Conservative Leader Pierre Poilievre recently stated in an opinion piece that he’ll only listen to the policy positions of Canadian businesses if they’re favourable to the “workers, consumers and retirees” he meets at rallies, town halls and during door-to-door canvassing.
Poilievre’s approach sounds appealing. After all, the federal government is supposed to adopt and implement policies for the good of the Canadian people. By lobbying the government directly, there is a risk that businesses influence policy to benefit corporate executives and shareholders at the expense of the larger population.
This risk is a classic political problem. People in the minority who stand to gain or lose a lot from a particular policy expend time and money to fight hard for or against it, while those in the majority who stand to lose or gain the least from the policy do not.
An example is the capital gains tax increase announced by Finance Minister Chrystia Freeland in the 2024 federal budget. Canadian business groups have been lobbying hard against the increase. They argue it will negatively impact economic growth by making investment and innovation less profitable.
The federal government, on the other hand, argues it will make the tax system fairer for those who earn their income through salaries (the poorer majority) as opposed to those who earn it through gains on the value of their assets (the richer minority).
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‘The people’ have many different views
Business lobbying through the people, as Poilievre has suggested, therefore sounds like a good way to overcome this problem. But it’s not.
Take, for example, current public investments in the electric vehicle (EV) supply chain. How are governments supposed to make sense of what the people want on EVs?
Car manufacturers, parts suppliers, mining companies and industry workers want government subsidies to attract and support both domestic and foreign investment in Canada.
Consumers, for their part, want the subsidies to go to reducing the cost of EVs, regardless of where they’re made. There are also some who would prefer governments invest these billions of dollars in public transportation to reduce the number of cars on the road, because even EVs are damaging for the environment.
THE CANADIAN PRESS/Nathan Denette
Businesses and workers who stand to benefit from investment in public transportation through infrastructure construction as well as the manufacturing, servicing and operating of buses and trains will also support this preference.
So what does a government do in the face of such a diversity of views? Having listened to “the people,” government leaders might conclude that they should do nothing since there is no consensus. No decision is, after all, a policy option.
Determining what most benefits the majority
But doing nothing because there is no consensus among the people is bad policy. In terms of the EV sector, jobs and innovation would be lost as battery and EV investments would go where the subsidies are. There would be inadequate public transportation for those who can’t afford EVs, are too young to use them or don’t want to use them due to environmental concerns.
Instead, political leaders have to decide what’s good for the majority of people based on their own understanding of what the people want. The question, then, is where that understanding comes from.
Who do political leaders consult and listen to? How do voters know about these consultations?
THE CANADIAN PRESS/Sean Kilpatrick
In liberal democracies like Canada, business lobbying is regulated to make it transparent and prevent abuses of the policymaking process.
For instance, Canada’s Lobbying Act requires people who are paid to lobby the federal government and Parliament register with the Office of the Commissioner of Lobbying of Canada. They must then file monthly reports on their lobbying activities that provide details on who they meet with, when they do so and what they talk about.
The reports are then made available to the public for consultation and analysis. Failure to register or report on lobbying activities are subject to fines and possible imprisonment.
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Talking and listening to all stakeholders
If businesses have to go through the people to make their case to government, then they will pay people to attend rallies or town halls attended by political leaders.
This would be no different than regular professional lobbying, except that it’s less effective because it is difficult for “the people” to provide details on how a policy should be developed and implemented. And the devil is always in the details for good policy.
Democracy and good policy-making require talking and listening to stakeholders. What’s important is that the process is transparent and regulated so that no one person or organization can have undue influence on the final policy outcome.
