Mr. Speaker, I am honoured to rise in the House today to speak in support of this ground-breaking legislation to reduce red tape, one of the first of its kind in the world.
The legislation before us would put strict controls on the growth of regulatory red tape by enshrining the one-for-one rule in law, which means that in order to change it, the government of the day would have to go to Parliament.
The one-for-one rule is the centrepiece of our package of regulatory reforms aimed at cutting red tape that can stifle businesses' productivity and their overall success. Under the rule, regulators must offset any administrative burden that increases from regulatory changes with equal reductions in existing regulation. That is not all. When a brand new regulation is introduced that adds to the administrative burden, an existing regulation must also be repealed. We have been implementing the one-for-one rule since April 1, 2012 through the cabinet directive on regulatory management. However, we are definitely not stopping there.
With the bill before us today, Canada would be the first country in the world to give the one-for-one rule the added muscle of legislation. This would make it one of the most aggressive red tape reduction measures in the world. The health, safety, and security of Canadians would still be protected. In fact, the preamble of this bill is very clear that the one-for-one rule must not compromise health, public safety, or the Canadian economy.
After more than two years of experience, we know that the rule is working. Before we look at the success of this measure and of our entire package of regulatory reforms, I want to talk first about why reducing red tape is so important.
Red tape impacts the livelihoods of all Canadians. It directly affects our ability as a country to create jobs, to grow, to innovate, and to compete. There is a direct connection between red tape and our long-term prosperity. Unnecessary red tape puts a wrench in the smooth flow of trade and bogs down the dynamic exchange of goods and services that is the lifeblood of a healthy economy. It also costs. A 2008 study by Statistics Canada reported that the cost to comply with the information obligations of 12 of the most common federal, provincial, and municipal regulations in five sectors of the economy worked out to a stunning $1.1 billion per year. In that same year, the Canada Revenue Agency calculated that the average annual time spent per establishment to comply with legislative tax requirements was 15 hours, at an annual average cost of $1,724.
As the Prime Minister has stated, red tape is a hidden tax and a silent killer of jobs. It is a cost business owners, who are already competing tooth and nail, simply cannot afford. We know this because our Prime Minister had the foresight to launch the Red Tape Reduction Commission in January 2011. The Prime Minister asked the commission to identify irritants to business that have clear detrimental effects on growth, competitiveness, and innovation. The commission was also asked to recommend ways to address those irritants and to reduce the compliance burden on a lasting basis, without compromising the environment or the health, safety, and security of Canadians.
For a year, the commission criss-crossed the country, talking to companies, small-business owners, and associations like the Canadian Federation of Independent Business about what most frustrated them and what they would like to see changed. It hosted a total of 15 round-table sessions in 13 cities, attracting some 200 participants. There was also an online consultation and a dedicated website. Hundreds of ideas were shared, and our red tape reduction action plan, with the one-for-one rule as its cornerstone, is the result.
It is my honour today to share with the House how successful the implementation of the rule has been. During its first year of implementation, the one-for-one rule provided successful system-wide control of regulatory red tape impacting business. As of June 1, 2014, under the rule we had reduced the administrative burden by over $20 million and had achieved a net reduction of 19 regulations.
Allow me to demonstrate by way of a few examples.
Statistics Canada has amended regulations under the Corporations Returns Act used to collect financial and ownership information on corporations conducting business in Canada. With these changes, only corporations with revenues of more than $200 million, assets worth more than $600 million, or foreign debt and equity of more than $1 million will have to report financial and ownership information. As a result, more than 32,000 businesses will no longer be required to fill out a complex government return. We expect that this will reduce the administrative burden by about $1.2 million a year.
Here is another example. Employment and Social Development Canada is reducing the red tape burden and the cost to business by repealing a set of regulations that imposed unnecessary administrative requirements on construction companies awarded federal government contracts. With these changes, the estimated annual savings for business is more than $900,000.
We are also seeing savings at Aboriginal Affairs and Northern Development Canada, which has undertaken a project to modernize the Northwest Territories and Nunavut Mining Regulations. The proposal was recently pre-published in The Canada Gazette part I and will result in estimated annual savings for business of more than $600,000.
It is estimated that to date, the application of the one-for-one rule has saved businesses well in excess of 100,000 hours per year in time spent dealing with regulatory red tape.
Treasury Board enforces compliance with the rule, and I am pleased to report that compliance has been strong.
With these kind of results and more than two years of experience under our belts, it is time to make the rule a permanent feature of the federal regulatory system.
The Prime Minister has endorsed the one-for-one rule. The 2013 Speech from the Throne committed our government to putting the rule into law, and with the bill before us, we are delivering on that commitment. With this legislation, we are sending a clear signal that our government has an unmatched resolve to cut regulatory red tape for business while continuing to ensure the protection of Canadians and our environment. What is more, this legislation would backstop the one-for-one rule with a strong commitment to transparency and accountability through annual public reporting on its implementation.
We are not the only ones who think enshrining the one-for-one rule in law is a good idea. Here is a quote from Laura Jones, the executive vice-president of the Canadian Federation of Independent Business, “The government implemented the one-for-one rule last year. Legislating it shows they are really serious about regulatory reform. It's important because it makes it much harder to undo”.
