Bill C-21 (Historical)

Red Tape Reduction Act

An Act to control the administrative burden that regulations impose on businesses

This enactment enacts the Red Tape Reduction Act, which establishes controls on the amount of administrative burden that regulations impose on businesses.

Red Tape Reduction Act

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, if I did not know any better, I would say the member had the wrong speech from the Prime Minister's Office. He is talking about the government's economic action plan and jobs and so forth, and many of the numbers he has put on the record I would challenge. However, I will issue him the ultimate challenge in an area where the government has not been very successful, and that is the whole issue of debt reduction. The government has not been able to balance a budget despite being very clear that it wants to be able to show that it can.

Given the type of speech the member gave, I would question the government's inability to issue a national budget at a time when there are issues affecting confidence in Canada's economy. The Prime Minister has let Canadians down by postponing a budget indefinitely. Could the member explain why he thinks the Prime Minister has disappointed Canadians in that fashion?

[Chris Warkentin, Conservative, Peace River, AB]

Mr. Speaker, it is interesting that the member would dispute the numbers of the World Economic Forum and the organizations I referenced, who are bringing forward these numbers, including Stats Canada. It is interesting that the Liberal Party would disagree with these numbers.

With regard to the budget, I can guarantee that we will continue to bring in budgets that will foster economic growth in this country. We will continue to lower taxes for small business. We will continue to reduce taxes for Canadian families.

We know the Liberals have not put out any policy on much, but we do know that they will raise taxes, that they will raise the debt, that they will raise the deficit and they impose a level of taxation that will be unsustainable for Canadian businesses and Canadian families.

[Djaouida Sellah, NDP, Saint-Bruno—Saint-Hubert, QC]

Mr. Speaker, I listened carefully to my colleague on the other side of the House, but I did not hear him talk about anything relevant to small and medium-sized businesses.

I visited SMEs in my riding of Saint-Bruno—Saint-Hubert, and business owners all agree that unnecessary red tape hurts them financially and causes them to lose valuable time.

Why do the Conservatives not eliminate regulations that are not in the public interest, unless it is because these regulations serve their own interests? I would like a straight answer from my colleague on the other side of the House.

[Chris Warkentin, Conservative, Peace River, AB]

Mr. Speaker, I think the member probably missed the opportunity to listen to the speech, because it was centred around the one-to-one rule that will now be legislated.

It is interesting, because she asks about the unnecessary burden of red tape, and I agree. As a matter of fact, when I sat on the Red Tape Reduction Commission, what we heard from Canadian businesses was that it is a costly endeavour to comply with the red tape that is required at the federal, provincial, and municipal levels. It is estimated that it costs businesses across the country about $31 billion to comply with regulation across jurisdictions on an annual basis. This is an incredible burden.

What the NDP, even in this debate, has reinforced time and time again is that it wants to see more red tape. It opposes the one-to-one rule. The one-to-one rule would actually require, as the member calls for, the removal of unnecessary red tape. If a new regulation is brought forward, one would have to be taken away, one that is no longer necessary, so that these small businesses would not have to comply with unnecessary red tape.

I believe that the member desires to see red tape reduced. That is why I call on her to split from her party and actually vote for the bill, which would reduce the amount of red tape for small businesses in her constituency.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I will be sharing my time with my colleague from Compton—Stanstead. I will therefore be speaking for just 10 minutes, in order to leave him the other half of my 20 minutes.

I have the honour today to address my colleagues, and those who are kind enough to be watching us on CPAC, on the subject of Bill C-21, An Act to control the administrative burden that regulations impose on businesses.

I would recall at the outset that for a long time, the government called this its bill to reduce—and not to control—red tape. We can already see that there has been some backsliding with respect to the government’s real intent to deal with the problem.

Over the last seven years, a number of ministers have made numerous announcements at various locations in Canada, with much fanfare, to express how eager the government was to attack the administrative burden. The Conservatives said they wanted to reduce what they called “red tape”. They made it into a major obsession, which has unfortunately produced very little in the form of Bill C-21.

