KWIECINSKI: There’s much ado about red tape for small business voters

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As small business owners in Ontario prepare to head to the municipal polls on Oct. 26, it’s a good time to highlight this data point: The average Canadian small business owner spends 32 days a year on red tape across all levels of government, including municipal.

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That’s way too much time spent on complying with rules or doing paperwork that is best described as unnecessary, excessive, complicated, outdated, or duplicative – especially since businesses already spend 60 days a year on what they accept as “necessary” red tape for health, safety, and environmental reasons.

Given this data, it’s not surprising that in a recent CFIB survey, small business owners told us that reducing red tape is the top municipal measure candidates should embrace on the campaign trail.

Small business owners want simple actions from city hall: clearer rules, less paperwork, and faster service. These things matter most when they need a permit or licence. Whether they’re building, renovating, putting up a sign or getting a business licence, owners need city hall to say “yes” or “no”quickly, so they can get on with running their business.

Time is money

Why such a fuss about red tape?

When small business owners are buried in red tape, they have less time to spend on what they do best – creating jobs, growing the economy, and supporting their communities.

In the business world, lost time equals lost money. The annual cost of regulation across Canada is a whopping $51.5 billion. Of this total, $33.6 billion is spent on “necessary” red tape, and the remaining$17.9 billion is the price tag for unnecessary rules and excessive paperwork. The smallest businesses – usually with no compliance department or lawyer on speed-dial – bear a disproportionately high burdenof these sky-high costs, paying over five times more per employee than larger businesses.

What makes matters worse is that the overall cost of regulation keeps rising. In Ontario, it increased by over 15% between 2020 and 2024.

What can local governments do

Municipalities can help stop this red tape madness by first establishing a Red Tape Reduction Commissioner and Red Tape Reduction Office staffed by existing employees. The talent is there and the bureaucracy doesn’t need to be increased. By making these moves, local governments would signal to small businesses and residents that red tape reduction is a priority.

Next, municipalities should count all their rules stemming from by-laws, policies, and forms. This count is critical, since you can’t measure progress without establishing a baseline. The Ontario and other provincial governments already count and provide updates on their regulatory requirement numbers, so we know it can be done.

Then, municipalities should carefully review all their rules to identify ones that should be removed or relaxed if they’re unnecessary, excessive, complicated, outdated, or duplicative. Businesses owners (and citizens, too!) can best help in this process if municipalities create a dedicated online Red Tape Feedback Portal where they can report regulatory challenges at their convenience, with the expectation that local governments will act on their suggestions.

The City of Toronto created a portal for businesses to report red tape burdens. As next steps, the city should place access to the portal on the main web page and all business-related web pages, and promote it through social media and other channels.

These fiscally prudent, red tape reduction ideas are a great starting point for municipalities to get the ball rolling on freeing small businesses from local red tape.

At a time when small businesses are dealing with tariffs, ever-rising costs, and low demand, they need all the help they can get from all levels of government.

-Julie Kwiecinski is the Ontario Director of Provincial Affairs for the Canadian Federation of Independent Business (CFIB)

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