TALKREGULATION Untangling
RED TAPE
Business must speak out, tough it out » by Margaret Cappa
WHEN STARTING UP OR RUNNING A BUSINESS, you hope is to stay in the green. But many business owners in Canada say this is hard to do when surrounded with webs of red tape. “Red tape is awfully frustrating for business
owners, it’s like death by a thousand paper cuts,” said Laura Jones, vice-president of Western Canada for the Canadian Federation of Independent Business. “Beyond what red tape means for owners,
think of all Canadians,” she said. “Te owners are not training staff, not coming up with new marketing models and not able to grow their business.” Te term “red tape” is often used to describe
seemingly excessive regulation, redundant rules and anything that appears to slow or hinder the growth of business. It may include great amounts of paperwork, stringent rules or long wait times for approvals. Many business experts and owners alike agree it can be detrimental to success. According to Ottawa entrepreneur Tony
Marcantonio, he can’t even get his business off- the-ground because of it. “I am so frustrated, you follow all the rules
and you get penalized,” he said. “I’m just sitting here waiting for approval.” A few years ago, the 55-year-old retiree said
the chemicals in his hot tub began agitating his asthma. So he scoured the Internet for a hypo- allergenic product and found an American salt chlorination system called ColorChlor. Te system worked so well he wanted to sell it in Canada, he said. Marcantonio got ColorChlor approved by
the Canadian Standards Association, ensuring all electrical codes were met. Te final step was Health Canada approval, and this is where the delays have climaxed. “At first while doing my research I was told
16 THE VOICE SUMMER 2010
three to 18 months for approval,” he said, “but when I sent in my final submission in March I was then told 15 to 18 months or longer.” Besides losing a business partner already,
Marcantonio estimates he’s lost over $50,000 in revenue in the last year and has spent more than $20,000 in product that’s sitting idle in his home. Furthermore, the application process for approval with Health Canada cost him more than $12,000 in licensing fees. “When you pay a license fee, you expect
responses and I haven’t received any status updates,” he said. “I understand there’s a public interest and
I agree with approval, but the private good is being sacrificed here.” People looking for products such as
ColorChlor circumvent the system and buy them overseas if they’re not available in Canada, said Marcantonio. Canadian money is benefiting foreign businesses instead of the domestic economy. “One of the main problems with regulation
is that it tends to be very prescriptive and one- size-fits-all,” said the CFIB’s Jones. “It can stifle creativity around how to best solve a problem and can create unintended consequences.” A main consequence is that business
owners have too many rules and regulations to meet. It’s hard for them to focus on the most important ones which deal with health, safety and the environment, she said. “From compliance with GST, to Stats Can
surveys, to border and trade rules to workers comp and much, much more, it’s really a staggering amount of things a business owner must be in line with,” she said. “What’s more, the vast majority of
businesses in Canada have fewer than five employees, meaning the owners are wearing too many hats.”
Ottawa entrepreneur Tony Marcantonio is facing a wait of 15 to 18 months for Health Canada approval to distribute in Canada a hypoallergenic salt chlorination system for pools and hot tubs from the U.S.
» GOVERNMENT TAKES ACTION However, the calls from the business community to reduce red tape haven’t fallen upon totally deaf ears. In March 2009, the federal government announced it had reduced the paper burden on small businesses by 20 per cent. Some provincial governments have made strides in reducing unnecessary regulation as well. For instance, in the last nine years the
British Columbia government annulled more than 163,000 regulations and is committed to a zero net increase in regulations until 2012. Te
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Nova Scotia government launched its Better Regulation Initiative in 2005 and said it has reduced the regulation burden on businesses by 15 per cent. Other provinces including Newfoundland and Québec have launched similar programs. According to Jones, the best advice to
dealing with red tape is to spread awareness and make concerns public. Te only way government will be accountable and regulate the burden of regulation is if the pressure continues, she said. In the end though, if you want to run a
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business you have to be bull-headed or else you’ll just be convinced to stop before you begin, said Joanne Plummer, owner of Mill Street Florist in Manotick. “Tere are always ridiculous rules, but there
are lots that deserve to be there,” she said. Plummer opened her flower shop in
1987 and said she’s encountered red tape every year since. From wait times for licensing, to ensuring she had enough parking and keeping her sign more than six inches away from the sidewalk, she has dealt with it all.
“You have to do your homework, be very
stubborn about following through and not let red tape discourage you,” Plummer said. “Opening a business is not for ninnies.”
TALK@ US
Tell us your stories. How have you dealt with red tape or or roadblocks that can serve as a heads up for
other business owners. Email us at
chamber@greatriver.ca or find us on Twitter @TheVoiceMag
THE VOICE SUMMER 2010 17
MARGARET CAPPA
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