Treasury Board President Tony Clement says the proposed law would require the government to remove one or more regulations for every new one added.
The Tories introduced the so-called "one-for-one" rule internally in 2012 to cut red tape that they say is bogging down small- and medium-sized businesses and killing jobs.
Clement says Canada would be the first country in the world to give the rule the "added muscle" of legislation.
He says the government has scrapped 19 regulations so far, which has saved companies millions of dollars in administrative costs.
But the opposition parties have been skeptical of the bill, saying they don't want to see cuts that jeopardize health, safety or the environment.