Worthwhile Canadian Initiative (really)

Canada recently became the first country in the world to legislate a cap on regulation. The Red Tape Reduction Act, which became law on April 23, 2015, requires the federal government to eliminate at least one regulation for every new one introduced. Remarkably, the legislation received near-unanimous support across the political spectrum: 245 votes in favor of the bill and 1 opposed. This policy development has not gone unnoticed outside Canada’s borders.

Canada’s federal government has captured headlines, but its approach was borrowed from the province of British Columbia (BC) where controlling red tape has been a priority for more than a decade. BC’s regulatory reform dates back to 2001 when a newly elected government put in place policies to make good on its ambitious election promise to reduce the regulatory burden by one-third in three years. The results have been impressive. The government has reduced regulatory requirements by 43 percent relative to when the initiative started. During this time period, the province went from being one of the poorest-performing economies in the country to being among the best. While there were other factors at play in the BC’s economic turnaround, members of the business community widely credit red tape reduction with playing a critical role.

That is from a study of Canadian regulation by Laura Jones.


Good idea. Legislators just need to create a list of regulations to kill and whenver than need to create a new just go to that list an pick one (assuming the regulation to eliminate does not have to be related with the new one).

Pardon the typos.

You've covered this before:

And note that Canada's not as trail-blazing as the article suggests. For better or worse, the UK red-tape reduction policy has reached a level of "one in, three out".

If there is no amendment that eliminating regulation grants "credit" to spend on a new regulation, this law is not so effective in actually decreasing regulation. Law shouldn't make a posibility of easy red tape reduction to remain unused. Elimination without replacement can be seen as a waste by the bureaucrats and they may want to keep it just in case. If there is a "credit" system, they can eliminate is right away (it can be further developed along the line that credits are used as a efficiency metric, but are "taxed" at some low rate so over time red tape very slowly decreases).

Good point.

You'd like to use a lot of new regulations to create a "credit" system? Complexity is not a benefit to such a system.

As well as being a tad ironic.

Well, it's no more ironic than a death penalty for murder. You impose such regulation on those who may overregulate, not on those who might get overregulated.

It's not a lot of regulation, for "tax" you only need a rule that once in x years some credits are written off, where x is something a bit higher than electoral cycle. That's all "tax" part. Credit system - just some public ledger with two numbers: total number of regulations units destructed and number of those due to the current government. First is used as a maximum new regulation units that can be proposed, second is an input to some already existing incentive schemes (or like n*some fixed cold cash bonus for every cabinet member).

I'm not sure about the solution, but Cass1an seems right about the problem.

A red tape reduction initiative will involve scouring the books to compile a list of unnecessary regulations. Once these have been identified, they ought to be eliminated immediately, but the structure of this law incentivises leaving them in place.

Also, this law seems very "gameable" to me. Unless the scope of a single regulation is very tightly defined, lawmakers could simply package more stuff into a single regulation than they did previously, allowing the regulatory burden to continue to increase.

The best way to take advantage of a current anti-red-tape sentiment is to eliminate as much red tape as possible immediately (which seems to be what BC did), rather than implement a law that has little immediate benefit and can easily be ignored later once this issue is off the radar.

I thought the same thing, but then wondered if agencies ever actually eliminate regulations without being forced to do so. Forcing all regulations to have sunset clauses might help.

"agencies ever actually eliminate regulations without being forced to do so"
Agencies will not. But the cabinet can be motivated.

Let's posit that there is a big chunk of good regulation that shouldn't go away (or for sceptic\libertarian, that it will not go away because of politics). Then the mandatory sunset clauses are pure loss. It'll add a lot of renewals without even approaching actual regulation shrinkage. Sunset clauses usually work because there is a hope that the renewal will not pass because of some political reasons. And if there is political will to maintain status quo in most areas, it is not the case. And in other areas changes in balances of powers and lobbying efforts will make regular negotiation complex. They will increase legal uncertainty, which is not what one want to happen on a large scale and affecting every business. "One in one out" or "one out - one credit to spend or keep" are much gentler approaches.

