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National Post: B.C. model is worth emulating

Monday, January 10, 2011

Laura Jones from the Financial Post writes Canada needs to follow B.C.'s lead in cutting red tape. Kevin Falcon was BC's first Minister of State for Deregulation and led the charge in reducing bureaucratic red tape by 30% in less than three years.

By Laura Jones
Financial Post
Monday, Jan. 10, 2011

Last spring, Stephen Harper boldly challenged G20 leaders to set targets for deficit reduction, arguing the pressing need for more sustainable fiscal policies to create a "framework for strong, sustainable and balanced growth."
However, there is another rotten floorboard in the framework for global growth that the Prime Minister should champion fixing in 2011 — to cut through the red tape strangling many businesses and to institute a permanent way to control its voracious capacity for growth.

There is nothing "sustainable" about three levels of government in Canada piling on ever more demands to business owners. There already are literally hundreds of thousands of examples of red tape from pesky to outrageous, such as: the Saskatchewan farmer who has to fill out 400 forms for every container of bags he imports; the furniture manufacturer who completes a 109-question Statistics Canada survey every year with questions that are either complex or don't apply to him; and the manufacturer of stuffed animals with removable rice packs that can be cooled or warmed who is being shut down by Health Canada because rice cannot be used as stuffing material under the Hazardous Products Act.

Getting serious about controlling this insidious problem would have enormous benefits for Canadians. It costs Canadian businesses more than $30-billion a year to comply with regulation. This could be cut by at least 25% without harming any of the legitimate objectives of regulation, such as health and safety, business owners say.
That is the equivalent of a $7.5-billion annual stimulus package, creating jobs, lowering prices to consumers and increasing wages — all without increasing budget deficits.

Canada needs a red tape revolution and the country is in a great position to show global leadership on this issue with many provinces taking up the challenge.

The British Columbia model, in place since 2001, is probably the longest running reform exercise in Canada's history. The Organization for Economic Co-operation and Development (OECD) is holding this model up as an example and officials in both Mexico and Australia seem interested in emulating it.

Why has the British Columbia model succeeded when so many other attempts to wrestle with red tape have failed? Because the province's government has the basics right: make it a political priority, then measure, track and report progress. Premier Gordon Campbell set a target to reduce red tape by a third in three years. He exceeded that target and British Columbia has now cut red tape by 40%, or more than 150,000 regulatory requirements.

Nova Scotia followed the same formula using a different measure. In 2005, it started tracking how much time was spent filling out forms and calculated a baseline measure of an astounding 615,000 hours. To date, 91,000 hours have been freed up for more productive uses.

In Europe, the Netherlands was the first to set a concrete target for reduction: 25% between 2003 and 2007 (estimated to increase gross domestic product growth by 1.5%). Its attempts to quantify specific benefits of reducing red tape are interesting. For example, the gains of cutting red tape in health care are used to increase the number of people treating patients. The government estimates that 24,000 hours will be "liberated" for patient care as a result of reducing red tape.

Other European countries, including Britain, France and Germany, have followed the Dutch lead and set ambitious targets of their own. All of these initiatives are promising but lack permanency, a virtual guarantee that regulatory creep will set in again.

The United States is nowhere on this file.

The case for Canada's federal and provincial governments to be global leaders in controlling red tape is ironclad: a low cost way to stimulate the economy and increase competitiveness. Canada should set a reduction target (25% by 2015) and create a permanent focus on the issue by legislating the requirement to publish regulatory counts by ministry each year, setting a no-net increase target as policy once the reduction target has been met, and appointing a minister of regulatory accountability. This would be groundbreaking global policy that passes the common sense test. What are we waiting for?

-Laura Jones is vice-president, Western Canada, for the Canadian Federation of Independent Business, which represents the interests of small and medium-sized businesses and lobbies on behalf of its 107,000 members at the federal, provincial and municipal levels. She is also lead author of Prosperity Restricted by Red Tape.

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