Government Operations Committee on April 10th, 2024

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

I appreciate that.

Mr. Greer and Mr. Swance, would you like to jump in? Is there a particular regulation that you hear from your members that just comes up all the time? Is there an example that you can share with us? That would help us better understand some of the regulations and their impacts. I want to go from the 30,000-foot altitude level to the grassroots. I'm just curious.

[The Chair, Conservative, Kelly McCauley]

We will have time for just one of you to respond, please.

[Ryan Greer]

Very quickly, I want to echo Corinne.

While it is important to focus on the specific, it's akin to managing the symptoms of an underlying problem without treating the underlying problem.

If you're looking for the most recent and current example, there is Bill S-211, the child and forced labour private member's legislation. While all of the organizations represented on this panel strongly support the objectives of that bill, there was zero consultation on the guidance that was issued from the public safety department just before Christmas.

It imposes a significant burden in compliance requirements on medium and large manufacturers, and some small ones, and many other members in other sectors. That has created a lot of cost, anxiety and expense at this moment right now in the lead-up to the first reports that are due to be filed on this at the end of May.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Mrs. Vignola, thank you for the red-tape-free doughnuts you brought for the committee.

You have six minutes, please.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you, Mr. Chair.

Thank you to the witnesses for joining us today.

Regulation is something we hear a lot about. We are told that it's onerous, particularly for small businesses. Conversely, we are told that large companies are doing fine and pay people to navigate the regulations.

Mr. Greer, do you agree that large companies adapt to the regulations, but that it would be good if there were fewer of them?

[Ryan Greer]

I think the premise of your question is correct, in that small and medium-sized businesses, and certainly small and medium-sized manufacturers, are the ones that are hit hardest by regulations, especially regulations that are poorly designed, or not created with an SME in mind.

However, it's not just the individual regulations; it's that nobody seems to be thinking about the cumulative burden facing that particular business.

When a cost-benefit analysis says that the cost will only be this many thousand dollars and this many extra hours a month of time to comply, that's not taking into account the thousands of other dollars of costs and dozens of other hours that are often spent by one or two employees to focus on that.

Without a doubt, we agree that the impact is largest on small and medium-sized businesses. It's a big proportion of what's driving some of the productivity challenges in helping those businesses grow from small to medium or from medium to large.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you for that.

Earlier you said you wanted regulations to be more consistent from one province to another so that it would be easier for companies to do business in different jurisdictions. I don't entirely disagree with that, but I don't entirely agree with it either. We are talking about an area of jurisdiction specific to each province, and some provinces adopt stricter regulations than others. You can't cherry-pick. Even in a free trade agreement, each country has its own regulations that the others must comply with. It wouldn't occur to anyone to say that they are right and the others are wrong.

How can we strike a balance between a province's regulatory jurisdiction and the desire of businesses to facilitate trade between the provinces?

[Ryan Greer]

Thank you for the question.

On the topic of mutual recognition, we absolutely believe that there is an opportunity. There is no reason, in many or most cases, to have different rules, compliance regulations and certifications for every province and territory.

A lot of these are small, minor issues. Some of the more famous examples are different first aid kit regulations and what should be in a first aid kit in a workplace. There's fall protection and what type of protection should workers who are at elevations be required to wear. There's nothing different from falling down a ladder in Alberta compared to Quebec or on the east coast. There are lots of areas where there are very minor technical differences that cause a lot of irritation for businesses.

If there was political will.... It would take leadership from all the premiers, as this is provincial jurisdiction, save for some federal regulations. It would really require an approach whereby there would be buy-in so premiers and senior ministers would want to pursue this.

Also, there would of course have to be carve-outs for provincially specific circumstances. In doing certain things in Alberta in the mountains, there are certainly differences that don't exist in other provinces that mean you may have to adjust safety or regulatory requirement standards.

Certainly there would be language requirements and other issues for a province like Quebec, but for the most part, most of these aren't needed and cause significant costs. There would be a significant benefit if we had mutual recognition.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

If I get your point, the leadership does not necessarily have to come from the federal government, since provincial regulation is under the jurisdiction of each province. Instead, it should come from the premiers of all the provinces during their pan-Canadian meetings, for example.

The federal government does not intervene in areas that do not fall under its jurisdiction.

Is that correct?

[Ryan Greer]

Yes, absolutely. There are separate federal regulations. That's a lot of what we're talking about today. So much of the burden that our members face is at the provincial and municipal levels. It does require a significant amount of provincial leadership.

