Cutting red tape a laudable venture
Businesses are always complaining about red tape and governments are always promising to cut it. Finally, some progress is being made. Red tape refers to excessive rules and regulations and modern governments certainly have vast scope for reduction.
This week, the Canadian Federation of Independent Business rated the provinces on red tape reduction and awarded Ontario a score of B- for eliminating 80,000 rules and regulations, an impressive 17- per- cent reduction since 2008. Unfortunately, there are still 386,251 rules and regulations left.
The big gain, though, could come at the federal level, where Treasury Board President Tony Clement this week released the wide- ranging report of the Red Tape Reduction Commission. The advisory body of business leaders and MPS created a broad list of specific recommendations for improvement in various federal departments. Perhaps its most important proposal is that the auditor-general review the government’s red tape reduction progress and report annually.
So far, the government has committed to what it calls “one- for- one,” a new rule that sounds suspiciously like a gimmick. For every new regulation imposed, another of equal administrative burden will have to be cut. At best, this creates a static situation. If a regulation isn’t useful, why not just cut it?
The CFIB is happy with the new focus on red tape reduction and rightly so. The business lobby group has fought hard to get politicians’ attention.
While the proposed changes will be an improvement, if enacted, the reforms don’t go far enough. The government is looking at trimming the dense foliage of regulation when the problem is at the root.
For example, there are a dozen recommendations for the Canada Revenue Agency. No doubt the agency can do a better job of explaining things to taxpayers, but the underlying problem is the complexity of the Canadian tax system.
Small business is the lifeblood of the Canadian economy. People running their own businesses can’t afford an army of accountants and tax experts. They just want to know what rules they have to follow and they want it explained in plain English. It’s a reasonable request.
To be clear, no one is suggesting reducing vital health, safety and environmental regulations. The issue is forms for forms’ sake and duplication between departments.
All this matters because regulations drive up consumer prices and create barriers for people who want to start job- creating businesses. The CFIB estimates that regulations cost Canadian business a minimum of $ 30 billion a year and about $ 7.5 billion of that is due to unnecessary paperwork. That’s an awful waste of money.