”
The government’s plan to deal with red tape is comprehensive and credible. If Mr. Harper, Mr. Clement, Mr. Bernier and other ministers continue to champion the cause, it will happen. The rewards for Canada will be huge: more jobs and higher incomes.
Laura Jones is executive vice-president of the Canadian Federation of Independent Business. She can be reached at email@example.com.