As a supporter of government policies that maximize economic freedom and minimize governmental intrusion into the marketplace, I am usually compelled to be rather critical of government policies, making me something of a nabob of negativity. Thus, it’s a happy day when a government does something that, in my view, is wise. To wit, the Carney government recently announced an initiative to reduce the mountains of bureaucratic red tape that has been strangling Canada’s economy for decades.
Specifically, it will launch a “review of regulations across federal departments and agencies with regulatory responsibilities.” This is pursuant, we understand, to one of Carney’s campaign promises. His government plans to “remove red tape by eliminating outdated regulation… to make government more efficient, make its processes more effective, and to catalyze more private capital so we can build the strongest economy in the G7.”
Moreover, department ministers in the government “will review regulations in their portfolios and propose actions and measures to eliminate red tape—including removing outdated regulation, reducing duplication with provincial rules, and making it easier to access and deliver services.” The Red Tape Reduction Office will oversee the review, and ministers will report to the president of the Treasury Board on their progress and next steps within 60 days.
All good stuff, and a great step on the road to rational regulation, a journey which has foundered somewhat of late under the federal government’s 2015 Red Tape Reduction Act (RTRA). A 2020 internal review of the Act found that “administrative burden and other costs can be further reduced by promoting a broad examination of regulations.”
But of course, there’s more to be done. It’s fine to instruct one’s regulators to police their red tape litter, but historically, regulatory reform requires more of a structured effort.
Fortunately, there’s a good example in Canada’s not-too distant past. As regulatory scholar Laura Jones observed in a 2015 report for the U.S.-based Mercatus Center, back in 2001, a newly elected government in British Columbia undertook a sweeping regulatory reform agenda. They appointed a minister of deregulation, whose goal became eliminating red tape and reforming regulations. Here, according to Jones, is why the program succeeded.
First, rather than using imprecise measures of regulation, such as a simple count of published regulations, the B.C. government counted the number of “regulatory requirements”—that is, mandated government actions imposed on individuals or businesses. The first government-wide count revealed 382,139 regulatory requirements.
Second, agencies were put on a firm regulatory diet. In addition to measurement and monitoring, the government had committed to reducing regulatory requirements by one-third. The RTRA has no such specific government-wide target.
Third, government agencies were required to demonstrate how many regulations would be eliminated in exchange for any new regulation. In the early years of the program at least two regulatory requirements had to be eliminated for every one introduced. The RTRA only required a “one or more” replacement ratio.
Finally, under B.C.’s initiative, new regulations were held to greater scrutiny and could not be promulgated without confirmation that the rules were necessary, outcome-based, transparently developed, cost-effective, evidence-based and supported the economy and small business. The RTRA merely requires that if a new regulation imposes a new administrative burden on a business, the government must change some other regulations to offset the cost of that new burden against the cost of an existing administrative burden on a business.
The Carney government’s new regulatory reform effort is good public policy. Okay, at least a start. All worthy journeys start with a first step. Let us hope the journey to regulatory rationality in Canada continues apace.
Kenneth Green is a senior fellow at the Fraser Institute.