The last two decades have seen a discernible trend towards privatization and deregulation in Canada, most notably in the transportation and energy sectors. Modern deregulation in the US began with the passage of the Airline deregulation Act of 1978, and was pursued with great energy under the Reagan administration in the eighties. The Economic Council of Canada produced an influential report in 1981, entitled “Reforming Regulation”, on the impact of regulation and possible deregulation of specific sectors.
Telecommunications provision, in the era when the telephone was the main form of such communication, was traditionally viewed as a natural monopoly. The Canadian Radio and Telecommunications Commission (CRTC) regulated its rates. The industry has developed dramatically in the last decade with the introduction of satellite-facilitated communication, the internet, multipurpose cable networks, cell phones and service integration. With such rapid development in new technologies and modes of delivery the CRTC has been playing catch-up to these new realities.
Transportation, in virtually all forms, has been deregulated in Canada since the nineteen eighties. Railways were originally required to subsidize the transportation of grain under the Crow’s Nest Pass rate structure. But the subsidization of particular markets requires an excessive rate elsewhere, and if the latter markets become subject to competition then a competitive system cannot function. This structure, along with many other anomalies, was changed with the passage of the Canada Transportation Act in 1996.
Trucking, historically, has been regulated by individual provinces. Entry was heavily controlled prior to the federal National Transportation Act of 1987, and subsequent legislation introduced by a number of provinces, have made for easier entry and a more competitive rate structure.
Deregulation of the airline industry in the US in the late seventies had a considerable influence on thinking and practice in Canada. The Economic Council report of 1981 recommended in favour of easier entry and greater fare competition. These policies were reflected in the 1987 National Transportation Act. Most economists are favourable to deregulation and freedom to enter, and the US experience indicated that cost reductions and increased efficiency could follow. In 1995 an agreement was reached between the US and Canada that provided full freedom for Canadian carriers to move passengers to any US city, and freedom for US carriers to do likewise, subject to a phase-in provision.
The National Energy Board regulates the development and transmission of oil and natural gas. But earlier powers of the Board, involving the regulation of product prices, were eliminated in 1986, and controls on oil exports were also eliminated.
Agriculture remains a highly controlled area of the economy. Supply ‘management’, which is really supply restriction, and therefore ‘price maintenance’, characterizes grain, dairy, poultry and other products. Management is primarily through provincial marketing boards.
- 1122 reads
