Ontario to cut red tape in broad strategy to help small businesses

theglobeandmail.com
By JUSTIN GIOVANNETTI
May 19, 2017

The Ontario government is targeting red tape as it proposes wide-ranging changes to the provincial business environment amid growing uncertainty in its trade relationship with the United States.

The eight-point strategy was presented to Premier Kathleen Wynne’s cabinet this week and is largely meant to help the province’s small businesses by making it harder for government to create new regulations, especially rules that would create expensive burdens or trade barriers.

The strategy would require government departments to cut existing regulatory costs by $1.25 for every $1 in additional costs from a new regulation.

Along with cutting red tape, one of the proposed rules would direct the Ontario government to reserve 25 per cent of its procurement budget for products and services from small businesses based in the province.

“This is the most ambitious regulatory burden reduction package that any government has done in generations,” Brad Duguid, the province’s Economic Development Minister, told The Globe and Mail.

“If this is passed, we’ll be able to say that the business impact of things we do here at Queen’s Park will only be neutral or positive,” he said.

While legislation is not expected before the fall, many of the changes outlined to cabinet would require Ontario’s government to change its culture when it comes to creating rules. New regulations would need to be weighed against the impact they have on small businesses, many of which don’t have the large organizations necessary to deal with new paperwork. Departments would also be directed to look at existing standards in North America and would need to justify why an Ontario-only rule is needed.

The strategy, which has not yet been publicly released, was created by Mr. Duguid and Jeff Leal, Ontario’s minister responsible for small business. It comes only days before the release of expected changes to the province’s labour laws that have upset corporate leaders who fear the moves could imperil business competitiveness.

Sources in the government have told The Globe that those changes could include increasing the province’s minimum wage to $15 an hour from $11.40, increasing the minimum number of vacation days in Ontario, requiring more perks for temporary workers and allowing easier union certification through signed cards instead of a secret-ballot vote.

Richard Koroscil, the interim CEO of the Ontario Chamber of Commerce, applauded the move to cut down on regulations but warned that it might not be enough to offset some of the impacts of the looming changes to labour laws.

“We’re really encouraged, we think this is a win for the Ontario business community. But while this is a step forward in terms of cutting red tape, this comes at a time when we are seeing massive changes to the employment standards and labour relations acts,” he said.

The strategy could change how often some businesses are inspected, requiring departments to reduce checks of companies with clean records and focus efforts on those that have a checkered history. It would also direct the government to create a single agency where all business inquiries about government would be directed.

Finally, the plan would call for the government to bundle all the licences that a new business now needs to operate into a single fee - a move that is expected to reduce government revenues.

While the strategy could bring some changes long advocated by the Canadian Federation of Independent Business, a group that closely monitors red tape, the move is coming at a bad time, according to Julie Kwiecinski, the group’s director in Ontario.

“It’s unfortunate because it’s happening at the same time that our members are livid because of drastic changes to labour laws in this province,” she said.