Small business sector: Meeting report
The government met with representatives of Ontario’s small business sector as part of Ontario`s Open for Business strategy. This report details the sector’s top five priorities and the government’s solutions.
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Created with: Canadian Federation of Independent Business
Open for Business is Ontario’s initiative to create faster, smarter and streamlined government-to-business services and to establish a modern system of government. It’s a key part of the Ontario government’s commitment to make the Province more attractive to business while continuing to protect the public interest.
Open for Business has three key areas of focus:
- Modern government – create a streamlined and focused regulatory environment that delivers results for business, while protecting public interest
- Modern services – deliver better products, including service standards that support business needs
- New relationship with business – create an open and responsive working relationship between business and government
Ontario’s Business Sector Strategy
One of the ways Open for Business (OFB) is implementing a new relationship with business is through the Ontario Business Sector Strategy, which establishes an open dialogue and collaborative relationship between government and key business stakeholders.
Under the strategy, sector representatives are asked to identify five priorities under jurisdiction of the provincial government that would strengthen their sector’s success. Ministries have two months to address these priorities, or explain why they cannot be addressed and deliver alternative solutions. This joint understanding of priorities allows government and the business sector to work together more effectively to generate economic growth, create jobs for Ontario families, and protect the public interest.
Open for Business is responsible for working with ministries to ensure progress and resolution of each sector’s issues within appropriate timelines.
Small business sector
Small businesses are crucial to Ontario’s economy—98 per cent of the 382,000 businesses in the province are small and medium enterprises (SME). In national terms, Ontario is home to more than one-third of Canada’s SME employer businesses. Together these small businesses supply 2.9 million Ontarians with employment, or nearly half of all employment in the province.
During the business sector strategy process, the small business sector was represented by the Canadian Federation of Independent Business (CFIB), the leading Canadian association representing the needs of independent owner-operators of small and medium-sized businesses. The association was established in 1971, and has 109,000 Canadian members in every sector nationwide with more than 42,000 in Ontario.
The small business tour – May 2012
In May 2012 the Minister of Economic Development and Innovation, the Honourable Brad Duguid, along with CFIB Vice President (VP) of Ontario and Communications, Satinder Chera, participated in three roundtables with small business owners with the goal of obtaining feedback on regulatory issues they face in Ontario.
Following these discussions, which took place in Markham, Oakville and Mississauga, common themes began to emerge: complicated and burdensome application processes; outdated requirements; lack of clarity and understanding of compliance requirements; complaints related to Workplace Safety Insurance Board (WSIB); and support for one-window access to programs and information. Discussions on these themes and on-going feedback from CFIB members to Federation surveys eventually became the basis of CFIB's five priorities for the small business sector strategy.
The small business sector and Ontario’s Business Sector Strategy
Building on the work of Minister Duguid’s Small Business Tour, the formal kick-off roundtable was held at the Ontario Investment and Trade Centre on August 29, 2012. The roundtable brought together senior political staff, deputy ministers, assistant deputy ministers, staff from key ministries and senior officials from WSIB to hear sector representatives present their five priorities. In his opening remarks, Minister Duguid emphasized the important role of small business in Ontario’s economy and welcomed the opportunity to work on further strengthening the government’s relationship with the sector.
Exactly 60 days later, on October 29, deputy ministers and assistant deputy ministers from the ministries of Labour, Economic Development and Innovation, Government Services and officials from the WSIB presented solutions that deliver responsive and meaningful results to business. In the words of CFIB's Satinder Chera, the work established "a lasting legacy", resulting from additional conversations and initiatives CFIB had become a part of through its participation in the Sector Strategy process.
