Pro-business group praises UCP’s pro-business regulation cuts

Last week, the Alberta government announced that the Canadian Federation of Independent Businesses had given the province a grade of A in their 2021 Red Tape Report Card.

In their report, the CFIB listed two main justifications for awarding this grade, which is significantly higher than the B- given last year: measuring how many regulations exist and reducing those regulations by 1/3 over 4 years.

The government announcement said that the province had received “an F in each of the previous three years”. This is a bit misleading and tries to paint the NDP as anti-business.

In the 8 years prior to the UCP being elected, CFIB never awarded the province anything higher than a D+. So, while it’s true that the NDP saw 3 F’s-and a N/A-during their term, the PC government saw an F, 3 D’s, and a D+ between 2011 and 2015. To blame the NDP for the low rankings between 2017 and 2019 is dishonest, given that the UCP’s predecessor (the PC party) wasn’t that much better.

The CFIB’s ranking is based on the following 10 indicators, which fall under 3 priority areas:

Regulatory Accountability Subindex

• Comprehensive measure of the regulatory burden
• Public reporting of the regulatory burden
• Regulatory budget

Regulatory Burden Subindex

• Total provincial regulatory restrictions
• Total provincial regulatory restrictions per capita
• Business-owner confidence in provincial commitment to red tape reduction
• Public feedback mechanism for reporting red tape concerns

Interprovincial Cooperation Subindex

• Total number of exceptions to the CFTA
• Select barriers to internal trade
• Implementation status of reconciliation agreements

Each indicator receives a score of 0–10. The CFIB uses these scores to assign a score to the subindex, which they convert into a letter grade. Finally, using a weighting scheme, CFIB combine the 3 letter grades into a single grade for each government, with regulatory accountability being weighted at 70% and the other subindexes (which were introduced just this year) at 15% each.

Alberta received an A in regulatory accountability, an A- in regulatory burden, and a B- in interprovincial cooperation.

We were 1 of 7 provinces to receive an A in regulatory accountability, but only 3 of those (including Alberta) received a perfect score of 10. We received a 10 in all 3 of the indicators for this subindex.

Alberta also tied for highest score in regulatory burden (Saskatchewan also got A-). We tied for the 5th highest score (7.1) for total regulations (65,793), placed 3rd (9.7) for regulations per capita (149), tied for 1st (8.0) for business owner confidence (39%), and tied for for 1st (10.0) for public feedback mechanism.

Finally, the province placed 4th for interprovincial cooperation overall, with the highest score (10.0) for total number of CFTA exceptions (6), tied for 4th (5.0) for barriers to internal trade, and tied for 6th place (6.7) for implementation status of reconciliation agreements.

The overall grade of A that Alberta received was awarded to 4 provinces in total, and Alberta received the second highest overall score (9.4) of all provinces.

It shouldn’t be that surprising that the provincial government under this UCP administration would rank this high regarding red tape reduction in general. Red tape reduction is something they have been hammering for nearly 2 years, including making an associate minister of red tape reduction, passing the Red Tape Reduction Act, and creating a separate website dedicated to the topic.

But is it a good thing? Is having fewer regulations positive for the province?

Well, let’s keep in mind that the CFIB is pro-business, so they’re going to view everything through the lens of whether it benefits businesses or not.

For example, look at the language they use: they reframe the word regulation as regulatory burden or regulatory restriction, presenting regulation as something negative and potentially unnecessary, something that hinders business. Or the fact that they include only business-owner confidence in red tape reduction, and not confidence from other demographics (such as workers or the general public), let alone confidence in the areas regulations should be improving (such as labour, safety, and environment).

I don’t have time (or the space) to go through all 41,538 of the net reductions the government has implemented so far (and that’s just for the first budget year). But there are a few I wanted to highlight. I think these changes to the regulations provide some perspective on what the CFIB is cheering for when they award a grade of A.

One area that saw regulation reduction was worker rights. The government passed Bill 32: Restoring Balance in Alberta’s Workplaces Act last summer. They framed it as supporting economic recovery and getting Albertans back to work, but according to the Alberta Federation of Labour, it weakens worker bargaining power and legal protections. So, while it may “reduce regulatory burden on employers” and “red tape from daily operations”, that reduction comes at a cost. (See here and here for more info on these changes.)

Or the change from having the provincial cabinet needing to approve any bitumen mining projects with a projected output of over 2,000 barrels a day to giving unilateral approving authority to the energy minister. Clearly, that benefits the mining companies, but at what cost? What guarantee do we have that the minister will do due diligence before approving such projects, especially when there’s pressure to mine more bitumen.

Or removing labour protections from farm workers, and then recategorizing nursery workers, greenhouse workers, and workers on mushroom and sod operations as farm workers, thereby increasing the number of workers in Alberta no longer covered by labour protections. Sure it gives the farmers and ranchers “flexibility in meeting employment standards”, but on the backs of the workers.

Or moving safety standards for some oil and gas equipment from being managed by provincial bodies to being managed by the companies operating the equipment. What could go wrong there?

Or tripling the disposal factor on groundwater usage, which then increases the maximum disposal limit on the resulting wastewater. Who benefits from increased disposal limits on produced wastewater? I mean, other than the company using that freshwater?

And the list goes on.

The 41,538 net regulation reductions this government passed last year amounts to a 6.19% reduction of total regulations. Remember, their goal is to reduce it by 33%, which is over 5 times what they’ve already done. We could potentially see nearly 225,000 regulations axed by the next election.

It shouldn’t come as a surprise that a pro-business organization like the CFIB would give high grades to a government that changes regulations so that they favour businesses. But is the grade a good thing?

Alberta doesn’t have more jobs. Average wages are lower. Is the environment better off? How have Albertans generally benefitted from cutting back on things that improved labour and the environment?

Because if the general population has yet to benefit from them, why is the government celebrating the grade?

One final thought, something I found amusing in the 2019–2020 Red Tape Reduction Annual Report was this quote from Grant Hunter, the associate minister over red tape reduction:

I look forward to working with CFIB again in the new year, as we once again declare Red Tape Reduction Awareness Week. We will not rest until we move to a grade of A, because that means Albertans will be able to get back to work.

We received an A this year. Why are we still short 233,200 full-time jobs compared to July 2019, after the Red Tape Reduction Act was passed? And remember, a quarter of those jobs were lost prior to the pandemic. If reducing red tape for a year and a half creates more jobs, where are they?

Originally published at kimsiever.ca on 5 February 2021.