Obstacles to enterprise irk local entrepreneurs

Businesses want commitment from municipal election candidates to tackle red tape

For Bridgitte Anderson, it comes as no surprise that for local businesses the top issue that needs addressing in the upcoming municipal elections remains red tape in permitting and licensing.

What is surprising, she noted, is how pressing the issue has become.

Anderson, president and CEO at the Greater Vancouver Board of Trade, is referring to the organization’s Metro Elects survey (conducted through consultancy Mustel Group) released earlier this month, where the permitting and licensing backlog (50 per cent) outranked affordable housing (48 per cent) and crime (44 per cent) as the most pressing issue facing area businesses.

“To hear that half of our members who were surveyed say that permitting, licensing and red tape is the biggest issue facing their business was quite surprising,” Anderson said. “It is very clear to us that businesses are finding it very challenging to operate in Vancouver and throughout Greater Vancouver – and municipalities need to listen to this.”

The issue, local businesses say, has plagued the region since before the pandemic. But the unprecedented shift to remote work and new workflows in the light of gathering restrictions starting in March 2020 dealt a severe blow to many Lower Mainland municipalities’ abilities to process permits and applications.

The pandemic, ironically, also kicked off a new wave of home renovation applications as people spent more time at their residences. The combination of higher application volumes and lower efficiency in processing those applications created a situation where small items that should take weeks to complete often dragged on into months, one official said.

“There have been some moves – especially at the City of Vancouver – to try to expedite matters and mitigate the situation,” said Ron Rapp, CEO at Homebuilders Association Vancouver (HAVAN). “But overall, it’s still taking far too long to process even simple permits. For all intents and purposes, these are things – like kitchen or plumbing permits – that should really be taking a matter of three weeks. And they are taking three months.”

Both Rapp and Anderson acknowledged municipal efforts underway to deal with the backlog. Since June 2021, Vancouver has engaged a task force specifically aimed at reducing wait times, managing to clear a backlog of 500 applications on low-density housing applications by spring of this year. At that time, city hall said there were still 450 cases in line for processing, although wait times after initial contact for applicants have been reduced by up to 16 weeks.

Business representatives said the moves have reduced some wait times, but they also noted that a more fundamental rethink of the system is needed for the issue to be resolved.

Anderson, for instance, said that municipal officials elected in the next election should take a much more proactive stance on issues like digitization of permitting and hiring more staff to deal with the backlog directly.

One of the more fundamental changes that may make sense, she added, is simplifying the current bureaucratic process.

“Do you need to have three or four different government bodies looking at the same project and approving the same thing to make it go ahead?” Anderson said. “Yes, safety is a first and foremost priority. But is there duplication in the system? What can we do to really strip away the red tape and make sure we stay ahead of the curve around technology, with the right mindset and staffing to streamline the system?”

The alternative is grim.

According to the GVBOT’s survey, 68 per cent of businesses said operating in the past five years has become harder, and 51 per cent found engaging with local government unhelpful. Anderson warned that, if municipal election winners do not face these issues head-on, the result is a compounding wave of negative effects on all aspects of life in Metro Vancouver – from housing affordability and job opportunities to overall economic and social well-being.

“This should be a wake-up call for municipalities to fully embrace the need for businesses to contribute to – and ensure – a thriving community,” she said. “About 90 per cent of B.C.’s economy is small business. It’s the fabric of our community. So when permitting delays and red tape are adding to their costs of business, where would businesses go? Would they go elsewhere? These are jobs. These are individual residents and their livelihoods. You have to look at the cumulative costs.”

Rapp agreed.

He noted that housing in particular might be a big issue that’s tied to permitting backlogs.

“When a client commits to undertaking a certain amount of work, they sort out defining the project in terms of architecture, specification, scope and scale. They finalize the costs, and they put contracts in place. Then you are being told by contractors that you have to wait in a queue much longer than expected. It’s to the point where some clients are considering cancelling the project because the financing landscape has changed [since the backlog started].”

Rapp added that from the standpoint contractor, “you can’t just keep people on standby. You have to keep your people busy ... and if you can’t get the permit approvals, you have to keep moving the goalposts around. That becomes a very difficult logistical exercise.”

According to the GVBOT survey, permitting was not a top-three concern for respondents in the general population, which Anderson said is a disconnect that needs to be addressed.

“The rising housing affordability challenges and public safety issues have really had a lot more discussion around [them] during this election,” she said. “It’s not to say permitting isn’t as important, but it hasn’t garnered the same amount of attention. But there are correlations between business costs and red tape, and it often isn’t until things get really critical that people realize the cumulative costs.

“It’s something we talk a lot about. We have to be vocal on this track.... We have the potential to do things that spur economic growth, to become a region where businesses want to come and operate. That’s the mindset we need right now.”