Some progress, but red tape still has tangles

Some progress, but red tape still has tangles by Laura Jones

Prime Minister Stephen Harper announced a year ago that he would create a Red Tape Reduction Commission to fight red tape, which he called a “silent killer of jobs” and a “hidden tax.”

Small-business owners would add “murderer of entrepreneurial morale” to those names: 25 per cent of business owners say they might not have gone into business had they known about the burden of red tape.

Last week, the commission released a final report containing 15 thoughtful recommendations on reducing and controlling red tape. If the government acts on the recommendations it could be a game-changer for Canada.

Red tape should not be confused with necessary regulation.

Business owners have no beef with legitimate rules that provide for tax collection, protect human health, promote safety or protect the environment.

Red tape is something else entirely. It is dumb and unnecessary rules and bad government customer service.

Red tape tangles range from the business owner who had to call the Canada Revenue Agency seven times to get an answer to a straight-forward corporate tax question to the business owner who was almost shut down after Health Canada forced a recall of a product they later admitted was safe.

Every business owner has a story. Imagine the productivity that would be unleashed if they didn’t.

The Canadian Federation of Independent Business estimates that regulations cost businesses in this country $30 billion a year. Red tape accounts for about 25 per cent of these costs. Beyond its corrosive impact on the economy, red tape damages the relationship between a government and its citizens.

When citizens get accusatory letters from government or talk to rude customer service agents, inspectors and auditors, they feel their own government is treating them like an enemy.

One of the commission’s most innovative recommendations is to add red-tape oversight to the man-date of the auditor-general.

Another good one, based on success in B.C., is to legislate a “one for one rule” requiring that at least one regulation be eliminated for each new one introduced.

Senior public servants would lose part of their bonuses if their department or agency does not respect the one for one rule.

The report’s recommendations are solid but there is a long way to go to make red-tape reduction a reality.

If the prime minister continues to champion the cause, the rewards for Canada will be big – greater productivity leading to more job creation, lower prices and higher wages.

Laura Jones, Sr. Vice-President Research, Economics & Western Canada with the Canadian Federation of Independent Business may be reached for comment at 604 684-5325 or msbc@cfib.ca