Canadian Underwriter

Senate tables Red Tape Reduction Act, proposes to address ‘administrative burden’ on businesses

February 5, 2015   by Canadian Underwriter

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Canada’s Senate is considering a bill that, if passed into law, would require the federal government to repeal or change a regulation whenever a new regulation “that imposes a new administrative burden on a business” is made.

Treasury Board President Tony Clement suggests that Bill C-21, the Red Tape Reduction Act, is designed reduce the administrative burden for businesses, but, an official with a public sector trade union suggested earlier that regulations help ensure roads are safe and that it was Canada’s tougher financial sector regulations that helped protect the economy after the financial crisis of 2008.

Bill C-21 was tabled Wednesday by Senator Yonah Martin, deputy government leader in the upper house, a day after the bill passed third reading in the House of Commons.

Bill C-21, the Red Tape Reduction Act was introduced in Canada’s Senate.

If passed into law with no amendments, it would read in part:

“If a regulation is made that imposes a new administrative burden on a business, one or more regulations must be amended or repealed to offset the cost of that new burden against the cost of an existing administrative burden on a business.”

It defines administrative burden as “anything that is necessary to demonstrate compliance with a regulation, including the collecting, processing, reporting and retaining of information and the completing of forms.”

The bill also stipulates that no regulation “is invalid by reason only of a failure to comply” with the Red Tape Reduction Act.

“Quite simply, when a new regulation that imposes an administrative burden is introduced, the law would require that another one be repealed,” Clement told the Commons last month when he tabled the bill for third reading. “Specifically, we monetize the value of the administrative burden and then declare that the monetary value be offset by other regulatory changes.”

The bill also proposes to let the Treasury Board president make certain regulations exempt from the act.

In April, 2012, the federal government introduced the “one-for-one rule,”

which requires federal departments to remove at least one regulation every time they introduce a new one that “imposes administrative burden on business.”

That rule “has reduced the administrative burden by $24 million and achieved a net reduction of 20 regulations,” Clement said last month in the Commons.

For example, Clement noted, the federal government changed the Corporation Returns Act to stipulate that only corporations with revenues of more than $200 million, assets of over $600 million, or foreign debt and equity over $1 million will have to report financial and ownership information.

“There are 32,000 businesses that will no longer be required to file this complex government return,” he said.

“As a former small business owner myself, I can say that nothing drives one crazier than filling out a form in triplicate from one level of government or one government department and then, the next day, getting another form asking the same questions.”

Several members of the opposition New Democratic Party spoke against the bill.

“Bill C-21 is dangerous,” said Isabelle Morin, NDP MP for the Montreal riding of Notre-Dame-de-Grâce-Lachine. “First, it gives the President of the Treasury Board a completely arbitrary position. He might unilaterally decide to get rid of some regulation or another. He can establish policies on how the rules will apply. He will have the power to regulate how deadlines will be determined for taking the necessary measures in order to comply with the regulations. He will have the power to determine the manner of calculating the cost of the administrative burden and how the law will apply to regulations that are amended when the one-for-one rule comes into effect. He will also have the power to grant exemptions.”

Bill C-21 was subject to hearings two months ago before the House of Commons Standing Committee on Government Operations and Estimates.

One critic of the bill was Chris Aylwar, national executive vice-president of the Public Service Alliance of Canada, a union representing about 170,000 public sector workers.

“Why should it be a burden to obey the laws of the land?” Aylwar said Dec. 2 during the Commons committee hearings. “Canadians depend on regulations to protect our water, food, health, and consumer goods. Regulations ensure the safety of the roads we drive on and the environment we live in. They keep financial institutions, telecom companies, and other businesses in check. In the case of financial regulation, Canada’s economy was sheltered from the worst of the 2008 global economic meltdown because our bank regulations were tougher than those in jurisdictions like the United States. Those regulations paid off and protected Canadians from the economic devastation that almost ruined some other countries.”