However, this is an important issue, not to say a major problem. Roughly $30 billion in time and costs are imposed on SMEs and entrepreneurship in general in Canada with forms and various other requirements. That is a lot of money. For an SME or a business, the situation is even worse in terms of its resources.

When you have more than 100, 125, 200 or 300 employees, you can set up human resources or administrative services where people can focus on administrative requirements. The business thus becomes more efficient, and in proportion to the company’s overall operations, such requirements pose less of a problem.

However, for the owner of a small business that has generated 5, 10, 15, 20 or 30 jobs through hard work, whenever a form or a request from a public servant appears, it is always handled by a single person: the small business owner. It is a heavy burden, especially for small businesses and microbusinesses. It is also a burden for medium-sized businesses, but it is even more serious for small and microbusinesses.

We have to deal with this problem, because 98% of our active businesses in Canada have fewer than 100 employees. Ninety-eight per cent. The category includes people who work very hard and have created jobs, but do not yet have sufficient turnover to have human resources and administrative departments. These people have to shoulder the administrative burden themselves.

Sixty-four per cent of employees in the private sector work in an SME; 64% of people in Canada who are not employed by provincial governments or the federal government work in an enterprise with fewer than 100 employees.

This is the sector of the Canadian economy that creates and maintains the most jobs, and it is these enterprises that have to come up with most of the $30 billion invested in time and trouble because of good old red tape.

In addressing this major and important issue, we unfortunately have serious problems with respect to the bill that is before us at third reading today. The bill embodies the government’s desire to apply the one-to-one rule, which is designed to eliminate a regulation for every new regulation made by the government.

I do not know how many times I have to drive this home. The one-for-one rule always gives nothing more than zero. We are faced with a solution whereby the sum total of what was to be an attack on red tape to liberate Canadian businesses still amounts to nothing more than zero. That is the major solution offered by this bill.

A few weeks ago, we were fortunate to have Kevin Page with us in Parliament. He gave a speech to my colleagues and me. He made a very accurate observation to the effect that when there is a complex issue, someone always thinks of a simple solution. The problem is that it is often a very bad solution.

When I think about the one-for-one rule, I cannot help but think about what Mr. Page said that day. That is exactly what we have here: a simplistic measure.

Another problem with this bill is that the President of the Treasury Board could decide to eliminate regulations. The member for Parry Sound—Muskoka is currently President of the Treasury Board and his record is not entirely spotless when it comes discretionary decisions. Take for example, the $50 million invested in gazebos in Ontario when the G20 leaders were visiting.

It is a serious problem when a bill places so much power in the hands of a single representative of government, particularly when the person who currently holds that position does not have a completely spotless record when it comes to discretionary decisions.

The Conservatives also have a poor track record with respect to workplace health and safety, and the bill says nothing about the environment.

We would not want Bill C-21, which gives the government power to tinker with forms and abolish regulations, to be exploited by a government with a very bad track record. Just think about the train tragedies that have occurred in recent years in Canada. The regulatory management that preceded those accidents was part of the problem, and it was the Conservative government that was in charge. We would not want Bill C-21 to be used to do away with regulations that are for the common good or important for the environment.

The NDP would like the report to contain clear obligations on how we will ensure accountability in how the government will use this law and in how the stakeholders will be consulted before a regulation is eliminated. It would be very important to give that responsibility to an organization and not just to the President of the Treasury Board.

However, the nine amendments presented by my colleagues in committee were all rejected. That is just another problem with this bill, which seeks to address an important issue. We need to cut red tape, but we do not want to adopt a solution that has no effect. It is therefore difficult for parliamentarians to determine whether this is a worthy bill.

In short, according to a document produced by Industry Canada, red tape decreased by about 11% between 2005 and 2008. The report concluded that employment trends and the decrease in workers' compensation claims were the primary causes. This shows how complex the situation is.

If people are being injured at work and there is no job stability, even if we reduce the administrative burden, we will not decrease red tape. If business owners are constantly having to replace employees and if these employees are getting injured every three days, there will be no decrease in red tape. Business owners will have to deal with all kinds of hassles. This is a much bigger and more complex problem.

