Regulating the regulators

According to a recent report from CIBC, Canada has been in a boom in small business promotion.

Small and medium-sized companies have contributed nearly 30 per cent to our Gross National Product, but they increasingly have been hampered by a maze of over-regulation.

That also hinders others who want to be the promoters of businesses. Clearly, the rules and regulations, which have been so harmful to business, must be changed.

Steady growth requires balancing two different economic processes: investment and demands. We must not interpose restraints on them, but unfortunately regulations often inhibit investment.

For instance, builders and those involved in construction have to check with gas, electric, water and other utilities to make certain that even a minor construction project would not upset underground lines.

This columnist attended a City of Guelph council meeting where hours were consumed by a debate over the removal of a tree from the front of a restaurant.

Often if a builder’s plans are approved, the application has to be reviewed again before any changes can be made. Then perhaps several times a year the builder must certify that all the requisite taxes and regulations have been completely followed.

Various jurisdictions traditionally try to attract businesses by offering them tax breaks and other alternatives. It is surprising that many report that taxes are not the crucial point restricting entrepreneurs, although non-competitive personal income tax rates are very important negative factors.

Nowadays there are organizations that will help businesses get started, to work through all the red tape entailed in starting a business. It has been noted by the Fraser Institute that “heavy-handed labour regulations are a deterrent to business.”

As an illustration of poor regulations, Ontario Hydro must reduce overhead costs with its seven companies supervising them. All but one should be eliminated, as they are job-throttling and raising costs.

Dealing with officialdom nowadays is almost an endurance struggle. Too many officials seem to be so “busy” that it takes countless hours to get approval of a builder’s plans.

Red tape is strangling economic growth. Regulating the regulators is a vital way to foster economic growth and more dynamic economy.

We must hope that our governments act accordingly, but cutting regulation is not easy because even the most perverse have determined defenders.


Bruce Whitestone