$36 billion regulation costs includes one-third red tape, CFIB says

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by Morinville News Staff

The Candian Federation of Independent Businesses (CFIB) says that $10 billion of the $36.2 billion in overall regulation costs to Canadian businesses is unnecessary, redundant or overly burdensome red tape.

The finding comes from the CFIB’s latest research, released on the first day of the organization’s annual Red Tape Awareness Week.

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

The CFIB says businesses with fewer than five employees are hit the hardest, spending $6,744 per employee complying with government regulation. Businesses with 100 or more employees spend only $1,253 per employee. The organization says regulation costs on Canadian businesses continue to be significantly higher than costs on US businesses.

“Red tape is a huge hidden tax on all Canadians but it’s small business owners who are feeling the most pain,” said Richard Truscott, Vice-President at CFIB. “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.”

The regulatory costs are not the only thing the organization’s research revealed. The CFIB says 48 per cent of independent business would not advise their children to start a business given the current level of regulation, and 78 per cent say excessive government regulations add significant stress to their lives.

“Most alarming is what all these rules are doing to the morale of Canada’s entrepreneurs,” Jones said. “As baby boomers continue to retire, we need the next generation of entrepreneurs to step up. If they don’t think it’s worth it to take the risk of running a business, it’s difficult to imagine the implications on job opportunities and government revenues,” Jones said. “We need to keep working to fix it.”

The Cost of Government Regulation on Canadian Businesses by Queenie Wong, Senior Research Analyst, is based on a CFIB survey of 7,823 independent business owners in the fall of 2017.

The 2018 report is available at cfib.ca.

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