Fixing Canada’s regulatory regime would foster economic growth

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Donald Trump’s tariffs have sparked a surge in patriotism in Canada, which is evident in the growing wave of efforts to buy local and “Made in Canada” brands on store shelves.

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There are more threats from the South than the national pride of the rally. They also force us to study our business approach carefully. There is a new effort to deal with the long-term obstacles that hinder Canada’s competitiveness – Including arbitrary and unnecessary inter-provincial trade restrictions, this makes it more difficult to operate within our own boundaries.

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But we have more – must – At this critical moment, to encourage economic growth and put Canadian businesses in a better position to compete and win.

In particular, policy makers need to target dazzling regulatory barriers that can undermine our productivity, hinder investment and kill growth. Doing so won’t make Canadian taxpayers a dime (which might actually save them some) and can start larger jobs and stronger growth.

Canada has always been a laggard in regulatory competitiveness. Compared to other countries, a World Economic Forum report says Canadian companies face the average burden of government regulations. The OECD’s key indicators show that Canada ranks well below France, Spain, Ireland and dozens of other countries in reducing regulatory barriers. Meanwhile, the CD Howe Institute identifies regulatory uncertainty as the driver of weak Canadian business investment and a contributor to its productivity challenges.

Some aspects of Canada’s regulatory system are commendable. It is worth noting that our financial framework blocks Canadians from the 2008 financial crisis, during which more than 500 U.S. banks failed, although none of them did.

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But in recent years, the pendulum has swayed too far, overemphasizing market stability at the expense of market dynamics. result? The barriers to entry and expansion, cooling of foreign investment and overlapping regulations tangled networks.

At a time when the world is changing rapidly, Canada cannot be an unattractive place to do business. But, that’s exactly where we’re going.

Consider it: Canada now has 44 different financial services regulators. Some are ethnic groups, some are provincial. The result is a pieced together of heavy regulations that hinder labor mobility, curb growth, increase corporate costs, and delay or stop exchanges of goods and services across provinces. Resources that can be specifically used to manage regulatory loads.

Many of these 44 regulators are expanding their size and scope. Over the past 20 years, we have seen regulators double or even triple. With this growth, the authorization has expanded significantly. They are increasingly actively addressing non-financial risks, beyond their traditional responsibilities of overseeing market strength and stability, and entering areas that affect competitive business activities such as strategy and reputation management.

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What can Canada do now to improve its regulatory competitiveness?

First, we can stop regulatory creep and modernize our regulatory infrastructure to increase efficiency and reduce compliance costs for businesses. This, in turn, will unlock more investment and innovation capital for the benefit of Canadians.

Currently, financial services companies must establish a comprehensive compliance framework to correspond to the requirements of their 44 regulators within the ever-expanding regulatory scope. This is a highly productive deployment of resources and brings higher costs to consumers.

Second, we can clarify the mandate of regulators, including the task of focusing on improving competitiveness and growth to complement their core financial stability. CD Howe Institute recently found that only 18% of the plans adopted by regulators are designed to increase efficiency or boost growth. By contrast, the UK has recently introduced the task of regulators to regulate growth, not just risks.

Third, we can reduce the burden on companies by coordinating supervision across the country and removing duplicate or outdated guidelines. For example, the credentials of many financial services professionals, including insurance regulators, are not always recognized outside their province, creating unnecessary barriers to movement.

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Trump tariffs will be harmful to our economy – But for Canadian policy makers, they can also be unprecedented opportunities to remove outdated and ineffective growth barriers.

In this turbulent time, we are all looking for ways to protect our economy and help it prosper. A predictable and balanced regulatory framework will help strengthen economic competitiveness, encourage foreign capital investment, increase productivity and promote job creation.

Celyeste Power is CEO of the Insurance Agency of Canada.

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