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Ottawa just ordered regulators to cut $2 of red tape for every $1 they add

Treasury Board President Shafqat Ali announced a new Cabinet Directive on Regulatory Competitiveness and Red Tape Reduction — the biggest federal regulatory reform since the Cutting Red Tape for all Canadians Act.

Published: October 22, 2026 · Updated: October 22, 2026 · 1 min read

Ottawa just ordered regulators to cut $2 of red tape for every $1 they add
Illustration generated with AI for Serious Pick Illustration generated with AI for Serious Pick

The directive

On Wednesday, the Honourable Shafqat Ali, President of the Treasury Board, announced a new Cabinet Directive on Regulatory Competitiveness and Red Tape Reduction, according to the federal news release. The directive changes the foundation of how Ottawa writes rules: regulators must now reduce regulatory burden costs by $2 for every $1 they add, assess the competitiveness impact of new proposals, remove outdated rules as quickly as possible, use recognized national or international standards by default, and review regulations regularly. The government says the aim is to make it easier for businesses to invest and grow while keeping health, safety and environmental protections intact.

The small-business welcome

Dan Kelly, president of the Canadian Federation of Independent Business (CFIB), welcomed the move in a statement, calling the two-for-one requirement "a significant step forward" that incorporates long-standing CFIB recommendations. But he warned that implementation will decide whether it matters: small businesses should not face new costs from having to buy access to standards or obtain unnecessary certifications, and "success will ultimately be measured by results" — fewer forms, lower compliance costs, more time to run the business.

Why it matters now

The directive builds on Bill S-7, the Cutting Red Tape for all Canadians Act introduced earlier this month, and follows a 60-day red-tape review in which departments identified nearly 500 measures to streamline processes — from easing transit rules for travellers to simplifying the Canadian Armed Forces grievance system. A new Red Tape Reduction Office inside the Treasury Board Secretariat will coordinate implementation and track progress. The timing is political as well as practical: with the fall budget due November 5 and the Parliamentary Budget Officer forecasting sub-1% growth this year, Ottawa is pitching regulatory reform as growth it can deliver without spending a dollar.

What matters

What happened

Ottawa unveiled a Cabinet Directive requiring regulators to cut $2 of compliance costs for every $1 of new burden, plus competitiveness reviews and faster removal of outdated rules.

Why it matters

Regulatory drag is a top small-business complaint — and the government needs growth levers that don't worsen a $60-billion-plus deficit.

What we know

It's a directive, not a law; the hard test is whether the new Red Tape Reduction Office can turn the 500 identified measures into real savings.

What we don’t

How compliance costs will be measured and enforced — and whether provinces, which own much of the regulatory stack, play along.

What’s next

Watch the November 5 fall budget — the government has promised a "significant" update on its economic plan, and this directive sets the tone.

Sources

federal budgetred taperegulationShafqat AliCFIBsmall business

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