FOCSG O HAT MATTERS - Alberta...We know they do their best to comply with the rules that are in place. We also know reducing red tape is about more than getting rid of a few requirements

Report of the Red Tape Reduction Task Force

MARCH 2012

FOCUSING ON WHAT MATTERS

TABLE OF CONTENTSExecutive Summary .................................. 3

Supporting Small Business For A Stronger Alberta ......................... 5

Building On Our Progress ......................... 8

The Regulatory System And Small Business ............................ 11

Listening And Responding To Concerns ......................................... 18

How Alberta’s System Stacks Up ...........23

Recommendations Of The Task Force ...24

Concluding Comments ............................28

We believe in regulatory excellence...having the right rules, not more rules. We have confidence that the public service can, and will, deliver on the goals that we have set out in this report.

Over the past few months we have heard from small businesses and the organizations that represent them. Our timelines were short, but we are encouraged by the response and contributions from the small business community. They spoke candidly about their personal experience and frustrations. We heard about some very specific examples as well as some larger, systemic concerns.

Like other government red tape reduction efforts, we found that it is not always a specific requirement that creates burden for small businesses. Rather, we heard businesses feel it is often the cumulative effects of having to deal with what seems to be an inefficient and overly risk-averse system. In our report, we share examples of what we heard and highlight some of the ways we can be more responsive to small businesses. While our recommendations do not cover every issue brought forward, we think they will begin to establish different expectations for how government should be responding to small businesses concerns about regulatory burden.

Small businesses are the heart and soul of our communities and are important contributors to the provincial economy. We know they do their best to comply with the rules that are in place. We also know reducing red tape is about more than getting rid of a few requirements. It is about thinking about how government does its work in a different way and putting in place a lasting reform program.

We understand that small business expectations are high. We believe that we can focus on what matters – to keep small business moving, while also upholding the responsibility Albertans have placed in us to maintain strong environmental standards and ensure safe, healthy communities. It is only with a continued effort and commitment from our public servants that we will be able to make a difference for Albertans. With a renewed focus on a client-centered culture in the public service, a strong voice for small businesses and a clear commitment from government’s leaders, we will reduce red tape.

Ty Lund, Chair, Red Tape Reduction Task ForceRobin CampbellDr. Neil BrownArt JohnstonKyle Fawcett

MESSAGE FROM THE

TASK FORCE

FOCUSING ON WHAT MATTERS: Report of the Red Tape Reduction Task Force • 1

EXECUTIVE SUMMARYSmall businesses play a vital role in Alberta’s economy and have incredible importance in the lives of Albertans and their families.

Small businesses make up 96 per cent of all businesses in the province. They are responsible for 37 per cent of all private sector employment in Alberta and employ almost half a million Albertans. They are found across our entire economy, building and strengthening the fabric of our communities as they pioneer new industries and reach for new opportunities.

Over the past ten years, more small businesses have been created in Alberta than anywhere else in the country. This is a testament to the entrepreneurial spirit of Albertans. It is also a testament to our province’s success in creating a positive business climate, including an ongoing commitment to provide an efficient and effective regulatory system.

Alberta has taken several actions to help ensure its regulatory system promotes economic growth and competitiveness while protecting the environment and the health and safety of Albertans. Through its Regulatory Review Secretariat, the government strives to promote quality regulations that are anchored in the principles of necessity, effectiveness, proportionality, transparency, consistency and accountability.

However, there is always room for improvement. In particular, small businesses have expressed concern that provincial regulations may be presenting barriers to their ability to sustain, grow and prosper.

In response to this concern, Premier Redford established the Red Tape Reduction Task Force. Through an internet-based survey and a series of dialogue sessions, the Task Force listened to small business owners and organizations about the issues and challenges presented by Alberta’s regulatory system.

Participants expressed a number of concerns and offered advice about:

• Accessinginformationaboutregulations;

• Understandingregulationsandotherrequirements;

• Listeningtosmallbusinesses;

• Compliancecostsforsmallbusinesses;

• Flexibilityinthecurrentsystem;

• Capacityandcultureinthegovernment;

• Enforcementofregulation;and,

• Coordinationintheregulatorysystem.

The Task Force also heard about several sector-specific issues and potential ideas that will continue to be considered beyond this report.

Overall, the Task Force heard about a system that in many ways remains too institutional in its speed, perspective and approach. This must be addressed.

2 • FOCUSING ON WHAT MATTERS: Report of the Red Tape Reduction Task Force

A key strength of small businesses is their flexible and agile nature. To effectively compete they must respond quickly to changes in the marketplace. They need a regulatory system that keeps pace with their needs – one that provides clear, consistent and timely responses.

Small businesses also need a regulatory system that is developed with their circumstances in mind. They are nimble operations that have limited financial and human resource capacity. Regulations can have a disproportionate impact on their operations, especially if those regulations seem to be developed from the perspective of large industries and institutions.

Finally, small businesses need a greater voice in the regulation development process and more support on the ground. This includes better stakeholder engagement, so that the perspectives of small businesses inform the creation and amendment of regulations. It means more transparency and accountability

from government, including rigorous reviews of the cost implications and impacts of regulations. It also means promoting a culture that values the contributions of small businesses and aims to help small businesses understand and comply with regulatory requirements.

In support of these goals, the Task Force has developed four recommendations:

• Developasmallbusinessstrategythatacknowledges and responds to the needs of Alberta’s small businesses.

• StrengthenAlbertagovernmentprocessesfor making, amending and reviewing regulations.

• Workwithothergovernmentsandrelatedbodies to streamline business regulations.

• Encourageaservicedeliverycultureingovernment that is collaborative, user-focused and ensures greater accountability.

These recommendations are designed to serve as a solid first step towards a more efficient and effective regulatory system that will better support growth, innovation and prosperity.

