Jacob Ziegel is a Professor of Law Emeritus, University of Toronto. Professor Ziegel has written widely about consumer law problems.
As Canadians brace themselves for the hardships of the country’s worst recession in more than twenty-five years, they are entitled to ask what protection they can expect against the many abuses that abound in the market place and the many more that are sure to emerge as unconscionable businesses and outright swindlers seeks to exploit consumer vulnerabilities during the recession.
The answer to the question is that consumers can expect very little help from federal or provincial governments. In some cases, in fact, governments are part of the problem and not likely to provide the solutions.
The picture was not always so bleak. In the 1970s, a wave of euphoria swept across Canada and federal and provincial governments vied with each other in introducing new consumer protection legislation and in establishing new ministries to administer and enforced the new programmes. Canada was the first country to establish a federal Department of Consumer and Corporate Affairs, and Ontario followed closely on its heels with the establishment of a Ministry of Consumer and Commercial Relations.
The euphoria was short lived as the attention span of politicians waned and Canada faced a serious recession at the beginning and at the end of the 1980s. In the US, President Regan led a counterrevolution against the welfare state and, in both Canada and the US, consumer protection programmes were cancelled or starved of funds. In Canada, a Conservative government gave the coup de grace to the DCCA in 1992 and reduced its role to a miniscule Office of Consumer Affairs in the new colossus that is Industry Canada.
All this would matter less if consumers were capable of fending for themselves as is sometimes implied in the old (and quite misleading) warning of caveat emptor. By their very nature, consumers lack the financial and political resources to become an effective pressure group. No consumer earns his livelihood from consumerism.
The consequences of this disempowerment of consumers are plain for all to see. Here are some random examples. Airline companies advertise one-way fare ‘bargains’ (as if a majority of air travelers embark on one way journeys!) while leaving the consumer to puzzle out for herself the mountainous extra charges for travel, security and airport taxes that often amount to as much again as the advertised fare. Consider too the numerous illusory diet programmes that promise effortless relief for overweight citizens or the fictitious and outrageously fraudulent email messages on computer screens from the recipient’s bank claiming there was a problem with the customer’s account and urging the customer to reply wih confidential details about his account numbers. Yet another example is offered by payday loan companies across Canada, many of whom are operating in violation of Section 347 of Canada’s Criminal Code, which imposes a sixty per cent ceiling on the cost of credit, yet federal and provincial authorities have turned a blind eye to the violations.
Federal and provincial governments are committed to encouraging vigorous competition among enterprises, but the opposite is true in the cab industry. Here municipal fiats impose a uniform fare structure regardless of the costs of individual cab owners. Worse still, the tariffs are determined without independent public scrutiny and evaluation. Last summer, Toronto City Council approved a substantial fare hike because of the escalating price of gasoline. Gasoline prices have dropped about a third since then, but there is no move afoot to cancel or reduce the fare hikes.
How do we restore a better balance in the market place and make governments more accountable? An adequate answer would require an article of its own but here are some pointers. Every government department or agency, federal, provincial or municipal, charged with protection of the consumer interest should be required to publish an annual report detailing the number of complaints and how it has handled them. Second, the federal department of consumer affairs should be revived and be provided with adequate funding. (Surely, if Canada needs a Department of Veteran Affairs to cater to the needs of less than a million veterans there is an even greater need for a ministry to protects the interests of thirty three million consumers?)
A third solution would be to empower government agencies and accredited consumer organizations to use existing class action laws for the enforcement of consumer protection laws. Class actions are proving to be one of the most effective weapons for the protection of consumer rights. However, it should not be left up to private law firms and individual grievors to carry alone the burden and risks associated with this innovative remedial device; there is ample scope for public-private partnerships.
However, none of these reforms are unlikely to be implemented until consumers speak up – loudly and often – and politicians at all levels begin to appreciate that consumers are a force to be reckoned with.