Philip Cross: Ontario's staggering 380000 regulations are warping the way business runs

The mindset behind detailed regulations reflects a distrust of human beings

The growing intrusion of the provincial government into the economy does not stop at taxes and spending. In Ontario, especially, regulation has multiplied, which acts as a tax on consumers and producers because they have to spend resources to comply, even if the burden does not always add to the government’s revenues.

It is difficult to convey to people who live outside of Ontario the extent of regulation after over a decade of Liberal government. Statistically, by its own count there are over 380,000 regulations on the books, twice as many as the next province. Their cost extends beyond raising the expense to business owners of every employee, or filling in forms for the bureaucracy, to fundamentally disrupting the relationship businesses have with their customers.

Regulations permeate everyday life in Ontario (except, apparently, when it comes to fundraising for political parties). I first began to keep note of their pervasiveness when visiting my tailor to get some alterations done. I thought it would be a simple matter to just drop off a suit. When I went to pass it to the tailor, he recoiled as if being handed something with bubonic plague, explaining that he could not touch clothes that had not been to the dry cleaners, with the tags still on them to prove their sanitary state.

My barber recounts that the Ontario government is threatening to force all barbers to undergo training to obtain an occupational licence as a hair stylist. Like most occupational licences, this one has nothing to do with his business and everything to do with government collecting $140 in licensing fees. The market has always protected the consumer from barbers who either can’t trim properly or lack a rapport with customers, by quickly driving them out of business.

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I made the mistake of asking my building superintendent and a tradesman what Ontario’s stupidest regulations were. After talking my ear off for half an hour, they settled on the “ladder law” that took effect last April. This requires anyone working with a ladder to take an online government course — at a $29 fee, of course. The first lesson? Be sure to face the front of the ladder. Never would have thought of that myself.

This is bureaucracy at its worst, a fixation on the process of complying with the letter of the regulation rather than achieving the desired result with the lowest compliance burden. My tailor would trust me not to pass him dirty clothes, and I trust him not to take them from me or anyone else; we hardly need tags to prove it. Regulating the details of how firms conform to regulations is often offensive or even insulting to the customer. This hurts the relationship that businesses build with their clients, the very heart of small retail operations.

Regulations are another example of how government bureaucrats will never understand business. The lifeblood of business is listening — a habit of imaginative engagement with customers and suppliers. The real cost of regulations is that they disrupt this communication between business and clients and suppliers. Instead, we have businesses forced to explain what the government requires, instead of what is needed to please the client.

More malignant is the mindset behind detailed regulations. It reflects a distrust of human beings, whether they are business operators or customers. The presumption is that people are actively trying to get around regulations to behave badly. And what white knight will save the human race from its darker side? The government, of course, staffed with celestial beings who supernaturally rise above the predatory instincts that hold sway over the great unwashed masses outside of government.

Regulation is supposed to provide evidence-based improvements to health, safety and the environment. Instead, as trade expert Michael Hart wrote in a 2012 paper for the C.D. Howe Institute, “many are based on irrational fears that serve little purpose other than to satiate the bureaucratic hunger for information or to accommodate what British blogger John Brignell calls the ‘march of zealots.’”

Businesses must be good at listening to survive. By contrast, Ontario’s Wynne government turns a deaf ear to the growing complaints about the suffocating effect of regulation on business in the province. It seems appropriate that Ontario’s official bird is the common loon; the out-of-control proliferation of regulation in Ontario is completely loony.

Philip Cross is a Senior Fellow at the Macdonald-Laurier Institute.


Philip Cross: Ontario’s staggering 380000 regulations are warping the way business runs

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