Hon. Danièle Henkel: Honourable senators, I rise today to speak to Bill S-7, which seeks to cut red tape for Canadians and businesses. I will address this bill from the perspective of a woman who has started and run businesses and who knows what it is like to be an entrepreneur.
When a person is running a small or medium-sized enterprise, or SME, they quickly learn that time is one of their most precious resources. Every hour spent filling out forms, looking for information or waiting for approval is an hour that cannot be devoted to clients, employees or business development. Unlike large corporations, SMEs do not always have specialized teams to meet administrative requirements or the financial means to do so. That is what I want to talk about today.
[English]According to the Canadian Federation of Independent Business, small- and medium-sized enterprises spent an average of 256 hours dealing with avoidable red tape in 2024 across all levels of government. That’s the equivalent of 32 working days.
Think about that. It is 32 days that an entrepreneur could have spent finding new customers, developing a product or growing their business.
This should concern us all. Administrative complexity comes at an economic cost. But there is also a human cost, especially for those who shoulder much of the responsibility for running a business on their own.
This is why I welcome the government’s commitment to tackling this issue.
[Translation]Bill S-7 proposes a number of useful amendments. In particular, it would remove outdated requirements, simplify certain procedures and enable greater use of digital tools. For instance, it includes provisions that would eliminate over 160 agricultural marketing regulations that are now obsolete. It also includes measures that would make it easier to recognize certain reliable foreign regulatory systems in order to speed up access to products our farmers need.
[English]Food, Health & Consumer Products of Canada has welcomed the improvements proposed in Bill S-7 but makes an important point. It said, “The real measure of success will be whether implementation delivers simpler requirements, faster and more predictable service.”
The Canadian Chamber of Commerce has also welcomed Bill S-7, while also emphasizing that “. . . regulatory modernization must be an ongoing priority, not a one-time exercise.”
Let me highlight a few provisions that illustrate both its potential and its limitations.
[Translation]First, the bill would modernize the Boards of Trade Act. At first glance, these changes may seem far removed from the day-to-day concerns of entrepreneurs. However, boards of trade play an important role in our communities. They bring businesses together, advocate on their behalf and contribute to regional economic development. Yet some of the rules by which they operate are outdated and unnecessarily burdensome.
From a very practical perspective, Bill S-7 would reduce the minimum number of council members, replace quarterly general meetings with one annual meeting and allow for terms of office of up to three years. It would also authorize electronic notices of meetings, facilitate the amalgamation of boards of trade, tailor financial audit requirements to their size and remove the requirement for prior ministerial approval to amend their bylaws.
These measures would allow them to devote fewer resources to their own administration and more to representing businesses.
[English]Another issue deserves our attention: the insolvency of small businesses. We often talk about starting businesses, but we must also consider the resources available to help them weather difficult times.
A company can face financial difficulties without being beyond saving. Yet, current bankruptcy and restructuring procedures can be complex and costly, particularly for small businesses. Bill S-7 proposes simplified procedures for certain small companies in financial distress.
The objective is a reasonable one: to make it easier for viable companies to restructure their debts, whilst allowing those that can no longer continue operating to wind down at a lower cost.
This approach is consistent with the position of the Canadian Bar Association, which argues:
The cost of a standard bankruptcy or proposal process is often disproportionate to the debt levels involved, and the procedural requirements were designed for larger, more complex insolvencies. . . .
[Translation]The Bar Association supports these simplified procedures, which could help more small businesses get back on their feet rather than shutting down. It does, however, call for one safeguard: When a business obtains temporary protection from legal action by its creditors, it must continue to pay its day-to-day bills during that period.
This proviso seems essential to me. Protecting a small business in distress must not mean imperilling its suppliers and creditors, as they too might be SMEs. I do think, however, that it is too bad that these new procedures are reserved for incorporated companies, to the detriment of sole proprietors. Furthermore, we don’t yet know which small businesses will be eligible, since the asset and debt thresholds will be set later, by regulation. If these criteria are too restrictive, this reform may fail to reach the small businesses that need it most.
I would also like to address the issue of digitization, which is an important part of this bill. Bill S-7 seeks to streamline procedures between businesses and various federal government departments. In the areas of food inspection, the environment and fisheries, it would expand the use of electronic documents, applications and communications.
That is a good thing, but digitizing a procedure does not necessarily make it simpler. Putting a complicated form on a screen does not make it simple, and an automated system does not necessarily provide better service if the entrepreneur doesn’t understand the decision, can’t get an explanation or still has to wait the same amount of time for an answer.
What SMEs want are procedures they can understand, deadlines that are reasonable, and someone they can contact when they run into a problem.
[English]These examples show that Bill S-7 offers useful improvements. But there is still much more work to be done. The short title of this bill, “Cutting Red Tape for All Canadians Act,” suggests a reform of considerable scope, even though the measures before us are limited.
The bill does not address the administrative burden across all sectors of our economy, nor will it directly benefit every Canadian or every business.
The government estimates that this bill will generate at least $264 million in savings over 10 years for businesses and the federal government. Given the scale of the administrative burden, I find that figure rather modest.
Last week, our colleague Senator Batters asked Senator Petten how this estimate had been calculated. I share her concerns. I would also like to know how much of these savings will actually benefit businesses, particularly small- and medium-sized enterprises. I, therefore, hope that the committee’s study will not only provide clear answers but also give us an opportunity to hear directly from those affected and determine whether the proposed measures truly meet their needs.
Ultimately, what matters is not just the savings announced on paper, but the results on the ground: fewer unnecessary procedures, shorter processing times and lower costs for businesses.
[Translation]Honourable senators, I support this bill’s objective, even though the proposed measures are still insufficient. We need a comprehensive strategy for cutting through red tape for all sectors and businesses of all sizes. The organizations I have spoken to are ready to chip in. We should listen to them and let our entrepreneurs focus on business rather than on paperwork.
Thank you. Meegwetch.