Nine out of ten small business owners agreed that excessive government regulations add “significant stress” to their lives, according to a new report from the Canadian Federation of Independent Business. / UNSPLASH PHOTO

Businesses spent an average of 92 days dealing with regulations in 2024, with 32 days specifically dedicated to red tape, according to a new report from the Canadian Federation of Independent Business.

The regulatory burden represents a cost of $51.5 billion annually—$17.9 billion attributed to red tape—and hinders productivity and growth, particularly for smaller businesses who face disproportionately higher costs per employee, the CFIB said, adding time spent on compliance has increased almost 10% since the last report in 2020.

“This trend suggests that various factors such as the complexity and the scope of regulation are contributing to growing compliance burden,” CFIB Economist Laure-Anna Bomal told reporters in a briefing before the report was released.

Rising fees for the use of professional services and accounting software are one of the main reasons why regulatory burden is increasing, according to the report. Longer wait times for essential government services such as business licenses and permits was another reason cited by CFIB members.

Significant stress

Nine out of ten small business owners agreed that excessive government regulations add “significant stress” to their lives, and two thirds say given the current burden of regulation, they wouldn’t advise the next generation to run a business.

Internal trade barriers, one of the primary contributing factors to regulatory burden, are becoming an area of focus, now that U.S. President Donald Trump is threatening to impose blanket tariffs on Canadian imports as early as next month, according to Corinne Pohlmann, CFIB’s Executive VP of Advocacy.

“Internal trade on its own, is a massive regulatory burden among businesses,” Pohlmann said during the briefing, citing different regulations from province to province. “It's not like there's a border between a province that you're going to stop you and if you have to pay a duty. It's the regulations that are different that require businesses to have to get, for example, three different sets of safety equipment, because they have employees in three different provinces.”

She also gave the example of trucking companies that have to stop before they enter another province to make slight adjustments to the truck. Another is the fact consumers can’t order wine or beer from another province directly to their home.

Pohlman said some progress is being made in internal trade, including a meeting between Prime Minister Justin Trudeau and the provincial premiers to discuss the issue. “We're hopeful that this is going to help them make some final good progress in an area that it's been incredibly onerous and challenging for small business for many years.”

She says one way to speed things up “relatively quickly” would be if provinces mutually recognized each other's rules and regulations, as opposed to trying to harmonize them.