European Commission President Ursula von der Leyen and U.S. President Joe Biden visit the Itsukushima Shrine in Miyajima Island as part of the G7 Leaders’ Summit, on May 19.JACQUES WITT/AFP/Getty Images
Kevin Lynch was clerk of the Privy Council and vice-chair of BMO Financial Group. Paul Deegan was a public affairs executive at BMO and CN and served on the White House’s National Economic Council.
After 40 years of relentless corporate consolidation, U.S. President Joe Biden signed an Executive Order on Promoting Competition in the American Economy in 2021, directing every agency to use all available authorities to promote competition. He also nominated strong and smart leaders – such as Lina Khan to chair the Federal Trade Commission. He increased the budgets for his enforcement agencies by US$120-million annually and created the White House Competition Council.
Meanwhile, there’s the competition policy leadership in the digital domain emanating from Brussels.
But with all this activity on the competition front, in both the U.S. and E.U., where’s Canada? Is it even on the agenda? Our last major look at competition policy was back in 2007-2008. Lynton Wilson, chair of the Competition Policy Review Panel, wrote in its report: “The change in public and private sector mindset that will be required to elevate competitiveness to the priority needed to assure Canada’s continuing prosperity will not be achieved easily or quickly.”
Mr. Wilson and his colleagues were right. Sadly, we have not elevated competitiveness to where it needs to be on our national agenda, and it shows in the declining competitiveness of Canadian business, our tepid productivity performance and our stagnant per-capita incomes.
Does the federal government’s competition policy review provide an opportunity for a reboot? Matthew Boswell, Commissioner of Competition, clearly hopes so, saying in a recent speech to the Canadian chapter of the International Institute of Communications, “Canada has an urgent need for a nationwide competition upgrade.”
The reality is that re-energizing competition in Canada is a broader challenge than updating our competition laws to better reflect a digital, services-driven economy and to better align with like-minded countries, as important and urgent as these actions are.
How can the government convince business that it is serious about ensuring a competitive marketplace when there is no willingness to tackle the internal trade barriers that hobble competition and limit the ability of companies to scale their operations?
How credible is any government commitment to competition unless it is willing to tear down the regulatory barriers that saw Canada fall from eighth to 23rd on the World Bank’s Ease of Doing Business indicator between 2010 and 2020? We are a G7 country and we should aim to be nothing less than seventh in the world when it comes to the ease of doing business.
How rigorously are we analyzing our new industrial policies to ensure they are pro-competition rather than subsidies to prospective national champions in clean tech and electric vehicles? How willing is any government to review supply management and other non-tariff trade barriers that stifle competition in key sectors?
Any chance of success will require a whole-of-government effort – across all levels of government – to break down regulatory barriers and enshrine the mindset of competition as the sustainable source of jobs and growth. That will not be easy in today’s fragmented political and policy climate.
Done right competition reform can boost productivity, GDP and household incomes. It’s not a zero-sum game between consumers and business; it’s about recognizing the value and power of competition.
But, as White House National Economic Council director Lael Brainard cautioned, “Restoring competition after decades of consolidation also means making promoting competition the mission of the whole of government, not just our antitrust enforcement agencies.”
A timely topic for the next federal-provincial-territorial meeting of first ministers.
