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The Borrowers and Depositors Protection Act : a case history in legislative failure

University of British Columbia

The Borrowers and Depositors Protection Act (BDPA) was introduced into the House of Commons on October 27, 1976 by the Honorable Antony Abbott, Minister of Consumer and Corporate Affairs. The Liberal Party was in a majority position, and had been in power for fifteen months of their four year term of office. Yet, eight months after its introduction, BDPA died on the order paper. The question this thesis asks is, "why?". Why was the Borrowers and Depositors Act a legislative failure? Research was conducted using original documents dating back to 1968, obtained from the Department of Consumer and Corporate Affairs. As well, interviews were conducted. Those interviewed included: Consumer Research Branch staff and officials from other areas of the Department of Consumer and Corporate Affairs; officials from other federal government departments, -former Ministers of Consumer and Corporate Affairs and their staff; a Senator; and representatives from the provinces, the finance industry, consumer groups, other interest groups and the academic community. This history of the policy process surrounding BDPA begins in 1960, when Senator David A. Croll first introduced a private member's bill respecting disclosure of consumer credit contract terms. It ends in mid 1981, with developments in the area of consumer credit. To assist in understanding the variations in public policy that were developed and recommended during this process of attempted reform in the area of consumer credit, a model, the Alpha and Beta Weltanschauung, has been developed. Weltanschauung is a German word, which liberally translated, means "worldview". The Alpha and Beta weltanschauung are, therefore, two ways of viewing the world. Those with the Alpha perspective use economic efficiency (in all its dimensions) as their criteria of "good" public policy. They prefer an omnibus, syoptic, ideal, uniform and consistent policy. Alpha's are not concerned with isolated market problems. Rather they evaluate the market from a national perspective. Beta's, on the other hand, have equity and distributive justice as their criteria. Those with the Beta perspective prefer an incremental, piecemeal and deliberately ad hoc approach to developing policy. Beta's are concerned with redressing individual concerns and favor a greater degree of government intervention in the economy, than do Alpha's. It is concluded that BDPA failed for many reasons. The proposed Bill met with hostility from the provincial governments. It was not as much the questions of legal constitutionality that hindered BDPA, and that raised the united opposition of the provinces, as much as it was the manner in which BDPA was being introduced. The finance industry, too, was wholeheartedly opposed to the Borrowers and Depositors Protection Act. Their influence was substantial. Even the Bill's alleged beneficiaries, consumers, were unhappy with many of the Bill's provisions. Dynamic factors, that is, changing economic, political, technological and governmental conditions, meant that BDPA became anachronistic. The Bill's substantive inadequacies only exacerbated these others problems. The most salient reason for BDPA's failure was the lack of Ministerial leadership, and the resulting influence (even power) that came to rest with officials within the Department of Consumer and Corporate Affairs. This influence was manifest through the ability of officials who were able, in turn, to veto the Minister's policy request, to initiate renewed activity, and to change the existing policy (the one they reinstigated). The officials did not do a good job. They failed as policy analysts. Of greater concern in this transfer of power, from the Minister to the officials are the question it raises concerning the basic assumptions of Cabinet government. Did the Government fail to support it own legislation?

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2010-03-22

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http://hdl.handle.net/2429/22294

Business Administration

University of British Columbia

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