Canada's Red Tape Report

Executive Summary

CFIB started reporting on the cost of regulation on businesses in Canada in 2005, filling a significant data gap at the time.¹ Nearly two decades later, we remain one of the few sources across the world providing regulatory cost estimates.  

In 2024, the average small business owner lost the equivalent of 32 business days wrapped up in red tape.

The combined cost of regulation to businesses from all three levels of government in Canada reached $51.5 billion. Approximately 35% of that – just under $18 billion was spent on red tape. Businesses of all sizes spent 768 million hours on regulatory compliance² - the equivalent of nearly 394,000 full-time³ jobs.  

The smallest businesses bear a disproportionately high burden of the cost, paying up to five times more per-employee than larger businesses (see Figure 1).

Figure 1: Annual regulation cost per employee, by size of business (in 2024 dollars)

Sources: Calculations based on CFIB’s Survey on Regulation and Paperburden (conducted in 2024, n = 2,230) and data from Statistics Canada.

Notes:

1. The number of employees includes the business owner.
2. The cost of red tape for each business size is determined according to the average percentage by which businesses indicated the regulatory burden could be reduced without sacrificing the public interest. The average for each business size is as follows: fewer than 5 employees = 38%; 5-19 employees = 34%; 20-49 employees = 33%; 50-99 employees = 33%; and 100 or more employees = 28%.

This report makes an important distinction between regulation that is justified, delivering valuable health, safety, and environmental outcomes, and regulation that is excessive, delivering little or no benefit.

Canada’s economic challenges add urgency to addressing red tape. With average annual labour productivity growth lagging behind most OECD countries, and projections showing the lowest GDP per capita growth among advanced economies, stimulating output is crucial.^4,5 Reducing excessive regulations could free up resources for growth-oriented activities, enhancing productivity and supporting long-term economic outlook.

In recent years, Canadian governments have made meaningful strides toward regulatory accountability, with several provinces now regularly measuring, reporting, and even setting targets to reduce the regulatory burden. This progress is a positive foundation for creating a regulatory environment that supports business productivity and growth, ensuring essential protections while minimizing unnecessary burdens. However, more work remains to ease the compliance load on businesses, allowing them to focus on growth and efficiency.

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