The federal agency in charge of ensuring there’s healthy competition between companies in Canada says there’s less of it than there used to be.
That’s the main takeaway from a new report by Canada’s Competition Bureau, published Thursday, which tracked competition in various parts of Canada’s economy and how it changed between the years 2000 and 2020.
By looking at granular data on profits, business creation and other metrics from Statistics Canada and various other government departments, the report found that overall Canada’s “competitive intensity” — the level to which firms compete with each other to win consumer dollars — has fallen over the years.
That means that instead of getting more competition, industries that were highly concentrated in 2000 were even more concentrated, in fewer hands, by 2020, the report found. And the number of industries deemed to be highly concentrated went up, too.
Rich getting richer
The biggest companies are being even less challenged by smaller new entrants than they used to be, and even the number of new entrants into industries overall has declined.
The rich are getting richer, too, as the report found that profits and markups have both risen over the past 20 years — especially at companies that were already highly profitable in the first place.
“The result of this decline in competitive intensity is that both consumers and businesses have seen fewer of the benefits that a more competitive economy has to offer, such as lower prices, greater choice and more innovation,” the bureau said in a statement.
Calls for more competition to combat soaring grocery prices
Featured VideoA new report says there’s a lack of competition in the grocery business — and consumers are paying the price. Right now, there are just five big players dominating the market in Canada.
While the report was short on concrete details as to how to fix the problem and reverse the trend, in broad terms the bureau said that what’s needed most is a “whole-of-government approach” to foster competition. And an overhaul of competition laws that would allow the bureau to do more to help.
Among the legislative changes the bureau has asked for previously is the ability to compel companies to provide inside information when requested. Currently the system is mostly voluntary.
The bureau has also asked that Canada’s Competition Act be overhauled in a way that would focus more on what’s good for consumers, as opposed to having loopholes that allow the vast majority of merger proposals to be approved.
“Merger review for the bureau is the first line of defence against concentration,” an official for the bureau said Thursday. “We need a strong Competition Act that lets us gather the information we need go after and the conduct we want to go after and really get remedies.”
Keldon Bester, the executive director of the Canadian Anti-Monopoly Project says the report “paints a picture that will be familiar to Canadians.”
While the report didn’t single out any particular industries as being any worse or better, overall, “the top firms stay the top firms for a greater duration. There’s less jostling and fewer new entrants to challenge them,” Bester said in an interview Thursday.
“That leads to stagnation and a loss of dynamism.”
New outlook needed
Bester says one interesting takeaway was that the report examined to what extent larger companies really are more efficient and found little evidence that was the case.
“That raises questions as to whether we should let companies acquire each other because of these efficiency benefits that we might not be seeing,” he said.
Ultimately, Bester says, an overhaul of Canada’s Competition Act is definitely justified, but he warns that isn’t a panacea that will magically make everything better and cheaper for consumers.
“How do we get more Canadians to start businesses?” he said. “How do we get businesses to scale up to go against new competitors? How do we change our mindset as Canadians that says as long as things are stable, they’re fine — because in reality, they might be in slow decline.”
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
