Friday, May 24, 2024

In budget 2024, Ottawa needs to let business do business

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Ottawa needs to begin cutting back on the rules and regulations that add to businesses’ costs and help drive the affordability crisis

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Ottawa politicians regularly blame Canada’s business community for the affordability crisis and the lack of quality jobs but absolve themselves of any responsibility for creating a business environment that will benefit Canadians. The government frequently talks about encouraging business investment, but at the same time keeps adding new rules, regulations and taxes that make investment more time-consuming, costly and undesirable. Affordability is all the rage in Ottawa. But businesses aren’t charities. The inefficiencies and higher costs of all the new red tape Ottawa keeps generating are ultimately passed on to consumers, fueling the inflation the government says it wants to help fight.

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The result is that Canada’s economic climate remains bleak. Our GDP grew by only 1.1 per cent last year and is forecast to grow less than one per cent this year. In 11 of the last 12 quarters, Canada’s productivity fell. Without productivity gains, living standards can’t rise. The knock-on effect is that Canada’s competitiveness in the global market is slipping.

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The way to fix these problems is not the Ottawa way, through even higher spending on new government programs. It’s by enabling private-sector businesses to do what they do best — grow the economy.

More spending won’t do that. New rules and regulations won’t, either. Nor will demonizing businesses’ attempts to be profitable, innovative, and competitive. Government spending simply cannot replace private-sector innovation or investment. Instead, the federal government needs to consider how it can just get out of the way. It needs to focus on creating an environment that allows business to produce the goods and services Canadians want — not the ones federal ministers think they should have — and in the process create jobs and paycheques for all Canadians.

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The world is desperate for Canadian agriculture, critical minerals, liquified natural gas (LNG) and hydrogen, all of which Canada has in abundance. But Ottawa’s policies are frustrating development of these resources. In some cases, the problem is lack of certainty about what policy will be as Ottawa eats up time conciliating different interest groups and political constituencies. In other cases, the problem is too much certainty: regulations are outright hostile to the development of many of the things Canada has a competitive advantage in — or would have if government let business pursue that advantage.

Today’s federal budget is an opportunity to begin to modernize our regulatory framework to help increase investment, jobs and growth, instead of trying to command industries into a more innovative or competitive frame. Project approvals cannot continue to take 10 years — whether what’s proposed is a major Carbon Capture Utilization and Storage project that would continue to reduce emissions, or a transportation gateway that would help ensure Canadian businesses can get goods to market reliably and efficiently.

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Where households are most feeling the pinch, consumer spending is down, which is not good for businesses in these areas. And if businesses are hit, that limits job creation, stalls income growth and reduces the tax revenues that fund our social services. It is a basic fact of economic life that business success is part and parcel of Canadians’ prosperity and quality of life. What’s good for Canadian business is almost always good for Canadian households, and vice versa.

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The budget is a good opportunity for the government to show it is serious about affordability. The private sector is ready to do its part. But government needs to get out of the way and let business do what business does best.

Financial Post

Robin Guy is vice-president and deputy leader for government relations at the Canadian Chamber of Commerce.

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