There are solutions, but they would require a lot more work and co-operation. For example, Belgium is working on digital solutions. Business owners send their papers in electronically, so they are not forced to send them every time a government official has a question.

Furthermore, some European countries have created statuses for microbusinesses. These countries are trying to cut red tape for people who are getting into business and who have only about 10 employees. These companies get a special tax status to make their lives easier. There are solutions that would have an impact.

Those solutions are not in this bill, and it has a number of problems. I will have to continue to think on this bill.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I listened with great interest to my hon. colleague.

Bill C-21 is yet another bill in which the government passes off fluff for action. It is as if the government has created itself as Don Quixote and is going to go after windmills called red tape.

The government has systematically attacked the basic systems that are in place to ensure a viable economy. One example is its attack on the environmental legislation, which stripped all of the water protections, and the government's dumbed-down idea that it would somehow make it easier to get the pipelines approved. Then it has run into one bit of opposition after another because there are no clear rules in place.

The Conservative government is afraid to bring in a budget. It cannot have a plan and cannot even count the money, and yet it has created this false attitude that it is going after red tape.

Could my hon. colleague tell me why he thinks we are wasting time on a bill like this flop, rather than dealing with clear issues like the budget and protecting citizens?

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I thank my colleague for the question. He shares my concerns.

I said before that we fear that this legislation, which can be used to play around with the regulations, might be exploited once it gets in the hands of the Conservatives. We saw them do this with the environment. For example, I do not know how many hundreds of rivers were protected in Canada. Now there are hundreds that are no longer protected. My colleague shares my concerns.

The other part of the problem is the incredible inaction on the part of this government when it comes to finding real solutions that could help small businesses. Taxes have been greatly reduced for big business.

However, practically no tax cuts have been given to SMEs. The opposite should have happened over the past seven or eight years. Why? Because when we give SMEs some breathing room, then they are less likely to take their money and invest it somewhere in Asia or who knows where. They are more likely to create jobs. That is what the government should have done.

Again, this is a meaningless solution for SMEs. Nonetheless, there are some really great structural solutions that would truly help SMEs, which the Conservatives are doing absolutely nothing for.

[Marc-André Morin, NDP, Laurentides—Labelle, QC]

Mr. Speaker, I think the reality must be the same in my colleague's riding.

Red tape is not the only problem small businesses are facing. In my riding, what I have seen and what entrepreneurs have told me is that people have lost seasonal employees because of the cuts to employment insurance. Those entrepreneurs have had a hard time getting workers to come and fill an essential need. There are plenty of ways to hurt businesses in addition to harassing them with endless red tape.

I would like my colleague to say a few words about that.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, my colleague referred to employment insurance reform, which is totally out of touch with what is going on in so many industries, particularly in eastern Canada and Quebec. That is certainly causing problems. It also relates to another comment I had.

If circumstances are such that a business has to hire new employees every six months, there could easily be a shorter form for when employees are replaced. However, if the form has to be changed every time, that will result in more paperwork, not less. It is like I was saying before.

There is another unbelievable phenomenon happening in my riding. It is so hard to manage the innovation tax credit that a significant proportion of small and medium-sized businesses no longer bother to claim it and have given up on some of their efforts to innovate.

In many cases, it is medium-sized businesses, not small ones, that have managed to keep claiming the tax credit. I have asked them if it is that hard for them to do. They have told me that the administrative hassle costs them between 30% and 35% of the amount they get back. I have asked them if there is really more paperwork. They have told me no, but the government checks and double-checks their answers, and they have to call an official 18 times, and the official challenges everything they submit.

Officially, the program does not involve any more red tape. However, the program is now managed in such a convoluted way that small businesses are, for the most part, abandoning their efforts to innovate. That is really bad for the country's economy in the medium and long terms. There are all kinds of examples like that one.

Once again, Bill C-21 is a long way from fixing this problem.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Mr. Speaker, the subject today affects many more businesses across Canada than we might think.