|CFIB's five priorities||Government response to CFIB's five priorities|
|Priority 1: Record-keeping requirements||Regulatory compliance can pose challenges for small business because of the additional resources it requires. For most small businesses, it is difficult to devote a single person to ensure compliance with regulatory requirements. Additionally, businesses must comply with varying reporting requirements from government bodies. For example, the Workplace Safety and Insurance Act, 1997 (WSIA) requires employers to report work-related injuries to the WSIB, even those that result in no lost time from work. Conversely, under the first aid program, the WSIB only requires employers to keep an administrative log of accidents and first aid treatment that is administered. To free up time for employers and reduce administrative costs incurred by the WSIB to process No Lost Time (NLT) claims, which accounted for two-thirds of all claims filed in 2011, CFIB recommends the elimination of the requirement in the WSIA to report NLT claims.||The WSIB will reduce the information required to register a NLT claim by approximately 60%. The WSIB is also moving towards paperless registration for all claims. By June 2013 the WSIB will begin the process of eliminating the paper Form 7 for all types of claims, with the goal of completely eliminating the paper Form 7 by end of 2013. Claims may already be registered through the new e-Form and, beginning in early 2013, via a new, easy to use tele-claim service. These proposed initiatives will reduce the burden on small businesses and support the WSIB's goal of delivering services to its clients in a responsive and administratively efficient way.|
|Priority 2: Government procurement||While procurement processes have improved, many SMEs are still unaware of opportunities available to them. The actual procurement process can also be difficult to navigate: small businesses find the vendor of record (VOR) program particularly complex and CFIB members have specifically pointed to the Request for Proposal (RFP) and the subsequent Master Form of Agreement as lacking clarity. In an attempt to resolve these issues, the Ministry of Government Services (MGS) launched its How to do Business with the Ontario Governmentin 2011. The guide offers an overview of the process, but could be improved by providing additional tools such as templates for responding to different RFPs. This would also reduce the amount of time required by government to troubleshoot with potential vendors. To improve the procurement process, CFIB recommends a link to government procurement opportunities on the ONe-Source for Business website; simplification of the VOR process and; amendment of How to do Business with the Ontario Government to make it more user-friendly.||As per CFIB's recommendation, links have been made available on the ONe-Source for Business website to VOR arrangement, a project is currently underway to critically analyze all components of the procurement processes. MGS is also in the process of organizing a series of workshops, in which CFIB will participate, with vendors who have been recently awarded contracts with Ontario. Based on this work, a recommendations report will be available by early 2013. In terms of amending Doing Business with the Ontario Broader Public Sector, CFIB and MGS met with the Ministry of Finance (MOF), which publishes the guide, to review CFIB's concerns. As a result, MOF has agreed to make revisions to this guide. The MGS-published How to do Business with the Ontario Government will also be amended to provide more practical information such as best practices and steps of the procurement process. Given similarities between the guides, MGS and MOF have agreed to ensure the audience for each guide is clear to reduce any confusion for vendors.|
|Priority 3: Ongoing regulatory measurement and reporting||CFIB advocates for regular public reporting on regulatory measures. Going a step further, legislating the requirement to report measures would make public accountability even stronger. CFIB acknowledges the significance of Ontario’s 2011 initiative in publishing the number of requirements it imposes on individuals and business, and encourages government to implement an ongoing measurement of the progress to reduce the regulatory burden. Having implemented metrics to track wait-times for health services, the government has already embraced the type of public accountability it should now adopt in the area of regulatory reform. Any proposed measurement model should be open and transparent, with the emphasis on reducing the red tape and paper burden on small businesses. CFIB recommends regularly measuring and publicly reporting on the number of regulatory requirements imposed on businesses, with additional plans to legislate the requirement.||OFB will bring forward for senior government consideration a proposal to amend the Ontario Regulatory Policy and implement a new regulatory burden strategy to measure and report on regulatory requirements sequentially by sector or process. The proposed approach includes: a regular reporting cycle; a standard framework for measurement; and a central mechanism for reporting. The objective of this sequential approach is to provide a deep examination into regulatory requirements that have impact on business, provide a meaningful measurement (e.g., cost or time imposed on business rather than simply a count) and work to reduce the burden over time. In addition to reduced time and cost to business to comply with regulations, the approach provides enhanced transparency through regular public reporting on government-wide progress.|
