OPINION: Canada stands out for reducing red tape


Executive Vice President

Canadian Federation of Independent Business



SOMETIMES it takes talking to an American to appreciate what is happening in Canada. I recently spoke to Uri Berliner, a journalist with National Public Radio, who was absolutely flabbergasted that Canada just became the first country in the world to legislate a cap on regulation. It is now the law that one regulation has to be removed any time a new one is added. “How can this be?” he asked. “How can this be in Canada?”

Two big factors made it possible for the Red Tape Reduction Act to become law in Canada. First, the federal government had a strong model of successful regulatory reform to borrow from in B.C. — it was the first Canadian jurisdiction to get serious about controlling regulation starting in 2001.

At the time, excessive regulation was a widely acknowledged problem in the province. Forest companies were being told what size nails to use when building bridges, restaurants were being told what size TVs they could have in their establishments, and children needed two permits to bring a tadpole to show and tell, to name just a few examples.

We had hit a wall, and there was an appetite for bold solutions. The government set a goal of reducing regulations by a third within three years. To achieve the goal, a policy was put in place that for every new regulatory requirement introduced, two must be eliminated.

B.C.’s “one-in-two-out” policy was culture-changing. Regulators started to see their jobs very differently. Success wasn’t defined as continuing to add more rules, but to keep the needed ones and get rid of the rest. Bureaucrats got so good at finding stuff that wasn’t needed that at one point they were eliminating five regulatory requirements for every new one introduced. Today, in order to maintain the reduction, B.C. has a “one-in-one-out” policy for regulatory requirements.

Uri, the NPR reporter, was even more gobsmacked to hear that there was no strong opposition to Canada’s Red Tape Reduction Act. He expected controversy and partisanship. In response, I explained the second reason regulatory reform has traction in Canada: Small businesses have put the issue on the political map.

Small businesses are telling their stories and helping the public understand the negative consequences of too much regulation. They are asking business associations to make it a priority. They are filling out surveys that have helped us put a dollar figure on the cost of regulation to business ($37 billion a year). They are cheerleading progress, even when it is slower than they might like. They are telling politicians it is important to keep a lid on regulation if we want the next generation of entrepreneurs to succeed.

Having small business owners — a respected, non-partisan voice — speak up for regulatory reform is making all the difference in Canada. It is paving the way for sensible policy that creates a better, less-adversarial relationship between government and the citizens it serves.

This is a sharp contrast to what is happening south of the border. Last weekend’s Wall Street Journal featured an article by author Charles Murray, amusingly titled “Fifty Shades of Red.” The article describes out-of-control regulating by the U.S. government and advocates that people deliberately refuse to comply with rules they disagree with. To protect against a regulatory agency coming after you, he suggests: “Let’s treat government as an insurable hazard, like tornadoes.”

Is this really the most hopeful approach to dealing with too much regulation in the U.S.? No wonder it is big news that Canada’s government is trying to deal with the problem more constructively.