who are employed by the Competition Bureau, and the educators who
retrain displaced workers.
Similarly, when government inspectors visit plants to monitor compliance
with federally imposed standards of health, industrial safety, or
environmental protection, they are imposing costs on the public in the
form of their salaries and expenses. When regulatory bodies develop
rules, hold hearings, write opinions, or have their staff prepare research
reports, they are incurring costs. The costs of the judges, clerks, and court
reporters who hear, transcribe, and review the evidence are also imposed
by government regulation. None of these activities are possible except by
incurring considerable costs.
All forms of government intervention use real resources and hence impose direct costs.The direct costs of government intervention are fairly easy to identify, as
they almost always involve well-documented expenditures. In 2017, the
total expenditures by all levels of government in Canada were $864
billion, just over 40 percent of total national income.
Indirect Costs
Most government interventions in the economy impose costs on firms
and households over and above the direct financial costs of the policy.
Here are three examples.
- Changes in Costs of Production