Canadian Manufacturing

Canadian businesses paying out $10B a year in regulatory red tape, CFIB says

Complying with "unnecessary" and "redundant" rules cost both small and large businesses dearly, the advocacy group says


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TORONTO—Businesses coast-to-coast are being weighed down by stringent and often unnecessary regulation, a new report from the Canadian Federation of Independent Business says.

The advocacy group that represents more than 100,000 small businesses across the country says the cost of regulations reached $36.2 billion last year, with more than a quarter of that total representing “unnecessary, redundant or overly burdensome” red tape.

“Many governments across Canada are taking action to control the cost of red tape,” said Laura Jones, the CFIB’s executive vice-president and Chief Strategic Officer. “The great news is, it’s starting to work but so much more needs to be done.”

Kicking off its annual Red Tape Awareness Week with the report, the group said complying with “unnecessary” rules cost Canadian companies $10 billion last year.

Meanwhile, it argues small businesses bear the brunt of that burden. Companies with more than 100 employees spend about $1,253 per employee on meeting regulations, but those with fewer than five workers spend and average of $6,744 per employee

“Red tape is a huge hidden tax on all Canadians but it’s small business owners who are feeling the most pain,” Richard Truscott, a vice-president of the CFIB, said. “They are on the front lines, frequently dealing with frustrating red tape including confusing language, processes that are longer than needed and rules that just don’t make sense.”

Along with the tangible cost of red tape, regulations also weigh on entrepreneurs.

According to the CFIB’s accompanying survey, which polled about 7,800 small business owners, 78 per cent say “excessive” government regulations add significant stress to their lives, while 87 per cent say the government is more focused on big businesses than small ones when crafting new policies.


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