Don’t pump regulation

Brian Flemming

Luckily, the finance minister quashed city hall’s idea to bung back price regulation

    BECAUSE OF rising fuel prices, the Halifax Regional Municipality (HRM) council last week unanimously voted to ask the Nova Scotia government to reintroduce price regulation for petroleum products like gas at the pump and home heating fuel,

    This was either the stupidest, or the most cynical resolution this bloated body has passed in all of its brief, three-year existence, Fortunately, a few days later, Finance Minister Neil LeBlanc politely told the IIRM to get stuffed. That HRM council was even prepared to discuss such a motion shows how seriously far from reality “shepherd” Gordon Snow and his council “sheep” truly are,

    To be sure, right-leaning management guru Peter Drucker once wrote that government regulation of business and industry was one of the most original inventions of western liberal democracy But, like penicillin, regulation has been so widelyused, and abused, that its potency has sharply declined.

    When the Organization of Petroleum Producing Countries (OPEC) quadrupled oil prices in 1973, it unwittingly truncated time for the developed world’s relaxed regulators of petroleum and power. Oil and electricity prices that had been satin stately fashion in lawyer crowded, oak – panelled hearing rooms suddenly became meaning. less. There was no time to change regulated prices quickly. And so the Long March to wards deregulation of petroleum and power began.

    Deregulation brought self serve gas.

    As John McLeod, The Doily News Money editor, reminded us last Friday the deregulation movement eventually brought lower fuel prices to Nova Scotia along with side benefits like self serve gas pumps and in-creased competition.

    HRM citizens have benefitted for years from deregulation as petroleum prices moved in concert with international markets. Indeed, gas prices in constant dollars were often lower than they were when OPEC increased prices. For example, a litre of regular gas that cost 50 cents in 1970 would cost about $2.20 in 2000 if it were priced in constant dollars,

    In the past year, once again because of OPEC, world petroleum prices have more than doubled, Although they’ve risen, the price of gas at the pump (which jumped three cents a litre yesterday) and of home heating fuel has not gone up in lock-step with international prices. And, if prices drop in the next year, the last thing consumers would benefit from would be re-regulation of petroleum products. By the time all parties made it to the hearings to set new prices, the game would have changed again.

    The sad truth is that unimaginative politicians aided and abetted, I’m sorry to say, by many in the media – remain in thrall to the “regulatory reflex”. If something goes awry in society, a kneejerk demand for regulation seems to be the only solution the mentally constipated have,

    What other solutions are there, you ask?

    For home heating fuel, I can think of two immediately One was dramatically demonstrated by CBC-TV’s First Edition, Consumer cop, Yvonne Colbert, who single handedly shamed tight-ass fuel delivery firms into bending their rules for minimum deliveries. People accustomed to paying $200 cash for each delivery were able to get their fuel, without regulatory hearings. Thank you, Yvonne,

    Another solution would be for our community to create a heating fuel coop to buy and store fuel when prices are low, e.g. In summer. Come winter, the co-op can sell, or loan, fuel to the neediest. A member of the Kennedy family successfully set up one of these co-ops a few years ago in Boston, No regulator was needed. Why didn’t HRM council encourage this solution? Do they even know about it?

    People rely on government fix

I    n many sectors, people remain mindlessly married to the regulatory solution for all llla even though ills clear that the easy societal gains regulation brings have long ago been made, Indeed, regulation has nowhere to go but into more and more marginal areas where the costs and difficulty of regulation far outweigh the social gains they supposedly deliver. Ever larger costs are imposed for ever smaller gains, as we will learn in the coming GM-food fight.

    And when regulation fails, as it did recently when a New Glasgow computer school collapsed, the government’s first reflex Is to hand out money to disappointed students, Thus does the government become both regulator and insurer of last resort. No one ever asks whether the students themselves had any duty to check the credentials of the school. That would b impolite and un-Nova Scotian.

    There are many solutions to society’s problems that don’t need the heavy hand of a full-meal-deal government regulator. Too bad HRM council doesn’t know this yet. Thank goodness, Neil LeBlanc does.