The benefits of doing so would be enormous. The economist Trevor Tombe has done some really excellent work on what the benefits of mutual recognition would be. He found that it could increase our economy by 4.4% to 7.9% over the long term. That's $100 billion to $200 billion a year. Per capita, we're talking about $3,000 to $5,000 per person.

It would be a significant economic boost if we were able to eliminate these interprovincial regulatory differences.

[The Chair, Conservative, Kelly McCauley]

Mr. Bachrach, go ahead, please.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

Thank you to our witnesses.

This is an interesting discussion, and I think everyone around the table can think of examples of government regulations that seem overly onerous. At the same time, we know that one goal of regulations is to protect things like health and safety, the environment and all these things that we value as a society.

There are plenty of examples of businesses advocating for deregulation that have led to really terrible outcomes. We have situations.... I've been the transport critic for five years. In looking at what's happened in the rail sector, after derailments at Lac-Mégantic and in Saskatchewan, we saw more regulation because, frankly, the trend that we had seen in that sector, with huge lobbying from the big rail corporations, was about deregulation and self-regulation. The Auditor General clearly found that those systems were not working, and so we see the pendulum swinging back and forth.

Another example is from the air sector, with Boeing. Canada's system for certifying aircraft, largely a very efficient system, largely rubber-stamped the work of the Americans. It was super-efficient and probably saved businesses a lot of money, but it turned out that we were rubber-stamping a system that was essentially corrupt and that cost the lives of hundreds of people.

In British Columbia, we had an experience with something called the results-based forest practices code, which was an attempt at moving towards outcomes-based forest management. It's like, “We're not going to tell you how close to log to the streams, which trees to cut or which ones not to, or how to build roads. As long as you broadly achieve these objectives that we're going to articulate in the legislation, you're good to go.” Well, it turns out there were a bunch of problems with that, because people weren't really checking what the outcomes were. Some of the outcomes were really bad, and there was a total lack of transparency for the public: They couldn't even tell where the logging companies planned to log because they were no longer required to publish the maps.

In the marine sector, we had a tugboat sink near Prince Rupert a couple of years ago, and two men were killed. It turned out that the tugboat had never been inspected for safety. The life vests and the survival suits on board the tugboat had never been maintained. The zippers had never been lubricated, so these young men, who were in a winter storm, couldn't put the survival suits on and do up the zippers, and so when they hit the water, they were dead. One of them managed to swim to a life raft and get to shore, but two men lost their lives, and now we're pushing for more regulation for small tugboats. It turns out that small tugboats under 15 tonnes don't have to be inspected. That's an efficient regulation if you're a small tugboat operator, but it sure isn't very efficient if you're a crew member. One of the crew members was a young guy. It was his first voyage on that tugboat.

What I'm getting at is that I think everyone around the table supports this idea of creating more efficient regulations. There are regulations that are written really well, really smartly, that achieve the objective with the least burden to the folks who are trying to comply, and there are regulations that aren't so efficient. The question is, how do we hit that sweet spot?

I guess I find that the one-to-one idea is a bit simplistic, in my mind, because not every regulation is equally complex, and so a government could comply by cutting a simple regulation and putting in place a new regulation that's 400 pages long.

I don't know how we get at this. I'm not an expert in it, but it just seems like we need to get away from the idea of simple slogans and catchphrases that are overly simplistic and towards a real conversation about how we create efficient policy that achieves our social and environmental objectives and helps business operate and our economy function. That's the conversation I want to have, and I hope that's the conversation we can have as part of this study.

Now my question, because I think I'm supposed to end with a question.... Is that right, Mr. Chair? How many more minutes do I have?

[The Chair, Conservative, Kelly McCauley]

Why start now? You have a minute and a half.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

I find that this question around interprovincial trade barriers is an interesting one, because to so many people it seems like a no-brainer, yet at the same time, we're a federation and we see all sorts of challenges when it comes to operating as a single country, not the least of which I don't even need to name because everyone knows exactly what we're talking about. Isn't that right?

How do we get there? What leadership is required from the federal government—because this is a federal committee—in order for the provinces to have a serious chat about how we eliminate these barriers?

[Alex Greco]

I'll start.

Frankly, I think that the federal and provincial governments need to be talking to each other. Right now, there's a lack of coordination. We're seeing that happening with Health Canada, Environment and Climate Change Canada and other departments not talking to their provincial counterparts. When regulations are introduced at a provincial or federal level, sometimes they come as a surprise.

