Steve Maxwell May 21, 2013

Maxwell’s rant: Why government spreads

The Ontario College of Trades, with its mandatory annual fees for plumbers, electricians, etc., is just the latest example of how governments naturally keep spinning tighter and tighter webs of regulation.

As necessary as government and bureaucracy are, there’s a flaw at the heart of both. The imposition of the Ontario College of Trades is a case in point, and to understand why you need to stop and think about things from the other side.

Imagine you’re a government bureaucrat. You’ve just been promoted to a new job with better pay, more responsibilities and a corner office. The work isn’t too difficult, so you have time to think about how you might leave your mark on the bureaucracy. Perhaps there’s something new that could be added to your role. Maybe there’s some previously-unnoticed regulatory function that could be filled. Then there’s always the temptation to create the perception of a need, then rush to the rescue as a hero and fill it. Even in corridors of government power, there still sometimes exists a spark of initiative, some urge towards accomplishment, and maybe even the impulse to advance things beyond the status quo.

All this is the dynamic behind the process that makes government spread and expand its regulatory influence over time. Government + Time = Regulation. Do we need regulations? Yes, absolutely. Does government have a vested interest in creating regulation beyond genuine need? Yes, the temptation exists, and it’s one reason why Canada has been in a long-term downtrend for decades.

For anyone who has a warm, fuzzy sense that Canada is on an upward climb economically, an appeal to the facts should set things straight. Some of the most telling of these facts apply to young people. In 2010, Statistics Canada reported the median annual income for people between 20 and 24 was $13,800. Back in 1976, this same age group enjoyed an income of $23,400 adjusted for inflation – nearly 10-grand more. Even Canadians up to their mid-40s are measurably poorer today than they were decades ago, as measured in real dollars. Why has this happened? I doubt anyone has the complete answer, but one thing’s for sure. Regulation is the opposite of productivity. The more regulation you have in a society, the slower, poorer and more falteringly the economic engine runs. Are we more regulated as a society now than in 1976? Is all of this regulation really serving a productive purpose? How, exactly, will the construction business be better off with another layer of watchdogs on duty?

What Canada really needs is a government that kicks into action when no other method of making things happen exists – and not a moment before. This sort of idea is not popular, I know, but sometimes good medicine is bitter. The last thing any country needs is a ruling class populated by people pursuing power, wealth and a cushy professional life in a low-expectation arena. The extent to which a critical mass of people can resist the impulse for selfishness in the government arena is the extent to which Canada will succeed.

Unlike most areas of our world, there is no natural limit to the slow advancement of government. Free market activities are subject to the guiding hand of supply and demand, but what governs government? In a democracy it’s supposed to be the informed will of an involved voting population. But where are the democratic limitations on government when the most far-reaching decisions are created and handed down by non-elected bureaucrats or judges? What do you call a democracy where democratic guidance runs only as deep as the paper-thin, 1/64”-thick birch veneer on a sheet of cabinet-grade plywood? The Ontario College of Trades and a hundred other layers of regulation and over-sight are leaving the producers of this country over-burdened, over-governed and over-regulated.

There are no shortage of Canadians who see and feel that things have gone too far in this country, but we do have one dangerous flaw in our national character. We’re way too complacent, even in the face of new regulations that look a lot like selfish bureaucratic motivations hiding behind manufactured needs.

There’s an old saying that’s worth remembering: “When you’re a hammer, everything looks like a nail.” Paraphrased a little, this wisdom applies just as much to good-old, over-regulated Canada: “When you’re a government, everything looks like it needs a guard rail.”

Will things change? I have my doubts. But at least let’s be fully aware of the source of the added hardship that’s about to fall on the men and women who build, renovate and create if the philosophy behind the Ontario College of Trades spreads. Maybe we might even work up the courage to do more than complain over coffee.

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