Regulation costs Canadian businesses $39 billion annually, $11 billion of which is unnecessary red tape Français
Small businesses pay five times more per employee than larger businesses
TORONTO, Jan. 25, 2021 /CNW/ - Regulation costs small businesses $38.8 billion annually, roughly 30 per cent ($10.8 billion) of which can be considered unnecessary, redundant, or overly burdensome regulation or red tape, according to the Canadian Federation of Independent Business (CFIB)'s Canada's Red Tape Report. The report, released in partnership with Intuit Canada, launches CFIB's 12th annual Red Tape Awareness Week™. Businesses with fewer than five employees spend $7,023 per employee to comply with government regulation, while businesses with 100 or more spend $1,237 per employee.
Regulatory costs due to the COVID-19 pandemic are not included in the estimate. However, 83 per cent of Canadian small businesses agreed COVID-19 substantially increased compliance costs.
"COVID-19 has battered the economy and hammered Main Street. As we look towards recovery, reducing red tape is a win-win—it's a low-cost way for government to stimulate the economy while still protecting needed regulation," said Laura Jones, CFIB's Executive Vice-President.
Ninety-four per cent of small businesses say it is important their federal and provincial governments are committed to reducing red tape, but far fewer are confident governments are committed to reducing red tape (15 per cent are confident federally, 24 per cent provincially).
"Small businesses need to recover so Canadians have jobs to come back to post-pandemic. It makes imminent sense for red tape reduction at all levels of governments to be part of that plan. Indeed, red tape reduction in areas like speedy municipal patio approvals during the pandemic helped many businesses survive," said Jones.
Practical ways to reduce red tape
The report highlights ways governments can reduce red tape including simplifying existing regulation and using plain language (79 per cent), and improving government customer service (68 per cent). Eighty-one per cent agree better online government services have the potential to significantly reduce compliance costs. One specific example cited is allowing businesses to submit compliance forms through software their business is already using.
"We are pleased to work with CFIB to sponsor this important research report that examines ways governments across Canada can help reduce the cost of compliance for small businesses," said David Marquis, Country Manager at Intuit Canada. "More than ever, the resiliency of small businesses is under threat and we must look for ways to reduce complexity and compliance burden to help them prosper."
Other noteworthy findings from the report:
- Nearly two-thirds (63 per cent) of small business owners would not advise their children to start a business given the current level of regulation (up 15 percentage points from 2017)
- Nearly nine in ten (87 per cent) small business owners say excessive government regulations add significant stress to their lives (up 10 percentage points from 2017)
- An overwhelming majority (94 per cent) believe government has big business in mind more than small business when creating regulations (up 7 percentage points from 2017)
For more details, read CFIB's Canada's Red Tape Report.
About Red Tape Awareness Week™
Now in its twelfth year, Red Tape Awareness Week™ (January 25-29) highlights the cost and impact of excessive regulations. The annual campaign continues to influence governments across the country to launch red tape reduction initiatives. To learn more, visit CFIB.ca/redtape and follow #redtape.
About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada's largest association of small and medium-sized businesses with 110,000 members across every industry and region. CFIB is dedicated to increasing business owners' chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.
About Intuit
Intuit's mission is to power prosperity around the world. We are a mission-driven, global financial platform company with products including TurboTax, QuickBooks, Mint and Turbo, designed to empower consumers, self-employed and small businesses to improve their financial lives. Our platform and products help customers get more money with the least amount of work, while giving them complete confidence in their actions and decisions. Our innovative ecosystem of financial management solutions serves more than 50 million customers worldwide. Please visit us for the latest news and in-depth information about Intuit and its brands and find us on social.
Survey Methodology
CFIB's Regulation and Paperburden Survey was conducted from November 6, 2020 to December 9, 2020. CFIB, also conducted a survey using identical questions with Quickbooks Online and Desktop customers from Intuit Canada between November 23, 2020 and December 1, 2020. A total of 6,569 respondents across Canada participated, across both surveys. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of plus or minus 1.2 percent, 19 times out of 20. In estimating Canadian regulation costs, answers from 4,603 survey responses were used after filtering and excluding outliers.
SOURCE Canadian Federation of Independent Business
For media enquiries or interviews, please contact: Milena Stanoeva, CFIB, 647-464-2814, [email protected]
Share this article