As an organization, we're for smart, outcomes-based regulation, but there has to be regulatory co-operation among provinces. If there isn't, we won't get the goods to market that we need. We won't have that smart regulation that is required. It has to be a holistic, whole-of-government approach from our perspective.

[Corinne Pohlmann]

I'd like to make a couple of comments.

On the interprovincial—

[The Chair, Conservative, Kelly McCauley]

I'm sorry; you have about 30 seconds.

[Corinne Pohlmann]

On the interprovincial trade side, we've done a huge amount of work. We work closely with the federal government and all the provincial governments in trying to improve this process. The federal government can play a role of encouraging and bringing together all of the provinces and playing a bit of a facilitator role, but they can't fix it; the provinces have to fix it.

That said, there are rules that the federal government is imposing on the provinces that also create barriers, and they need to set an example to the provinces to say that they are going to remove some of them, make them easier or make them better, so you guys do the same. That's how it's going to start to move better.

The federal government has done not bad work in this area of interprovincial trade. They're really keen on moving forward. The provinces are the ones we really need to focus on.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Mrs. Block, please go ahead.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Through you, Chair.

I will be directing the first of my questions to Ms. Pohlmann, and then perhaps I will be able to have other witnesses weigh in on some of the issues that we're talking about here today.

I did have the opportunity to meet with representatives from the CFIB earlier this spring. I have 360 members in my riding. I represent a large rural riding in Saskatchewan. I did go back to look at the slide deck they gave me. I note that—it's probably reflective of a poll that was conducted in January—71% of your members highlighted that taxes and regulatory costs were the largest costs to small and medium-sized businesses. That's something that we really need to pay attention to.

Obviously, over the past eight years, we've seen a steep increase in the cost of living for Canadians, and we've heard from small businesses that they are not immune, that they too have been struggling due to the rising price of everything. This is partially, we know, maybe, being driven by the rise in the carbon tax in many ways.

I do understand that the government stated that it gives back a portion of the tax funds to small and medium-sized businesses, but as my colleague pointed out, your organization recently blew the whistle on the federal government by stating that they had failed to return what she identified as $2.5 billion of these funds to the businesses that you represent. This includes $300 million to businesses in my province of Saskatchewan. That has been identified not only by your organization—perhaps even by members through their chambers of commerce—but by businesses themselves through emails that I have received. Many have had to close their doors as a result of not only the pandemic but also the rising costs that are being imposed on them.

If you're aware, can you tell me if the government has reached out to your organization or even to members of your organization in regard to returning these funds to small and medium-sized businesses?

[Corinne Pohlmann]

Obviously, we've been actively engaged on this issue for quite a while, so we have been in touch with both the elected official side as well as the civil service side to encourage ways to return that money. We're certainly providing suggestions on how that could be done.

It's important to reiterate something you said earlier as well, which is that corporate bankruptcies are up over 130% year over year in Canada. We see more businesses closing than opening. We've had that three months in a row, which is unheard of in Canada. They need this help right now, so anything we can do to get that money back to those businesses will be very helpful. This has been our messaging.

We have been speaking to government, so there has been outreach. We have had those conversations, but we also want to make sure that any of that money that gets returned is not returned to just a distinct group of businesses or even larger businesses but is given back to as many businesses as possible, because all of them have had to pay.

It's important that this be a key component of whatever happens. We're very hopeful, but we have to just wait and see. We are continuing, of course, to use our members and their influence to also encourage government to return that money in those eight provinces that are affected.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

The $300 million that is owed to Saskatchewan businesses works out to about $7,000 for each small business.

If you don't mind speculating, what sort of difference would this make to these businesses, particularly when the operating costs are so high due to many of, I would say, this government's disastrous policies?

Have businesses come to you and articulated what difference getting this money back would make for them?

[Corinne Pohlmann]

Having a few thousand dollars might not seem like much to a lot of people, but to a very small business, it could really help them get through the next two or three weeks. It's going to be an important amount.

Keep in mind that the CEBA—the Canada emergency business account—deadline just passed. We know that about 25% of them had to get a loan in order to repay it and that another 6% to 8% couldn't pay it back. They're also dealing with that. Having a little bit of money to help them pay a debt that many of them are under is going to be really important.

I'm personally very worried that so many businesses are making decisions right now to close their business. Any little bit of money at this point is going to help, so we're really trying to encourage that money to be returned as soon as possible.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Mr. Bains, go ahead, please.