|Priority 4: Sunset clauses on regulations||Sunset clauses require preset reviews of regulations and can help to ensure that regulations are updated to reflect current realities. Given that regulations are ‘hidden' form of taxation, it is important that they are regularly reviewed to assess their impact and applicability with changing circumstances. To this end, CFIB recommends the government attach a specific timeline for reviewing new and existing regulations it imposes on businesses and individuals.||OFB will bring forward for senior government consideration a proposal to implement a mandatory review policy across government for regulations on a go-forward basis. The proposed approach includes: a two-track policy to focus on high impact regulations and government-wide review policy and tools. High-impact regulations would face a mandatory review within a flexible medium term-timeframe (e.g., 10-year maximum), and ministries would be encouraged to monitor lower-impact regulations and review them periodically. The mandatory review policy would create a consistent approach to review regulations regularly for ongoing relevancy and effectiveness, while recognizing ministries' available resources.|
|Priority 5: Regulatory registry expansion||Ontario’s Regulatory Registry allows businesses to preview both proposed regulations and recently approved regulations. However, there is currently no mechanism for businesses to provide feedback on existing regulations. A central repository for business feedback on existing regulations would save small business owners time and money, as they would no longer have to approach individual ministries. Also, ineffective regulations would be more closely monitored. This step would help to build on Priority 4. CFIB therefore recommends expanding the role of the Regulatory Registry to provide businesses with the opportunity to provide ongoing feedback to the government and require Ministers to justify the rationale behind specific regulations.||OFB will expand the Regulatory Registry to provide businesses with the opportunity to provide ongoing feedback to government on any existing or proposed Ontario regulation, by adding a feedback form to the Regulatory Registry. Responses to questions or comments, with a rationale for specific regulations, will be provided directly to business using existing government processes and service standards. Activity on the Registry will be reviewed after an initial period (e.g., 6 months) to ensure government resources are being used effectively and to identify any opportunities for improvement.|
Priority 1: Record-keeping requirements
The vast majority of business owners want to comply with government rules. For most small businesses, however, it simply is not feasible to devote a single person to ensure compliance with regulatory requirements. For many start-ups, this could represent their entire labour force. Most often, the business owner copes with regulatory compliance after hours or on weekends, making regulations both a financial and personal challenge for entrepreneurs.
Regulatory compliance can pose significant challenges because of the additional resources it requires for the business. This is only made more difficult when there are varying reporting requirements from government bodies. For example, the WSIA requires employers to report work-related injuries to the WSIB, even those that result in no lost time from work. Conversely, under the first aid program, the WSIB only requires employers to keep an administrative log of accidents and first aid treatment that is administered. The same can be said for Employment Standards regulations which do not require small businesses to remit records related to payroll (e.g., hours of work, wages, and vacation pay), unless requested through an audit.
The CFIB believes there is an opportunity to further reduce the amount of paperwork without compromising workplace safety by eliminating the requirement to report NLT claims. Not only will this free up valuable time for employers to devote to making their workplaces safer and growing their business, but it will have the added benefit of reducing the administrative costs incurred by the WSIB to process those NLT injury forms. Such paperwork accounted for approximately two-thirds of all claims filed in 2011 (125,000).
CFIB recommendation: Eliminate the WSIB requirement to report NLT claims.
(Lead: Ministry of Labour, Associated Agency: WSIB)
During the two-month timeframe of the Small Business sector strategy, the Ministry of Labour (MOL) and the WSIB worked collaboratively with the CFIB to make it easier for small business to report NLT claims, which represent a large proportion of all claims received by the WSIB, as well as other claims. CFIB's request aligns with the transformational goals of the WSIB as it moves to a paperless registration system as it has already introduced an online e-Form 7 and will soon add other services such as tele-claim in an effort to reduce burden on business and provide better service to its clients.
As a result of this collaborative work, the WSIB has committed to reducing the information required to register a NLT claim on a Form 7 by approximately 60%. The WSIB is also moving towards offering more eServices and to paperless registration for all claims. By June 2013 the WSIB will begin the process of eliminating the paper Form 7 for all types of claims, with the goal of completely eliminating it by end of 2013. In place of the paper Form 7, the new e-Form 7 is currently available on the WSIB website and an easy-to-use tele-claim service will be implemented in early 2013 to support the WSIB's goal of delivering services to its clients in a responsive and administratively efficient way.
