Thank you very much, Mr. Chair and committee members. It's a pleasure to be here today.
By way of background, the Independent Contractors and Businesses Association of British Columbia has been the leading voice for British Columbia's construction industry for 43 years. We represent more than 2,100 members and clients who collectively employ over 50,000 people.
We advocate for our members in support of a vibrant construction industry, responsible resource development and a growing economy for the benefit of all British Columbians.
For the benefit of the committee, some of my remarks today will be informed by previous roles I had as a senior public servant in British Columbia where, among other things, I had responsibility for red tape reduction, regulatory reform, and small business and major investment delivery.
For the purpose of staying within the time limits that I have been given, my brief will serve as a broader version of the remarks that I give today.
We appreciate the opportunity to provide our suggestions on the critically important topic of Canada's regulatory structure and its impacts on small business. This study is very timely for addressing the silent and underpriced costs that small businesses face with the myriad of laws, regulations, policies and guidelines imposed by all orders of government.
The effects of government regulatory activity are disproportionately felt by smaller businesses of zero to 20 employees, where the majority of Canada's jobs can be found. We hear every day from our members that the cumulative effect of government regulation can be crushing as they work to deliver construction services on time and on budget, as they develop their workforce in a rapidly changing business environment, and as they simply struggle to meet their regular payroll.
When government enacts new regulatory measures, the cost to a small business often manifests as lost or forgone business that would otherwise have generated additional income, created more jobs and provided incremental tax revenue to government. These opportunity costs are often hard to quantify but they are nonetheless very real as small businesses cope to fill out one more form or as they make one more call to determine what government is asking of them in existing or new regulation.
Deployment of information technology in online government is always worthy of consideration in any effort to improve regulatory compliance and service delivery, but it is not a panacea nor is it a substitute for addressing the general architecture of regulation, processes and continuous improvement.
As the standing committee has heard recently from a couple of other witnesses, in 2001 British Columbia embarked on a comprehensive program to reduce the quantum of regulation on its books. Those efforts now span 18 years and are recognized as best practice by many jurisdictions throughout North America.
Initial efforts saw a reduction of 36% in unnecessary regulations between 2001 and 2004, increasing to 49% by 2018. This was accomplished without compromising compliance or health, safety and environmental protection objectives. Between 2015 and 2017, B.C. broadened the scope of its red tape reduction efforts to include service delivery improvements within government.
Both initiatives have built a lasting architecture and have entrenched a cross-government culture and commitment to continuous regulatory review, monitoring, improvement and accountability.
The B.C. experience also offers a number of lessons that could be of benefit to the standing committee to identify pathways to improvement and in the improvement of the overall architecture for regulatory reform. A number of the key elements are listed more comprehensively in the submission you have before you. I'll run through them sequentially, but briefly.
The first is ministry mandate letters. In British Columbia in 2015, ministry mandate letters included red tape reduction as a core corporate goal of government, and that was included within each and every minister's mandate letter. That provided the impetus to drive a culture of regulatory reform into the system. It had quite a bit of effect as government moved beyond the efforts to reduce the quantum of regulation and into the service improvement side of red tape reduction.
As I mentioned earlier, British Columbia has actually measured the quantum of regulation on the books and has had a one-for-one rule—one regulation in and one regulation out—for some time. I understand that that commitment has been extended through to 2021.
Stakeholder engagement, and also public servant engagement, is critically important. On the stakeholder engagement side, it is always important to engage with a variety of sectors on an ongoing basis. Another innovation in British Columbia in the 2015-17 period was harnessing the power of social media to bring in ideas from the public, ideas that we then drove into the system as efforts continued to improve upon our regulatory agenda.
Having a secretariat with a central agency function is also important and linked to the mandate letters in terms of having that tracking function of regulation, but also pushing out to ministries the ideas that come in from the public and from industry sectors and monitoring.
The next thing I'd say is transparently reporting on an annual basis what the quantum of regulation is on the books and where service delivery improvements can and have taken place.
Before I conclude, I want to highlight three items of considerable concern to our members from a red tape perspective and that are currently under consideration or within the realm of federal regulatory policy. One is Bill C-69. Our members are very concerned about the impact of this legislation. It is now before the Senate. We made representations to the House of Commons committee last year, but we're very concerned about the impact this will have on a go-forward basis for major project delivery. Simply put, the approvals process there has a number of additional barriers that will make things much more difficult.
The steel tariffs that have been imposed in response to section 232 in the U.S., while understandable as a response to the measure that President Trump took, are having a detrimental impact on the construction industry in British Columbia via cost escalation. We're keeping a very watchful eye on the supply side because we simply can't source steel at a competitive price from eastern Canada; it has to come from the United States or offshore.
Finally, I want to flag for the committee the question of community benefit agreements, which many of you may have heard about from the Building Trades Unions. We flag this as an issue from the perspective that it can lead to cost escalation in publicly tendered contracts. We want to ensure that for those projects within provincial jurisdiction, for example the SkyTrain extensions that are forthcoming in British Columbia, federal dollars not be given to the province if the precondition is building trades will only do the construction. In British Columbia there is a projected labour agreement framework that is to be put in place by the new government that will freeze out non-union and non-affiliated contractors, or about 85% of the B.C. construction industry.
In closing, I'd like to highlight one key metric. The World Economic Forum has placed Canada's overall competitiveness at twelfth out of 140 countries, but for regulation, we are disconcerting 53rd out of 140 countries. The work you're doing today is critically important in that overall competitiveness context, which serves to underscore the urgency of your committee's work.
Thank you again for the opportunity to present today, and I look forward to the question and answer period.