Cutting red tape and making regulatory processes as pain-free as possible is one of the most important things government can do to help Canadian businesses thrive, particularly in this time of global economic uncertainty. That is why the red tape reduction action plan gets rid of business irritants in areas such as payroll, labour, and trade and introduces time-saving measures like a single window and electronic submissions.
The red tape reduction action plan, which is being rolled out over three years, is one of the most far-reaching and ambitious red-tape-cutting initiatives in the world today. It encompasses a half-dozen fundamental systemic reforms in the way government regulates as well as some 90 specific changes individual departments will undertake.
Allow me to highlight the systemic reforms that are truly game changers for doing business in Canada. I have already spoken about the one-for-one rule, which has successfully controlled and even reduced the administrative burden in Canada, but I am pleased to add that our action plan also ensures that the needs and concerns of small businesses are considered when we regulate.
We are talking about businesses with fewer than 100 employees or with between $30,000 and $5 million in annual gross revenues. These businesses represent over 40% of Canada's private sector GDP and almost 50% of all the jobs in the private sector.
Small businesses are at the heart of Canada's entrepreneurial drive, yet because of their more limited resources, small businesses often feel the weight of the regulatory burden more acutely than others. We are tackling that reality by requiring regulators to use the small business lens for regulations that have a significant impact on small business. That will happen when a regulatory change imposes over $1 million in annual nationwide costs and has an impact on at least one small business.
Regulators now have to put themselves in the place of small business when they regulate. They have to ask themselves these questions: Is the information we are asking them for already being collected by another government department? Is there another way to regulate that is less burdensome? Most important, are we communicating in plain and understandable language?
I also want to emphasize that the burden of proof is not on business. It is up to the regulators to prove that they have done everything they can to minimize the costs for small business. All in all, there are 20 small business checklists that regulators have to fill out, publish, and have signed by their ministers as part of the submission package. This ensures that the impacts of new regulations on small businesses are considered in the earliest stages of design, and, if need be, are mitigated.
Because departments will have to post these completed checklists online, small-business owners will be able to judge for themselves how effectively the government is minimizing the regulatory burden. The one-for-one rule and the small business lens will bring a new discipline to how government regulates and how it is creating a more predictable environment for businesses.
This is part of our broader commitment under the red tape reduction action plan to improve service and become more accountable. We are introducing service standards for high-volume regulatory licensing, permitting, and certification processes. Businesses will now know how long they have to wait to receive these decisions.
As a former business owner, I have to interject that certainty is crucial to business potential. If entrepreneurs see opportunity, they must have certainty when they strike out. Specific timelines will help small businesses the most. Departments will publish these timeframes on their websites, and they will have to report on their website whether these targets are being met or not. For all these authorizations, businesses will also have access to a feedback mechanism they can use to register a complaint.
I am pleased to report that so far regulators have created service standards for 24 of these high-volume regulatory licensing, permitting, and certification processes, which cover more than 60,000 transactions with business each year.
One of the things that businesses often complain about is being surprised by unexpected changes to regulations that impact their investment plans. As part of the action plan, we are addressing that by requiring regulators to publish forward regulatory plans. These plans would identify anticipated regulatory changes over the next 24-month period. Business and consumers would be given an early warning of the government's intention to regulate. It gives that all-important predictability that they need to plan. It also allows businesses and consumers to provide their input into the design of new regulations.
Again, regulators are delivering, and so far, 32 forward regulatory plans from departments have been posted. In these plans, regulators have to identify if they expect the one-for-one rule and the small business lens to apply.
Treasury Board Secretariat is making it easy for business to find these plans through its government-wide roll-up page. That is to ensure that Canadians and Canadian businesses have a heads-up on regulatory changes that are of interest to them. I encourage all businesses to stay abreast of these anticipated regulatory changes and to get involved in these consultations to make sure they are designed with their input.
None of these commitments are worth anything and an action plan is only a pile of paper unless we can prove we are fulfilling our promises, which is why we are keeping scrupulous track of just how much red tape we are cutting.
In January, the President of the Treasury Board had the honour of releasing the first annual scorecard on the red tape reduction action plan, so Canadians can know just how much progress we are making. The scorecard reports on system-wide changes to the regulatory system, particularly on the implementation of the one-for-one rule, service standards, forward planning and, of course, the small business lens. The scorecard is vetted by a regulatory advisory committee, and yearly results are provided to the Auditor General. These external business and consumer experts have reviewed the report, provided their unvarnished advice on its fairness and reliability, and endorsed it as a reasonable account of the progress made.
These are some of the top regulatory reforms in our action plan. Taken together, our government's red tape reduction action plan ensures that cutting red tape is part of the government's DNA. It goes further than we have ever gone before to meet the needs of business and to be accountable when we regulate, and it cements Canada's reputation as one of the best places in the world to do business and invest.
Tackling regulation is just one of the many fronts we are working on to create the conditions for businesses to succeed. From fiscal to tax policy, from regulation to immigration, we are empowering businesses to make the most of what they can be, but most importantly, collectively, to make the most of what Canada can be.
Our government understands that the way to create jobs and growth is to reduce barriers for businesses, not raise them. The bill before us today does that. It frees businesses to do what they do best: innovate, invest, grow and, of course, create jobs, which means it is a bill that would benefit all Canadians. That is why I strongly encourage all members to support the bill moving forward.