Thank you, Mr. Chair.
Mr. Chair and honourable members, it is a pleasure to appear before you on behalf of 400 chambers of commerce and boards of trade and more than 200,000 businesses of all sizes from all sectors of the economy and from every part of the country.
It will come as no surprise that the regulatory burden continues to be a growing concern for Canadian business. The World Bank's “Ease of Doing Business” report ranked Canada as 23rd in 2020, but we were fourth in the world as recently as 2006. A big part of this decline is we are now ranked 53rd for the burden of government regulation on business. Regulation is literally stifling our economy.
It goes without saying that the right policy environment can help businesses succeed and generate long-term economic growth for the country. Making Canada an attractive destination for business investment that supports economic growth requires getting the fundamentals right.
At a time when inflation is persistent, government and the private sector must look at new ways to make Canada more competitive. Governments in the past have attempted to regulate our industries into a more competitive frame, but this has had the opposite effect, as the costs of starting and growing a business have become a disincentive to investment.
The regulatory burden is troublesome in several ways, but two stand out.
First, we can’t continue to move at a snail’s pace; we need the government to be more ambitious. We need the government to accelerate modernization and ensure that approvals and permitting can meet our public policy ambition.
Second, the ongoing struggle for companies to comply with complex regulations is increasing operating costs. These are consistently one of the biggest barriers to economic growth. According to the “SME Regulatory Compliance Cost Report”, the total regulatory compliance cost to small businesses was nearly $5 billion in 2011, which at the time was approximately $3,500 per business. That number has no doubt increased over the past decade, along with the regulatory burden overall.
We cannot afford for more private sector investment decisions to be sidelined because of the complex regulatory environment in Canada. Too often, we hear from our members about the investments they have on hold while they wait for direction from the government. Lack of clarity and speed on the new investment tax credits is a good example. While other jurisdictions, such as the United States, move quickly to create the conditions for investment, Canada is falling behind.
Complying with a complex network of overlapping regulations with all levels of government is expensive and time-consuming. When combined with inefficient and unpredictable regulatory processes, this sets all businesses up for failure. While I commend the government for pushing a regulatory modernization agenda, we must move more boldly and urgently.
In the time remaining, I would like to focus on three recommendations.
First, the government must move to implement an economic and competitiveness mandate to federal regulators. Too often, regulators do not fully consider economic impacts on business when making decisions.
Second is regulatory alignment across domestic and international jurisdictions. When regulations are more consistent across jurisdictions, businesses are better able to trade within Canada and beyond. Quite simply, we should not require a free trade agreement within our own country. Unless the government actively works to improve collaboration and alignment to ensure businesses are not at a disadvantage, we will see less innovation, fewer choices and higher prices. An example of this is when each province establishes its own framework for regulating pesticides or rules for the trucking of goods across jurisdictions.
Finally, the government should pledge to provide regulatory certainty for businesses. Evidence-based regulations can both protect the public interest and promote market success. For companies looking to invest billions of dollars in developing new pipelines, new mines or other large-scale infrastructure projects, this is a must-have.
In closing, I will say that Canada needs smarter regulatory systems, better processes and well-designed regulations to help minimize the cost of business and unlock economic growth while improving public health and safety outcomes.
Sustained collaboration with all levels of government and our international partners will make it easier for businesses to do what they do best—produce.
Thank you.