Laura Jones is Chief Strategic Officer for the Canadian Federation of Independent Business. This week marks the ten year anniversary of the Red Tape Awareness Week she started.
Canadian governments are becoming the envy of our neighbours to the south for something unlikely but important – success at reducing red tape. Last fall, Congressional House and Senate subcommittees heard testimony about British Columbia’s successful reforms – reforms that started more than a decade ago and have sparked a new approach to controlling red tape across Canada that is now gaining traction well beyond our borders.
The Canadian red tape revolution started in 2001 when a newly elected B.C. government recognized that regulating with abandon had become a serious problem for a province that was lagging the rest of the country on important economic indicators like growth and per capita income. Rules had gotten so prescriptive that restaurant owners were being told what size televisions they could have, golf course owners were told how many par-four holes they needed and the Forest Practices Code was the height of a small building.
The B.C. government tried a bold new approach that most would describe as common sense – start by measuring what it is you want to reduce, make the reduction, and then put limits in place so regulatory creep does not set in again. Prior to this, there had been virtually no accountability with respect to government regulation in Canada which is surprising when you consider how much data and reporting there is with respect to the other big ways governments affect our lives, taxing and spending.
B.C.’s reforms were a smashing success in a policy area littered with fly-by-night reform initiatives that did little more than solve a few red tape irritants while others piled up. By 2004, the province had reduced its regulatory requirements by one-third using a policy of eliminating two regulatory requirements for every new one introduced. Once the one-third target was met, a one-for-one policy was introduced. To date, the province has cut its rules almost in half while maintaining high levels of environmental, health and safety outcomes. The economy went from one of the worst-performing in the country to one of the best.
B.C. was first to forge this path, but many other Canadian provinces and the federal government now have their own innovations. In 2015, Canada’s federal government became first in the world to make it the law that one regulation (and equivalent burden) be eliminated for every new one introduced. And it did this with near-unanimous support across the political spectrum: 245 votes in favour and one opposed. This did not go unnoticed outside Canada’s borders, with NPR asking whether Canada could be a model for the U.S.
Other provinces, including Quebec, Saskatchewan and Nova Scotia, are successfully reducing red tape. Manitoba is an innovator to watch as it recently legislated two-for-one until 2021 and one-for-one after that. Its regulatory measure is the most comprehensive in North America.
Stateside, Canada’s success is starting to get attention. In 2016, Kentucky Governor Matt Bevin launched an initiative to reduce red tape by 30 per cent in three years. Sound familiar? The model his team was most interested in was B.C. Kentucky’s regulatory reform website: “Kentucky is drawing upon the best practices of several other red tape reduction initiatives. This includes an extremely successful effort in British Columbia, which resulted in tremendous progress there and in other parts of Canada.”
Other states that have taken inspiration from Canada’s success include Illinois, Iowa, Missouri and Virginia. Last year Virginia passed a law, the Regulatory Reduction Pilot Program, aiming to reduce regulatory requirements by 25 per cent in key areas over a three-year period.
Reducing red tape is not easy. Even U.S. President Donald Trump’s much ballyhooed red-tape cutting isn’t much more than fake news, as the number of federal regulatory restrictions increased during his first year in office.
But the gain from freeing up hundreds of thousands of hours of time from unnecessary tasks is worth it. Excessive regulation creates problems from reduced economic activity and incomes to increased income inequality and poverty. Developed countries can no longer afford to pile on rules with abandon.
Canada’s model is a hopeful one. It shows that it is possible to cut red tape while protecting the health, safety, and environmental outcomes we all value.
This does not mean we should be smug. Canada still has work to do, particularly with respect to approval processes for big projects. But we can be proud that we are ahead of the curve in creating regulatory accountability and better outcomes for citizens. Americans are taking notice.