Business Beat: Death by 130,000 cuts

By Medicine Hat News on July 11, 2018.

While there is no measure of the total number of regulations across all levels of government faced by Canadian businesses, there are figures that help illustrate the extent of regulation in the economy. In 2015, the federal government reported that there are 131,754 federal requirements that impose an administrative burden on businesses. This is an increase from 129,860 in 2014, the first year the federal government started collecting this data from regulators. If that number seems imposing, you only need to add all the provincial and municipal regulations to begin to understand how daunting the landscape could be for business.

We know that well-designed and well-implemented regulations are one of the governing tools used to help preserve the well-being of citizens and the environment. For businesses, a stable, rules-based economy can help maintain market integrity, certainty and protection for investment and business operations. However, Canada’s complex network of overlapping regulations from all levels of government has created a costly and uncertain environment in which to operate a business. Onerous compliance costs along with inefficient and unpredictable regulatory processes divert business resources away from more productive activities. This is especially true for small businesses, which lack the specialized and dedicated compliance resources of larger firms.

Some of the concerns identified include:

* Regulatory overlap between the federal and provincial/territorial governments.

* Interprovincial regulatory differences with little progress made to aligning regulations between provinces and territories.

* More rules. More paperwork. Less business, causing Canadian businesses to face growing cumulative regulatory burdens with more compliance and reporting requirements leading to less focus on actually growing their business.

* Business input and best practices are often not considered, often with regulatory guidelines and best practices not followed by regulators. This can result in inadequate consideration of business issues, inconsistent regulatory consultations, flawed cost-benefit analysis of proposed regulations and an underestimation of the actual costs to business.

* Regulatory regimes not keeping pace with rapidly changing technology. Many regulatory frameworks are overly prescriptive, outdated and not equipped to deal with or incentivize innovative business activity.

In recent years, federal, provincial and territorial governments have initiated regulatory policy reforms. In addition, Chambers of Commerce, locally, provincially and federally have also worked rigorously over the years to identify areas of concern within regulations that impose burdens on business or areas that could be streamlined for better service delivery.

Individually, these efforts have improved certain processes and reduced some administrative burden. However, collectively these improvements have been outpaced by the increasing number and complexity of new regulations. This escalation has reduced the productivity and competitiveness of Canadian firms while making Canada less attractive to foreign investment.

Solutions within government’s control

The good news is that the solutions to Canada’s regulatory problems are within the government’s control. A concerted effort at every level of Government to modernize regulatory frameworks can improve environmental, social and economic protections while increasing investment, growth and the number of jobs for Canadians.

So what can governments do to improve? Regulators at all levels of government must work together to implement efficient, modern regulatory frameworks that balance the absolute need to protect, without sacrificing economic growth and prosperity. Some of the recommendations that the Chamber network has identified include:

1. Immediately convene a government-business regulatory competitiveness working group. The working group would develop recommendations for government to measure and reduce cumulative regulatory burden. It would also develop recommendations for governments to ensure a consistent application of regulatory guidelines across jurisdictions and ensure the adoption of best practices by regulators;

2. Give regulators economic growth and competitiveness mandates to ensure economic impacts receive appropriate consideration in decision-making, while preserving necessary protections;

3. Increase federal leadership in eliminating internal trade barriers to trade through clear goals, timelines and accountability as part of the Canadian Free Trade Agreement;

4. Improve regulatory consultations through earlier engagement with stakeholders while ensuring processes are transparent and evidence-based;

5. Increase efforts to modernize individual regulatory frameworks and create greater flexibility.

There is an opportunity for all levels of government to modernize Canada’s regulatory systems and turn them into a competitive strength instead of a weakness. It will require a renewed effort to improve how governments regulate, while reducing overall regulatory burden, duplication and misalignment. The success of broad-based regulatory reform will depend on a new partnership built on strong political leadership, regulator buy-in and business collaboration.

For more information, the Canadian Chamber of Commerce report, Death by 130,000 Cuts: Improving Canada’s Regulatory Competitiveness, can be viewed on the http://www.chamber.ca blog post: It Is Time to Regulate Smarter or by downloading the report at http://www.chamber.ca/download.aspx?t=0&pid=4153ea5f-4964-e811-ba1d-005056a00b05

To read the Chamber’s policy positions and recommendations for government view our advocacy page on our website: https://medicinehatchamber.com/pages/Advocacy#policy .

Lisa Kowalchuk is the executive director of the Medicine Hat & District Chamber of Commerce. For more information on this column or the Chamber, contact 403-527-5214.

Note: This headline has been updated to 130,000 cuts, better reflecting the “federal requirements that impose an administrative burden on businesses.”

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