Free Market is Not so Free for Consumers

Frontier Centre, Poverty, Trade, Uncategorized, Worth A Look

It sometimes seems as if many of Canada’s so-called capitalists believe in the free-market system in about the same way that many Renaissance cardinals believed in chastity: A good idea as long as it doesn’t interfere too badly with what you really want to do.

From artificially high prices for chicken, eggs and milk to corporate welfare for a whole range of companies in selected industries, government can’t resist tinkering with free markets. And those who prosper from these practices don’t mind a bit.

Against this background, the loonie’s surge against the U.S. dollar has brought us more examples of corporate avoidance, shall we say, of genuine free-market economics. We had Bombardier, for example, forbidding U.S. dealers from selling Ski-Doos to Canadians. Book publishers continue to charge Canadians high prices for their wares. And purveyors of many different kinds of products have refused to honour warranties on goods bought in the United States.

Now there’s a new case which appears to combine the worst features of government meddling and corporate dual-pricing. This one involves the auto industry, and the apparent complacent co-operation of the federal government.

Robert Lamb of Kirkland found out to his horror late last month that Transport Canada was saying he could no longer drive his shiny new Honda Civic in Canada.

Lamb had bought the car less than a month earlier from a dealer in the United States, saving about $5,000 over the Canadian list price in the process. He went through all the complicated Canada Customs and Transport Canada routines, and paid all the requisite taxes before bringing the vehicle home.

But that was all to no avail, as The Gazette’s Jan Ravensbergen reported yesterday: On Oct. 29, federal authorities informed Lamb somewhat belatedly that his Honda doesn’t meet Canadian standards – even though it had been assembled in Ontario!

They claimed it lacks some kind of compulsory anti-theft device; he’s not so sure of that. You can’t fault the feds for enforcing safety standards, but what makes this smell a little is that according to George Iny, the president of the Automobile Protection Association, Canada’s Registrar of Imported Vehicles relies on the manufacturers to certify whether their vehicles meet all our safety, environmental and other regulatory standards. Talk about leaving the fox in charge of the henhouse.

Registrar of what, you ask? The Registrar of Imported Vehicles, a private company subcontracted by Transport Canada, applies Transport Canada’s rules, some of which are, the department says, “subject to revision without notice.” Consumer beware.

Honda might be just doing its civic duty here, but some will wonder how it is that an anti-theft device that was good enough for 2007 cars is no longer good enough for 2008 cars. Toyota, too, has several models no longer certified for Canada, for similar reasons. You do remain free to buy more expensive cars in this country, however.

The federal government, so far mute about the case, really needs to explain this.

The auto industry is seamlessly integrated, with new cars and new parts moving freely across the Canada-U.S. border in the hands of the companies,without duty. But the same free market isn’t available to consumers.

Canadian consumers can’t catch a break. Whether the dollar is high or low, they can’t seem to make the market system work for them. From egg prices to auto imports, government is not on the side of the little guy.