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Canada’s Competition Problem: 7 Reasons

Regs to Riches | Vass Bednar | Oct 24, 2021

Capacity issues 1 - Canada's Competition Problem:  7 ReasonsCanada’s real competition problem is capacity.

Competition policy is an important instrument that can be used to regulate behaviour between businesses and create beneficial outcomes for the economy and society,  including: greater economic efficiency and innovation, more product variety for consumers and better prices, the ability for entrepreneurs to start businesses and bring new products to market and overall economic fairness.

It’s hot shit.  Yet it remains notably absent from Canada’s technology tool kit.

See:  Betakit podcast with Senator Deacon on Open Banking and Competition

As the country’s digital policy agenda has taken shape, it has included many other approaches: a digital sales tax, debating whether technology platforms should pay for news, new privacy and consumer protection legislation, updating the Broadcasting Act, and consulting on a proposed approach to Online Harms.

The OECD has advised that, “competition policy and competition authorities have a very relevant role to play to ensure a robust economic bounce-back and recovery in the long-term.” Competition policy could have been a sleeper hit in the last election because it is a  pocketbook issue jackpot and President Biden’s recent Executive Order should have been a wake up call.

The Competition Policy Review Panel’s 2008 report “Compete to Win,” chided the country, proclaiming that we lacked a “competitive mindset.” I would venture that Canada is anti-competitive because we fundamentally lack the capacity to improve our competitiveness. This lack of capacity is the primary barrier to better competition discourse and outcomes, and I believe there are seven key failings that will prevent a basic review of the Competition Act from showing up in a new mandate letter.

For one, our Commissioner of Competition (Matthew Boswell) lacks the intellectual  independence to speak freely on matters of competition, as the Bureau is nested under the Ministry of Innovation, Science and Economic Development (ISED). When compared to his international peers, people may interpret his quieter voice as indicating that we do not have policy challenges or opportunities when it comes to competition in Canada. This may not be the case, and it’s why we should “Free Boswell” - Parliament should move the Competition Bureau out of  ISED in order to reduce the perception of political interference and give the Commissioner more voice and autonomy.

See:  Opinion: Biden administration takes an overdue first step to foster competition and help consumers

Secondly, alongside our muzzled Commissioner, there is a basic literacy gap that is a barrier to entry into the conversation. Few people truly understand how our legislation works, and there are many misconceptions. This has led to a concentration of competition conversations that are sector-specific,  such as in telecommunications. This lack of  familiarity with the Act was evident in some of the platform proposals discussed in the recent federal election. Though embarrassing, this problem is solvable through novel learning interventions like a bootcamp or crash course. Lets do it.

It is imperative that more people are invited into conversations about competition. If competition policy remains the sole domain of economists and lawyers, the public conversation will remain limited at best and captured by private players at worst.

Third, public policy and public administration programs are graduating too many young people who have never been exposed to the basic mechanics of competition policy. This is an oversight that can be similarly corrected. The Competition Act is a core piece of legislation that shapes the business behaviours that facilitate the innovation economy and it should be familiar to policy practitioners.

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