When did the Harper Tories become so, well, red?
Supposedly, they subscribe to an ideology of creating the conditions for an efficient and prosperous marketplace and then leaving free enterprise to go to it. Instead, this government has developed a penchant for telling businesses how to conduct their business – a proclivity that, if anything, is growing. The Calgary School on whose ideas the Harper government's early political and economic philosophy was based, not to mention the party's hard-core of true believers, must be doing spit-takes with every new proclamation.
There's the Fair Rail for Farmers Act, unveiled on Wednesday, which will oblige the country's two railway giants (Canadian National and Canadian Pacific) to meet government-set grain-shipping minimums and will force them to ship more grain on behalf of each other's customers at government-regulated rates. CN's president and CEO, Claude Mongeau, condemned the government's decision to "punish railways with re-regulation for an outsized crop and winter conditions totally beyond their control," and complained that the government is choosing "to hit one sector of the economy in order to placate a vocal constituency."
The next day, new Finance Minister did the "I'm watching you" motion in the direction of Canada's banks, as one (Bank of Montreal) had the temerity to re-introduce a 2.99-per-cent rate on a five-year mortgage. A year ago, when BMO cut its rate to this same level, Mr. Oliver's predecessor, Jim Flaherty, scolded the banks publicly for their recklessness given Canada's excessive household debt and overheated housing market – while privately leaning on the country's big banks to keep mortgage rates higher. The implication from Mr. Oliver's statement on the matter was that Ottawa had cracked down on mortgage lending before and is willing to do it again.
These are merely the latest examples of this government's heavy hand in the marketplace. It has blocked foreign takeovers of key Canadian resource assets, and specifically cracked down on purchases by state-owned enterprises in Canada's oil sands. It has tried (wildly unsuccessfully) to micro-manage additional competition in the wireless communications sector. It has pledged to force cable TV providers to change the way they package and sell channels to consumers.
What all these sectors have in common is that they are, to varying degrees, regulated. Government has always had a role in how they are allowed to operate – often because they are all in sectors with limited competition. Nevertheless, the Harper Tories, who came into office eight years ago with a strong distaste for regulation and other forms of government red tape (on the basis that it discourages investment and forms obstacles to private-sector economic activity) has found it irresistible to keep its heavy hand out of these markets – and often in ad hoc ways that have made government policy an obscured and moving target. It's become less clear just when and where this government is likely to meddle in the marketplace.
The glaring inconsistencies between the government's approach and the doctrine that got it elected can be explained by the coalition of voters it relies on to stay in power – the Prairies, rural Canadians, the suburban middle class. The recent acceleration of its actions may well reflect its nervousness about seeing those votes drift elsewhere in the next election. Ideology is being tossed overboard to appease the concerns of those groups. Increasingly, this is leaving country's business community – which once had a strong philosophical ally in Ottawa – on the outside looking in.