Measuring ‘Red Tape’
The Prime Minister and Rob Moore, Minister of State (Small Business and Tourism), just announced the creation of the Red Tape Reduction Commission, which will work to reduce the burden of federal regulatory requirements on Canadian enterprises, especially small- and medium-sized businesses.
Naturally this initiative involves the creation of a new bureaucracy, the Red Tape Reduction Commission, to be chaired by Minister Moore. There will be the inevitable consultations, as if no one has ever asked businesses how the burden government imposes on them can be reduced. The likelihood of new answers emerging from yet another round of consultations seems to me to be vanishingly small.
Here are a few ideas that the government doesn’t need a roundtable consultation to gather:
First, restore to parliament is oversight role which has been so badly eroded since government began to grow so fast in the postwar period. Parliament was always first and foremost the place where the liberties of citizens were jealously protected against the unwarranted intrusions of power, going right back to early principles such as “grievance before supply,” i.e. that the people’s grievances should be heard before the King’s request for the money to carry out his activities. It used to be that parliament scrutinized regulations every bit as carefully as legislation, and did so with a jealous zeal to protect individual freedom.
The torrent of regulation has now become so vast that, like the Queensland floods, it has swept all before it. Parliamentarians have essentially given up the fight — a shocking state of affairs when one remembers that a recent survey of outgoing MPs showed that many of them were confused or ignorant about what their true role is. They seem to think it is getting up on their hind legs in Question Period and making themselves objects of ridicule and contempt rather than being doughty defenders of our right to be free from unwarranted intrusion by the state.
Next we should have an annual regulatory budget, just as we do an annual financial budget. One of the main points of the budget is to expose to public and parliamentary view and scrutiny just how much money the government intends to take out of our pockets to fund the business of government. But the costs imposed by regulation are every bit as real as the tax bill we all get to pay the government’s bills. And when governments can stealthily shift the costs of its policies onto businesses and citizens, it obscures for everybody the true cost of government. Let’s make the government table a regulatory budget detailing how much time and money it plans to force citizens and companies to spend in pursuit of government policy — and let Canadians decide if that’s a price they’re willing to pay.
To make that regulatory budget effective there would have to be tough, consistent and independent yardsticks for measuring the costs that regulations impose, so governments couldn’t fiddle the regulatory books. And such measurement must include an objective assessment of the benefit a regulation is intended to create, so that we can do a genuine cost-benefit analysis of the rules governments intend to impose on us. A regulation that will produce $10m of benefit, but cost $100m to put in place is a poor deal. We should make that cost-benefit relationship perfectly transparent; it should be a legislative requirement that every proposed regulation come with such an objective analysis. Egregiously offensive regulations might not make it past this screen in the first place. If we added to this a legal requirement that each regulation must be designed so as to achieve its stated purpose at the lowest cost (in time and money) possible, there would be more accountability as those who bear the burden of regulation could challenge regulatory absurdities directly in court.
To avoid the accretion of regulations over the years as ones that once had a purpose are overtaken by events, but remain on the books, we should consider a universal sunset provision. No regulation can be valid for more than, say, 10 years, unless it is proposed and passed afresh through the process of scrutiny.
Too many regulations for parliament to scrutinize them effectively? A narrow bottleneck like that might be a good thing. If we said that any proposed regulation must be specifically approved by parliament within 5 years of its promulgation or it would cease to have effect, governments would have to ratchet back the flow of regulation to what parliament could process. If we supplemented the work of MPs and Senators with an Auditor General of Regulation, the AGR could help to focus the work of parliamentarians by producing an annual report that chooses a few select areas of regulation (e.g. food safety, or airport security), cycling through all areas of government activity every 5 years or so. The AGR could work with the accounting profession and others to come up with those objective standards of measurement of regulatory costs and benefits this process would need.
Finally, the federal government should be more assertive of its power to create a barrier free economic space within Canada, as we have argued in our paper Citizen of One, Citizen of the Whole. Barriers to trade created by the provinces are an important part of the regulatory burden on Canadians. By the creation of a Charter of Economic Freedoms for Canadians, and using federal power to sweep away these barriers, Ottawa would make a big step in the direction of reducing regulatory burden.
Who knew regulatory reform could be such fun?
Brian Lee Crowley
- Peter Nicholson in the Globe and Mail The Globe and Mail today had a Q&A with MLI’s Peter Nicholson about budget cost-cutting...
- AbitibiBowater, Democracy and the Public Interest by Brian Lee Crowley March 10, 2011 – Ottawa – The Macdonald-Laurier Institute (MLI) today...
- MLI Issues First Paper in Series on Canadians’ Access to Therapeutic Drugs March 25, 2011 – Today the Macdonald-Laurier Institute issued the first in a series of...
- When British taxes go bad According to a story in today’s Daily Telegraph, “Almost one million of the lowest-paid workers...
- Back to the future: A guide to budget-making…MLI in Hill Times MLI Managing Director Brian Lee Crowley has some good advice from his grandfather and reminds...
Please note that the link above was live when posted. Older links may no longer be functional.