Smothering by regulation hurts business competitiveness

As a Chamber of Commerce representing close to 900 businesses we often speak of the cumulative regulatory burden businesses face every day.  Not only are they working hard to stay competitive against like businesses in their sector, but they are working to keep their heads above water when it comes to the mandatory regulations imposed by all levels of government.

“Chamber members consistently tell us that regulatory burden and the layering impact of regulation from different ministries and levels of government is one of the most difficult areas to navigate as a business,” said Stuart Harrison, President & CEO, Peterborough Chamber of Commerce.  

The Canadian Chamber of Commerce (CCC) has crunched the numbers and found “in 2015, the federal government reported that there are 131, 745 federal requirements that impose an administrative burden on business.”

As a result one could say that Canada’s regulatory system is smothering business in Canada.  A new report by the CCC, and supported by the Peterborough Chamber of Commerce, Death by 130,000 Cuts, improving Canada’s Regulatory Competitiveness, calls on governments to modernize their regulatory frameworks and give businesses in Canada room to thrive.

The report details the cost of regulation and how it shapes a business’ activities by impacting
behaviour around capital investment, productivity and innovation, as well as creating a focus on paperwork and compliance tasks.  A study out of the United Kingdom and referenced in the report identifies that “ the relationship between regulation and growth is complex…” as it can have both negative and positive impacts.
Death by a 130,000 Cuts examines why Canada is falling behind by looking at nine factors including regulatory overlap, interprovincial regulatory differences that report calls a tyranny of small variances from province to province that add up, inconsistent regulatory processes and consultations along with the role of our regulating bodies and the criteria they follow.

The report also looks at regulating in an era of accelerating technological change as not only is technology disrupting markets and sectors; it’s disrupting how regulators establish and enforce rules for those markets.
In the end the call to action is that Canada has the opportunity to modernize its regulatory system and turn them into a competitive strength instead of a weakness.   

In order to do so the Canadian Chamber offers seven recommendations:

• Recommendation One: Establish a government–business regulatory competitiveness working group
• Recommendation Two: Give regulators economic growth and competitiveness mandates
• Recommendation Three: Increase federal leadership eliminating interprovincial trade barriers
• Recommendation Four: Rebuild stakeholder confidence in cost-benefit analysis
• Recommendation Five: Improve regulatory consultations
• Recommendation Six: Increase efforts to modernize individual regulatory frameworks
• Recommendation Seven: Increase international alignment, especially in new areas of regulation

The recommendations provide a strategic way forward designed to ensure Canada’s business
competitiveness in a global economy.   

“Inconsistent and unpredictable rules and processes are making it difficult for businesses—whether large or small—to keep up and comply. This leads to our businesses being less competitive and Canada becoming a less attractive place to invest, start or grow a business,” said the Hon. Perrin Beatty, President and CEO of the Canadian Chamber of Commerce. “Regulations are designed to keep us safe and to create a level
playing field. But when they start to smother businesses, that becomes a real problem.”

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