I am simply going to take the example of the manufacturing sector, which plays a key role in Canada. It once accounted for 65%, but it is now 50%; it is declining somewhat. In that segment, we find not just companies with 500 or more employees. From one end of my riding to the other, there are companies with five or 15 or 50 employees. These manufacturing entrepreneurs need an appropriate operating framework. They have enough competition at the international level. Today, no sector of economic activity, whether in Canada or elsewhere on the planet, can be exclusive to one region, one riding or one country any longer. Everything is global these days. You produce something, a natural resource, and it can be processed or manufactured anywhere on the planet.

I am talking about the manufacturing sector, but there are other sectors such as agriculture or retail, which now has to adjust to e-commerce. What is needed is a genuinely flexible framework. Bureaucracy and red tape, as it is called today, are certainly part of operating a business. However, I have sometimes had businessmen or businesswomen tell me that they had to spend one day a week doing nothing but administration. They had to fill out reports: one for the environment, another for workers’ compensation, because there is also bureaucracy at the provincial level. Put it all together and it adds up to a lot. People have to be able to operate their businesses in a sound environment and, most importantly, a competitive environment.

Bill C-21, An Act to control the administrative burden that regulations impose on businesses, is intended as a response from this Conservative government to the Canadians and the small and medium-sized businesses that have often voiced their concerns about the expanding administrative burden that regulations impose on the cost of doing business in Canada. If we want to prosper, we must really have an attractive framework.

The government therefore wants to institute the one-for-one rule. As my colleague said earlier, plus one minus one equals zero. You do not have to be very good at mathematics to understand that calculation: 1 - 1 = 0. However, the one-for-one rule must not interfere with public health or safety. There is an environmental framework and a framework for public health and safety. It applies mainly to employees but can also relate to the cleanliness of food processing. This must all be as transparent as possible.

Once again, they are going to give a minister, Mr. Gazebo, some latitude, rely on his judgment, and trust him to reduce administrative burdens and make decisions about this subject. I am sorry, but the Conservatives and Liberals really do not have a good track record in this regard, particularly when it comes to regulations that protect Canadians’ health and safety. I stress this again. We have seen very clearly the disastrous consequences for the environment and public safety that deregulation has had for the Canadian public in recent years.

Regulations that are in the public interest should be retained, of course. What needs to be done is to closely monitor the aggravating factors and the factors that are mitigating and user-friendly for businesses and business owners.

Bill C-21 seems to disregard that obligation. We would have liked to have assurances that deregulation will not apply to regulations that affect health and safety and, most importantly, the environment.

If the Conservatives really wanted to help small businesses, they would have supported the NDP’s proposal to create an ombudsman position to deal with issues such as the excessive credit card fees that the big banks unfairly charge merchants. This is an ineffective injustice that my colleague from Montmagny—L'Islet—Kamouraska—Rivière-du-Loup has been battling vehemently since he first came to the House.

Small and medium-sized businesses create most of the new jobs in Quebec and Canada, not only in the major centres, but also outside the urban areas. In addition, small businesses make those regions thrive. Unfortunately, small businesses and the regions outside urban areas get very little attention from this Conservative government. The Prime Minister and his key ministers have completely ignored them at the expense of big businesses, the ones that have been given billions of dollars in tax cuts. We see what happens when you favour a single sector of economic activity, with the price of oil falling. The Conservatives find themselves in a precarious position, making it up as they go. They are no longer even capable of producing a budget in real time, something that is essential to help Canadian business owners across the country.

I talked about the fiscal and administrative environments as well as the actual environment. When someone operates a business, we want them to do so in a way that respects the environment. Of course, the government also deregulated that. It said it would let project proponents self-regulate. Canada is one of the only countries in the world that lets everyone do almost whatever they want, wherever they want, whenever they want. Furthermore, the provinces have tried to protect themselves when it comes to natural resources, just in case the federal government is unable to impose an environment that is not highly regulated, but that people respect.

Thinking clearly about what is happening also means having a healthy, clear and successful framework. I am thinking of future generations. That is what is so aggravating about this. Future generations do not have an environment in which they will be able to develop our natural resources without polluting. If you add this to our changing demographics and our aging population, it is going to be a disaster. We were talking earlier about renewing our workforce. Businesses have a real challenge on their hands. The workforce, the next generation, the men and women who want to be part of this prosperous Canada should have the opportunity to do so, and they should be able to run businesses even in areas where crops cannot be grown as they once were here in Canada. There are areas where climate change is preventing people from farming the same way they did in the past.

