Red tape at Canada-US border discouraging small businesses from trade: report

Red tape has one-third of Canadian small businesses thinking twice about trading across the U.S. border, a new study says.

According to the report by the Canadian Federation of Independent Businesses (CFIB), “in a slowing economy, eliminating unfair and costly rules at the Canada-U.S. border is an inexpensive way of supporting small businesses, who employ more than half of all working Canadians and continue to create most of the new jobs in the country. With Prime Minister Trudeau and President Obama scheduled to meet this spring, we hope they will take steps to improve cross-border trade for all businesses by making red-tape-free-trade a priority.”

The report, which is based on 8,600 responses from small business owners across the country, assessed the performance of the Canada Border Services Agency and the U.S. Customs and Border Protection Agency in facilitating cross-border trade. While the report noted that each agency has improved accessibility, knowledge, and how they treat customers, neither has worked on how they provide and communicate relevant information. Thirty-six per cent of the survey’s respondents said administrative hassles and lack of transparency around fees forced them to reduce how often their goods get across the border.

“While we are pleased to see some progress, red tape is putting the benefits of free trade out of reach for many small businesses,” Satinder Chera, CFIB vice-president, said in a statement. “Small firms need timely and easily accessible information, which the CBSA can provide by improving its Single-Window Initiative to include small businesses, not just pre-approved customs brokers. Making fees more transparent and proportional to smaller transactions would also help.”

“Government red tape is a hidden tax that affects Canada’s small businesses much more than larger firms,” the report continued. “The annual cost of all regulations on businesses in Canada is pegged at $37 billion per year, with one-third of that ($11 billion) considered unnecessary red tape.”