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Konrad Yakabuski

The free-market madness of Maxime Bernier Add to ...

Maxime Bernier is trying desperately to stand out, in a good way. The Quebec Conservative MP seeking his party’s leadership has channelled Ayn Rand to draft a platform that is the political equivalent of fantasy football for the Fraser Institute set. And what a fantasy it is.

In Mr. Bernier’s Canada, the telecommunications sector would be entirely deregulated and cellphone bills would instantly shrink. Supply management in the dairy and poultry sectors would be history, making imported milk and McNuggets abundant and cheap. Corporate welfare à la Bombardier and GM would end, allowing Ottawa to slash taxes, thanks to the massive savings.

Mad Max, as he’s known to his fans and detractors alike, deserves an A for economic theory but an F for deliverability. His policies are based on the assumption of perfect markets. But the latter exist only in the minds of free-market ideologues. The real world is infinitely more complicated.

Pure telecom deregulation might lead to the concentration of even more market power in the hands of big incumbents such as Bell and Rogers rather than a surge of new domestic and foreign competitors. Ending corporate welfare sounds like a great idea until you’re faced with an economic crisis that threatens thousands of jobs in southern Ontario. Ending milk quotas sounds brilliant until you add up the cost of buying out farmers, who came by their quotas honestly as a result of past government policy and have a legal right to compensation.

Most of Mr. Bernier’s economic reform proposals are too politically impractical to be taken seriously. But if they were formulated to capture positive coverage from pro-libertarian media outlets, they’ve been a smashing success. Mad Max is the National Post’s favourite Tory.

Mr. Bernier’s latest attack on Quebec’s maple syrup “cartel” has only enhanced his Postmedia star status. He is calling on Ottawa to abolish a federal decree recognizing rules put in place by the Federation of Quebec Maple Syrup Producers, and backed up by provincial law, under which the federation sets quotas and prices for the province’s 7,500 producers. The latter must conduct bulk sales of their sirop d’érable through the federation, which retains a 4-per-cent fee to cover the cost of marketing, research and maintaining a “strategic reserve” of syrup.

“Just as supply management in dairy, egg, poultry products must be abolished, just as the old Canadian Wheat Board was wisely abolished, the maple syrup cartel must also be abolished,” Mr. Bernier said on Tuesday. “It is the

opposite of a free market.”

The Quebec Court of Appeal recently upheld the current system and Mr. Bernier has championed a potential appeal to the Supreme Court by one Quebec producer who has repeatedly flouted the federation’s rules to export her syrup directly across provincial borders. For those who like their news Fox-like and un-nuanced, hers is a classic David v. Goliath battle.

Unfortunately, it’s not that simple. Maple syrup has little in common with milk (an essential foodstuff whose production is not subject to the weather), or wheat or oil (which are global commodities). Maple syrup is a luxury food product that has historically been subject to dramatic price variations due to Mother Nature’s mood swings and the concentration of production in Quebec and Vermont.

Until recently, Quebec accounted for 80 per cent of global syrup production. Since annual supply and price varied sharply, breaking into new markets was difficult. The rules put in place by the Quebec federation, to create a stockpile of syrup and prevent prices from spiking or tanking from one year to the next, created the conditions to overcome that problem. Aggressive marketing and quality control by the federation have led to a surge in global consumption.

Indeed, the federation is a victim of its own success. Stable prices and global marketing have prompted U.S. producers to boost production in recent years, free riding off the positive market conditions created by the federation. A handful of Quebec producers are now seeking to do the same, thinking they can get a better price on their own without the federation getting a cut.

The free riders Mr. Bernier claims to champion would be the first to lose out if he got his way. Without a stockpile of syrup to ride out the bad years, prices would spike and domestic and export markets would dry up.

Such is the madness of Mad Max.

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Follow on Twitter: @konradyakabuski

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