An improved regulatory system will result in less red tape, a more competitive business climate, and a continued commitment to building a cleaner, safer and better Alberta.

DID YOU KNOW?Alberta’s business-friendly attitude and our strong economy have resulted in our province leading the country in small business creation over the past decade and the highest number of small businesses per capita in the country.


SUPPORTING SMALL BUSINESS FOR A STRONGER ALBERTASmall Businesses Have a Big Impact

They are found in every corner of the province and every sector of the economy and they are all fuelled by a bold and entrepreneurial spirit that drives our province forward. They are small businesses, and they make big contributions to the lives of Albertans.

In Alberta, small businesses are defined as businesses with 50 or fewer employees. Impressively, they make up 96 per cent of all businesses in Alberta. Of these, two thirds are “micro-businesses”, each with one to four employees.

Although they are commonly termed “small” businesses, they have a very sizeable and impressive impact on Alberta’s economy and society.Consider:

• Alberta’ssmallbusinessescontribute 29 per cent of Alberta’s total Gross DomesticProduct(GDP).

• In2009,AlbertarankedfirstinthecountryintermsofsmallbusinessGDPpercapita.

• Alberta’ssmallbusinessesareresponsiblefor37 per cent of all private sector employment in the province. In 2010, there were 490,357 Albertans employed by small business.

• Smallbusinessishighlyprevalentacrossthe entire economy. In every industry in Alberta, at least 88 per cent of businesses are small businesses.

Given the vital roles that small businesses have for the lives of Albertans, it is important that Alberta remains a place where small businesses can remain strong, sustainable and successful.

Alberta is already a place that encourages small business. Over the past decade, our province has led the country in small business creation. In fact, Alberta has the highest number of small businesses per capita in the country. In 2010, there were 39 small businesses for every 1000 people, far exceedingtheCanadianaverageof31.

This reflects Alberta’s favourable business climate and low business tax rates, which promote growth. In addition to these advantages, the government is pursuing ongoingefforts,suchastheCompetitivenessInitiative, to ensure Alberta remains an attractive and welcoming place for business and investment.

For more information on Alberta’s small businesses read the 2011 small business profile: Small Business, Big Impact.(http://albertacanada.com/about-alberta/statistics-and-publications.html)


An Ongoing Commitment to Regulatory Excellence

The Government of Alberta is also working to support businesses of all sizes through an ongoing commitment to make Alberta’s regulatory system more efficient and effective.

In particular, the government has established the Regulatory Review Secretariat. The Secretariat provides oversight when regulations are created or amended, focusing on the impact a proposed regulationwillhaveforAlbertans.Workingcollaboratively with government ministries, the Secretariat helps ensure that quality regulations are produced.

In addition, government has established a set of principles to guide its regulation-making activities. The Government of Alberta Guiding Principles of Regulation are intended to provide context when regulations are developed. By ensuring that regulations align with these principles, the government fosters the creation of a regulatory system that provides a stable business climate while protecting the environment and the health and safety of Albertans.

Government of Alberta Guiding Principles of Regulation

NECESSITY� We will require strong evidence

of need before regulating.

� We will ensure that existing regulations remain relevant through on-going review.

EFFECTIVENESS� We will strive to use a results-

based approach in the design of regulations.

� We will ensure that regulations can be adequately complied with and enforced.

PROPORTIONALITY

� We will regulate as lightly as possible, and use alternatives when possible.

� We will ensure that both the burden of complying and the penalty for not complying are fair.

TRANSPARENCY� We will consult widely before

regulating or changing regulations.

� Regulations will be stated in clear, simple language and properly communicated.

� We will be responsive to what we hear from Albertans.

ACCOUNTABILITY

� We will promote mutual accountability with both public sector and private sector stakeholders.

� The Regulatory Review Secretariat will be accountable for measuring and reporting on our work.

CONSISTENCY� We will ensure that regulatory

requirements in different sectors are consistent and coordinated.


Reducing Red Tape for Small Businesses

Red tape reduction has been a continuing objective of the Government of Alberta. A number of actions and initiatives have already been taken to reduce administrative burdens on small businesses and promote a regulatory climate that enables small businesses to succeed.

Some of these actions and initiatives include:

• CreatingareviewprocessthatrequiresAlberta government departments to assess impacts on stakeholders when they are developingorreviewingregulations;

• Workingwithotherprovincestoremoveregulatorybarriers,suchastheNewWestPartnership Trade Agreement with British ColumbiaandSaskatchewan;

• ThePublicRegistryforProposedRegulations, a website that provides a central access point for information about proposedregulationsthataffectbusiness;

• Establishingapolicyforexpirydateson regulations to ensure government requirements are regularly reviewed andassessed;and,

• Pursuingsector-specificregulatoryimprovement initiatives, such as the RegulatoryEnhancementProjectforenergy resource development.

DID YOU KNOW?You can access information on

proposed regulations that affect the business community at:

http://www.finance.alberta.ca/business/reg_review_secretariat/

public_registry.html


BUILDING ON OUR PROGRESSThe Red Tape Reduction Task Force

Alberta is in a favourable position when it comes to offering a positive climate for small business.

Our province has already taken a number of tangible actions to improve the regulatory environment and reduce red tape for businesses. TheworkoftheAlbertaCompetitivenessCouncilconfirmsthatAlberta’seconomyisstrong and remains one of the most competitive inNorthAmerica.ArecentCanadianFederationof Independent Business survey of its members shows that small businesses in Alberta are among the most optimistic in the country about their economic prospects.

However, regulatory reform is an ongoing exercise and there is always room for continuous improvement. In recent years, small businesses have expressed concern that provincial regulations may be presenting barriers to their ability to sustain, grow and prosper.

