The problem with trying to help small businesses survive is finding the right place to start.

When the Ontario government committed in 2004 to developing a Small Business Agency (SBA), the list of concerns from small and medium-sized enterprises (SMEs) was overwhelming: Red tape, tax relief, communications, workplace safety, insurance, financing and access to government contracts, among many others.

The agency, which was established in April as part of the provincial Ministry of Economic Development and Trade, is intended to save small companies time and money by streamlining government procedures and making programs more accessible and transparent.

"When I worked in a small business, before being elected, I saw first hand how the paper burden could paralyse companies. There's something like 5,000 forms for small businesses in Ontario. That's far too many to keep the (sector) growing," says SBA chairman Jeff Leal.

Jeff Leal

The Peterborough MPP also is a parliamentary assistant to the minister of economic development and trade.

According to the Canadian Federation of Independent Business (CFIB), SMEs account for about 90 per cent of companies, about 50 per cent of employees and about 50 per cent of the province's economic output. In Ontario, the CFIB has 42,000 members that create more than half of the new employment in the province.

Leal says the SBA cannot solve all problems for all companies, so it must focus on the things that can make interactions with the government more user friendly. He adds that he would like to see significant improvements within a year.

The agency's primary goals are to cut paperwork, review regulations that can hamper growth (and make sure new rules are not more of the same) and ensure that compliance is as easy as possible.

The agency has seven SME advisers, with an eighth to be added, whose job is to steer bureaucrats in the right direction.

Right now, the only way to find out whether you're in compliance is when you find out you aren't, says Pamela McDonald, general manager of CD Warehouse in Ottawa and an SBA private'-sector adviser.

"What I've heard is music to my ears, this strong commitment from government to move it forward. They have a pretty good strategic plan for measuring improvement and that will be the key to the whole thing," she says.

"If nothing else, we now have an ability to have input before regulations are finalized. This makes me very, very happy," McDonald adds.

The CFIB has long sought input and its members were happy when the SBA announced it would use the federation's 10-point manifesto as a template for change.

"We're being overwhelmed, both by the burden of regulations and their cost," says Judith Andrew, CFIB's vice-president for Ontario.

Federation statistics put annual costs for SMEs complying with federal, provincial and municipal regulations at more than $8,000 per employee in companies with less than 20 workers and $2,600 for companies with between 20 and 50 employees.

"The biggest problem is the government has no capacity to oversee the regulations it already has on the books, nor an ability to communicate with small businesses," Andrew says. "Conflict is everywhere. Our view is that regulations have a laudable purpose, but let's get some consistency so we can know what will happen, how and when."

The CFIB wants to see regulations streamlined, including making compliance more flexible.

"Businesses are tax collectors for government, but they can fall into deep jeopardy if they don't follow onerous regulations. The government wouldn't penalize its own employees for a mistake, so why do it to (the private sector)?" Andrew says.

Andrew also would like to see bureaucrats made responsible for creating or perpetuating a system that hampers business growth, although she admits getting government officials to take responsibility for policy is not an easy task.

"There has to be some sort of accountability or else nothing will change," Andrew says.

"Regulations cost everyone money and making them easier to use and enforce helps everyone's financial ledger."

Perhaps the biggest problem facing the SBA is quantifying the changes it plans to make.

Leal says the best gauge will be to measure how much time SMEs spend complying with red tape and then trying to minimize it.

Another success measure will be a noticeable increase in the number of businesses operating in the province.

"The ministry is trying to model the agency after the one Tony Blair used in the U.K. That system has been successful because (government officials) have moved into an environment where they are much more sensitive to rules and the effects they have," he says.

"The U.K.'s (small-business sector) has shown very healthy growth since."

Despite an often adversarial relationship with government, Andrew says she sees positive signs.

"We've been at this a long time and we're starting to get traction on some issues that will help people do business," she notes.

One success has been an increase in the level at which small businesses pay corporate rates of tax to $400,000. Another is the creation of My Laws, a one-stop government website that can tailor regulations to a specific company.

Andrew also expects to see changes shortly in workplace safety and insurance regulations, which for years have bounced small businesses from classification to classification, as well as relief on property taxes. Small businesses pay up to four times the residential rate for properties of the same value.

"All these issues seem to have a link, so there's plenty of work to be done. The bottom line is that without some sort of simplification and consistency, economic development will be hampered," Andrew says.

(Mike Levin can be reached at levin@businessedge.ca)