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Editorials Globe editorial: Bill Morneau is right. The Canadian economy needs smarter regulation

The cartoonist Rube Goldberg made a career out of imagining hilariously complex machines built to accomplish the most basic tasks.

To remind you to go to the post office, he proposed a 20-foot-long portable device, featuring 15 moving parts, all designed to present you with a note reading, “You sap, mail that letter.” To prevent you from staining your shirt while eating soup, he drew up plans for a huge, 13-stage doohickey, including a clock, a sickle, a parrot and a rocket, all to power what he called a “self-operating napkin.”

To this day, contests are held and prizes awarded for dreaming up Rube Goldberg machines – devices that do something that needs doing, but with the absolute maximum amount of effort, complexity and expense.

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Mr. Goldberg was satirizing technology and modern life. He was also satirizing government bureaucracy.

Buried deep inside Finance Minister Bill Morneau’s fall economic and fiscal update was a section on improving the efficiency and productivity of the Canadian economy through a focus on smarter government regulations.

Government has to regulate many areas of life, to protect the environment, safeguard consumers and maintain public health. Society and the free market don’t work without regulations ensuring an honest and fair playing field. But the market works best when regulations follow the KISS principle – keep it simple, stupid.

Consider this Goldbergian example from Mr. Morneau’s fall update: “The Canadian Institute of Plumbing and Heating estimates that,” thanks to conflicting provincial and territorial regulatory standards, “the cost of water heaters could be as much as 30 per cent higher than necessary.”

Deciding what constitutes a safe water heater is surely a job for a regulator. But is it really necessary for 13 Canadian jurisdictions to have different regulations for boiling water, such that it can only be accomplished by a piece of machinery that is one-third more expensive than it needs to be?

Mr. Morneau wants Ottawa to pay a lot more attention to regulations that weigh down the economy. It’s an excellent idea. Some of the trouble, as with the water heaters, has to do with regulations imposed by the provinces, as part of interprovincial trade barriers. Some of it is in federal hands.

We’d suggest creating a small federal ministry dedicated to change. Give it the power to audit every other federal department. Have it also review provincial and territorial regulations. Publish an annual report.

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Call it the Ministry of Keeping Government Simple. Or the Department of De-Goldbergization.

This is mostly not about deregulation – simply cutting rules and leaving it to business to do as it pleases. In fact, there are clearly areas where more government oversight is badly needed. For example, a Globe and Mail investigation recently revealed that Western Canada is dotted with thousands of abandoned oil wells, each of which carries a hefty cleanup price that regulations should have imposed on their former owners, and which may now land on taxpayers.

But when government regulates, it has to do so as intelligently and efficiently as possible.

Mr. Goldberg’s devices accomplished necessary tasks; they just did so with spectacular inefficiency. Preserving the environment, ensuring health and protecting consumers are all core functions of government. At issue is not the what of regulation, but the how. It’s about making sure government rules are getting the most regulatory bang while costing the economy the least actual bucks.

This is, unfortunately, just about the least sexy area of economic policy. It involves no multibillion-dollar infrastructure announcements, no ribbon cuttings and no canapés at black-tie galas. Instead, it demands lots of hard thinking and careful accounting, leading to many small rule changes adding up to potentially large benefits for the overall economy.

Canada is already a relatively well-governed country, with a highly efficient economy that is – mostly – not crushed by dumb rules and regulations. According to the World Bank’s Ease of Doing Business Index, Canada is among a group of countries where doing business is classified as “very easy.”

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But we’re not the leaders of the pack. Canada ranks just 22nd in the world. The United States is in eighth place. New Zealand, Singapore and Denmark take the top three spots.

Time for Canada to aim higher. Let the de-Goldbergization begin.

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