In response to these concerns, Premier Redford established the Red Tape Reduction Task Force inDecember2011.

The Task Force was mandated to assess the quality of business regulation in the province, with a specific focus on how regulation impacts

small business. As part of this assessment, the Task Force was instructed to consult with small businesses to identify regulatory challenges, especially those having an impact on growth, competitiveness and innovation.

Based on this work, the Task Force was asked to make recommendations aimed at reducing red tape and improving the quality of regulation, while ensuring protection of the environment and the health and safety of Albertans.

The work of the Task Force was not about the number of regulations in Alberta. Simply having fewer regulations doesn’t necessarily translate into a better regulatory environment.

In fact, some regulations enable the government to respond to changing circumstances and provide flexibility in how requirements are applied.

Alberta needs regulations of good quality so that businesses can thrive and so that government, regulatory bodies and all Albertans can understand applicable rules and requirements.

The work of the Red Tape Reduction Task Force specifically focused on reducing the regulatory burden on small business. The outcomes of the Task Force will be used to augment the Government of Alberta’s ongoing work.

MEMBERS OF THE RED TAPE

REDUCTION TASK FORCE

Chair Mr. Ty Lund

MLA for Rocky Mountain House

Mr. Robin Campbell MLA for West Yellowhead

Dr. Neil Brown, Q.C. MLA for Calgary-Nose Hill

Mr. Kyle Fawcett MLA for Calgary-North Hill

Mr. Art Johnston MLA for Calgary-Hays


Listening to Small Businesses for Greater Success

The Task Force undertook a number of strategies to gather information about the current regulatory burden on small businesses.

The Government of Alberta worked to generate awareness of the Task Force with the support of various government and business networks.TheseincludedChambersofCommerce,theBusinessLink,ProductivityAlberta,andtheCanadianFederationof Independent Business. Interested stakeholders reflected a broad range of economic sectors, including upstream oil and gas, electricity, meat producers, financial services, science and technology, service sectors, transportation, and retail/wholesale.

Consistentwithitsmandateandrecommendations from the Alberta CompetitivenessCouncil,theTaskForcesupported development of a Regulatory Benchmarking Report. The aim of the benchmarking exercise is to understand how Alberta’s regulatory environment performs relative to those of other provinces.

The Task Force also held in-person dialogue sessions with small business leaders and stakeholders in the province. Two sessions wereheld:oneinEdmontonandoneinCalgary.Thedialoguesessionsincludedsmallbusiness owners and representatives of small business organizations.

At the dialogue sessions, attendees were invited to share their experiences with provincial regulations, including areas where they have seen recent improvements and aspects they continue to find challenging. Attendees were also invited to provide advice on possible ways to address issues and challenges.

In order to gather input from a larger number of individuals, the Task Force also utilized an internet-based survey. The survey solicited responses from small business leaders. A total of 507 complete survey responses were received, reflecting input from a broad range of economic sectors.

Survey respondents were asked for their opinions on a number of issues, including their main challenges when dealing with provincial regulations;andwaystheysaworexperiencedconflicting requirements, compliance and enforcement issues, and complexity. The survey also asked for ideas on what the Government of Alberta could do to better address the needs of small businesses when developing or reviewing regulations.

The Task Force also received a number of written submissions and held meetings with select business organizations. This provided further opportunities for the Task Force to hear first hand about the challenges faced by small businesses.

The input gathered through the consultation process was reviewed and a number of consistent themes emerged. These are summarized in this report, along with quantitative results from the survey. Preliminary data from the benchmarking exercise are also discussed.


THE REGULATORY SYSTEM AND SMALL BUSINESSThrough the consultation process, small business owners and stakeholders identified a variety of concerns about the impact of regulations on small businesses.

In some cases, participants cited very specific instancesofproblematicrequirements.Whilenot all specific instances can be canvassed

in this report, it is clear they were rooted in a number of common concerns that are identified below.

Some examples of specific issues are also presented, along with information on how the Government of Alberta is taking action to address them.

Accessing information about regulations

Participants expressed a degree of frustration with the accessibility of information about provincial regulations. Many said it is hard to locate regulations that apply to and match their situation. Major concerns included theavailabilityofinformationonline;thecomplexityofgovernmentwebpages;andlittle public information about where to find regulatory information.

The Task Force also heard that it is hard to obtain clarifying information about regulations from government officials. Many said they are not sure who to contact when they have questions or concerns. Several relayed stories about being “bounced around” various

ministries and officials when they had a question. In some cases, government officials have been unable to answer questions about the meaning or applicability of regulations. Some participants felt this was due to a culture that fails to sufficiently empower staff to make decisions.

Participants stressed the importance of being able to easily access regulatory information. Small businesses are frequently providing products and services to larger industry clients as part of complex projects. As a result, small businesses need to have a solid understanding of “two sets” of regulatory requirements: those that apply to their small

The Government of Alberta provides several services to help businesses access

information about government rules and regulations. These include BizPaL, Business Link, the Business in Alberta

web portal, and the Public Registry of Proposed Regulations. Prior to this

survey, were you aware of these services?

Total Responses: 702

YES22.36%

NO 77.64%


business;andthosethatapplytotheindustryclient they are supporting.

Many said it would be helpful to have a centralized repository, searchable online tool, or other mechanism that enables “access to information all in one place”. Government should also promote these resources so that small business owners and operators know where to go.

Survey respondents expressed similar sentiments.Almosteightinten(78percent)

indicated they are not aware of services that are offered to help businesses access information about government rules and regulations, such as BizPal or the Business Link.BizPalisapartnershipbetweengovernments that provides on-line, simplified access to information about the permits and licenses that businesses need to establish andruntheiroperations.TheBusinessLinkis an organization that provides information, resources and supports for small businesses on how to start, grow and transition their businesses.

