TORONTO, Jan. 27, 2025 /CNW/ – A new report from the Canadian Federation of Independent Business (CFIB) reveals that in 2024, small businesses in Canada spent an astonishing 735 hours just navigating regulations. That’s more than 30 full days wasted! Shockingly, over a third of this time—about 256 hours—was spent dealing with unnecessary red tape that could be cut without affecting public safety.
The time spent on this red tape has grown by 35% since 2020, increasing from 189 hours to 256 hours. This means business owners are losing a whole month of productivity each year to fill out forms, sift through complicated government websites, and untangle confusing legal language.
“These hours lost could be spent training employees, expanding the business, or simply serving customers better,” said Marvin Cruz, CFIB’s research director. “To boost Canada’s productivity, reducing regulatory barriers must be a key focus for all levels of government.”
Besides time, compliance comes with a hefty financial burden. In 2024, Canadian businesses faced compliance costs of around $51.5 billion, a 13.5% increase from 2020. Business owners attribute 35% of these costs—roughly $17.9 billion—to red tape alone.
Small businesses feel this burden the most. Those with fewer than five employees spent over five times more per worker on compliance compared to larger firms. In 2024, they spent approximately $10,208 per employee on regulations, while businesses with over 100 employees only spent $1,374. Additionally, smaller companies averaged 198 hours of compliance work per employee, while larger firms spent just eight hours.
Many business owners believe that cutting down on red tape would free up resources to help them grow. They could invest in hiring more staff, increasing salaries, and improving overall work-life balance.
“Small business owners want to run their businesses, not become experts in government regulations. Too much red tape stifles growth and discourages new ventures,” said Laure-Anna Bomal, CFIB economist. “By reducing unnecessary regulations, we could unlock over 200 million hours for more productive activities across the economy. Just think about how much more entrepreneurs could achieve with that time.”
CFIB emphasizes that a majority of small business owners believe regulations hinder their productivity and growth. With challenges like U.S. tariffs looming, it’s crucial for Canadian governments to take action to improve productivity and competitiveness.
To tackle the issue, CFIB has suggested a 10-point plan aimed at trimming red tape. This includes measuring the impact of regulations, holding government accountable, using straightforward language, and prioritizing regulatory accountability in politics. You can read more about these findings and recommendations in the full report: Canada’s Red Tape Report: The Cost of Regulation to Small Business.
About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s leading association for small businesses, representing 100,000 members nationwide. CFIB works to improve conditions for business owners through policy change, expert guidance, and special savings programs. Learn more at cfib.ca.
Source link
Canadian Federation of Independent Business, CFIB, complying, Business owners, Red Tape, small businesses, businesses, business expansions, regulatory burden
