Starting a Business in Canada

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Sep 8, 2011 - 2 minute read - government

Canadian Government Looks To Reduce Red Tape For Small Business

Did you know that we have a Red Tape Reduction Commission? I know I didn’t.

For those not familiar with the term “red tape”, it comes from the American Civil War. Veterans' war records were physically bound with red tape. The red tape became a symbol in veterans' difficulty in accessing their war benefits. “Cutting through the red tape” became a phrase used to describe the speeding up of a bureaucratic process.

Anyone who runs a small business or is in the process of starting one, knows that there is plenty of red tape holding back the progress of small businesses in Canada. From dealing with many different jurisdictions to filling out forms and complying with some arcane process, small business owners have to jump through a seemingly endless series of hoops.

The Federal Government is aware of this and it has developed a commission (I know there’s a joke in there somewhere) to look into the problem. The commission spoke with small business owners and other stakeholders during the winter of 2011. The commission has recently issued its report, titled What Was Heard.

Tax issues were some of small business owners' main irritants:

  • cumbersome, expensive and complex filing processes (GST/HST)
  • the lack of flexibility in handling late remittances and fines
  • inconsistency of interpretation and lack of written answers
  • cost of audits
  • reporting burden, for example, the repeat filing of forms

Other issues included:

  • the time required, in general, to complete multiple mandatory business surveys
  • access to government contracts
  • the overall frequency of requests for information, often without pre-populated forms.

Small businesses felt that these issues had a negative effect on factors necessary for their success such as:

  • the ability to minimize overhead costs
  • get and keep the right people
  • obtain funding through tax credits or other programs
  • compete on a level playing field
  • pursue innovation, research and development
  • exploit new business opportunities and new markets.

Over the next six months, the commission has the mandate to clarify peoples' comments, confirm the findings, and start the search for effective solutions to the most important issues.

I think it will be very difficult to overcome the current culture of the way things are done by a number of these government agencies, but the very fact that someone is trying makes me hopeful they will have some success.