Strangulation by regulation | Tega Adjara

Law360 Canada (August 22, 2024, 11:42 AM EDT) --

Tega Adjara

Canada’s economic prominence in the early 21st century marked a significant turning point, as the country’s prosperity garnered global recognition, leading to a surge in migration to North America. Although Canada had been economically stable prior to the 2000s, it was during this period that the nation’s economic success became widely acknowledged. The strength of the Canadian dollar, which even surpassed that of its southern neighbour, symbolized this era of prosperity.

In 2017, this economic ascent was captured in an article titled “The American Dream Has Moved to Canada,” written by Scott Gilmore and published by Maclean’s magazine. Gilmore highlighted that Canada’s homeownership rate was five per cent higher than that of the United States, Canadians were ranked as the sixth-happiest people in the world and their life expectancy was 2.5 years longer than that of Americans. However, seven years later, the validity of these claims is uncertain, and certain aspects of the Canadian dream appear increasingly fragile. Unfortunately, many Canadians today find themselves struggling, unable to sleep soundly let alone dream of a better future.

While Western economies, including Canada’s, have historically subscribed to Adam Smith’s theory that free markets and open competition naturally lead to greater prosperity, the reality is that the laws of the land play a crucial role in determining whether an economy flourishes or stagnates. Despite Canada’s continued status as a strong economy, the federal and provincial governments must exercise caution in introducing and implementing regulations that risk strangling economic growth and frustrating the lives of ordinary citizens.

In conversations with long-time waitstaff, many question the necessity of the smart serve license required to work in the industry. They argue that standard business policies already equip both seasoned workers and new entrants with the skills needed to serve and manage customers responsibly, taking into account their safety. These workers believe that the government’s involvement is unnecessary and merely a means to generate revenue. Similarly, security guards question the rationale behind having to renew their licences every two years or even annually in some cases. Even local meat cutters are not exempt from the burden of excessive regulations. While certain sectors undoubtedly require oversight, these regulations should be essential and not serve as obstacles or burdens that impact employers’ ability to retain employees or offer competitive wages. Government interference in every small industry has a significant and often negative effect on the economy.

When one looks at global giants Amazon, Apple, Google, Microsoft, Netflix and Facebook, all of which hail from the United States, it is hard to believe this is mere coincidence. The culture and laws of the United States have undoubtedly played a role in nurturing these organizations, particularly through the deregulation of banking, telecommunications, airlines and natural resources. This deregulation fosters competition, strengthening these firms domestically before they expand globally. In contrast, Canadian firms are heavily protected by regulation, which guarantees their safety in the Canadian market but leaves them complacent and unwilling to venture into new markets or allow foreign competitors to enter. As a result, Canadian consumers suffer from monopolies in sectors like telecommunications and insurance, a trend that has persisted for generations. It is clear that a move toward deregulation in Canada is long overdue in order to avoid the strangulation of the economy for the small man.

After completing his LLB at the University of East London, Tega Adjara pursued a specialized LLM in international law and the global economy. Adjara obtained a certification in leadership and management from the London School of Economics (LSE), then ventured to Canada to complete another LLM program at Osgoode Hall. Currently, he is going through the Ontario licensing program.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the author’s firm, its clients, Law360 Canada, LexisNexis Canada or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.   

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