The heading is also the name of a Canadian economics blog: http://worthwhile.typepad.com/

Tyler was referencing that

and the blog name is a play on a joke about the most boring news headline conceivable which was postulated to be:

"worthwhile Canadian initiative"

That was an actual headline on a Flora Lewis column written ca. 1984. Michael Kinsley, then a columnist at The New Republic sponsored a contest among the magazine's readers, inviting them to submit examples of boring newspaper headlines which would best that one ("the three words, taken individually, are sleep inducing; taken together, they are virtually lethal"). The prize was two copies of Gerald Ford's memoirs. One submission was "Economist Dies". The eventual winner was a gassy headline on a popular science op-ed piece at the New York Times, submitted by Mark Lilla.

In the 2010-2015 UK coalition government, they had an even more ambitious "one in, two out rule" for regulations:

"When policymakers do need to introduce a new regulation, and where there is a cost to complying with that regulation, they have to remove or modify an existing regulation with double the cost to business."


Maybe it really works, but it seems obvious that the regulatory burden on the economy is not very well correlated with simply the number of regulations. If it causes governments to issue broad and vague regulations, instead of narrow and precise ones, I am not sure what is gained.

Replace two one-sentence regulations with one two-sentence regulation. I've cut red tape by 50%!

Yeah, +1 to both of you. I don't think this will work as designed. I predict longer and more complex regulations. And do note that The Liberals have pledged to advocate for federal employees in Parliament, whatever that means....

From the post and the comments above, the point seems to be that these rules have in fact been working, as unlikely as it seems on paper. It will be interesting to see how the new Canadian government interprets the rule. I honestly have no idea.

It's tempting to think of government, and the left in particular, as wanting regulation for its own sake. But what really happens is that every week, someone realises they want some particular regulation. With these rules, the easest way to get those new rules might be to delete some old ones, rather than trying to game the system.

In Brazil, there was an attempt to reduce bureaucracy, but the plan failed because there was to much bureaucracy involved in the implementation. Canada seems to have the best plan. However, "the bureaucratic mentality is the only constant in the universe", so I will remain skeptical for a while.

I wonder if this leads to the drafting of broader and more vague regulations as legislators try to stay within the letter of the law while still promoting some pet cause.

If so this could cause more harm than good because regulatory uncertainty is more damaging than a larger quantity of clear rules.

It may be worthwhile to note that the legislation to which you refer was passed by the previous, Conservative, government. The new , Liberal, government won on a campaign that largely promised to undue all the "damage" done by the Conservatives. Part of this reversal is a far more active federal government. So it will be interesting to see whether the Liberals' activism can adhere to the legislation in question, or whether they'll feel the need to repeal it in order to pursue their goals. My guess is that it won't last.

'It may be worthwhile to note that the legislation to which you refer was passed by the previous, Conservative, government.'

Not here - this is not a place that actually cares much about what is actually happening. It has more important things to be concerned about, apparently-

'Part of this reversal is a far more active federal government.'

Or at least one willing to stop doing things like this - 'Drastic cuts to funding and constraints on scientific freedom have significantly damaged Canadian research and its capacity to develop science-based public health and environmental policies.

Harper’s assault on science was extensive: with government scientists censored, budgets chopped, data monitoring programs eliminated, scientific libraries shuttered and the contents thrown into dumpsters. The long form census was axed, depriving decision makers of vital information about their citizens.' http://www.theguardian.com/science/political-science/2015/oct/21/how-science-helped-to-swing-the-canadian-election

Canadians just didn't seem to like the results of faith based government, compared to one actually using data and science to guide Canada's future.

As noted in the article - 'All of this advocacy worked. Science became a major campaign issue during the election. There were all-party debates on science policy and extensive media coverage. The Green, Liberal and NDP platforms included significant commitments to restore science to its rightful place in society and public policy.

“We’ll reverse the $40 million cut that Harper made to our federal ocean science and monitoring programs,” said Liberal leader Justin Trudeau at a September campaign stop. “The war on science ends with the liberal government.” In tweet after tweet after tweet, opposition candidates argued that they were best positioned to defend scientific integrity.

Now that it’s been elected with a healthy majority, the Liberal Party says it will make data openly available, unmuzzle scientists, bring back the long form census, appoint a chief science officer, and make the agency Statistics Canada fully independent.'

One would almost think that this web site would be an enthusiastic supporter of science in public policy, but such a clearly unfounded belief is a characteristic of the previously lauded group of 'loyal readers.'

You're citing silly polemical journalism from the UK as probative? You've stopped trying.

Rich from a website that actively discusses Steve Sailer!!! as an authority on anything!!!!!

Art Deco is now considered a website?

Full marks for snark, but you lose style points for all those exclamation marks.

