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With all eyes focused on WWT (World War Tariff), another Trump initiative was quietly put in place last week in one of the now-signature Trump “flood the zone” initiative waves.
On Jan. 31, the Trump administration published an executive order (EO) titled “Unleashing Prosperity Through Deregulation,” and as regulatory reform initiatives go, well, it’s every anti-regulatory analyst’s dream as “each new regulation issued, at least 10 prior regulations be identified for elimination.”
For reference, one of Canada’s strongest regulatory-reform efforts (in British Columbia back in 2001) only called for a 2-for-1 ratio. Although B.C.’s effort did somewhat foreshadow Trump’s, in that it created something of a DOGE (Department of Government Efficiency) when the B.C. government appointed an actual minister of deregulation to oversee the effort rather than leaving it to the bureaucracy to reform itself. And it worked. By 2004, 37 per cent of regulatory requirements in B.C. had been eliminated (exceeding the initial one-third target).
Trump’s new plan is less explicit in defining regulations, but it makes sure that new regulations cost less than the 10 regulations they replace. “For fiscal year 2025,” reads the EO, “the heads of all agencies are directed to ensure that the total incremental cost of all new regulations, including repealed regulations, being finalized this year, shall be significantly less than zero, and any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least 10 prior regulations.”
And Trump’s plan will put regulators in government agencies on a permanent diet, as a “total amount of incremental costs… will be allowed for each agency in issuing new regulations and repealing regulations for each fiscal year after fiscal year 2025.”
Why does this matter to Canadians?
Because, unlike those few years of B.C. regulatory reform, Canada has been wrapping itself in regulatory red-tape for decades, making our economy less competitive globally and with the United States. Between 2006 to 2018, the number of restrictive regulations in Canada grew from about 66,000 to 72,000. And according to the Canadian Federation of Independent Business, the cost of regulation from all three levels of government to Canadian businesses totalled $38.8 billion in 2020, for a total of 731 million hours—the equivalent of nearly 375,000 fulltime jobs.
Clearly, Canada has a regulatory problem—our governments generate seemingly endless spools of regulatory red tape, which keep Canadian businesses tangled in inefficiency, wasted labour and non-competitiveness. President Trump’s new regulatory reform initiative will further increase the “red-tape gap” between Canada and the U.S.
Policymakers in Ottawa and the provinces would do well to learn about Canada’s experiences with deregulatory programs and strive to match—or beat—the new U.S. regulatory reform efforts before a massive lack of regulatory competitiveness becomes a serious problem, adding insult to injury on top of World War Tariff.
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