Improving productivity in Canada

The Parliamentary Industry and Technology Committee (INDU) released a report last week entitled Improving Productivity in Canada [pdf, 3.3MB].

The report contains a number of recommendations of interest to the telecom sector. Many will focus on Recommendation 34: That the Government of Canada review measures related to competition policy in the telecommunications, transportation and financial services sectors to strengthen competition in Canada.

In my view, there are two important prerequisite recommendations to such a review:

• Recommendation 19: That the Government of Canada work with provinces and territories to reduce the regulatory burden by addressing irritants systemically rather than individually to improve the overall impact of regulatory decisions, support innovation, encourage investment in Canada bring down prices for consumers. This may include but is not limited to:
  • streamline regulations surrounding domestic food processing and manufacturing, to encourage investment in Canada;
  • adopting legislation requiring all federal regulatory agencies to explicitly consider competitiveness and business growth in the performance of their duties by rigorously assessing the potential impacts of regulatory decisions on economic growth beforehand, rather than as an afterthought;
  • expanding the scope of the Red Tape Reduction Act by reducing or eliminating the exemptions it currently provides; and
  • establishing an independent body, modeled on the United Kingdom’s Regulatory Policy Committee, responsible for publicly assessing the quality of regulatory impact assessments.

and,

• Recommendation 20: That the Government of Canada undertake a comprehensive review of federal regulatory and permitting systems in order to identify and remove unnecessary regulatory and reporting burdens – particularly where they disproportionately affect small and medium-sized enterprises – with the objective of reducing duplication, accelerating timelines, improving predictability for investors and aligning regulation with trusted jurisdictions where appropriate in order to free up capital and management time for growth and technology adoption.

If you search for “incentives to invest” on my blog, more than 130 references come up. Just 2 weeks ago, in “Regulatory impacts on investment”, I referenced evidence of capital investment reductions triggered by CRTC regulations – evidence that is found in the CRTC’s own industry monitoring report.

I wrote, “The next few years will test whether Canada can maintain its infrastructure leadership while pursuing competition policy based on government intervention.”

The INDU study references a witness who “proposed undertaking systemic reform to improve the impact of all regulatory decisions. He criticized that previous government efforts had focused primarily on isolated irritants, comparing this approach to ‘pumping air into a leaky tire: It might help you in the short term, but the underlying problem goes unsolved.'”

While the INDU Committee would like the Government to improve productivity with a review of telecom competition policy, such a review needs to consider the impact of regulation on investment and competition in the sector.