WASHINGTON (March 8, 2016) – As the White House prepares to receive Canadian Prime Minister Justin Trudeau for a state dinner this week, there are key lessons the president and Congress could learn from Canada’s recent legislative history, especially the way the nation has streamlined regulation, according to a new studyfrom the R Street Institute.

Although lampooned by U.S. conservatives as a land of big government, the size of the Canadian government actually has fallen from its historic peak in 1992. Part of that has come through a series of spending cuts, but also crucial has been the introduction of “regulatory budgeting” techniques designed to keep the regulatory state from growing any larger. Meanwhile, in the United States, more than 4,000 new regulations take effect each year and another 2,700 are proposed.

“Regulatory budgeting has been enacted in Canada to arrest the growth of, and even begin to shrink, the regulatory state for the sake of encouraging investment and fostering economic activity,” R Street Associate Fellow Sean Speer writes. “We should bring Canada’s lessons from regulatory budgeting to bear as the U.S. Congress considers how best to reform the federal regulatory system.”

Speer examines two Canadian examples of regulatory budgeting, one at the provincial level in British Columbia and more recent reforms at the federal level. The British Columbian government created a Cabinet-level position to oversee deregulation purposely adopted a broad baseline by which to measure reforms. The provincial government achieved a 37 percent reduction by its three-year deadline.

The federal reforms led by former Prime Minister Stephen Harper are estimated to have saved Canadian businesses more than C$32 million in administrative burden as well as 750,000 hours spent dealing with “red tape” each year.

For regulatory budgeting to work in the United States, Speer observes that Americans should learn from the Canadian example that political leadership is crucial, the baseline of regulations must be comprehensive and estimations of regulatory costs must be inclusive and credible.

“Regulatory budgeting is not a silver bullet,” Speer wrote. “But it can bring greater accountability, discipline and transparency to the regulatory state. In turn, it could improve conditions for ore investment and economic activity.”

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