Ottawa’s recent spring economic update brought some brief excitement for anyone sick of dealing with the monopolies that dominate our economy. The section titled “Driving Productivity and Affordability Through Competition” seemed to suggest that a bold plan might finally be at hand, one that would take on the gatekeepers that have installed themselves at various choke points in our daily lives.
But a year into this government’s mandate, and approaching five years since the onset of the cost-of-living crisis, the details don’t live up to the packaging.
The section starts off strong, announcing the government’s intention to launch a “Whole-of-Government Competition Plan.” In theory, this is an excellent idea, championed by the former Biden administration down south and by competition experts Vass Bednar and Denise Hearn at home. Across the federal government, there are powerful levers to promote competition. Have them work together in concert and the multiplier effect would be substantial. But announcing your intention to launch something is different from launching something. For now, all we know is that the minister of finance and national revenue will be giving more detail “in the coming months.”
Saying you want more competition and doing the work to upset the powerful interests that most certainly do not want more competition are two different things.
– Keldon Bester, executive director, Canadian Anti-Monopoly Project
More worrying than the delay is the core of this intended-to-be-launched plan, which appears to be nothing more than a bland commitment to reduce red tape and get the government out of the way. Stop me if you’ve heard this before, possibly under Paul Martin, Stephen Harper or Justin Trudeau.
No weird trick
The problem is that many of the monopolies that haunt our lives are crafted not in red tape, but in kilometres of cables, football fields of warehouses and hangars full of airplanes. There is no one weird trick to fix the Canadian economy, and the frictionless callout against red tape (which is bad) in favour of competition (which is good) isn’t it.
If the federal government wants to shake up competition, especially in the markets over which it has the most direct pull, it needs to go to the heart of how control is exercised in those markets.
Step one is to beef up the Competition Bureau and appoint a new commissioner of competition with clear marching orders to put a halt to harmful takeovers and move quickly on the oligopolized markets that are often invisible to everyday consumers. The government needs to direct our telecom regulator, the Canadian Radio-television and Telecommunications Commission, to double down instead of backing away from the regulations that allow independent competitors to build businesses on the infrastructure of incumbents.
Groceries are a clear test case
Riding on growing energy for public grocery stores, the federal government needs to invest in structural alternatives that put food on Canadian tables, including the unsexy but important food-processing and -distribution sectors.
Ottawa also needs to take public steps to restore consumer confidence that they’re getting a fair deal with existing competitors. Twice now, investigations by CBC’s Marketplace have found grocers systematically overcharging shoppers for meat products, even after commitments from the companies to rectify the behaviour. This is an egregious breach of consumer trust, yet the current maximum fine of $15,000 for an offending company is meaningless. Public denouncement, stricter penalties and stepped-up enforcement from the Canadian Food Inspection Agency are other concrete ways the government can make clear that markets need to be working for Canadians.
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The federal government should also be partnering with the provinces — which have a clearer line of sight toward changing business practices — and leading a unified push against harmful practices like the property controls that allow grocers to dictate where their competitors set up shop. Manitoba is leading the way here, and its experience will certainly provide lessons for other provinces looking to deliver more choice for their citizens.
Still at the starting line
All together, these suggestions still represent only the first step toward a deep commitment to improving competition and making markets work for Canadians. Heck, even cut some red tape while you’re at it. But a generic enthusiasm for competition is no substitute for the real political fights that need to happen to make Canadians’ lives more affordable.
Of course, there’s a less pessimistic read of the announcement, which is that the government has the right prescription and is setting up for a bold push to deliver more competition for Canadians.
But saying you want more competition and doing the work to upset the powerful interests that most certainly do not want more competition are two different things. So far, it’s not clear that this government is prepared to do the latter.
Keldon Bester is the executive director of the Canadian Anti-Monopoly Project and a fellow at the Centre for International Governance Innovation.
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