A new Statistics Canada report reveals a 37% surge in federal regulations imposed on businesses between 2006 and 2021, negatively impacting economic growth, employment, and productivity. The study estimates this regulatory burden reduced GDP growth by 1.7 percentage points and employment growth by 1.3 percentage points in the business sector.
The number of federal regulations imposed on businesses increased dramatically over the span of 15 years, a trend that weighed on investment and economic growth, according to a new Statistics Canada report.
The negative effect of regulatory accumulation on growth, employment and productivity was not as great for small businesses compared as it was for large ones. Regulations are rules introduced by governments usually with the intention of protecting the public interest – such as mandating requirements for health and safety – but can frequently weigh on business activity when they become too onerous or numerous. The Statscan report notes a regulation may appear to be beneficial to the economy by promoting competition, for example, but it could stifle growth when layered on top of other regulations.
“While the results of the study point to potentially important costs for the economy, it is not meant to reflect a full economic assessment of the benefits of regulations and costs associated with not introducing regulations,” the study cautioned.
REGULATION ECONOMIC GROWTH EMPLOYMENT PRODUCTIVITY CANADA
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