Short-term Impact of Shopping-hour Deregulation: Welfare Implications and Policy Analysis

The trade-off between the short- and long-term effects of the deregulation of shopping hours must be taken into account by policy-makers when introducing new legislation. In this paper, we argue that while long-term efficiency gains can be expected from relaxed shopping hours in Canada, deregulation also involves short-term social costs and a potential short-term redistribution of social welfare among Canadians. These issues seem to have been neglected in the debates over whether the provinces should permit Sunday shopping. This paper also presents empirical evidence on the immediate aftermath of deregulation in Quebec (July 8, 1990) in order to give policy-makers in the other provinces a better understanding of the risk of consumer disenchantment following deregulation.