Federal government tops most absurd red tape regulations: CFIB

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The federal government has won several top awards — though perhaps not for the prize it had in mind.

The Canadian Federation of Independent Business (CFIB) announced 2024 Paper Weight Awards and the Canadian government swept the top category of most absurd regulations.

The Canada Border Services Agency (CBSA) took the top spot in the red tape race for its “burdensome and unfair decision” on a small costume business in Calgary.

The owner of Calgary’s Costume Shoppe is facing potential closure after getting hit by the CBSA with $100,000 in import duty fees. The agency changed the classification on his imported theme costumes from “festive wear” to “fancy dress.”

The result was a “regulatory and costly nightmare” for the small business, CFIB director Julie Kwiecinski said in a statement.

“The change essentially means that a Santa suit or scary ghost mask are considered the same as regular clothing people wear every day,” she continued. “I think it’s pretty clear to everyone but the CBSA that themed costumes are not intended for continuous wear, day in and day out.”

The shop’s owner has been forced to re-file previous inventory, even though the items have already been imported, and can’t appeal the CBSA’s decision unless he pays first.

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“The livelihood of this and other small businesses is at risk; yet there’s precedence for big businesses being exempted from these duties,” Kwiecinski added.

“Doesn’t the CBSA have bigger fish to fry than enforcing a silly, unreasonable rule?”

In second place was Health Canada, due to its plans to introduce a new cost recovery process for the natural health products industry that will involve paperwork challenges and excessive fees to get a product into the Canadian market.

Businesses in the sector will also have to navigate a standardized “Product Facts Table” and add new labelling requirements on top of the rules already in place.

Finally, Finance Canada took the third spot for making payroll services subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).

According to the CFIB, this development resulted in more paperwork for small businesses using payroll services and duplicates existing anti-money laundering controls used by banks.

The regulatory burden has been discouraging for small businesses from adopting digital payroll solutions.

“If the CBSA, Health Canada and Finance Canada had first considered how their new rules would impact small businesses, we wouldn’t be in this regulatory mess,” Kwiecinski added.