Understanding regulations and other requirements

The Task Force heard that many regulations are unclear and hard to interpret. This makes it difficult for small businesses to understand government’s true objectives behind the regulation. As a result, businesses can find themselves in a situation of non-compliance, even though they have read and attempted to follow the text of the requirements.

Survey respondents shared these concerns. Nearly half of respondents disagreed with the statement, “Provincial requirements for businesses are easy to understand and navigate”.

Participants emphasized that small businesses want to comply with the rules, but need to clearly understand regulatory expectations so they can run their operations accordingly.Understandingrequirementsand how to comply is essential to undertake planning, to determine costs and prices, and to effectively compete in the marketplace. Several said the Government of Alberta should take steps to rationalize regulations so that businesses have the information they need on the ground. It was suggested that newer communications technologies be used to improve the accessibility of information and understanding of expectations.

Individuals and businesses should be able to easily understand why

a rule is in place, whether that rule applies to their situation, and what

is required to comply.Rate your agreement with the following

statement : Provincial requirements for businesses

are easy to understand and navigate.


(strongly agree) 5

4

3

2

(strongly disagree) 1

0% 5% 10% 15% 20% 25% 30%


Listening to small businesses

A widely shared sentiment was that the Government of Alberta does not adequately consider small businesses when regulations are made or amended. Participants observed that many regulations seem to have been made with large corporations in mind. Some said this is not surprising, given the substantial role that multinationals and other large corporations play in the economy. However, it must be remembered that small businesses are also operating in the same sectors as large industries, and as such, are often subject to the same regulations.

Many expressed the view that small business input is not sufficiently sought when new regulations or changes to existing regulations are being considered. As a result, small businesses are often surprised by new regulatory requirements and find it difficult to comply.

Participants called for better engagement of small business stakeholders when the creation or amendment of a regulation is proposed. One suggestion was to create a forum that enables ongoing dialogue between small businesses and the Alberta government.

This would ensure the voice of small business is clearly heard and is factored into decisions on regulations.

Throughout the discussions it was also suggested that stronger relationships should be built between government and small businesses. This would help government better appreciate small businesses and better recognize the contributions small businesses make to Alberta.

Compliance costs for small businesses

The Task Force heard a great deal from participants about the cost impacts of regulationsonsmallbusinesses.Unlikelargeindustries, small businesses have considerably less capacity to absorb compliance costs or meet some reporting requirements. Regulations can therefore disproportionately impact small businesses.

Asoneparticipantexplained,“Wehavetoofew people to undertake the paperwork required and no time to spend time searching for information, and so complying with regulatory requirements often means that someone is taken away from serving clients”.

It was said that in order to avoid taking time away from clients, small business owners often carry out compliance activities after business hours. This takes time away from their personal lives and families.

Participants stressed the real cost of regulation is the cumulative impact of regulatory requirements. Small businesses are not only required to comply with formal regulations, but also with all related codes, standards and policies associated with those regulations. These all add to the cost of doing business.

It was noted that inefficiencies in the regulatory system also create cost burdens for small businesses. Many participants raised concerns about the length of time it takes to navigate government processes. For example, several felt there are unnecessary delays in the government’s processing of applications, authorizations and other procedures involving documentation. Reporting systems were also cited as sources of inefficiency in the regulatory system. The Task Force heard that many information reporting requirements are too complex and onerous.


Flexibility in the current system

Small businesses see the current regulatory system as inflexible. Participants said that the system places too much emphasis on whether rules are followed and not enough focus on whether the desired outcome are achieved. As a result, the regulatory system does not foster innovation, but instead presents an attitude of “do it this way or you’re not allowed”.

Equallytroublingforparticipantswastheir belief that the maze of regulations and policies they must navigate do not necessarily result in a better, safer or cleaner province. Many survey respondents shared thissentiment.Overathird(35percent)ofrespondents disagreed with the notion that “provincial regulations are clearly achieving positive results for health, safety and the environment”.

It was the perception of participants that government has tended to use a “one size fits all” approach when it comes to regulation. They suggested that government consider using different regulatory approaches where it makes sense to do so.

For example, as ventures that must be nimble and take risks, small businesses are often at the forefront of examining new solutions and adopting new technologies. These can help reduce costs, improve performance and enhance competitiveness. Participants said government should use regulatory approaches that allow businesses to test solutions and use new technologies.

Please rate your agreement with the following statement:

In general, it is clear that provincial regulations achieve positive

results for health, safety, and the environment.


(strongly agree) 5

4

3

2


0% 5% 10% 15% 20% 25% 30% 35% 40% 45%


Capacity and culture in the government

Participants had many comments about the overall orientation of the Government of Alberta when it comes to regulating business. Several noted that over time there has been turnover among government staff. Newer government employees do not necessarily have the same level of expertise and institutional knowledge as those who have left. This, they said, leads to regulations that are sometimes out of touch with realities on the ground.

People also raised concerns about government’sresponsiveness.Whenbusinesses make inquires about regulatory requirements, these are sometimes met with uncertainty or ambiguity. Some participants

expressed frustration with a lack of timely response to inquiries. Time spent waiting for a response translates into project delays or missed opportunities, all of which result in costs to small businesses.

A number of respondents felt that the social and economic contributions of small businesses are not sufficiently valued or understood. This can result in less concern about the potential impacts of regulations on small business or their long-term viability. Some participants said they have been met with an adversarial attitude when they have raised issues or concerns with some government officials or regulatory bodies.

Participants said the Government of Alberta needs to enhance its capacity and change its culture. Officials administering regulations should focus on helping businesses achieve compliance. Some suggested that government officials could be more knowledgeable about the industries they are regulating. Many said they would like to see government be more accountable for the regulatory decisions it makes, including regular measurement and evaluation of its performance.


