Red tape costs Canadian business, including farms, billions: survey results

Thursday, January 22, 2015

by SUSAN MANN

Dealing with excessive government regulations, confusing forms and bad customer service is costing Canadian small and medium-sized businesses, including farms, $37 billion in 2014, according to a survey released Wednesday by the Canadian Federation of Independent Business.

And all that red tape is burning out farmers, says Mandy D’Autremont, federation senior policy analyst, agri-business.

Farmers don’t have time in the middle of calving, for example, to wade through confusing paperwork or wait on the phone for hours to get the answers they need from government employees. Government “doesn’t necessarily understand the realities of farming,” D’Autremont says.

Farmers don’t have a problem with legitimate rules and their concern about red tape isn’t a move to try and ditch all regulations, D’Autremont says. “Food safety is a goal that all farmers share. But red tape is something else. It’s the unnecessary duplication of paperwork.”

It’s also a farmer having to deal with multiple levels of government on the same matter because “government agencies aren’t communicating with each other,” she says.

Another example the business federation’s members flag quite frequently is government inspectors with different interpretations of the same regulation. “That’s confusing because which interpretation should farmers follow?” she asks.

The costs of red tape are up from $31.7 billion in 2012. In addition to the monetary costs, small and medium-sized businesses spend an average of 842 hours per year completing paperwork and complying with government rules connected with everything from payroll taxes and GST/HST filings to recycling and parking. “That’s a lot of time,” D’Autremont says.

Survey findings show farms continue to be among the hardest hit businesses in the country. Sixty-three per cent of farmer respondents say their business has been hit with delays from red tape compared to 56 per cent of small business owners generally.

Canada-wide, small business survey respondents said about 30 per cent of the regulations that don’t affect health, food safety and environmental objectives could be removed, saving them about $11 billion annually.

There were a total of 8,867 responses to the business federation’s online survey conducted last June and July. Of those, 440 responses were from the agricultural sector. Half of the agricultural responses were from Ontario. The agricultural survey respondents were all primary producers.

The survey was released as part of the business federation’s sixth annual Red Tape Awareness Week, which runs this year from Jan. 19 to 23. Of the federation’s 109,000 members, 7,200 are from the agri-business sector; 65 per cent of those members are primary producers.
 
“Red tape is more pronounced in Ontario for farmers than in some of our other regions, specifically Quebec,” D’Autremont says, adding the results reflect that there’s more red tape in Ontario than elsewhere in Canada.

Other results from the survey on the impact of red tape on agribusinesses include:

• 86 per cent say excessive regulations add significant stress, compared to 78 per cent of business owners generally across Canada.
• 72 per cent say red tape takes away time that could be spent on family and friends, compared to 63 per cent of business owners generally.
• 64 per cent say it significantly reduces the productivity of their business.
• 63 per cent say it discourages business growth.
• 35 per cent would not advise their children to start a business given the red tape burden.

The Federation of Independent Business also rated the direction provinces are going in with regard to taking action to measure and report on the problem. Ontario’s rating of B+ improved from last year when it got a B. D’Autremont says the report card rating reflects more the direction governments are going in rather than the current red tape burden on businesses in those provinces. The survey, on the other hand, is about the current red tape burden on small and medium-sized businesses.

Ontario Agriculture Minister Jeff Leal says by email forwarded by his press adviser he’s pleased to see the province’s strategic approach to cutting red tape has earned it an increased rating from the business federation. Eliminating unnecessary red tape and regulatory burdens is a priority for the Ontario government and for the agriculture ministry.

Since 2008, Ontario has eliminated 17 per cent of all regulatory requirements or 80,000 regulatory burdens, he says. “But we know there is more work to do.”

Leal says in October 2014 his ministry hosted the seventh Open for Business Forum. Through previous forums “we have streamlined regulations and established new policies,” including amending meat regulations to create a more flexible approach to compliance without compromising food safety, streamlining approvals for on-farm anaerobic digestion facilities and introducing changes giving greenhouse growers more options to manage waste water.

Lorne Small, president of the Christian Farmers Federation of Ontario, agrees the Open for Business Forum that he sits on along with other farm leaders has had some success “sorting out a number of the red tape-type issues.”

Small is critical of the business federation’s survey. “Everyone says regulations are a problem but we need regulations to live by as a civil society. You have to have regulations but it’s a question of how much.”

One Ontario regulation Small says he likes is the one requiring farm business owners to register with the provincial agriculture ministry and direct their registration fee to one of three general farm organizations. Small says he likes that one because it provides the Christian federation with revenue to do its work. But he acknowledges there are many people who probably don’t like that regulation.

Ontario Federation of Agriculture president Don McCabe couldn’t be reached for comment. BF