Several benefits will be generated for the small business community as a result of these changes. First of all, elimination of paper Form 7 is expected to save business time and money by switching to a more efficient claim filing model. Specifically, the new e-Form 7 is reducing the amount of mandatory data required from an employer by more than 60% for NLT claims. Additionally, the new e-Form 7 allows employers to review their claim submission and status within 24 hours of submission and allows them to attach additional information to the form online, rendering the entire process more flexible. For its part, the tele-claim service will provide employers with live service and allow businesses to save time by easily registering a claim. The tele-claim service will be available during hours that meet business needs. With a direct line to WSIB staff, the tele-claim service will provide a more personalized service that will guide small business owners who may be new to the claim process and/or dealing with the WSIB.
To ensure effectiveness of the new services, the WSIB will rely on its established metrics to monitor the success of the transformational initiatives, by specifically tracking participation rates, timeliness and satisfaction rates.
Priority 2: Government procurement
Procurement provides a small business with stable income, increased credibility with potential buyers, and a launching pad for exporting products or services. Unfortunately, many small businesses feel shut out of the process. While procurement processes have improved, barriers still remain.
When it comes to procurement opportunities, many SMEs are not aware of opportunities to sell to the government because they simply don't have the same resources that larger firms do to devote to understanding procurement systems and applying for contracts. As a start, adding a link from the ONe-Source for Business website to procurement opportunities would be helpful to the business owner, and would support the goal of bringing these opportunities to the attention of small businesses.
However, that’s just the first step. For many entrepreneurs, the actual procurement process can be a difficult maze for them to navigate through. This is certainly the case with the VOR program. Its complexity creates a sense of frustration for some business owners. For example, CFIB members point to the RFP and the subsequent Master Form of Agreement as lacking clarity. The current use of standardized forms requires business owners to determine for themselves which requirements actually apply to them (e.g. requirement to have WSIB coverage, when in fact the business is exempt). Identifying and implementing ways to tailor the information for different sectors would be helpful.
To that end, MGS launched its How to do Business with the Ontario Government guide. The Ministry of Finance subsequently released an additional publication - Doing Business with the Ontario Broader Public Sector: A Guide for Small and Medium Enterprises in 2011. Currently, the guide provides an overview of the process, but it could certainly benefit from improvements that address the last point and provide additional tools to help small businesses. For example, including templates for how to respond to different RFPs would help them through the process. It would also reduce the amount of time required by government employees to troubleshoot with potential vendors.
At the end of the day, small businesses are not looking for preferential treatment; they are looking for equal access to government procurement opportunities. Given the realities of owning a small business, the CFIB hopes the government uses this feedback to level the playing field even further.
CFIB recommendation: Provide a link to government procurement opportunities from the ONe-Source for Business website; simplify the vendor of record process and amend the Doing Business with the Ontario Broader Public Sector: A Guide for Small and Medium Enterprises to make it more user friendly.
(Lead: Ministry of Government Services)
MGS has responded to the first part of CFIB's request by providing links to government procurement opportunities from the ONe-Source for Business website to MGS has also made substantial progress in simplifying the VOR arrangement procurement process. In fact, whereas four years ago it would have taken six months to vet 100 potential vendors, today it only takes six weeks. Building on these improvements, a project is currently underway to critically analyze all components of the procurement process using Lean Six Sigma as part of Supply Chain Management Division’s (SCMD) continuous improvement program. The project aims to reduce the procurement process burden by 25% by engaging vendors who have recently been awarded contracts with the province through a series of workshops, in which CFIB has also agreed to participate. MGS conducted the workshops in October and November 2012 and aims to begin implementing the resulting recommendations in early 2013.
In response to CFIB's third request regarding procurement guides (Doing Business with the Ontario Broader Public Sector: A Guide for Small and Medium Enterprises and How to do Business with the Ontario Government) MGS has committed to revising the guides to make them more user-friendly. MOF will make amendments to its Doing Business with the Ontario Broader Public Sectorguide, while the MGS-published Guide to Doing Business with Government will also be revised to include more practical information, such as best practices and steps of the procurement process. Given similarities between the guides, MGS and MOF have agreed to ensure the audience for each guide is clear to mitigate any confusion for Ontario vendors. Both guides will be revised and published in early 2013. Finally, MGS will continue to lead strategic planning consultation with vendors and other communities in order to improve processes and introduce more openness and transparency.