Enforcement of regulation

Government culture was also discussed in relation to enforcement, with participants saying the applicability and enforcement of regulations is a very challenging area for small businesses. It was said that some areas of the regulatory system are enforced in a way that places too much emphasis on punishing non-compliance and too little emphasis on helping businesses work towards compliance.

The Task Force also heard that the same regulation can be interpreted differently by different enforcement personnel. Many shared experiences of inconsistent regulatory enforcement, where the same activity was deemed compliant by one inspector but later deemed non-compliant by another. Some said these challenges are rooted in the fact that regulations are often complex and hard to understand. The lack of clarity may result in different interpretations by enforcement personnel across the province.

Survey respondents had similar views. Over a third disagreed with the idea that the Government of Alberta “enforces regulatory requirements in a consistent manner”. However, this was also noted by many survey respondents as an area where they had not encountered problems or had only limited experience with enforcement officials.

Participants suggested that Alberta’s regulatory system should be more outcome-based in its approach to enforcement. This would assist enforcement by enabling inspectors to assess whether certain objectives are being achieved, rather than sparring over paperwork or the interpretation of specific rules.

Participants also suggested the regulatory system should foster a spirit of collaboration between government and small businesses, and better educate businesses about requirements to improve compliance. These efforts would enable small businesses to innovate and compete, while still working to achieve the results that Albertans expect.

Please rate your agreement with the following statement:

The Government of Alberta enforces regulatory requirements in a consistent

manner. (This includes things like site inspections, storing records, audits, etc.)


(strongly agree) 5

4

3

2


0% 5% 10% 15% 20% 25% 30% 35% 40% 45%


Coordination in the regulatory system

Participants relayed frustration about the level of regulatory coordination within the Government of Alberta and between different governments.

People cited examples of duplicative regulations regarding the same subject matter. In some cases these duplicative regulations lead to redundancy in reporting, which has costs for business. In other cases, conflicts and inconsistencies from different programs and requirements were noted, creating uncertainty and a lack of predictability for small businesses.

For example, it was said that immigration policies and regulations are uncoordinated between the federal government and provincial government. This is making it difficult for small businesses to access the workers they need to remain competitive.

Federal and provincial commercial vehicle regulations were a key source of concern, with people saying this creates an uneven competitive environment for operators.

Participants also noted inconsistencies in regulations within the Government of Alberta. For example, it was said the building code is not aligned with environmental regulations. Compoundingtheseinconsistenciesisalackofinformation sharing among Alberta government ministries and regulatory bodies. The Task Force also heard about inconsistencies between Occupational Health and Safety, the Workers’CompensationBoardandtheEnergyResourcesConservationBoard.

This results in duplicative reporting and a higher administrative burden on small businesses. In some cases, this results in small businesses reporting the same

information more than once, or needing to gather similar information in slightly different ways. These redundancies push up compliance costs, impacting business competitiveness.

Participants said the Government of Alberta should work harder to resolve regulatory inconsistencies between government departments. It was also suggested that the Alberta government pursue greater regulatory harmonization and standardization with other governments – federal, provincial and municipal. These efforts would help reduce overlap and conflict, providing better clarity and certainty for small businesses.


LISTENING AND RESPONDING TO CONCERNSThrough the internet-based survey, in-person dialogue sessions and written submissions, participants also provided a number of individual examples and challenges they faced in their specific sectors. In particular, the Task Force heard about challenges in areas such as: worker safety, employment standards, taxation programs, immigration and foreign worker programs, transportation rules, building codes and permitting, professional and trade designations, securities, food safety standards, environmental and project approvals, and business licensing.

Whilethisreportdoesnotspecifically respond to these individual concerns, they will be forwarded to the appropriate ministries for further validation and consideration in the ministries’ ongoing regulatory reform efforts.

The Task Force feels it is important to note that the Government of Alberta is already pursuing initiatives to reduce red tape and support small businesses. The examples below illustrate some of the actions being taken to respond to specific concerns.

Modernizing Alberta’s bus services

In October 2011, Alberta became the first North American jurisdiction to replace a regulated carrier system that had been in placesincethe1960s.Undertheoldsystem,government required carriers to maintain minimum service levels and provide service to rural or remote communities in exchange for limiting competition on the carrier’s routes.

By modernizing Alberta’s intercity bussing rules, the province has opened the doors for several new small businesses, eliminating

some burdensome requirements and essentially creating an open market for bus service. Safety is not compromised as all carriers are required to operate safe vehicles, have properly licensed drivers, maintain appropriate insurance coverage, and are subject to commercial vehicle inspection requirements. Final amendments to regulations to fully implement these changes are expected in 2012.

DID YOU KNOW?The Government of Alberta has a number of initiatives

already underway to deal with the regulatory burden on small

businesses in the province.


Improving licence requirements while protecting consumers

Small businesses highlighted a number of challenges with business licensing renewals and requirements in their feedback to the TaskForce.Whilemanybusinesslicensesare a municipal responsibility, the province is responsible for protecting consumers across a number of business sectors. Service Alberta currently regulates a range of businesses that must post security as a requirement of licensing(auctionsales,collectionagencies,direct sellers, home inspectors, payday loan businesses, and timeshare sellers, among others).Thesecuritycanbeintheformofa

surety bond, irrevocable letter of credit, cash, or a term deposit. Many smaller businesses find it onerous to navigate the securities marketplace and some have difficulty qualifying for the required security.

Service Alberta is advancing a proposal under the Fair Trading Act to allow the creation of compensationfund(s)forprovinciallylicensedbusinesses. These funds could protect and compensate consumers who have suffered a financial loss due to the actions of the business operator and reduce the ongoing cost of security instruments for businesses.

