Red Tape Is Costing Canada’s Economy: Business Group

The dreaded ubiquitous government red tape is being targeted by the Canadian Federation of Independent Business.

According to the Canadian Federation of Independent Business, estimates show that reducing rules and regulations by 25 percent across the country would result in stimulating the economy by $7.5 billion annually. Photos.com

Red tape, the bane of businesses everywhere, is being targeted by an organization that wants to raise awareness about the negative impact of excessive regulation on both small business and citizens.

During its Red Tape Awareness Week from Jan. 10 to 14, the Canadian Federation of Independent Business (CFIB) encourages entrepreneurs across Canada to advocate for change and pressures politicians to take action to reduce red tape.

Long a champion of regulatory reform, CFIB estimates the burden of red tape costs Canadian businesses a whopping $30 billion each year in compliance costs alone.

“That’s a very conservative estimate, and it doesn’t even include the cost to individual Canadians,” says Laura Jones, CFIB’s Vice-President of Western Canada.

The “alphabet soup of regulatory requirements” exists at all levels of government and involves a vast number of rules that businesses are expected to be aware of and fully comply with, says Jones.

“The issue of red tape really does range from your garden variety, fairly benign issues to those that are really outrageous and everything in between. And the problem is it’s like death by a thousand paper cuts—it all adds up to a whole lot of wasted time and energy and money.”

It also adds up to a lot of frustration and stress. In a CFIB survey, 70 percent of business owners said dealing with red tape added “significant” stress to their lives.