Canada is abound with industries dominated by a handful of players, resulting in higher prices for consumers, less innovation, and weaker economic growth. Ottawa aims to increase competition by revising its outdated legal framework, but a veteran economist says it’s government actions that have been undercutting competition and continue to do so.
“It’s farcical for the government to pretend that it’s encouraging competition through changes in competition law,” Philip Cross, former chief economic analyst at Statistics Canada and Munk senior fellow at the Macdonald-Laurier Institute (MLI), told The Epoch Times.
“The fundamental problem of competition in Canada is not the competition law—the whole culture of how governments in Canada interact or work with the business sector, in particular, shelter in large parts of the business sector.”
Cross wrote a paper on competition policy in April for the MLI in which he argued that there is little point in changing Canada’s Competition Act without broader changes in government policies and attitudes toward business, such as restrictions on foreign companies entering the market and with policies like supply management for certain agricultural products.
“The greater hindrance to competition in Canada is the behaviour of governments, not of firms,” Cross wrote.
Canadians pay among the highest prices in the world for wireless services, given the lack of competition with three major players Rogers, Bell, and Telus. The Canadian Radio-television and Telecommunications Commission (CRTC) announced on May 9 that it’s aiming to increase cellphone competition for consumers by having the large players share their networks.
Canadians don’t have much choice for domestic flights, with the industry dominated by Air Canada and WestJet. Banking is dominated by six big banks. Furthermore, the grocery sector is concentrated in the hands of Loblaws, Sobeys, and Metro.