In the long term, it may be more economical and efficient for businesses to contribute to such a fund as opposed to paying premiums on a surety bond year after year. Honest businesses that have operated for a number of years with no claims would benefit the most as their requirement to contribute yearly could be reduced or eliminated. In Alberta, the RealEstateCouncilofAlbertahascreatedacompensation fund and it is very successful and well funded now.

Safely building Alberta

Municipal Affairs is responsible for codes and standards that regulate ten construction relateddisciplines.Everycodeandstandardis subject to review, consultation and updating on a regular basis to address ever changing technologies, safety needs and societal expectations.

The Task Force heard small businesses express concern that “no one comes to us to deal with issues, and when there is consultation, it is not mindful of small

business”. The current system for permitting and inspection services was noted to have created a confusing patchwork, leaving businesses navigating a complex set of rules and processes that can often involve different levels of government.

WhileMunicipalAffairsworksdiligentlytopromote opportunities for input into codes and standards, there appears to be no easy way to engage small business owners in this process. Municipal Affairs is supportive of

finding ways to improve service delivery for all development, construction, occupancy permits and business licensing. As one example, the government plans to introduce legislative changes to better protect new home buyers and hold builders more accountable, including development of a mandatory, regulated new home warranty program. The design of the program will be friendly to small businesses because of a sophisticated web-based, publicly accessible warranty registry and tracking system.


Updating Alberta’s environmental regulations

Albertans expect clean air and water and healthy landscapes. Building on work to improve competitiveness in the oil and gassector,AlbertaEnvironmentandWaterhas identified the need to review, revise and consolidate regulations under the Environmental Protection and Enhancement Act.AlbertaEnvironmentandWateris

advancing a regulatory system that will work to ensure environmental outcomes are achieved through the use of effective risk-based policies, understanding of the cost impacts to stakeholders, and considering the administrative processes and infrastructure.

Once internal reviews have concluded, the department will undertake a process to engage external partners and stakeholders in the development and implementation of its Strategic Regulatory Initiative – focusing on a cumulative effects management approach, promoting innovation and maximizing efficiencies in the system.

Other regulatory bodies

Across all sectors, the Task Force heard that small business does not distinguish between government departments, its agencies and other similar organizations. Small businesses in a number of sectors noted some of the excessive regulatory burden comes from the policies and procedures developed within those external organizations, rather than directly from regulations. One example shared with the Task Force highlights this concern as it relates to parts of Alberta’s electricity transmission system.

Planning and operation of the electricity transmission system is done through organizations that operate independently fromgovernment.TheAlbertaElectricSystemOperator(AESO)isanot-for-profit organization established under the Alberta Electric Utilities Act and serves as the province’s electricity system planner. TheAlbertaUtilitiesCommission(AUC)is an independent, quasi-judicial agency that regulates utilities in Alberta, including approving the need and routing for new transmission projects.

Right now, small businesses looking to connect on or off the transmission grid are required to undergo the same resource-intensive hearings process as substantially larger, province-wide transmission projects. TheAUCisworkingwithAESOtoimplementrules for an abbreviated review process for some applications and has clarified rules for minor system modifications under a letter inquiry process. These changes will help respond to small business concerns.


Improving regulatory delivery of meat inspection

One of goals of Alberta Agriculture and Rural Development(AARD)iscontinuedexcellencein food safety. The Meat Inspection Act, Meat Inspection Regulation and the Meat Facility Standardsdocument(updatedmostrecentlyin2009)setouttherulesforthelicensingofabattoirs and the inspection of meat and meatproductsinfacilitieslicensedbyAARD.

Alberta has approximately 50 licensed abattoirs operating in the province. There areafurther300meatprocessors(including

smallbusinessesandfarmers)thatprocessmeat but are regulated by the Public Health Act and Food Regulation, which fall under the responsibilityofAlbertaHealthandWellness(AHW).

Representatives of Alberta’s abattoirs participated in the Task Force’s discussions with small business. They expressed concerns about differential standards, mounting frustrations with reporting requirements, issues with enforcement and interpretation

of rules. They indicated a desire to explore possible solutions with government.

GovernmentofficialsfromAHWandAARDare working together to better understand and respond to the concerns of abattoirs and reduce regulatory burden in a way that does not compromise the safety of Alberta’s food supply.AARDisalsoworkingtoimproveitsongoing discussions with abattoirs and better respond to the input of small businesses.

Harmonizing regulations across borders

In2010,Alberta,BritishColumbiaandSaskatchewanlaunchedtheNewWestPartnershipTradeAgreement(NWPTA).ThisambitiousagreementcreatedCanada’slargest interprovincial barrier-free trade and investment market and calls for the three provinces to work together in unprecedented ways for the benefit of workers, businesses and investors. An important focus of the agreement is the streamlining of regulations to eliminate unnecessary differences in the provinces’ business and occupation-related regulations and standards.

Historically, there have been a number of differencesamongAlberta,BritishColumbiaand Saskatchewan requirements governing theoperationoflargetransporttrucks.UndertheNWPTA,thethreegovernmentsagreedtoconsistent regulations and policies governing the operation of large transport trucks, without compromising safety. As a result, uniform rules regarding the size and weights of vehicles and other aspects of trucking operations cameintoeffectJuly1,2011.Commercialtransportation now has, as much as possible, one set of rules that will apply from the

eastern border of Saskatchewan and across AlbertatothecoastofBritishColumbia.

Effortsarealsounderwaytoreconcilebusiness registration and reporting requirements so that a business registering in one province will, upon application, be deemed to have met registration requirements in the other two provinces. Progress on this next milestone is expected to be reported in summer 2012.


