Skip to content

Provincial takeover of local government is bad business

The Canadian economy has always been a steady source of national reporting. It’s important news.

The Canadian economy has always been a steady source of national reporting. It’s important news.

However, since the COVID-19 outbreak, even more so over the past year, the coverage on national economic indicators and trends has been more extensive. Weekly reports from the Bank of Canada, daily reports from bank economists and financial insiders regularly get front page postings and top news space on the internet. Even if we don’t pay serious attention to reports, we all experience economic impacts whenever we shop, buy gas for the car, and pay rent or a mortgage. The national interest rate has reached the maximum level of five per cent because of inflationary pressures, which the rate has helped ease. Fixed mortgage rates are currently at plus-or-minus five per cent.

I bought my first house in 1981, when mortgage rates hit 21 per cent, but it was affordable thanks to a considerably lower cost of housing, a dual-income family and qualifying for the maximum Alberta government interest shielding program subsidy. Even though Alberta’s economy was on a decline then, the well-managed government of Peter Lougheed had the foresight to offer relief to Albertans facing extraordinary costs, and without breaking the bank.

Although Alberta’s current economy is in relatively good shape compared to the rest of Canada, mainly thanks again to the oil industry and hot oil prices, I’m not as confident in our current provincial government’s ability to protect us from the vagaries of the economy. I have no confidence whatsoever in our current national government’s ability to likewise protect us. In fact, I’m confident they have contributed significantly to our financial woes.

Despite its broad mandate and socio-economic responsibilities, government is in many ways like a big business. It’s market-driven (we, the public, are the market), must be product-savvy to supply its market (sound laws, good programs and services), responsibly managed (financially and organizationally) and well-led.

In business, the person at the top takes full responsibility for the performance of the company. It’s no different in government. It is harder to lead and manage government than it is a private business. The business of government is very much in the public eye and its market is made up of millions of demanding customers. Government should strive to please most of us every day and certainly every four years. A good business must also strive to please their market, pay attention to buyer habits and trends, wants and needs. Ignoring these patterns can cause a company to lose market share, which they may not recover.

Unlike government, for which we have three levels to serve us, often competitive, a company has many competitors that can replace it in the market. Think of brand names that have been around for decades and think of why that is so; because of the habits of good business management stated above, and perhaps because an even better company bought them out and kept the brand alive. Governments need not worry the same way about a takeover, except by new political management every four years if they’ve lost the interest of their market.

But wait. One level of government should worry about a takeover. Municipal governments are creatures of their province and in Alberta, if current politicking plays out, local government takeover by the province could become a reality.

That’s bad business.