There there Millian, close your eyes. Don't let reality interfere with your beautiful daydream

I am neither a 'website' nor am I a Sailer votary.

When I saw the first exclamation mark I was intrigued. The second one had me totally with you. The third one made me angry and ready to march by your side!!!

But then you went for five exclamation marks, and that was just a bridge too far. Suddenly it was as if a veil fell from my eyes, and I realized that I had had been manipulated and controlled by insidious punctuation tricks.

To think that I was only two exclamation marks away from following you blindly. Well, live and learn!!!

So, quoted text from the winner of the Canadian election is somehow not valid in an art deco world?

Color us all unsurprised that facts play no role in your comments.

You fancy Justin Trudeau has anything of interest to say? Color me unsurprised.

That sounds like FUD. Maybe you missed this part: "the legislation received near-unanimous support across the political spectrum: 245 votes in favor of the bill and 1 opposed." I'd put money that the law stays.

"While there were other factors at play in the BC’s economic turnaround, members of the business community widely credit red tape reduction with playing a critical role." Other factors in play? BC, as in British Columbia, as in Vancouver and Victoria, located across the bay from Seattle, one of the most beautiful places in the world, and a magnet for people of wealth from the West as well as the East (i.e., Far East). To attribute the economic growth in this region to repeal of a few regulations is absurd. Next thing we will read in MR that financial instability is attributable to excessive inequality.

Haven't they always been?

But it was widely credited by the "business community" as playing a critical role. Why would business people tell self serving lies?!

Canada is quickly becoming overrated.

- the wealth producing province Alberta just elected socialists opposed to oil

- oil prices are collapsing, perhaps permanently

- the new federal government is promising deficits and is led by the least experienced politician in Canadian history. His nickname is Zoolander

- Ontario continues to implode under the weight of activist govt. The interest on provincial debt is about $10 billion a year

- real estate bubble is one of the world's biggest

The advent of Barack Obama, Justin Trudeau, and Jeremy Corbyn is indicative of the collapse of the peer-review function in the internal operations of their respective parties, a collapse now ratified by two electorates out of three. What's amusing is that the American variant of this disease is assented to by some of the same people making hay a few years earlier over George W. Bush's supposed inadequacies.

The democratic establishment likes barack obama. He was no Trump.

The republican establishment liked GW Bush as well.
He just was a bad president.

They like them and they hate them? Sounds like a defense mechanism. They like a patsy when he does whatever they tell him to do. They don't like a patsy when he makes his own decisions. Pay no attention to the man behind the curtain.

He just was a bad president.

Compared to whom?

All the others, save maybe Franklin Pierce.

How can anyone think George Bush was any good in 2015? (or even in 2003?) The guy was a disaster and an embarassment for America. We are still paying dearly for his foreign policy mistakes...

9 of the 15 provinces of Iraq were quite tranquil from the beginning of 2008 onward and the remaining 6 were far less violent than they had been. The ISIS mess belongs to his successor. Not that partisan Democrats will ever admit to that.

9 out of 15? Well if 30 out of the 52 american states had no terrorist attacks would that also be called "tranquil" for you? Should US troops have stayed forever in Iraq and Afghanistan? Would you gladly payed for that and for their health care? Would there been ISIS if Saddam was left alone? And btw, who will rule after Assad, the ultramoderate muslim party? ... Unless you mean that ISIS was/is financed by notorious US/West allies, with US/West showing complete indifference (and i would dare to say cumplicity), then yes, of course, ISIS mess belongs to Obama as well.

No clue why you'd compare Iraq, which has been abnormally troubled since 1958, to the United States, which has suffered almost no political violence in 140 years.

The games people play when they're trying to make a point....

How troubled was Iraq between 1993 and 2003? It sucked to live there, but they weren't cutting off heads.

And I'd prefer we had kept that $1 trillion spent creating that beacon of democracy promised by Cheney and company.

How troubled was Iraq between 1993 and 2003? It sucked to live there, but they weren’t cutting off heads.

What are you talking about? Freedom House awarded Iraq it's lowest score for 29 of the 31 years extending from 1972 through 2002 and its next lowest score for the other 2 years. Some observers have put the death toll from state violence against the public at an annual mean in the five digits over the period running from 1968 to 2003. That does not include the losses from the Iran-Iraq War (thought to be in the high six digits). The place was not some common-and-garden military regime. It was a totalitarian horror with only North Korea and a few other places as competitors.

