Regulation affects us all. For an individual, it’s filling out tax forms, waiting in line for a driver’s license or getting a permit to renovate a home. Business owners are expected to complete mountains of paperwork and comply with a plethora of rules — tax forms, records of employment, business registration, workers’ compensation, business licensing, sign by-laws and the list could go on.
The endless rules, forms and processes that governments impose on Canadians and small businesses alike is known as red tape. We already knew that it cost Canadian businesses more than $30 billion a year, and recently, as part of CFIB’s 5th annual Red Tape Awareness Week™, we found out that the most common types of red tape cost ordinary Canadians at least $10 billion and add significant stress to all of our lives.
In 2005, the government of Newfoundland and Labrador recognized the impact red tape was having on small- and medium-sized businesses, and, in the following years, made substantial progress, exceeding its initial reduction targets. When it announced its regulatory reform initiative, the government stated it would use the government of British Columbia as its model for regulatory reform.
Since 2001, B.C. has reduced red tape by more than 40 per cent and has maintained a “one-in, one-out” policy, which means getting rid of one regulatory requirement for each new one introduced. By comparison, our government has reduced red tape by 27 per cent since 2005. But, in having reached their goals, progress has slowed considerably in recent years.
Newfoundland and Labrador has long been lauded as a leader on regulatory reform in the country, but the landscape is changing. Other jurisdictions are beginning to take regulatory reform very seriously and are taking action. For example, last year, the government of Saskatchewan passed legislation requiring annual reporting of progress on red tape and it is expected that one or two other provinces will pass similar legislation soon.
CFIB recognizes some regulation is definitely necessary, but there is a better way to engage with governments so time and money is not wasted. It has become clear that Newfoundland and Labrador has a lot of work to do in this regard. Efforts on red tape have to be re-started and it has to be a priority for our government.
Cutting red tape and paperwork for business is an easy way for a government to stimulate business growth and enable job creation. It’s a tax cut that costs government nothing.
The formula for red tape reform is simple: measure, report, repeat. The basic solution therefore lies in transparency and accountability. Without proper measurement and public reporting, citizens and small businesses are often unaware what regulations affect them until they actually have to deal with a government.
The government has made a good first step to getting red tape reduction back on track. CFIB is cautiously optimistic about the announcement made last fall that the government will release to the public an annual report on regulatory reform this coming spring. If this happens, the next step is to legislate the requirement for an annual report.
Newfoundland and Labrador has legislation, the Transparency and Accountability Act, which governs public reporting of the activities of government entities. All that’s necessary is an amendment to this legislation enshrining a public annual report on regulatory reform.
If the government takes these steps, our ability to know how its regulations affect us will be vastly improved. It’s all within reach, and there are reasons to be optimistic. But we won’t get there by resting on our laurels.
Vaughn Hammond is Newfoundland and Labrador director of provincial affairs for the Canadian Federation of Independent Business.