Might makes right

Far right commentators tell us that government should remove itself from every possible sector of the country’s economy. For example, the Fraser Institute, an organization that cares for interests of Canada’s most privileged, wants immediate action. Their plan — published in Postmedia newspapers — demands a federal spending cut of $10-billion, for a start. That would involve elimination of entire departments and programs.

Of course, we can infer the sorts of programs and ministries they have in mind for abolition. These would be certainties:

  • Environment Ministry;
  • Office of Consumer Affairs;
  • Competition Bureau;
  • Canadian Anti-Fraud Centre;
  • Hazardous Materials Information Review Commission;
  • Superintendent of Financial Institutions
  • Most of Industry Canada
  • All of the cultural and educational elements of government.

No doubt, they would dissolve any federal program that might interfere with dominating and self-interested behaviour of big business because deregulation and less government are the solutions for every economic issue. People with different views believe that effective regulation is needed to supervise the imperfectly competitive markets that are typical of this country.

The retail price gap that continues to exist across the Canada-U.S. border is being examined by a Senate committee dominated by the Conservative Party and, in the six months since they began addressing the subject, they’ve determined precisely nothing. No surprise there because in 2009, Harper’s government made sweeping amendments to Canada’s Competition Act, which included repeal of the criminal prohibition against “price maintenance.” Resale price maintenance may prevent or discourage retailers from offering lower prices to consumers.

Online retailer Amazon, for example, offers many of the same products in the USA as they do in Canada. However, Canadian distributors pressure Amazon to maintain higher Canadian prices. That results in situations like this one:

By the way, I saw the same device at Canadian Tire today, priced at $99.95. Canadian consumers usually pay significantly more than Americans for exactly the same products. There are many explanations offered but most of them make little sense.

A friend is planning a kitchen renovation. He priced Armstrong vinyl flooring in North Vancouver and in Bellingham and the difference was more than 40%. For one small project, shopping in the USA leaves almost $900 in his pocket and he expects more savings for purchases of plumbing, lighting and appliances.

It will get worse. Harper’s Conservatives this week made a move that demonstrates they are on the side of business and unfettered exploitation of Canada and Canadians. Read Rafe Mair, Harper’s Underhanded Gutting of Fisheries Act Designed to Help Enbridge and Co.

Categories: Economics

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