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The Progressive Economics Forum

Deregulation: A Bad Idea Crosses the Atlantic

The Harper government announced today that federal “regulators will be required to remove at least one regulation each time they introduce a new one that imposes administrative burden on business.”

At the risk of imposing a proofreading burden on communications staff, that sentence is missing the word “an.”

I first heard this idea at a meeting of the OECD’s Regulatory Policy Committee, where the British government representative was touting the “One-in, One-out rule.” Canada’s Conservatives have just renamed it the “One-for-One Rule.”

At best, this rule is a gimmick. At worst, it will delay or prevent the implementation of needed public-interest regulation.

The issue is not, of course, the sheer number of regulations. It obviously makes sense to review existing and proposed regulations. But an honest review should be open to the possibility that more regulations are warranted, if that is what the evidence indicates.

The One-for-One Rule will create perverse incentives for federal regulators. They will maintain and husband unnecessary regulations so that they have something to remove when they need to introduce new regulations.

For your reading pleasure, here is what I and others submitted to the OECD.

UPDATE (January 21): This letter is in today’s Globe and Mail (page F8):

Regulation roulette

It obviously makes sense to review existing and proposed regulations (Tories Seek To Cut Red Tape Wrapped Around Businesses – Jan. 19). But an honest review should be open to the possibility of increasing regulation, if the benefits outweigh the costs.

Requiring the elimination of an existing regulation for each new one creates perverse incentives. Regulators will husband unnecessary regulations so they have something to eliminate when new ones are required. If not, the “one-for-one” rule could impede needed public-interest regulation.

Erin Weir, economist, United Steelworkers

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Comments

Comment from Travis Fast
Time: January 19, 2012, 8:21 am

The conservatives are doing yet another in-out in-out in place of real public policy.

Comment from Andrew
Time: January 19, 2012, 7:08 pm

This is indeed really stupid. I note the commission also recommended that public service executives get bonuses based on their elimination of regulations. So someone can get a bigger bonus by dropping food safety or drug safety regs. Brilliant!!

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