Thanks.
I'll refer you to the slides that are in front of you. Slide 3 shows that the smallest businesses actually pay the largest per-employee cost of regulation. From a small business perspective, the cost of regulation is regressive and puts the smallest businesses at the biggest disadvantage because they don't benefit from the economies of scale that larger businesses would.
Slide 4 shows the same data, but now it's compared to U.S. businesses. U.S. businesses have lower per-employee costs for most business sizes. This again underscores our main point that there's probably still room to reduce the regulatory burden. The impacts really go far beyond costs. When asked, small businesses will tell you that the excessive regulations have a significant impact on their productivity, as you can see here.
Perhaps more worrying, as you can see on the slide, is that close to half of business owners report that they would discourage their kids from going into business as a result of the regulatory burden that now exists in this country. Given the demographic trends we're facing, this should not be ignored.
In terms of the types of federal irritants that are of greatest burden to small businesses, this slide here gives you a very high level overview of the top concerns of small business owners. Tax related regulations and paperwork really dominate the top three. Basically, all businesses have to deal with CRA. Also significant for many small businesses, though, is dealing with records of employment—or ROEs—and Statistics Canada.
As far as solutions go, as you can see here, small businesses are really strong supporters of just about anything the government might try to do to reduce red tape. We recommend all of the things you see listed here, some of which have already been addressed to some degree or have started to be addressed. We'd be happy to discuss any of these points further.
For example, Canada was the first country in the world to pass one-for-one legislation, and it did this with all-party support. Canada is actually now seen as a world leader in this particular area, and we think that still more can be done. For example, as Ryan also pointed out, the one-for-one legislation should be expanded to include more than just regulations, to other types of requirements found in legislation and policies and guidelines.
Furthermore, we recognize that the government recently announced some new regulatory modernization initiatives as part of the fall economic statement, including establishing an external advisory committee, which is also listed here as one of the things our members think is important. All of these are a very good start and are only the beginning. Small businesses really need governments to continue to do more.
As you can see here, what small businesses are looking for is for governments to simplify, reduce and clearly communicate regulations to help them better comply. They also want to see improvements in government customer service, which can include things like providing examples of what constitutes compliance. For these types of initiatives, it isn't always just about the regulations; it's often about how those regulations are communicated and what it is that businesses need to do in order to comply.
This is a list of comments from business owners on what they would do if they had more time and were spending less time on red tape. This actually came from a poll we did just two weeks ago during our annual red tape awareness week, and we hope some of these ideas will inspire you to continue paying attention to this important policy area.
Finally, I will leave this slide up as these are our main recommendations, which Laura went through at the beginning. We'd like to thank you for your attention, and we look forward to your questions.