Report highlights small biz frustrations with red tape

January 11, 2011, Toronto – Canada’s second annual Red Tape Awareness Week kicked off yesterday with a report from the Canadian Federation of Independent Business (CFIB), highlighting the hardships faced by small business owners.

The report, entitled Red Tape Diaries, features a collection of stories submitted by small owners from across the country. One story tells the tale of a New Brunswick-based baker whose store opening was delayed because of “conflicting information” regarding provincial licensing. Another tells how a Toronto-based storeowner’s primary source of advertising was taken away after the city passed an “overbearing” municipal by-law.

“This is just a tiny sampling of the hundreds of thousands of stories that are out there. It all adds up to a colossal waste of entrepreneur’s time and money and clearly diverts their focus away from where it needs to be – building their business, creating jobs and expanding the economy,” says Laura Jones, CFIB vice president for Western Canada.

A 2010 CFIB report estimated that Canadian businesses pay out as much as $30 billion each year in regulatory compliance costs, with the brunt of this being paid by the country’s smallest firms. According to the CFIB, businesses with more than 100 employees spend on average $1,117 per employee, per year, to comply with regulations, while companies with zero to four employees spend an average of $5,825.

In a press release, the CFIB states: “According to Canadian businesses, the burden could be reduced by at least 25 per cent without harming the legitimate objectives of regulation such as protecting health and safety.”

Throughout the week, the CFIB will conduct a number of initiatives to draw attention to regulatory red tape and other challenges facing Canadian entrepreneurs.

CFIB was established in 1971 to give independent business a voice at all levels of government.