Prime Minister Mark Carney has initiated a review aimed at reducing bureaucracy in Canada. This effort is part of his election promise to alleviate the regulatory burden that has hindered the economy for years. In early July, Carney directed the president of the Treasury Board to engage federal departments in identifying ways to cut red tape. The review period concluded on Monday, resulting in the release of reports from 31 federal agencies.

The reports, titled "Red Tape Review Progress Reports," offer various proposals that could potentially save time and money for citizens and businesses. They aim to make Canada a more appealing place for investment and economic growth. For instance, the Treasury Board is exploring regulatory cooperation to support trade. This includes negotiating a mutual recognition agreement with provinces to standardize rules for non-food items and working with international partners to harmonize regulations.

Health Canada and the Public Health Agency of Canada are also seeking to align standards with other advanced nations. Their goal is to ensure Canadians have access to safe foods and medicines while reducing the regulatory burden on low-risk products. They also aim to simplify the licensing and reporting requirements for the cannabis industry.

Additionally, the Impact Assessment Agency of Canada and Natural Resources Canada are looking to streamline the approval process for infrastructure projects. They plan to focus on federal jurisdiction and accelerate decision-making timelines under the Impact Assessment Act.

Despite these proposals, skepticism remains about the government's ability to implement meaningful changes. Previous attempts to reduce red tape, such as the Red Tape Reduction Commission established by the Harper government in 2011, did not meet expectations. A report from Statistics Canada indicated that the regulatory burden increased steadily from 2006 to 2021, negatively impacting GDP and employment growth.

The current government faces challenges, including opposition from environmental groups and Indigenous leaders regarding fast-tracked national interest projects. Many proposals also have long timelines for implementation. For example, Health Canada plans to revise Cannabis Act regulations by the 2026-27 fiscal year and anticipates a two-year timeline for speeding up food and drug approvals.

The lengthy timelines suggest that federal departments may struggle with internal bureaucracy. Any changes must comply with the Cabinet Directive on Regulation, which requires extensive impact analyses and consultations. The fate of the 500 initiatives outlined in the reports will depend on the relevant ministers and their officials, who have historically been responsible for creating many of the existing regulations.

To effectively reduce red tape, Carney may need to introduce legislation that fast-tracks the removal of unnecessary regulations. Additionally, deeper spending cuts could incentivize departments to streamline their operations. The current plan to cut spending by 7.5 percent in select departments next fiscal year is seen as insufficient.

If the government can successfully reduce the regulatory burden, it could lead to significant economic growth. However, overcoming bureaucratic obstacles will be essential for achieving these goals.