Red tape binding Canadian business

OTTAWA―Small details are creating big barriers to Canadian economic growth.

Here is our continued coverage of the five policy fixes that could boost Canadian manufacturing’s presence on the global stage.

“Regulatory differences among provincial and federal levels are very tiny, but when you add them up, they amount to a huge cost of doing business in Canada,” says Glenn Hodgson, senior vice-president and chief economist at the Conference Board of Canada.

Currently, many laws overlap and conflict―causing costly delays for industry while discouraging investment.

The Canadian Federation of Independent Business (CFIB) has pegged the cost of red tape on the Canadian economy at $30.5 billion dollars a year.

A CFIB survey also found regulations were stressing out 70 per cent of company owners, with a quarter confessing they may not have gone into business had they known the compliance hassles involved.

Dan Kelly, CFIB senior-vice president of legislative affairs, says Ottawa was just starting to cut back on some of that burden before the government was defeated.

Its red tape reduction commission was looking at regulatory reforms, such as a new Canada Revenue Agency system to let small businesses write in tax questions and receive answers tailored specifically to their firm.

“Small business had long been complaining that they would call the CRA centre, sit on hold forever, finally get to ask their question and then the agent would just repeat something that was on the website,” Kelly says.

The new system would’ve made agents accountable for any incorrect information if businesses were audited down the line.

“We’re hoping the government will be able to pick up where it left off,” Kelly says, adding that includes re-introducing the defeated 2011 budget that contained measures for ongoing red tape cuts.

Hodgson agrees that governments are making progress.

He notes the 2010 Trade, Investment and Labour Mobility Agreement (TILMA) between Alberta and B.C. has removed nit picky rules that were preventing at least 60 occupations from operating across the two provinces.

“But the mere fact that we needed a trade agreement between two provinces is symptomatic of the problems in this country,” he adds.

The report says there’s plenty more red tape that needs slashing. It calls on the federal government to quickly establish a single regulator for Canadian securities markets and to act as a leader to provinces and municipalities.