Regulation Costs Canadian Businesses $37 Billion a Year


Red tape deterring next generation of Canadian entrepreneurs

Toronto – Canada’s Red Tape Report, issued on day three of Red Tape Awareness WeekTM, revealed that the total cost of regulation to Canadian businesses has grown to $37.1 billion, up from $31.7 billion in 2012.  In terms of time, businesses spent an average of 842 hours a year complying with government rules and paperwork in 2014.  That figure was up 12 per cent from 2012.

Forty-two per cent of small business owners would not advise their children to start a business given the burden of regulation.  “If today’s entrepreneurs are telling their kids don’t do it, where is that next generation of entrepreneurs going to come from?” asked CFIB executive vice president Laura Jones.  “Red tape is a serious threat to our future prosperity.”

Not all regulation is red tape, but business owners say that regulation could be cut by about 30 per cent, or $11 billion a year, with no negative effect on important health, safety and environmental objectives of regulation.  The savings would translate to 4.5 hours a week of extra time for the average business.  Added Jones: “Reducing red tape frees up small business owners to spend more time training staff, serving customers, growing the business, and even getting home a little earlier to their families.”

The study also found that regulation costs Canadian small businesses significantly more than their U.S. counterparts.  The largest cost difference between the two countries was found in businesses  with fewer than five employees.  Businesses of this size pay 58 per cent more per employee in Canada ($6,683) than in the U.S. ($4,240).

“We can’t afford to keep piling on more regulation,” concluded Jones.  “Whether you measure in terms of time wasted, money spent or business opportunities missed, the evidence is overwhelming.  Red tape is out of hand, and governments need to get cutting.”

Read the full report at

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CFIB is Canada’s largest association of small- and medium-sized businesses with 109,000 members across every sector and region.