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Editorial — Help for consumers may be coming
The federal government brought down its Speech from the Throne on Wednesday, and advance reports suggested it would focus on the best interests of Canadian consumers.
This is clearly designed with the 2015 federal election in mind, but it is a much-needed focus all the same.
Canadians pay far too much for basic items, and given that most of them are not getting much in the way of wage increases, it’s getting harder and harder to pay the bills.
While the federal government can’t single-handedly force businesses to lower prices, it can open up sectors to more competition in several key areas under its control. These include the telephone, cable television, internet and credit card industries.
Lack of competition means that Canadians pay very high prices for cellphone service, particularly for extras like roaming charges and data plans. The big three companies control almost all of the market and have shown little willingness to lower prices.
On the cable television front, consumers are forced to pay a lot of extra money for channels they don’t watch, and also often pay expensive bundled charges for cable and internet service.
In these two areas alone, consumers are forced to pay out more every year, leading to an erosion of their ability to buy other goods and services.
Banks charge businesses excessive fees for the ability to accept payment by credit card. This adds to retail prices.
The federal government also needs to look into whether marketing boards benefit consumers. The main effect of such boards is to double prices for goods like milk and cheese, as compared to the United States.
There is a slim indication that the feds may be willing to take on the powerful dairy farmers' lobby, as a free trade deal with the European Union is on the horizon, and it allows for more cheese to be imported into Canada.
The federal government can also look in its own back yard when it comes to reducing costs to consumers. It can stop levying GST on other taxes, as it does with fuel. Tax should be paid on goods or services, not on other taxes.
Ottawa can also look at reducing high airport surcharges on travellers. The main effect of those charges, including security charges, airport taxes and other costs, is to drive Canadian air travellers to adjacent U.S. airports. The taxes are self-defeating, but they are also punitive to those who continue to fly from Canadian airports.