Reducing red tape on businesses could free up resources

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Is the political climate finally right to cut back the bureaucratic red tape that has long stifled development and growth in Canada, to the consternation of businesses big and small?

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On Saturday, Conservative leader Pierre Poilievre pledged to cut 25 per cent of red tape within two years by introducing a “two-for-one” law that requires the government to cut two regulations for every new one imposed. For every $1 in new administrative costs, the government would be required to cut $2 elsewhere.

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The proposed law is a step up from the existing Red Tape Reduction Act, which came into law in 2015 under former prime minister Stephen Harper’s Conservative government. The current law requires the government to offset new administrative burdens on a “one-for-one” basis, as long as repealing it doesn’t “compromise public health, public safety or the Canadian economy.”

Liberal leader Mark Carney has also pledged to trim the red tape as part of his promise to reduce internal trade barriers.

As part of his campaign platform, Carney is promising to require federal departments to review and report on progress within 60 days “steps to eliminate outdated or unnecessary rules, reduce duplication or overlap with provincial rules, and streamline the administration of rules and the delivery of regulatory decisions.”

Canada’s lagging productivity is a longstanding economic issue, and there sees to be an increased awareness that businesses will need all the help they can get in the face of U.S. President Donald Trump’s tariffs.

That means cutting through the “confusing rules and regulations, administrative obstacles, excessive paper burden, and poor customer service Canadians face every day from all levels of government,” as the Canadian Federation of Independent Business (CFIB) has put it.

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Canadian businesses have encountered a 2.1 per cent annual increase in the number of total regulatory requirements since 2006, according to a February Statistics Canada report — a total jump of 37 per cent between 2006 and 2021.

Statistics Canada estimated that the growth in regulatory requirements reduced business investment by 9 per cent and caused GDP growth to decline by 1.7 percentage points.

Canadian businesses spent 768 million hours on regulatory compliance in 2024, the equivalent of nearly 394,000 full-time jobs, according to the CFIB’s 2025 Red Tape Report.

The report distinguishes between “justified” health, safety and environmental regulations and regulations that deliver “little or no benefit.”

“Reducing excessive regulations could free up resources for growth-oriented activities, enhancing productivity and supporting long-term economic outlook,” the CFIB report said.

Even if the political climate at home is such that the proposals are quickly adopted, we may still find ourselves lagging behind the U.S.

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That because Trump upped the deregulatory stakes in an executive order signed in January: “The Order requires that whenever an agency promulgates a new rule, regulation, or guidance, it must identify at least 10 existing rules, regulations, or guidance documents to be repealed,” a White House fact sheet said.

Today’s promises  

• Poilievre is promising a new “one and done” rule for resource projects that will handle all regulatory approvals across all levels of government within one application, with a target of six months for decisions up to a maximum of one year.  
• Liberal leader Mark Carney is promising to reduce the minimum amount seniors must withdraw from a registered retirement income fund by 25 per cent for one year and increase the guaranteed income supplement by 5 per cent for one year. 
• NDP leader Jagmeet Singh is promising to overhaul bankruptcy and insolvency laws by expanding protections for workers under the Companies’ Creditors Arrangement Act to include post-employment benefits such as unpaid wages, severance, protection of group sickness or accident insurance plan, a group term life insurance policy or a private health services plan. 

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• Email: jswitzer@postmedia.com

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