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OPINION: Entrepreneurs and small business need fewer, simpler rules

By Laura Jones

Published in the Toronto Sun January 25, 2018

Rules matter. They say something about who we are individually and collectively. The rules we make for our kids — please and thank you, look both ways before you cross the street, use your inside voice — say something  about our values as parents.  The rules we make collectively in the form of laws, regulations and government guidelines say something about us as a society.

What does it say about Canada that we’ve made so many rules that half of all small business owners would not advise their own kids to start a business because the financial and emotional costs of regulatory compliance is too high?

Perhaps it says that we are blind to the serious downside of too many rules. Too much of a good thing can be a bad thing or as a Hindu proverb succinctly puts it: “Even nectar is poison if taken to excess.”

What does it say when we ask a small bookstore café to install an expensive grease trap even though the only “grease” ever used is a bit of mayonnaise on sandwiches? What does it say when we force a business to build an expensive sidewalk that doesn’t connect to any other sidewalks—quite literally a sidewalk to nowhere—in order to do a modest expansion? What does it say when tax rules are so complicated that Canada Revenue Agency staff are regularly giving wrong advice? What does it say when it takes 20 years to get to a yes-or-no decision on whether a ski resort can be built?    
Rules can be a good thing — they can keep us safe, reduce pollution and protect consumers.  But that doesn’t mean that more rules are always better. Sometimes less is quite literally more — more of the things we value like safety, prosperity and a respectful relationship with our government.

Going too far with rule-making is also costly. Exactly how much excessive rule-making costs Canadian families each year is impossible to estimate with precision because the costs are largely hidden in wasted time and lost opportunities. But it is almost certainly thousands and thousands of dollars a year. Ask yourself, if a $5,000 bill for unnecessary rules and regulatory rigmarole came in the mail, would you gladly pay it? 

Perhaps the worst thing too much regulation does is undermine the relationship between government and the citizens it serves.  Many small business owners caught in red tape quagmires ask: “Why is my own government treating me like the enemy?” 

Is this what we want our rules to say? That entrepreneurship is the enemy. That we don’t mind wasting time and money? That looking like we care about safety with piles of procedures and policies is more important than actual safety? This hardly seems consistent with the value that Canadians place on the idea of peace, order and good government.

Can we find the sweet spot with rule-making? There are reasons for optimism. Several years ago Canada became the first country in the world to make it the law that for every new regulation introduced one must be eliminated. It’s a good start but it only applies to a small subset of government rules and does nothing to reduce the excess that currently exists. At a minimum it should be broadened.

Rules matter. Fewer and simpler rules that support a culture of entrepreneurship, safety, and respect between government and its citizens would say something great about Canada.

— Laura Jones is executive vice-president of the Canadian Federation of Independent Business. Follow her on Twitter @CFIBideas.

This story was originally published in the Toronto Sun.


January 25, 2018

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