CFIB exposes “ridiculous” red-tape rules

If your small biz clients feel bogged down by regulatory requirements, they’re not alone.

As part of its Red Tape Awareness Week, the CFIB has highlighted some of the “ridiculous red-tape rules” businesses across the country have had to deal with for years. This includes owners having to fill out a great number of banal Statistics Canada surveys, as well as being handed late fees for what were actually punctual payments.

Read: CFIB tackles small business regulatory costs

In the case of the latter, the CFIB says businesses have often been asked to pay late fees after the government failed to process their payments until weeks after their deadlines. The onus then falls on the business to pay for the error or fix the mistake.

Laura Jones, executive vice-president of CFIB, says these are good example of what the federation calls red tape. She adds, “[We don’t mean] the regulations that protect Canadians, but those rules, processes and government inefficiencies that place undue cost on businesses.”

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“Small business owners feel the government doesn’t respect their time,” says Jones. She adds the time spent on tedious paperwork and on hold when trying to contact regulators would be better spent with customers or on planning.

The CFIB adds these poor practices illustrate a $9 billion problem in Canada. It also says its latest red tape report estimates it costs Canadian business owners $31 billion a year to comply with regulations from all levels of government.

Read: Tax tips: Catering to small business

Though rules are required, the CFIB concedes, current costs could be cut down by 30% without risking public health and safety. “Red tape is a hidden tax that holds back our economy,” says Jones.

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Passing the buck: The owner of a small health services company in New Brunswick takes care of the payroll for his business, and he recently got a letter from CRA that asked him to garnish an employee’s pay. Though owners are usually asked to garnish wages over months or years when an employee owes money, this was a one-time, small amount. But since the CRA was having trouble contacting the employee, however, they punted the duty to his employer.

Gentlemen, stop your engines: A custom airplane engine manufacturer in Ontario recently had to cut back production due to a case of the taxman blues. His small shop was audited three times in one year rather than once, with each review taking up two full days. In the end, agents disallowed a number of the business’ deductions and the owner wasn’t compensated for several days of lost business.

Extra steps: The New Brunswick Department of Agriculture offers farmers a $385 reimbursement of the fee they pay to be certified as organic. The CFIB says the submission process could be completed in one step, but it’s actually done in three; farmers apply for certification, are accepted and told to sign again, and then have to request the reimbursement as well.

Past their prime: The owner of a business in Quebec was ordered to comply with extra regulatory requirements since he operated in a specific industry and location. He had to fill out a monthly report on the activities of his employees, as well as pay a number of additional payroll taxes. His problem? The extra rules were originally intended to shield workers from unfair treatment in the 1930s, but modern labour laws are now in place and protect all staff.

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