Sometimes, well-intentioned rules and regulations developed by the government affect business’ ability to act on growth opportunities and efficiently use resources. These laws and regulations are often referred to as government red tape by the general public. They often relate to additional paperwork, hidden costs, and project delays, and make companies less responsive to market opportunities.
Red tape affects many industries across Ontario, but few as much as the automotive manufacturing and food processing sectors. Both provide significant benefits to Ontario in terms of jobs and exports generated; however, business leaders are finding it tough to start or grow businesses in this space.
Over the past few months, the Government of Ontario have released two reports about red tape in food and automotive manufacturing. This commitment to the Red Tape Challenge, which calls on governments to identify and systematically reduce regulations, is an encouraging sign that businesses will be more competitive in the future.
This article will highlight the most significant findings from both reports.
What is the Red Tape Challenge?
Government red tape affects businesses across Canada. According to the Canadian Federation for Independent Business (CFIB), one of the biggest advocates for cutting red tape, business rules and regulations cost $37 billion per year – $11 billion of which is considered unnecessary by the CFIB. CFIB works on behalf of small businesses to encourage all levels of government to clean up these regulations.
Ontario’s Regulatory Modernization Committee responded to this call by developing six principles that will help guide this transition:
- User Focus: Make it easier for businesses to understand government rules and regulations through more direct, plain language and create easier ways to access information on government services.
- Industry Standards: Use industry standards, such as those developed by the International Organization for Standardization (ISO), to eliminate unnecessary reporting.
- Risk-Based Inspections: Reduce the enforcement burden on businesses with an outstanding health and safety record and adopt methods for determining who the high-risk targets are.
- Simple Reporting: Index all companies by their Business Number to share information among government agencies and ensure companies don’t need to provide the same information more than once.
- Options for Small Businesses: Set different compliance paths for small businesses, rather than a “one-size fits all” approach for all.
- Digital Focus: Reduce or eliminate paper-based communications and provide digital services platform where businesses can use a straightforward and transparent process.
These six principles have guided Ontario’s efforts to reduce red tape in automotive manufacturing and food processing, as noted below.
How to Cut Government Red Tape in Automotive Manufacturing
The Red Tape Challenge in Ontario provided an opportunity for automotive manufacturers to voice their concerns about restrictive legislations preventing business success. During the automotive industry consultation period (from March 29, 2016 to June 15, 2016), the Government of Ontario received 160 comments on how laws could be improved. From these comments:
- 79 opportunities for improvement were identified;
- 63 opportunities will be acted on;
- 41 opportunities will be addressed in the next 3 years; and
- 22 opportunities will be further explored to gain a better understanding of how the legislation impacts businesses.
Ways Automotive Manufacturing Will Benefit
41 Red Tape Challenge recommendations are expected to be addressed over the next three years. Some of the methods to achieve better business conditions include:
- Reviewing and streamlining the process for sponsoring apprentices;
- Simplifying waste disposal procedures;
- Automating greenhouse gas emissions reporting;
- Improving health and safety inspections and audits; and
- Digitizing vehicle registration.
How to Cut Government Red Tape in Food Processing
Likewise, Ontario’s Red Tape Challenge provided an opportunity for food processors to voice their concerns about rules restricting business success. During the food processing consultation period (from August 1, 2016 to September 30, 2016), the Government of Ontario received 372 comments on how laws could be improved. From these comments:
- 107 opportunities for improvement were identified;
- 57 opportunities will be acted on;
- 26 opportunities will be addressed in the next 3 years; and
- 31 opportunities will be further explored to gain a better understanding of how the legislation impacts businesses.
Ways Food Processing Will Benefit
26 Red Tape Challenge recommendations are expected to be addressed over the next three years. Some of the methods to achieve better business conditions include:
- Improving communication of pest control regulations;
- Standardizing food inspection practices;
- Harmonizing food labelling requirements;
- Improving the apprenticeship certification process; and
- Reducing the time it takes to get a commercial vehicle operator’s license.