The cost of living and doing business continues to grow due to levels of inflation not seen in 40 years. But governments are not helpless in terms of options to foster economic growth and offset the costs of inflation on employers and employees. In fact, there is no other policy change that will have a greater and more immediate economic impact than the reduction of red tape in the public sector.
Red tape is normally understood to consist of outdated and redundant government required policies that slow business growth and investment in communities, resulting in a loss of potential productive activity. Reducing red tape will help improve the economy and attract investment by reducing the amount of labour required for non-productive activities that contribute to creating red tape. Filling out and submitting reports, navigating complex websites, waiting for permits or approvals, going into offices to pay a fee, are all examples of how red tape eats away at the valuable time of business owners while they are trying to focus on operations and growth. If red tape is not prioritized or reviewed regularly by governments, it inevitably grows in complexity and creates greater burdens for business and citizens.
In Atlantic Canada, all four provinces have taken strides to address red tape. Nova Scotia, New Brunswick and Prince Edward Island have all set up dedicated offices or departments to reduce compliance burdens and harmonize regulations across the region. These initiatives have resulted in millions of dollars saved by businesses through burden reduction initiatives. In 2021, Nova Scotia saw an estimated $10.1 million in savings to businesses and New Brunswick reduced their regulatory burden by an estimated $1.45 million resulting in cost and time savings for businesses. The Office of Regulatory Affairs and Service Effectiveness in Nova Scotia in particular not only takes the time to get regulation right, but also plays a role in outreach and developing partnerships to help businesses and individual connect with government more easily. This should be a model for the rest of Canada to follow.
The challenge of inflation is not going away anytime soon. Governments need to adapt by reducing deficit spending and the printing of money, ultimately forcing them to become more selective and accountable for their spending—similar to how businesses operate. Successful businesses try to run as efficiently as possible in order to produce the best goods and services at the best prices they can for customers. Creating greater efficiency within government through the reduction of regulatory burden and associated costs is one of the most-effective ways to increase economic productivity without straining the public purse or contributing to inflation.
It’s time for all levels of government to commit to regulatory harmonization, cooperation, and digitization. With the ongoing labour challenges limiting the availability of talent and the rising costs for both citizens and business, it’s time to do things more efficiency and reduce the number of person-hours lost to the burden of regulatory requirements.
Brandon Ellis is the senior policy manager at the Atlantic Chamber of Commerce, a nationally accredited business association representing more than 16,000 businesses through its network of 90 Chambers of Commerce across the four Atlantic Provinces.
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Creating Growth Through Efficiency: The Importance of Reducing Red Tape
Thursday, September 8, 2022
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Business Truth & Reconciliation
The Atlantic Chamber of Commerce takes proactive steps to promote reconciliation and respect for Indigenous rights within the corporate sector. In response to the Truth and Reconciliation Commission's Call to Action 92, the Chamber urges its members to embrace the United Nations Declaration on the Rights of Indigenous Peoples as a guiding framework.
Recognizing the importance of education, the Chamber encourages businesses to provide comprehensive training for management and staff on the history of Indigenous peoples, including the legacy of residential schools, Indigenous rights, and Aboriginal-Crown relations. Emphasizing intercultural competency, conflict resolution, and anti-racism, these efforts aim to foster a more inclusive and harmonious corporate environment rooted in mutual understanding and respect.
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