The regulatory framework in which most businesses in Canada will operate is made up of nearly 2,500 regulations spread over more than 15 departments. These cover everything from agricultural businesses to R and D companies researching the energy of the future. Business people across Canada need to dedicate a huge amount of time, money and consultation to complying with these regulations.

At present, red tape is preventing the collective growth of entrepreneurship. The need to prove that they comply with regulations by collecting, processing and retaining information, preparing reports and filling out forms is such that it discourages many people from actively taking the reins of businesses across the country. I talked about demographic changes. That will be the result if there is not an appropriate framework.

This small bill, which is truly small, contains about 11 clauses. In actual fact, there are only four. It is a question of semantics. It does not address the real problems, which cause quite a few headaches for Canadian entrepreneurs.

In closing, it is not until the NDP comes to power in 2015 that things will change and entrepreneurs will prosper.

[Dan Albas, Conservative, Parliamentary Secretary to the President of the Treasury Board]

Mr. Speaker, I have to say to the member opposite that I really enjoyed his speech. He was all over the map, just like his party is on this issue.

On one point, we had a member get up previously to say how filling out EI forms is red tape, yet the NDP is constantly saying that it supports having a strong EI system so that people can get the help they need. We try to balance everything so that at the end of the day, entrepreneurs can do what they do best, which is build their businesses.

However, I will just come back to this member in particular.

First of all, the NDP has been completely unclear as to whether or not it is going to support this bill. Could that member show some leadership and please say yes or no? Could he say whether the NDP will be supporting or not supporting the bill?

Second, the NDP claims to be the party that supports evidence-based decision-making. The one-for-one rule has reduced 250,000 man-hours of work that entrepreneurs needed to do in order to submit forms to the federal government. It has saved over $30 million. Does the member realize that the administrative burden is decreasing on small business or not?

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Mr. Speaker, when it comes to the math, you will really have to bring the Conservatives up to speed because the one-for-one rule always equals zero.

Although my colleague says that $30 million has been saved with a bill such as this one, that is surely not enough to save the hundreds of thousands of jobs lost after the economic downturn. That is a fact. It means that they did not do enough.

The NDP will be the only party to do enough to restore Canada's international reputation.

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Mr. Speaker, I appreciate my colleague's intervention and the wisdom of the advice that he offered to this chamber, especially in the face of some of the rather insulting questions that came from the other side.

In particular, I want to ask him to expand a bit more on the fact that if the government was convinced that it could reduce red tape and could get rid of useless regulation, why has it not done it? Why does it need to bring in another bill, with more regulations, at more cost to government, and with more delay? Why is it that the current government just cannot get the job done?

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Mr. Speaker, business owners tell us that it is always the same story: the federal government keeps asking them for more. What they want is less. One-for-one will always equal zero. Zero does nothing to help business owners who want to their businesses to prosper.

As I said, international competition is fierce. Business owners want to keep their businesses, they want their businesses to remain prosperous and they want the regions across Canada to thrive and contribute to Canada's economic prosperity. However, that is not what is happening at all.

Earlier we heard about employment insurance. Are members aware that it is not eight out of ten but just three out of ten applicants who receive the EI they are entitled to? That is because the decisions almost always have to be appealed. It is always a long administrative process. In the end, people get discouraged and give up. That is not what we want for Canadians across the country

[Dan Albas, Conservative, Parliamentary Secretary to the President of the Treasury Board]

Mr. Speaker, I certainly appreciate that the member gets really jumpy when we ask him to make a decision. Does he support a reduced burden upon small business?

The previous member who asked him a question gave him the biggest softball I have ever seen. Does the member realize that this bill would enshrine a policy that has been enacted by the government for two years, saving entrepreneurs over 200,000 hours and over $30 million collectively? Would the member stand in his place and say whether or not he supports small business, yes or no?