From shipping to staffing, the Chamber and its partners have the tools to save your business money and the solutions to help you run it more efficiently. Join the U.S. Chamber of Commerce today to start saving.
Worries about red tape aren’t just an American phenomenon. Our neighbor to the north came up with one way to lasso in the Regulatory State. Since 2012, Canadian federal regulators have been operating under a “One-for-One” rule:
[F]or every new regulation added that imposes an administrative burden on business, one must be removed.
NPR reports that it has had a positive effect on Canada’s business climate:
[Canadian cabinet minister Tony] Clement says small businesses are logging less time on paperwork - a reduction of hundreds of thousands of hours so far. Nineteen federal regulations have been eliminated.
[Earlier this year, I noted that Australia is also engaging in a regulatory reform effort by emphasizing cost-benefit analysis and adequate public consultation and review.]
Would Canada’s approach work in the U.S.? While the rule is interesting and is having some effect, it misses an important point about federal regulations. It’s not the sheer number of regulations that we should worry about as much as whether regulations accomplish what Congress intends in a cost-effective manner.
For example, EPA regularly practices bait and switch by issuing costly air pollution regulations—like those for mercury--that claim massive benefits. But in the fine print you find that the vast majority of the benefits come, not from the primary pollutant the regulation is designed to reduce, but fine particulate matter (PM). This pollutant, as William Kovacs points out, “is already controlled by its own stringent air quality standards, and is currently well below (25-30% below) the level that EPA itself considers safe for virtually every American.”
Here are two other examples:
- Is EPA’s war on coal in the name of reducing carbon emissions worth the risk of decreased power grid reliability?
- Is FDA’s rule requiring calorie count labels on vending machines a cost-effective solution? In this case, we don’t know, because the FDA never estimated the rule’s benefits.
A plus of the one-for-one approach is it would force regulators to reexamine old regulations to see if 1) they’re still necessary; 2) they’re working at intended; 3) there are better ways to meet the desired end. That’s better than the Obama administration’s record of regulatory look-back.
But taming the Regulatory State needs more than just a regulatory budget. It requires a systemic approach that restores accountability, transparency, and meaningful public input. A better process will result in better regulations.