In many cases, seeking legal and legal solutions only makes the problem worse.
In democracies such as Canada and the United States, leaders and governments must respond to the needs and desires of the people who elect them to remain in power. This is not always easy.
Many factors are completely beyond a government's control, such as the weather and the actions of other countries. Other problems may require more natural, human, or financial resources than are available, limiting what the government can do. However, one tool available to governments is legislation. Similarly, in a free society, citizens can use the legal system to meet their needs and solve their problems.
However, laws and lawsuits are not effective in all situations. While it may, and usually does, address the problem that prompted its creation in the first place, it can often have unintended negative consequences.
Fairness is a very important value to Canadians. There has been a significant amount of litigation and numerous laws enacted in response to cries of “It's not fair!” But we have to be careful what we wish for.
A fairness and gender equality lawsuit has been filed after a clothing retailer requested alterations for women's clothing but not for men's clothing. Men didn't have to pay to have their pants shortened, but women did. The court ruled that this was unfair and discriminatory against women. As a result, retailers now charge both men and women for such modifications.
In another fairness case, a class action lawsuit is underway against coffee shops that charge extra for non-dairy milk in their coffee drinks. The lawsuit alleges that this practice discriminates against individuals who avoid dairy products for health or personal reasons, and argues that non-dairy milk is not inherently more expensive than dairy products. However, the lawsuit overlooks that providing multiple coffee lighters increases inventory and labor costs. If surcharges on non-dairy milk are banned, the increased cost could be reflected in all coffee drinks. Although this may seem fairer, it may not produce the desired results.
Inflation is a problem that we would like to see controlled. Rising costs and supply constraints of inputs, including labor, are contributing to the price rise. Instead of consistently increasing prices, some producers choose to reduce the size of their products while maintaining the same price. This is a phenomenon known as shrinkflation.
One US observer is calling for legislation that would prohibit smaller packages from being sold at the same price as larger ones. But such laws would likely be ineffective. If current prices and sizes do not cover production costs, the product may become unavailable, leading to reduced supply and further upward price pressure.
One current federal government action that arguably does more harm than good is the decision to drastically reduce the number of international students allowed to study in Canada.
The reason behind this action is the severe lack of affordable housing in Canada.
There is a mistaken belief that by enrolling fewer students we can create more housing for Canadians. However, the increase in available housing supply is negligible. Many students live in dormitories on campus. Often many students share her one small unit. Think back to your university days if you were studying away from home.
In fact, reducing the number of international students will do more harm than good.
International students represent an important export industry for Canada. We sell educational services to other countries just as we sell wood, and the revenue generated by international students exceeds the sales of wood. Limiting the number of international students will have a negative impact on the trade balance.
Additionally, limiting the number of international students has a negative impact on universities. These institutions are constrained by the funding they receive from the government, which has prevented them from keeping up with rising costs or expanding in important areas such as research. Universities are also facing pressure from politicians and the public to raise tuition fees. State regulations prohibit borrowing money to develop alternative sources of income, such as dormitory expansions. Historically, governments have addressed this problem by encouraging universities to use income from international students to balance their budgets.
Finally, there are the long-term human capital benefits that Canada gains from educating non-Canadians. They can either return to their home countries and contribute to the development of their countries and maintain a mutually beneficial relationship with Canada, or they can stay here and add talent that will help us all.
Pay attention to how citizens and governments use the legal system. Remember, you can't legislate against the common cold, even if you hope it works.
Dr. Roslyn Kunin is a Troy Media columnist, speaker, and consulting economist.
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