Newfoundland government sets worthy red-tape goal—here’s how to get there

Premier Tony Wakeham’s government has set an ambitious goal to reduce red tape, the unnecessary or excessively burdensome regulation on businesses, which drives up the cost of doing business and ultimately harms economic growth in Newfoundland and Labrador.

As one leading researcher in the field explained, the term “Red tape is intended to stand in contrast to government regulations, rules, and policies that support an efficient and effective marketplace and provide citizens and businesses with the protections they need. Unlike justified regulation, red tape does not deliver benefits that exceed its costs”.

Specifically, the Wakeham government wants to achieve an “A” grade in the Canadian Federation of Independent Business (CFIB) annual red-tape report card. How can it get there?

While many governments talk about red-tape reduction, successful examples are few and far between. But the Wakeham government could learn from the Gordon Campbell government in British Columbia during the aughts. Campbell, who understood that burdensome regulation hurt B.C.’s economy, implemented a comprehensive deregulation program that helped B.C. go from an economic laggard to a leader within Canada.

First, the Campbell government developed an accurate measure of the province’s regulatory burden. While the CFIB report is useful, it reflects the sentiment of its members and a best-guess of regulatory costs. The Wakeham government should count the exact number of regulations in the province so it can measure progress.

Second, the government should have a clear goal. For example, Campbell’s government set out to reduce regulation by one-third. The Wakeham government does have a goal—improvement in the CFIB report. But it should also have a measurable target that does not rely on sentiment.

Third, under the Campbell government’s reforms, for every new regulation proposed, the government had to eliminate a specific number of existing regulations. New regulations were also held to greater scrutiny (for example, they had to be cost-effective and support the economy). Putting the bureaucracy on a “regulatory diet” was a big part of B.C.’s success.

Lastly, political leadership matters. As premier, Campbell personally championed the regulatory effort, appointed a minister of deregulation, and sustained the effort over a period of years so the apparatus of government became accustomed to a new regulatory approach.

Again, Wakeham’s plan is promising but he should consider a stronger measurement-focused approach. While he plans to designate a minister responsible for red-tape reduction, he should appoint a dedicated minister to champion the effort. And he should consider stricter rules around any new regulations.

In short, rather than following the example of many governments that spoke eloquently of red-tape reduction but ultimately accomplished little or nothing, the Wakeham government should act. By cutting red tape, the government can help unleash the Newfoundland and Labrador economy, make the province more attractive for investment, and ultimately help create jobs and spread prosperity for workers and their families.