Owners of small businesses may occasionally be frustrated by regulatory challenges, obscure processes or poor service when it comes to dealing with their local governments or cross-border business management. In light of this, the inquiring minds at the Canadian Federation for Independent Business (CFIB) have released their annual “Small Business Red Tape Report Card” – a report that breaks down government accountability and political advocacy for small businesses on a province-by-province basis. You can read the full report here.
“Red tape” as we know it was coined as a reference to important Vatican documents, bound in red ribbon rather than the more pedestrian string. And yet, for many small businesses, it is a modern and highly relevant issue – especially where access to financing is concerned. CFIB estimates the cost of all regulations on Canadian businesses at $37 billion each year, and argues about one-third of that figure represents unnecessary red tape.
Because regulatory compliance has a high fixed cost, small businesses face a larger per-employee cost of adhering to government regulations than big companies. And, in the United States, studies have shown correlation between increases in regulation and declines in new business formation. Transparency and accountability on the part of local and provincial government will need to improve, especially in light of economic instability and the low Canadian dollar. Meanwhile, companies like Merchant Advance are working to make access to finance easier and less disruptive to businesses – cutting away at some of the red tape that might find itself winding around your day-to-day operations.
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