Providing information and guidance to small businesses

The Task Force heard that small businesses often have difficulty seeking out advice and guidance in a number of areas. The Rural AlbertaBusinessCentre(RABC)PilotProgramis a new partnership between the Government of Alberta and organizations actively involved with the business community in eight locationsthroughoutAlberta.Eachofficewillbe staffed by a small business advisor who will assist local entrepreneurs in growing and expanding their businesses by providing one-stop access to timely and relevant information and support services. The rural business centres will provide services to entrepreneurs, small business owners and managers at all stages of the business life cycle from start-up

to expansion to succession planning. The services will include one-on-one business advice, seminars, workshops and access to information about small businesses and business opportunities.

ThecommunitiesparticipatingintheRABCPilotProgramincludeCamrose,ColdLake,FortMacleod,GrandeCache,Hanna,RockyMountainHouse,SlaveLakeandLaCrete.TheRABCPilotProgrampromotesstrongerlinkages between the Alberta government and businesses in rural communities, and supports the continued development of a competitive andproductiveeconomy.TheRABCsarelaunching their operations in early 2012.


HOW ALBERTA’S SYSTEM STACKS UPComplementinganumberofrelatedinitiatives,including the work of the Red Tape Reduction Task Force and the efforts of the Alberta CompetitivenessCouncil,theGovernmentof Alberta has initiated a research study into how well Alberta’s regulatory environment performs. The study has been undertaken to benchmark the business regulatory environment in Alberta.

The study is a perception-based survey of legal, economic and industry specialists based in Alberta and three other benchmark jurisdictions:BritishColumbia,Saskatchewanand Ontario. It focuses on ten priority business regulatory areas that are commonly encountered by a wide range of Alberta-based companies. These include:

• Startingabusiness;

• Propertyownership,transferandregulation;

• Provincialconstructionregulations;

• Environmentalassessment,permitting andregulation;

• Employmentstandards:hiring,benefits andfiring;

• Occupationalhealthandsafetyandworkerscompensation;

• Labourrelations(unionregulations);

• Disputeresolutionandcontractenforcement;

• Provincially-regulatedfreighttransportation;and

• Businessinsolvency,restructuring and wind-up.

The study will examine each area across five aspects of regulatory quality: clarity and communication;consistencyandcoordination;regulatoryeffectiveness;operationalefficiencyandtimeliness;andregulatoryrevision.Theseareas are aligned with the Government of Alberta Guiding Principles of Regulation.

At this stage, preliminary data suggests the overall quality of Alberta’s regulatory environment is generally positive, both in absolute terms and in relation to other jurisdictions. Areas where Alberta might be able to improve its performance include:

• theneedforstreamlinedprocesses;

• identificationofambiguitiesinsomeregulations;

• overlapsinprovincialandfederalregulations;

• establishingclarityinregulatoryrequirements;and

• timelinessofhearingsanddecisions.

This early information is consistent with what the Task Force heard from small business stakeholders in the consultation process.

Full results of the benchmarking study will be made available this fall.


RECOMMENDATIONS OF THE TASK FORCEThe input and feedback received through the consultation process was rich and informative. It illustrated a province and regulatory system which has room for improvement when it comes to helping small businesses grow, innovate and prosper.

In light of this, the Task Force has developed four major recommendations.

These recommendations are not “one-offs” to address individual, specific issues that were raised by some participants. Instead, the recommendations are broader, addressing the root causes behind those and many other challenges that plague small businesses.

The ultimate aim of the recommendations is to fundamentally improve Alberta’s regulatory environment so that small businesses facelessredtape;benefitfrombetterconsiderationoftheirperspectives;andaresupported by a clear, straightforward and transparent regulatory system.

RECOMMENDATION 1: Develop a small business strategy that acknowledges and responds to the needs of Alberta’s small businesses.

There is a clear need for stronger relationships between the Government of Alberta and Alberta’s small businesses. In particular, there are opportunities to enhance understanding and appreciation of the importance of small businesses, their needs and perspectives, and their contributions to Alberta communities and families. Throughout the consultation process, many called for government to have better ongoing dialogue with small businesses so that their issues are recognized and receive proper attention.

To this end, the Task Force recommends that the Government of Alberta develop a small business strategy by the end of 2012. The strategy should aim to enhance the availability of information and supports to assist small businesses. The goal should be to help small businesses connect with knowledge and resources to support their understanding and compliance with regulatory requirements, and to help position them for long term success.

Elementsofthisaspectofthestrategy should include:

• Anongoingprocesstoengagesmallbusinessviewsandconcerns;

• Afocusonkeyareasofbusinessregulation;

• Thedevelopmentofimprovedpartnershipsbetweengovernmentandsmallbusinesses;

• ImprovedpromotionofservicessuchasBizPal,theBusinessLinkandnewpilotRuralAlbertaBusinessCenters;and,

• Toolsandmechanismstoimprovetheability of Alberta government staff to consider small business perspectives.

RECOMMENDATION 2: Strengthen Alberta government processes for making, amending and reviewing regulations.

The Task Force heard a great deal from participants about the way regulations are made and changed. Strengthening government processes in these areas can go a long way towards improving the quality of Alberta’s regulatory environment.


Alberta government departments should be expected to comply with the Government of Alberta Guiding Principles of Regulation whenever they are considering the creation or amendment of a regulation, or reviewing existing regulations. Put simply, if a regulation doesn’t conform to these principles, it shouldn’t be approved. These principles, established by the Regulatory Review Secretariat, are intended to ensure that quality regulations are produced by the government. Importantly, they include the concepts of clarity, consistency and efficiency and effectiveness – all of which were emphasized by small businesses as extremely important.

Alberta’s regulation processes should also be enhanced to ensure the perspectives of small business are considered and reflected. Departmentsshouldalwaysbeconsideringonthe ground business realities when regulating, use the best available evidence at their disposal, and assess the cumulative impact that the administrative processes, standards and guidelines may also have on stakeholders.

