As Canadians grow more concerned about rising inflation, competition across different sectors of the economy has become a “kitchen-table issue” at a time when the federal government is reviewing the competition law.
The country’s two largest newspaper chains, Postmedia and the owners of the Toronto Star, recently confirmed talks about a potential merger, signalling more consolidation in an industry that already has a limited number of players.
In a highly anticipated report about food inflation last week, the Competition Bureau called for more competition in the grocery sector, tying the higher prices to the limited options for consumers.
All of that builds on the mounting scrutiny of several sectors, with the telecommunications industry being the prime example.
The head of the competition watchdog recently said that scrutiny is creating a window of opportunity for action, as the federal government undertakes a review of the Competition Act.
“Competition issues are grabbing headlines across the country,” Competition Commissioner Matthew Boswell said during a speech last month in Ottawa.
And as Canadians struggle with high inflation, Boswell said it’s easy to see how competition policy “has gone from being a podium topic to a kitchen-table issue across the country.”
Canadians more aware of lack of competition
Keldon Bester, co-founder of the Canadian Anti-Monopoly Project, said inflation and a global conversation about corporate power have made people more aware of the role competition plays in their day-to-day lives.
“When Canadians are pushed and their budgets are stressed, they work harder to find alternatives to make ends meet. I think that brings forward a lack of options that we have in a lot of areas of our lives that we can kind of afford to ignore in the good times,” Bester said.
“Internationally, we’re seeing a real change in how governments and citizens interact with the corporations that make up our daily lives.”
The rapid rise of grocery prices alongside growing profits in the industry have led some to argue that firms were profiteering off inflation.
The Competition Bureau’s report last week found grocery margins have grown modestly yet meaningfully over the last five years, though the trend predates the current bout of high inflation.
“The fact that Canada’s largest grocers have generally been able to increase these margins — however modestly — is a sign that there is room for more competition in Canada’s grocery industry,” the report said.
Meat prices are shown in a Surrey, B.C., grocery store in January. A report from the Competition Bureau found grocery margins have grown modestly yet meaningfully over the last five years. (Justine Boulin/CBC)
The bureau laid out the history of consolidation in the industry, arguing that it has hurt consumers.
When the Competition Act came into place in 1986, there were at least eight major grocers in Canada. Fast-forward to 2023, and that number has dwindled to just five.
The bureau made a set of recommendations in its report, urging governments to make it easier for more players to enter the market.
A spokesperson for Industry Minister Francois-Philippe Champagne called the report a good first step, and said the federal government would be reviewing the recommendations to see how it can make Canadians’ lives more affordable.
Lack of competition hurting productivity: experts
The dangers of poor competition go beyond prices, experts warn. A study published in the fall by researchers at the HEC Montreal Centre for Productivity and Prosperity found a lack of competition is hurting productivity, too.
The Competition Bureau acknowledged in its report that it hasn’t done enough to protect and promote competition, noting the Competition Act needs to be reformed.
The federal government launched a review of the act last fall and finished public consultations on the changes earlier this year, with the findings set to be released in the near future.
Bester is a loud critic of the law, and wants to see reforms that make it harder for mergers that would hurt consumers to be approved.
The Competition Bureau also needs to be better quipped to handle collusion and cartel conduct, he said, noting it has taken it years to investigate the bread price-fixing scandal.
Bester warned that reform will require politicians to stand up to major companies that aren’t interested in such changes.
“It’s going to take a lot of courage to make the right decision for Canadians,” Bester said.
OTTAWA – Prime Minister Justin Trudeau says the NDP is caving to political pressure from Conservative Leader Pierre Poilievre when it comes to their stance on the consumer carbon price.
Trudeau says he believes Jagmeet Singh and the NDP care about the environment, but it’s “increasingly obvious” that they have “no idea” what to do about climate change.
On Thursday, Singh said the NDP is working on a plan that wouldn’t put the burden of fighting climate change on the backs of workers, but wouldn’t say if that plan would include a consumer carbon price.
Singh’s noncommittal position comes as the NDP tries to frame itself as a credible alternative to the Conservatives in the next federal election.
Poilievre responded to that by releasing a video, pointing out that the NDP has voted time and again in favour of the Liberals’ carbon price.
British Columbia Premier David Eby also changed his tune on Thursday, promising that a re-elected NDP government would scrap the long-standing carbon tax and shift the burden to “big polluters,” if the federal government dropped its requirements.
This report by The Canadian Press was first published Sept. 13, 2024.
Simon Jolin-Barrette, minister responsible for consumer protection, has tabled a bill to force merchants to calculate tips based on the price before tax.
That means on a restaurant bill of $100, suggested tips would be calculated based on $100, not on $114.98 after provincial and federal sales taxes are added.
The bill would also increase the rebate offered to consumers when the price of an item at the cash register is higher than the shelf price, to $15 from $10.
And it would force grocery stores offering a discounted price for several items to clearly list the unit price as well.
Businesses would also have to indicate whether taxes will be added to the price of food products.
This report by The Canadian Press was first published Sept. 12, 2024.
Quebec legislature member Youri Chassin has announced he’s leaving the Coalition Avenir Québec government to sit as an Independent.
He announced the decision shortly after writing an open letter criticizing Premier François Legault’s government for abandoning its principles of smaller government.
In the letter published in Le Journal de Montréal and Le Journal de Québec, Chassin accused the party of falling back on what he called the old formula of throwing money at problems instead of looking to do things differently.
Chassin says public services are more fragile than ever, despite rising spending that pushed the province to a record $11-billion deficit projected in the last budget.
He is the second CAQ member to leave the party in a little more than one week, after economy and energy minister Pierre Fitzgibbon announced Sept. 4 he would leave because he lost motivation to do his job.
Chassin says he has no intention of joining another party and will instead sit as an Independent until the end of his term.
He has represented the Saint-Jérôme riding since the CAQ rose to power in 2018, but has not served in cabinet.
This report by The Canadian Press was first published Sept. 12, 2024.
