Canada Signs Law To Limit Regulatory Red Tape

Canada Signs Law To Limit Regulatory Red Tape

We tend to think of our northern neighbors as the slightly more socialist and government heavy version of ourselves. But it appears they've caught onto this and are taking decisive measures to limit the amount of bureaucracy in their frosty country.

Canada's ruling Conservative government took aim this week on the government’s hidden tax: regulation. Regulatory decisions and their implications get precious little scrutiny, unlike traditional budget items.

Regulatory transparency in the country got a considerable boost Thursday when the Red Tape Reduction Act (C-21) received Royal Assent and became law.

Minister Tony Clement, who has driven the bill, has now made Canada the first country in the world to require that for every new regulation introduced one of equivalent burden must be removed.

Although just recently signed into law, C-21 has been operating as policy for several years already, meaning that the costs of new rules must all be quantified and equal or greater costs removed elsewhere for them to become law.

The law effectively caps the cost of rules coming directly from regulations. Rules can also come from legislation and policy so the one-for-one rule does not cut the cost of all government rules. Still, it is a very good start.

The Canadian legislation should be looked at by our own politicians at both the state and federal level. With our record number of agencies and bureaus it could be an easy way to ensure new, costly, rules are not perpetually layered on top of old and outdated ones.

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