Yeah, look what George Bush did to Libya by inciting and abetting the overthrow of its leader without having a plan in place for the aftermath. What a buffoon.

And his Syria policy? What with the red lines that were violated and ignored? His pledge to dump Assad and aid the people trying to overthrow him, followed by his screwing up on that and abandoning the place while there were still moderates to support was pretty bad. Then he just hands it over to Russia which reversed his policy against Assad? Crazy.

And then there was his ignoring the advice of his military leadership in Iraq and pulling out all the forces after blowing an easy renegotiation of the status of forces agreement. You'd almost think he didn't want to keep any troops there anyway, given how quickly he capitulated and how inept the talks were.

At least he pressed a reset button with Russia, ensuring that they would be on their best behavior. That was a good move. And his nuclear deal with Iran made everyone there love America again and usher in a new era of peace and goodwill. Peace in our time, you might say. So he's got that going for him. Which is nice.

That was all Bush, wasn't it?

One trillion spent and hundreds of thousands dead. Obama's absolute worst mistakes don't hold a candle to Bush.

Especially when you consider what their predecessors left them upon taking office. The Onion nailed it both times:



That Onion counterpoint perfectly summarizes most Republican (not conservative) arguments.

I wonder who Dan Hanson would replace Assad with... the ultra moderate muslim party? Maybe you would also like to have your tax dollars spent on keeping a huge US force in Iraq forever, but there are limits no? And I would like to know whats the alternative to a nuclear deal with Iran: another disastrous invasion which would fuel a new cycle of jihadi recruits and organizations even worse than now? Would you also advise Obama to retake Crimea I wonder (again just another little invasion)?

About the Arab Spring, which turned to be an Arab Nightmare, you are right, but you can not really blame it on Obama 100%...

Obama is not a bad President. Most everything that has happened on his watch so far he does not disagree with. A weaker United States of America was his plan all along...

Ontario has been badly governed for about thirty years.

Things are getting ugly in Alberta and are going to get much worse.

But Quebec is getting its shit together and B.C. is chugging along - expect for the impact of all those wealthy Chinese "refugees" driving up housing prices.

Alberta was the victim of an electoral spasm of anti-encumbency - not a shift to the left. People here voted for the NDP out of protest, because no one thought they were actually going to win a majority. The worst-case scenario was thought to be an NDP minority with a Wildrose opposition to keep them in check. But vote-splitting on the right and strategic voting on the left resulted in an NDP majority government. Cue the wailing and gnashing of teeth.

Some of the NDP candidates who won were place holder candidates who didn't even really campaign, and no one knew anything about them. It was pure anti-incumbency, not a vote for progressivism.

Within two months of the election, the NDP here was already polling lower than the conservative/libertarian Wildrose party. The people of Alberta realized what they had done and rejected it almost immediately. Unfortunately, since the NDP has a majority government with room to spare, we now get to have five years of spankings for our little tantrum.


I expect that what you say is all true. I said things are going to get much worse in Alberta and I believe that is true.

The NDP will make things worse but they will be blamed for more of the downturn than they are responsible for.

If oil stays below $50.00 Alberta will be in deep shit and it would not matter who was in power. Oil below $50.00 is also going to kick the snot out of the Federal budget and Trudeau's various fiscal fantasies.

Dan - another point is that the NDP has basically promised to shut down the existing electrical generating capacity in Alberta. Alberta is going to be paying higher electricity bills to pay for the construction of new generating capacity. If the new capacity is natural gas prices go up to pay for the capital cost. If the new capacity is going to be wind and solar the price goes up a lot more.

Oh, the NDP is going to do lots of damage. They've already pledged to stop oil pipelines out of the province, and their proposed 'solution' is to build refineries for the oil here in Alberta. This despite the fact that the left has protested and litigated refinery construction out of existence, and that it makes no sense from an environmental or economic standpoint to refine the oil in Alberta and then have to transport many different formulations of gasoline to different jurisdictions. But of course, the NDP thinks it's smarter than the incredibly complex and efficient oil market.

We already have wind plants in the best wind location in the province. The best they can manage to do is to provide power for Calgary's LRT system. Solar makes no sense up North where we start with a deficit of solar flux to begin with, and where the sun only shines for a few hours per day in the winter when we need the power the most.

