Is it that your government loves you less, or that it just loves Big Business more?

Allan Fotheringham August 8 1977

Is it that your government loves you less, or that it just loves Big Business more?

Allan Fotheringham August 8 1977

Is it that your government loves you less, or that it just loves Big Business more?

Allan Fotheringham

Canadians are sustained largely by their smug superiority complex toward the vulgar Americans. As an example, there is a delightful myth in this country that the lobbyist—the florid, Panetella-shrouded cartoon figure—exists only in the well-oiled corridors of Washington and is a foreign animal in pristine Ottawa. It is one of the lovelier delusions of our time.

One of the best samples of the underestimated power of the lobbyists is the intriguing story of how the business community in Canada killed the Competition Act that was introduced in 1971 in an attempt to impose some antitrust muscle on a country that in effect has none. The business lobby succeeded in having Consumer and Corporate Affairs Minister Ron Basford sacked and the principal mandarins in his portfolio moved. Much reduced corporate contributions to Liberal campaign funds helped dump the Liberals to a minority position in the 1972 election and the Consumer post has since been given a low priority by the Liberals, with a constant turnover in ministers. It is now headed by a man who previously was one of the chief lobbyists fighting the ministry.

A detailed account of the success of the lobbyists is laid out in a new little book by W. T. Stanbury, an academic who specializes in the consumer and antitrust field. It is called Business Interests And The Reform Of Canadian Competition Policy 1971-75 (Carswell Methuen) and is a devastating indictment of how the Liberals bow to business pressures while ignoring consumers.(Owners of pigs may be better represented in Canada than consumers. The Directory of Associations in Canada lists 14 associations under “Consumer Protection”—38 associations under “Swine.”)

Canadian businessmen don’t really believe in competition. They do in the United States. But not here. A country built on the monopoly clause given the CPR and monopoly charter King James gave the Hudson’s Bay Company has grown accustomed to collusion. As Stanbury says, “There does not exist in Canada any fundamental belief in the virtues of competition as the method of allocating scarce resources and of diffusing economic and political power.” Canadians, being docile types, tend to be trusting of public power. (Americans are not.) To quote Northrop Frye, “The idea of a chain of command was built into this country from the beginning, the respect for authority.”

Ah, the respect for authority. This is what it has done for obedient Canadians. Two years ago a group of academics let

loose by the federal government determined that Canada has the weakest anticombines legislation of any so-called civilized country. When the original legislation was introduced in 1889, large lobbies of manufacturers from Toronto and Montreal descended on Ottawa with a great array of lawyers and defeated the bill. There has been a section of the Combines Investigation Act since 1923 making it an indictable offense to take part in a merger

that has operated or is likely to operate to the detriment of the public. There has never been a conviction that was not reversed on appeal.

In 1925 there were only three permanent staff members administering the act. By 1941, the number had increased to only eight. Over 20 years the average fine per firm was a picayune $2,722 (the U.S. average under the Sherman Act was $51,204).

It was no surprise, therefore, that Canadian business reacted with such fury when new Consumer Minister Basford introduced in the Commons in June, 1971, Bill C-256, the Competition Act, that the London Sunday Times called “the most sweeping antitrust legislation in North American history.”

As Stanbury points out, the business lobby in Ottawa has four characteristics: it is invisible, it is continuous, it is intense and its pressure is constantly shifting— from cabinet ministers to senior civil servants to the Senate to backbenchers. Basford was denounced as a “dangerous fa-

natic.” At one stage, a lobbying group that demanded rewriting of the Competition Act represented 13 firms with combined revenues of $7.8 billion. The ferocity of the business attack on Ottawa of course had its desired effect: Basford was dropped as consumer minister in early 1972. He was replaced by Robert Andras, an auto dealer from the Lakehead who, applauded The Canadian Grocer, had “the entrepreneurial wisdom of a successful salesman.” Mr. Andras, just incidentally, was also co-chairman of the 1972 election campaign, a man who knew that Liberal bagmen had run into stiff opposition because of Basford’s bill. Mr. Andras announced that a revised bill would be reintroduced.

After the 1972 election. Herb Gray became the minister. By April of 1974 he had ready a bill to amend the Combines Investigation Act. The day he opened debate, the Liberal front benches were empty. An election was called the next month and he was dropped from the cabinet. André Ouellet succeeded him. By 1976, he had resigned after making his frustrated comments about the judge when an antitrust case against sugar companies failed. Bryce Mackasey then became minister.

Even more interesting has been the pillaging of the senior staff in the department. Once it was clear the Liberals were backing away from the original Competition Act, David Henry, the respected director of investigation and research, resigned to go to the Supreme Court of Ontario. When deputy minister Jim Grandy left shortly before Bill C-256 was allowed to die on the order paper, the writing was on the wall. In 10 years there have been seven different ministers and six deputies—not a record that would indicate Mr. Trudeau takes the consumer portfolio very seriously.

Today the newest minister is Tony Abbott, who has spent his entire life in an anti-consumer coloration and became minister only by last-minute panic when a cabinet shuffle was held up six hours by yet another impassioned Mackasey resignation. Abbott was an executive assistant to the late Robert Winters and then followed him to Brascan, where he was corporate counsel to that giant which held food and brewing interests. Next, Abbott was president of the Retail Council of Canada, a lobby for the big chain stores, and in one bitter speech at the time referred to “Comrade Ron” and “Commissar David”— meaning Basford and Henry. This is the man who is going to stickhandle the remnants of legislation on monopolies, mergers and combines. Good luck, consumer.