Processes should also be transparent. Albertans should have assurance that regulations have been created or amended with due consideration for the needs of small business and with regard to the Government of Alberta Guiding Principles of Regulation.

To strengthen government processes, the following actions should be taken:

• Improvetransparency(e.g.,publicreporting)ofregulatorychangesprior toimplementation;

• Makepubliclyavailable,bytheendof2012and continuing on a regular basis, an evaluationframework(includingdefinedmeasures,activitiesandresults)forAlberta’sregulatorysystem;

• Requireconsistentandregularuseofcostmodels to assess financial impacts of regulations,andasaconsultationtool;and,

• Includeconsiderationofregulatoryburdenas part of Government-wide Results-Based Budgeting(programreviews).

RECOMMENDATION 3: Work with other governments and related bodies to streamline business regulations.

The Government of Alberta is only one source of regulations placed on small businesses. Its related agencies, boards and commissions,andothergovernments(andtheirrelatedagencies)alsocontributetotheoverall regulatory mix. Together, these have a cumulative impact on the competitiveness of Alberta’s small businesses.

Whileworkingathometoimprovetheprovince’s regulatory system, the Government of Alberta must also proactively work with other regulators to streamline business

regulations. This means overcoming jurisdictional barriers so that there is less duplication and greater regulatory harmonization. It also means opening up lines of communication and sharing information among government departments and agencies, to improve regulatory coordination and lower the red tape burden faced by small businesses.

To achieve these goals, the following actions should be taken:

• BuildontheTrade,InvestmentandLabourMobilityAgreement(TILMA)andNewWestPartnershipTradeAgreement(NWPTA)efforts to further streamline and harmonize regulations;

• Pursueimprovementstothefederal-provincial-territorial Agreement on Internal Trade;

• Improvepartnershipsandlinkageswiththefederal government to identify and define areasforimprovedregulatorycoordination;

• ThroughthePublicAgencyGovernanceFramework, ensure all agencies are working towards the Government of Alberta’s desired outcomes, including reducingregulatoryburden;and,

• Workcloselywithmunicipalitiestoaddressregulatory issues through review of the Municipal Government Act and the Safety Codes Act.


RECOMMENDATION 4: Encourage a service delivery culture in government that is collaborative, user-focused and ensures greater accountability.

It is important that the Government of Alberta has the capacity to competently develop and deliver regulations that impact small businesses. It must have a public service with the necessary expertise to identify, appreciate and consider the potential impacts ofregulations.Considerableturnoveringovernment staff is expected to occur over the coming decades as demographics shift. Steps should be taken to ensure that institutional knowledge is preserved and strengthened.

The Government of Alberta’s public service also needs to be empowered with a culture that values decision-making, innovation, responsiveness and high quality customer service. Small businesses, and all Albertans, should have the ability to obtain information and services from the government without confusionorunreasonabledelay.Efficientaccess to clear, consistent and correct information is vital for small businesses so they can understand regulatory requirements and how to comply with them.

A collaborative, user-focused service delivery culture within the government will help ensure the needs of small businesses are better acknowledged and addressed, and will enhance government’s accountability. To achieve these goals, the following actions should be taken:

• Identifyingandimplementingtechnologysolutions(e.g.,on-lineforms)asanoptiontofacilitatesmallbusinesscompliance;

• Advanceacultureofclient-serviceinthegovernment through public service renewal initiatives;

• StrengthentrainingforGovernmentofAlberta workers to encourage client-oriented service and better supports for smallbusiness;and,

• Educate,involveandempowerGovernment of Alberta staff in identifying and implementing red tape reduction opportunities, and providing the mechanisms to prioritize and effect change.


CONCLUDING COMMENTSAlberta continues to offer a positive business environment – one that has helped foster the creation of small businesses and enabled them to seize many economic opportunities.

To maintain this good business climate, Alberta can not rest on its laurels. As a growing number of countries compete for investment, industries and jobs, Alberta must continue to remain a competitive place to do business. Our province has, and will continue to have, a regulatory system that supports – not hinders – the ability of businesses to grow, innovate and succeed, while protecting the environment and the health and safety of Albertans.

This is particularly true in the case of small businesses. Small businesses employ thousands of Albertans. They help our families to prosper and our communities to remain strong and vibrant. They reflect Alberta’s pioneering and entrepreneurial spirit, often leading our province into new frontiers of industry and discovery. It is essential that Alberta’s regulatory system recognizes the needs of small businesses and enables their success.

To this end, reducing red tape and improving regulation can not be a one-time effort. It must be an ongoing effort that is strongly championedbyCabinetandpursuedbyaneffective and empowered public service. It should be transparent, with regular reporting to Albertans and accountability on the part of government.

The Government of Alberta will continue to enhance its relationships with small businesses. Greater understanding of the views, perspectives and priorities of small businesses is essential if our province is to remain successful in fostering their creation and long-term growth.

The recommendations of the Task Force are a key step towards a more effective, more responsive, higher quality regulatory system. An improved regulatory system will result in less red tape for small businesses, a more competitive business climate, and a continued commitment to building a cleaner, safer and better Alberta.

FOR MORE INFORMATION CONTACT:

Red Tape Reduction Task Force11th Floor, Legislature Annex Building

9718 – 107 StreetEdmonton, Alberta T5K 1E4

Email: [email protected]

http://alberta.ca/RedTapeReduction.cfm

ISBN (print): 978-0-7785-9886-2ISBN (electronic): 978-0-7785-9887-9

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FOCSG O HAT MATTERS - Alberta...We know they do their best to comply with the rules that are in place. We also know reducing red tape is about more than getting rid of a few requirements