A Conservative war on business

James Cowan is deputy editor of Canadian Business.

The time has come for drastic measures. Prime Minister Stephen Harper’s government has spent the past three years quashing foreign investment, dedicated its summer to quibbling over cellphone bills and filled its speech from the throne with promises to fuss with credit card fees, retail prices and the nation’s cable television packages. Government hype may promote these initiatives as “consumer friendly,” but what they are is anti-business. When Conservatives want to dictate the fine print on phone bills, something is woefully amiss. Perhaps we need a new industry minister. But who? Is there a lone wolf lurking in the political wilderness, ready to lead the pack? A slayer of bureaucracy, a champion of capitalism? Yes. And his name is Maxime Bernier.

Bernier served as Harper’s first industry minister and later in Foreign Affairs. You might recall his regrettable taste in romantic companions (a Hells Angels associate), his habit of leaving sensitive documents in random locations (said associate’s home) and his talent for saying foolish things (such as calling for the ouster of an Afghan governor). For these sins he was demoted and has spent the past couple of years as the minister of state for small business. But Bernier’s 18-month tenure as industry minister stands in retrospect as a golden age for this government’s business policy. He approved the $24-billion takeover of Falconbridge, a nickel- and copper-mining company, by Swiss miner Xstrata PLC. He deregulated local phone service and blocked the CRTC’s bid to govern aspects of Internet voice services. And he commissioned Compete to Win, an expert report advocating the slow removal of foreign investment barriers that was so sensible it has been ignored by the Harper government ever since. His vision for the Canadian economy—open to investment, unencumbered by red tape—is a Bizarro World inversion of his party’s current plan. When Bernier called himself a “free market guy” in 2006, he was credible. When James Moore, the current minister, said he was a “free enterprise guy,” he was either in denial or speaking ironically.

A free market guy wouldn’t favour a cap on cellphone roaming fees, as hinted in the speech from the throne. A free market guy wouldn’t advocate government-legislated cellphone costs, knowing full well that carriers deprived of roaming fees will hike other charges to compensate. A free market guy would favour—call me crazy—an actual free market solution to the problem, such as increasing competition by allowing foreign carriers to enter the market on equal terms. But that’s not what Moore is trumpeting.

In case after case, the government insists on intervening, apparently oblivious to the fact that their intervention is part of the problem. The easiest way for the Conservatives to “end geographic price discrimination,” or the higher prices paid in Canada compared with the United States, would be to reduce import tariffs. Instead, reports suggest the government wants to use the Competition Bureau to investigate and compel companies to offer comparable prices on both sides of the border. With myriad factors affecting those prices on both sides of the border—from the value of the dollar to the price of gas—proving ill intent on the part of investigated companies will be all but impossible. Such a scheme would produce endless red tape, and zero benefits for consumers.

There is room for redemption and tiny glimpses of pro-market thinking in the Conservative agenda. The government appears to have backed away from rumoured new regulations for the airline industry and, rather than regulating credit card fees, will instead compel more transparency. And thanks to the ambiguous, specifics-free nature of the throne speech, they could still embrace competition, rather than regulation, as the best way to aid consumers. Bernier’s personal shortcomings may have made him a lousy minister, but his policy legacy needs to be rediscovered. If not the man himself, then at least his spirit could still save the Conservatives from themselves.

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