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The federal government has moved to cap cellphone contracts yet defends Canada’s supply management system. (MOE DOIRON/THE GLOBE AND MAIL)
The federal government has moved to cap cellphone contracts yet defends Canada’s supply management system. (MOE DOIRON/THE GLOBE AND MAIL)

GOVERNMENT POLICY

Ottawa's wireless strategy: consumer agenda that’s not quite complete Add to ...

With the government stuck in a messy controversy over Senate expenses, the federal Conservative Party reached out to donors this week with a message to change the channel: Just look what we’ve done for consumers lately.

“Our Conservative government is taking action to reduce your cellphone bill – and we want to make sure you have heard about it,” Conservative Party of Canada executive director Dan Hilton wrote in a fundraising e-mail that was sent hours after the government quashed Telus Corp.’s proposed deal to buy discount wireless provider Mobilicity, and a day after the federal telecom regulator unveiled a tough code of conduct for cellphone companies. “We’re putting Canadian consumers first and making sure there is more competition in the market.”

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“Putting Canadian consumers first” has been a part of the party’s message since its birth 10 years ago from the merger of the Canadian Alliance and Progressive Conservative parties. From cutting the GST to tougher product safety laws, the Conservatives have tried to position themselves as the Consumer Party of Canada, appealing to budget-conscious voters who want a fair shake from powerful business interests.

The reality is more complex. High-profile announcements like the wireless code – which, when implemented, will cap cellphone contracts at two years in length – grab the biggest headlines. But those who lobby for consumer interests say the government is inconsistent, favouring certain populist causes while ignoring structurally important changes that could benefit consumers and businesses alike.

“We never quite know what we’re going to get” from government, said John Lawford, executive director of the Public Interest Advocacy Centre, a leading consumer watchdog.

Picking and choosing

Many of the government’s policy moves have been easy to understand, such as raising spending limits for cross-border shoppers and reducing tariffs on imported hockey equipment.

Other changes have been less direct, but no less transformative. The government empowered the Competition Bureau with new U.S.-style rules that allow for more vigorous investigation and stiffer penalties. It appointed Jean-Pierre Blais, a strong consumer advocate, as chairman of the broadcast and telecom regulator, the Canadian Radio-television and Telecommunications Commission. It also brought in the Consumer Product Safety Act, replacing the toothless Hazardous Products Act with tougher legislation enabling it to recall unsafe products.

“Our government has a strong record on consumer issues, whether it’s putting more money in their pocket with the GST cuts, providing for more choice and competition in the wireless sector, or strengthening consumer protections on the health and product safety side,” said Andrew MacDougall, a spokesman for the PMO.

Yet the government’s willingness to tackle some key consumer issues has gone only so far. The most glaring example is supply management, the protectionist system that largely keeps non-Canadian dairy products, eggs and poultry out of the country, while guaranteeing Canadian farmers steady, above-market prices.

Supply management aids farmers “at an unreasonable cost to consumers,” the C.D. Howe Institute think tank said in a report last month. The study showed Canadians pay 81 per cent more for milk than the average price in U.S. cities, 64 per cent more for eggs and 124 per cent more for chicken. The average consumer spends $72 each year for supply-managed dairy products alone; a typical Canadian family spends hundreds of dollars more per year for food than they would in a less-regulated market.

The Conservative government, however, continue to defend the system. “Supply management has its positive points and it can be agreeable,” Industry Minister Christian Paradis told The Globe and Mail on Tuesday, minutes after he made the Telus announcement in the name of lower telecommunications costs. “We decided as a party to stand behind supply management in the last election campaign and I think we have to be consistent there.” But doesn’t supply management cost consumers? “It’s broader than this,” he replied.

There have been other inconsistencies in consumer policy. The Conservative government resisted for years calls to force airlines to advertise all-in pricing, and introduced rules only after the United States did the same. While the government is dropping import tariffs on sporting goods and baby clothes, it is also raising tariffs on goods from 72 countries, and will reap an estimated $250-million more a year from consumers.

The government has also done little to help raise the voice of the consumer. Unlike in the United States, which has well-funded groups such as the Consumers Union (publisher of Consumer Reports), groups here complain they face a vacuum of private funding. “The kind of work we do doesn’t lend itself to emotional fundraising,” said Ken Whitehurst, executive director of the Consumers Council of Canada. But Industry Canada’s Office of Consumer Affairs provides just $1.6-million annually to consumer advocacy groups, an amount unchanged for years.

The inconsistencies point to the challenge for the Conservatives in managing competing forces within the party who pull in different directions on consumer issues: free-market purists, social conservatives and populists.

Michele Austin, a former senior Harper government adviser who now works for Summa Strategies in Ottawa, says “the nice thing about the consumer agenda is that it’s flexible – it’s not ideologically pure. It can appeal to swing voters who are fiscally conservative but socially conscious. … Championing issues suits Prime Minister Stephen Harper’s pragmatic conservatism, where you make a big deal about standing up just a little bit for the little guy.”

At the same time, she warns that the Prime Minister “has to be cautious about taking the consumer agenda too far” or else “the party faithful will start to become disillusioned. … True conservatives don’t delegate too much power to regulators.”

It helps that companies can sometimes be receptive to consumer-friendly interventions. Canada’s wireless providers asked Ottawa to create a wireless code after the provinces began enacting their own legislation. The CRTC responded with a code that not only restricts contracts but also limits certain charges and forces carriers to communicate more transparently. Government, industry and consumers alike responded positively.

That suggests there are still easy political points to be earned on consumer issues. More codes of conduct would likely win favour with some voters, particularly in the realm of airline passenger rights, financial services and privacy. Meanwhile, the government could boost the consumer voice in Canada with a few million dollars in new funding and perhaps by appointing a junior minister responsible for consumer protection. “A small amount would go a long way,” Mr. Whitehurst said.

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