Canada is a protectionist country. At least in every way that counts. Sure, when it comes to consumer goods and raw materials we believe in "free trade". But when it comes to brick and mortar services and operations, we love to impose foreign ownership rules.
This is ostensibly to protect us against foreign dominance in our economy. But one has to ask, who is this policy really protecting?
I contest that it does almost nothing to protect the average consumer. From our chartered bank system, to foreign ownership rules on telecom companies, media companies, and aerospace companies, the Canadian consumer is often the most disadvantaged consumer in the developed world.
Political parties like the NDP want to solve the problem through more regulation. In the case of banks, they want to legislate away the banks right to nickel-and-dime us with service fees.
You can always count on a lefty for more regulation. But this is really about the fact we have too much regulation as is. In fact, the regulation we have today is the problem. It doesn't need to be fixed with more regulation.
Anyways, I digress.
The whole theory behind the chartered bank system is that it provides "stability". Big nanny protects us consumers from making bad decisions, and depositing our money in all but the largest, most stable institutions.
The result? A handful of financial institutions have a collective monopoly, without any incentive to provide better customer service, and with every incentive to collusively charge monthly fees for chequing accounts and, in some cases, even balance checking transactions. Ridiculous.
Now don't get me wrong, I have nothing wrong with rich people. I'm a capitalist after all. But who's the government really protecting with the chartered bank system? The big rich banks and their massive profits? Or the consumer?
In fact, they shouldn't really be protecting either. They should be allowing more choice and competition, and by extension, giving the consumer more power.
The story is not much different with cellular phones in this country. As most Canadians know by now, we currently have the most expensive cell phone service in the developed world, and one of the most expensive in the entire world.
In fact, Canada is the only major nation in the world, where wireless penetration (the per capita number of people who have cellphones) has declined in the past 5 years, while wireless data rates have skyrocketed. The increase in rates has more than made up for the loss of customers, as an increasing number of Canadians cannot function without their mobile phones in our modern economy.
It might be different. But we have foreign ownership requirements when it comes to telecom companies.
While German mobile carrier T-Mobile operates in most Western European countries (and even the United States), and Vodaphone operates throughout Europe, parts of Asia, and Australia, they would not be allowed to setup a wireless service in Canada, unless they had a majority Canadian stakeholder. Translation: no external competition. Just big Canadian conglomerates.
Almost no other country in developed world stonewalls external entrants into their domestic markets. We do. We hold economic protectionism near and dear to our heart.
Does the average Canadian consumer benefit in any way? Only if you consider higher prices, and less choice beneficial.
It's not going to change anytime soon, either.
The Conservative government wholly supports foreign ownership requirements as demonstrated in blocking of the sale of MDA to a US company. And while they reserved 30% of the new wireless spectrum for new entrants into the wireless market, they precluded foreign companies from participating.
The Liberal's once mocked Stephen Harper for saying that "when he's through with Canada, we won't recognize it". Well the truth is, I still recognize it, and I don't like it.
I am a heavy wireless data user in Canada, and I'm sick of my $500 cellphone bills from Telus, while my American and European counterparts laugh at me with their unlimited $50 data plans. I am stuck with, well... no tenable choice as a consumer.
I am sick of paying $12 for a chequing account, without a minimum balance of $10,000, when I used to have free chequing accounts with my US bank when I lived there.
Canadian banks, cellphone companies and media companies are rackets. And the government is an avid participator in maintaining them.
The rich really are getting richer in Canada, and mainly because your government is giving you no choice but to give a select few more of your money. How is your government standing up for Canadians? I'm sorry, the Conservatives are "standing up for Canada" which is really code-word for "standing up for the status quo".
Don't even get me started on Human Rights Commissions.
I'm perhaps a luddite, but at 36 years old, I still do not own a cell phone. The wife and I are scrupulous savers and will not let any big bank or big bell steal our money. I'm still holding out for an affordable cell phone. Pray for me. ;-)
I also have not paid a bank fee for 5 years now. You got to get yourself hooked up with ING and PC Financial Bank. We have to vote with our wallets. There are some options for us that don't want to part from our hard earned money!
Keep up the fight!
"when he's through with Canada, we won't recognize it"
Would you be so kind as to provide a source for this quote that you attribute to Stephen Harper, and a clear, prominent, and prompt update to your post in the event that the quote is found to be unfactual?
Amen. Totally agree.
For news on cellphone and internet competitivity: www.michaelgeist.ca is an excellent source. He holds the national research chair in Internet and E-commerce law at Ottawa U.
Concerning banks: Quebec is worse than the rest of Canada. There's an extra regulatory body here, so that (for example) when ING wants to sell mutual funds in Qc, they have extra hoops to jump through. The result? ING doesn't bother. They don't sell mutual funds here, so we're stuck with even fewer choices than the ROC.
So what you are saying is that the rich who through their large deposits and loans at the bank, should subsidise your bank account, so that you do not pay for your chequing account, or do you believe that the tellers you go to should not get paid.?
Would you go to Loblaws or a Lawyer, or dentist and ask for free service?? or products.?
There is a reason for the regulations in Quebec, basically you have to be a University grad to sell the funds (or take two years of exams), this is to protect little old ladies from being sold funds they think are like GIC's, otherwise they sue if their funds drop in value ( and believe me they do, as it is never the investors fault when the value of their investment drops).
Remember when you deposit ie lend money to the Bank you are covered by insurance up to 100K, but when the bank lends you money , they are not, so they have to hope you pay it back. I bet that is one regulation you would not like abolished.
Stephen, thanks for your response. Why aren't Canada's regulations sufficient? Why an extra level of rules in Qc? Are we to believe the little old Ontario ladies are getting gypped, while the Quebec old ladies are sleeping easy?
In my eyes, it's an extra cash grab by the Quebec gov't. No doubt a group like ING would have to fork over cash to go through the extra regulatory clearances. Surprise, surprise: the Quebec gov't with its hand out.
On the subject of bank accounts, I understood that Mike Brock's lamenting two things: A lack of choice, and a lack of competition (one usually leads to the other). Hence his rant about cellphones: We only have 3 carriers in this country. Where's the motivation to be competitive? Compare this to Europe, where you have many multi-national companies competing for your money. This has nothing to do with subsidies. It's about avoiding monopolies and oligopolies.
In any case, it was good discussing with you.
Mr. Reeves, your posts seem to me to demonstrate a complete lack of comprehension of Brock was trying to say. He never asked for any free service, he asked for competitive service. Banks were, and are able to provide all of the advice, and services without monthly service fees, and would do so if forced to compete. Cell phones are even worse, and competition even more controlled. (Although Mike, I have 4 cell phones on a family plan with unlimited data up and down loads for a total of $65.00 for the unlimited data, texting, voice mail, call display bundle for all 4 phones)