Their policies are incoherent. Their 'stimulus' plan is a thinly-veiled mechanism for transferring wealth to the public employees unions and the trades who support them, and will do nothing for the province but drive up the debt. Their answer for how to pay for all this is the typical claptrap: "Stimulus" will pay for itself, and the additional social programs will be paid for by taxing the rich and corporations. Oh, and they are opening new cabinet departments solely to create and manage all the new regulations they plan to dump on us.

Oh, and they are also promising a new carbon tax and more regulatory control over CO2 emissions in industry. Good times ahead.

" “Stimulus” will pay for itself"

The Alberta NDP don't seem to get the point (and neither does Justin Trudeau) that a small open economy, whether it is just Alberta or all of Canada, with open capital flows, has a very small multiplier effect.

They're not thinking it through that deeply. Fiscal stimulus is the perfect NDP solution to everything, because it's a form of voodoo economics that allows them to claim that all their big-spending plans don't have to be paid for. It helps when the 'stimulus' funnels money to public employees and union workers who make up the bulk of their support.

And if it doesn't work, they can always claim that it would have worked if it had just been bigger, but those bastards on the right wouldn't let them. So it's all their fault.

It really is the perfect public policy.

Yes, "refugees". By which we mean Party functionaries and Army Colonels buying a third or fourth home.

This sounds like a political game.

Define regulation. Define one regulation in a complex web of regulations covering the same topic.

Is a regulatory exception to a regulation a regulation.

Fine, let's eliminate it.


"This sounds like a political game."

Maybe, but any effort to reduce regulation is probably better than making no attempt what-so-ever.

How many regulations is the right number? How do we know that? As others have pointed out, is one regulation with a 200 lines the same as a regulation that is 10 lines?

The Precautionary Principle implies that we can't risk any additional regulations.

I don't know, but in the US we're at about 10x the right number, and in Canada about 5x.

We should be quibbling and curating when we get to a much smaller regulatory state. Right now, the right approach is slash and burn.

Oh, so you do know how to calculate this. I'm interested to know how you arrived at that estimate.

It's actually 9.86% and 4.98%. I'd show the calculation, but it should be obvious to anyone.

What could these metrics possibly mean? Is that the character count in the compilation of codes, rules, and regulations?

Perhaps it is pages? Maybe they are using a smaller font?

Perhaps one draconian rule has replaced a dozen more nuanced and permissive rules.

Why do you fancy the one rule is draconian?

I'd rather have an expiry on regulations. Regulations can be renewed but this would force legislators to examine the effectiveness every so often. Everything else has an expiry date so should regulations.

Notice that while this process you describe is certainly worthwhile, it is by itself a huge increase in bureaucracy.

When you've sobered up you might explain how sunset provisions amount to a 'huge increase in bureaucracy'.

Doesn't the UK currently have a cap on regulation? See: https://www.gov.uk/government/collections/one-in-two-out-statement-of-new-regulation

If that's true, I don't think Canada is the first to have a cap as TC claims.

I don't think the UK regulation came from legislation, although it does apply to all future legislation.

I bet that the politicians will route around that pretty easily.

The politicians are a problem when they delegate legislative authority. It's the agencies themselves who are then the primary problem (conjoined to constituency groups).

A character count you cannot get round. One disconcerting thing when you see compilations of regulations on a shelf is the secular increase in volume.

Some methods which can be used to inhibit regulatory growth are reducing the number of authorities who are permitted to issue them, requiring periods of public comment, and required vetting by a board of legislators.

Failing that, I hear tarring and feathering works.

I think we should save that for the judges.

My company sells the same products in various markets using Amazon as our sales channel. But, we do have to follow the regulations of each market, so its interesting to see how each government handles various issues.


The Canadian government will actually answer emails about regulations, including stating "your product does not have to comply with XXXX" meanwhile in the USA, the government employee is never quite the person who can handle your question, and they won't offer anything in writing, and eventually you are left uncertain.

This uncertainty leads to perverse outcomes for the government, like companies deciding to abandon product lines that are not really covered by the regulations, but no one will say they are not in writing, so better safe than sorry.

The one are where Canada falls down is their corporate income tax. Its simply too complex. I'm now paying $1,200 to have it filed by a CPA firm, for sales of around $40,000 of product. Smart barrier to entry I suppose.

But don't you worry, the little boy masquerading as the newly crowned Prime Minister will surely throw that piece of Extreme Right-Wing garbage out the window real soon now.

Comments for this post are closed