Montreal, February 6, 2019 – In spite of the efforts of the federal government in recent years to rein in the expansion of the regulatory burden, the fact is that its initiatives have had only mitigated success.
Indeed, according to a study published today by the MEI, the number of regulatory requirements imposed on businesses by the federal government and federal agencies increased from 129,860 to 136,121 between 2014 and 2017.
“That’s over 130,000 things businesses must do in order to respect federal regulation—and that doesn’t even include the provinces!” explains Mathieu Bédard, Economist at the MEI and co-author of the publication. “These imposed conditions are a significant drag on the competitiveness of Canadian businesses and on the economy in general.”
Among the obligations put forward by the federal government, the One-for-One Rule, according to which the regulator has two years to offset the additional costs of new regulations, has quite simply not produced the expected results.
“Ottawa must absolutely establish a concrete plan, set a clear target, and make reducing the regulatory burden a priority, as we did in the early 2000s in British Columbia, when I was Minister of State for Deregulation,” argues Kevin Falcon, co-author of the publication.
Indeed, the BC Liberal Party was elected in 2001 on a platform promising a 33% reduction in the regulatory burden. After three years, it had exceeded its target and eliminated 37% of this burden. “The key element of this success was political will and the fact that all of the ministers were accountable,” adds Mr. Falcon.
As a measure of the importance of this issue, if our regulatory burden were the same as that of the United States, per capita GDP in Canada would be 2% higher after five years, and 5.3% higher after twenty years.
“Ottawa already has a method of account for the regulatory burden. Now the government just needs to fix a target and take the necessary steps to hit it,” concludes Kevin Falcon.
The Economic Note entitled “How to Successfully Reduce the Regulatory Burden” was prepared by Mathieu Bédard, Economist at the MEI, and Kevin Falcon, Executive Vice President of Anthem Capital, former Minister of State for Deregulation in British Columbia, and Senior Fellow at the MEI. This publication is available on our website.
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The MEI is an independent public policy think tank. Through its publications and media appearances, the MEI stimulates debate on public policies in Quebec and across Canada by proposing reforms based on market principles and entrepreneurship.
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