Government red tape cost business $33 Billion a year

Press Release – Canadian Federation of Independent Business

It costs Canadian businesses a staggering $33 billion a year to comply with the countless rules imposed by all levels of government, according to a report by the Canadian Federation of Independent Business (CFIB). This estimate includes the time and money spent on everything from figuring out how high a business can hang its sign, to complying with legislation such as the federal privacy laws and filling out tax forms.

“With $33 billion, you could eliminate the GST,� Garth Whyte, CFIB’s executive vice-president, said. “$33 billion represents 2.6 per cent of our national GDP.�

The report, Rated R: Prosperity Restricted by Red Tape, concludes that while some regulation is necessary, too much of it limits consumer choices, raises prices, frustrates entrepreneurship and reduces productivity and innovation.

“If governments are serious about Canada’s competitiveness, they had better get serious about reducing this burden,� Whyte said, pointing out that 63 per cent of survey respondents said regulation “significantly reduces� productivity in their business. When asked what they would do if this burden was lightened, six in ten small business owners said they would invest in new equipment or business expansion.

Whyte further noted that small businesses are hit especially hard, since they don’t have the resources to deal with the truckloads of rules. Most Canadian businesses have fewer than five employees and pay more than $5,300 per employee every year to follow government rules. Meanwhile, firms with 100 employees or more pay $1,100 per employee.

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