Reviews of the procurement process from the vendor community’s viewpoint will be carried out periodically to ensure continuous improvement is kept on track.
Priority 3: Ongoing regulatory measurement and reporting
Any government serious about effective regulatory reform must give the public a way to evaluate its regulatory activity. Internal guidelines and checklists, a feature of many reform initiatives, are not enough. Those proposing additional regulation should not be left to police themselves. Recent experiences (discussed more fully in the next section) show that it is possible to estimate the regulatory burden. Regulatory measures must then be regularly reported to the public. Going a step further, legislating the requirement to report regulatory measures would make it harder for governments to abandon public accountability.
The Ontario government took an important step in this area in 2012 by publishing the total number of regulatory requirements (386,251) it imposes on businesses and individuals. Having set the benchmark – the initial count – the CFIB encourages the government to implement an ongoing measurement of the progress that tracks the progress it is making to reduce the regulatory burden on individuals and businesses. Having implemented metrics to track wait-times for important health services, the government has already embraced the type of public accountability the CFIB is now encouraging it to adopt in the area of regulatory reform.
The government can either continue with the existing count, adopt a measurement model from another province (i.e. BC and Nova Scotia), or create a new model unique to Ontario. Any proposed model should be open and transparent with the emphasis on reducing the red tape and paper burden on small businesses.
CFIB recommendation: Regularly measure and publicly report on the number of regulatory requirements imposed on businesses; with additional plans to legislate the requirement.
(Lead: Ministry of Economic Development and Innovation)
OFB will bring forward for senior government consideration a proposal to amend the Ontario Regulatory Policy and implement a new regulatory burden strategy to measure and report on regulatory requirements sequentially by sector or process. The proposed approach includes: a regular reporting cycle; a standard framework for measurement; and a central mechanism for reporting.
The objective of the sequential approach is to provide a deep examination into regulatory requirements that have an impact on business, provide a meaningful measurement (e.g., cost or time imposed on business rather than simply a count) and work to reduce the burden over time. The proposed approach focuses on improving administrative processes and paperwork burden rather than significant policy shifts. The approach includes the following key components:
- Regular reporting cycle: The approach proposes to establish a regular reporting cycle, for example annually, to report on progress achieved government-wide. Regular progress reports could outline, for example, areas under review with any corresponding measure of burden, and upcoming plans for the following cycle.
- Selection of areas to examine: A selection process would be established to identify and prioritize processes or sectors to examine under the proposed approach, and would include alignment with government priorities, consultation with ministries across government and a broad range of stakeholders. The selection process would recognize the imperative of no new fiscal resources to undertake this initiative.
- Measurement: The proposed approach would measure time and cost impacts to business. To provide consistent measurement across regulatory areas under examination, a standard framework such as Ontario’s Regulatory Cost Calculator (used to estimate direct costs of compliance with regulations) would be applied where appropriate. Engagement with business stakeholders will be an important aspect to inform the estimates.
- Central mechanism for reporting: A central mechanism would be established to oversee measurement and reporting of regulatory burden initiatives across government.
Following senior government approval, a strategy document would be developed to publicly launch the initiative. Such a plan would outline the goal of the initiative and key components of the approach – to publicly report on a regular basis, using a consistent measure of time and cost impacts of regulatory requirements. For the first phase of the initiative, the objective will be to select areas that are relevant to a broad range of businesses and that can be measured and reported in a reasonable timeframe to build experience on the new approach.
Priority 4: Sunset clauses on regulations
With 386,251 regulatory requirements in place, many can outlive their usefulness before governments get around to amending or eliminating them. Instituting a sunset clause that requires preset reviews of regulations can help to ensure they are updated to reflect current realities. For example, governments are required to introduce annual budgets to respond to changing financial and political circumstances. Given that regulations are ‘hidden' form of taxation, it is critical that they are regularly reviewed to assess their impact and applicability with changing circumstances. To this end, the government could attach a specific timeline for review (e.g., five years) with new and existing regulations it imposes on businesses and individuals.
