Regulations and the free market philosophy

  Niagara Falls, Ontario,
Thursday, March 19, 2009
by: Joe Hueglin

There is the belief among some that the saying "that government governs best which governs least" be followed. That individual decision making is to be preferred to regulation.

Canadian banks are now ranked seventh, eighth, ninth and tenth in North America. There is "praise, right around the world, of the solid banking sector that Canada has." How come for why is stated by Bloomberg News as being " 'because of tighter government restrictions on lending and capital requirements,' " (1)

In 2006 the present government altered regulations to allow 40 year mortgages with no down


payment. Finance Minister JimFlaherty became among those "sounding alarm bells in recent months about the dangers of 40-year mortgages" and reversed himself, the necessity of down payments was reintroduced. In doing so "the federal government once again stressed it was concerned about the " ' risk of a U.S.-style housing bubble developing in Canada. ' " (2)

Undeterred by this experience the Harper government is removing environmental regulations on projects it's funding (3) and has replaced assessment of projects on navigable waters with ministerial discretion and the necessity of foreign purchasers of Canadian owned enterprises showing the acquisitions are of value to Canada on any less than $1,000,000,000.00 in value. (4) All without discussion or debate in Parliament.

"Once bitten, twice shy" has clearly been overridden by belief for, though something definitely went wrong through removing regulations the first time, the lesson has not been learned "be far more careful the next time." (5)


Joe Hueglin

Photo credit: Jim Flaherty in the House of Commons, image by the CBC

1. CBC News, As U.S. rivals shrink, 4 Canadian banks crack North American top 10, March 17, 2009, CBC

2. Trichur, Rita, ING Direct first to end 40-year mortgages, July 10, 2008, The Toronto Star

3. Jones, Jeffrey, Ottawa loosens green vetting for stimulus projects, March 16, 2009, The Toronto Globe And Mail

4. Government of Canada, "An Act to implement certain provisions of the budget tabled in Parliament on January 27, 2009 and related fiscal measures" Parts 7 & 13, (PDF) January 27, 2009

5. Using, Idion: Once bitten, twice shy


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