Small businesses in Canada, including small farms and agri-business, are struggling with the growing burden of regulatory compliance. In 2024, a report by the Canadian Federation of Independent Business (CFIB) revealed that businesses spent 735 hours on compliance, with 256 hours wasted on unnecessary red tape.
The costs are staggering. Regulatory compliance cost Canadian businesses $51.5 billion in 2024, up from $45.4 billion in 2020. Of this, $17.9 billion is attributed to red tape, an increase of over $5 billion since 2020. Higher wages, professional fees, and increased time spent on compliance are driving these costs.
Smaller businesses bear a heavier burden. Companies with fewer than five employees spent $10,208 per employee on compliance, compared to $1,374 for larger firms. Similarly, small businesses spent 198 hours per employee on regulatory tasks, while larger companies only spent eight hours.
“Small business owners don’t get into business to be government compliance experts. Red tape discourages entrepreneurship, stagnates economic growth and overall, is a lose-lose situation for businesses and consumers alike. Eliminating unnecessary regulatory compliance would free up over 200 million hours across the economy for more productive activities,” said Laure-Anna Bomal, CFIB economist and report co-author. “Imagine what an entrepreneur could do if they got just over a month back. If Canada wants to improve its productivity and economic competitiveness, it must put a renewed focus on cutting red tape.”
By addressing these barriers, Canada could enhance productivity and competitiveness, giving small businesses the tools to grow and succeed.