CFIB recommendation: Institute sunset clauses in new and existing regulations.
(Lead: Ministry of Economic Development and Innovation)
OFB will bring forward for senior government consideration a proposal to implement a mandatory review policy across government for new regulations on a go-forward basis. The mandatory review policy would create a consistent approach to regularly review regulations for ongoing relevancy and effectiveness, while recognizing ministries available resources (i.e. reviews would not require new fiscal resources).
The proposed approach will seek to implement a two-track policy for mandatory reviews which will focus ministry resources on reviewing regulations that have the highest impacts on business and other stakeholders. High-impact regulations would face a mandatory review within a flexible medium term timeframe (e.g., 10-year maximum) and ministries would be encouraged to monitor low-impact regulations and review them periodically.
The approach also proposes to develop government-wide criteria and tools to promote consistent reviews across government. OFB will work with ministries to develop supporting materials and tools to promote consistent implementation across government. The approach would build in flexibility for ministries based on resource considerations and any existing review mechanisms or requirements already in place. The implementation strategy would also explore amending Ontario’s Regulatory Policy to reflect the mandatory review approach.
Priority 5: Regulatory Registry expansion
Ontario’s Regulatory Registry allows businesses to preview both proposed regulations and recently approved regulations. However, there is currently no mechanism for businesses to provide feedback on out-of-date or irrelevant regulations. This is one area where the Registry could be expanded to provide businesses with the opportunity to give ongoing feedback to the government and require Ministers to justify the rationale behind those regulations. This would save small business owners time and money since they would have a central repository for their concerns instead of having to approach individual ministries. Also, ineffective regulations would be more closely monitored. This step would help to build on Priority 4.
CFIB recommendation: Expand the role of the Regulatory Registry to provide businesses with the opportunity to provide ongoing feedback to the government, and require Ministers to justify the rationale behind specific regulations.
(Lead: Ministry of Economic Development and Innovation)
The government will expand the Regulatory Registry by adding a feedback form to provide businesses with the opportunity to provide ongoing feedback to government, on any existing or proposed Ontario regulation.
The new Registry feedback form will include a comment box and drop-down list of topics and themes (e.g., health, workplace, law and safety) to guide the user in inputting the comment or question. Based on the information submitted, the comment will be routed to the appropriate government contact for a response. Responses to the submitted question will be provided directly to business using existing government correspondence channels and service standards.
As a result of these changes, business will have better access to provide government with feedback through a one-window portal on an existing site, already familiar to business. This will save business time as they will not have to search and locate the appropriate ministry or contact responsible for a regulation. The expanded Registry is also expected to enhance government responsiveness to business questions and concerns about Ontario regulations and can act as a mechanism to flag regulations for review, as part of the solution developed to address CFIB's fourth priority.
After an initial period (e.g., 6 months) the new feedback process will be reviewed to ensure resources are being used effectively. To track performance, OFB will look at whether government correspondence service standards are being achieved, and measure the volume and type of inquires received through the Regulatory Registry. Ultimately, the assessment will consider whether the comments lead to government action or change.
OFB will work with relevant government partners to introduce the regulatory feedback form on the Regulatory Registry by the spring of 2013.
In a two-month period, the Government of Ontario delivered tangible recommendations and outcomes by working with small business. Record-keeping requirements have been reduced significantly and will continue to decrease thanks to the transformational work planned by the WSIB. CFIB and other business community members will engage in MGS' continuous improvement program to simplify the VOR arrangement process and level the playing field for small businesses vying for government contracts.
Speaking specifically to MEDI's proposed regulatory measurement strategy, CFIB's Satinder Chera reminded everyone that "time is money" and that "measuring the time and cost of burden is a huge step forward for Ontario." MEDI will also take on regular review of regulations and provide business with a central location to offer feedback on all existing regulations. In the words of CFIB Executive VP Laura Jones, the initiatives undertaken by MEDI, MOL and MGS though the Business Sector Strategy process make for "very promising steps for small business". The ministries look forward to further collaboration with the CFIB and the small business sector to deliver on these solutions.