Are Canada's competition laws outdated? Some say it's time for change

Rogers and Shaw applications are seen on a cellphone in Ottawa on May 9, 2022. The Competition Bureau sought to block the companies’ recent merger, fuelling criticism of Canada’s competition laws.

Whether checking in at the airport or checking out at the grocery store, it seems everywhere you turn these days, you find frustrated consumers. Many complain about high prices or limited choices across sectors — and blame lack of competition.

But now, the federal government is looking to update Canada’s competition laws — possibly the most significant review in decades. Everything seems to be on the table, from tiny tweaks to a major overhaul. Commissioner of Competition Matthew Boswell is one of those pushing for reforms.

“I think it’s fair to say, unfortunately, that the Competition Act is lagging behind our international peers,” said Boswell. He heads up the Competition Bureau, which aims to boost competition within sectors to benefit consumers. It’s recommending more than 50 changes to the act.

The changes aren’t radical, he says.

“They are really aimed at bringing us to the starting line in terms of competition law enforcement in the modern, digital world.”

For one, the bureau wants the power to compelcompanies to share information. It’s currently studying the rise in food prices at grocery stores, for example, but the companies involved only have to provide details about their business voluntarily. The bureau says changing that would allow it to conduct stronger investigations.

Another recommendation is to enact tougher rules on mergers. One of the most high-profile mergers recently was the massive tie-up of Rogers Communications and Shaw Communications, which was approved by the government in March.

Boswell calls that outcome “a big disappointment.”

If the Competition Bureau believes a merger will lead to less competition, it can apply to the Competition Tribunal to block the deal. But in the case of Rogers-Shaw, the tribunal sided with the companies, and it went to the federal industry minister for final approval.

Boswell says the current rules can lead to greater concentration, and are out of step with those of peer countries like the U.S. or Australia.

Keldon Bester, a fellow at the Centre for International Governance Innovation think tank, agrees, and wrote a report on the gaps in Canada’s merger laws last fall.

“We rarely, if ever, intervene against mergers,” Bester told CBC News. “Even ones that we know are going to make things worse for consumers, worse for producers or worse for workers.”

Bester says as other nations like the U.S., U.K. and Australia retool their competition laws, Canada needs to keep pace or risk falling behind.

“They’re looking at the past 40 or 50 years of how they’ve treated monopoly and concentrations of power, and they’re saying we need to take a different path.”

But Michael Osborne, who works on competition issues at the law firm Cozen O’Connor, cautions against a wholesale revamp. He says if regulations become too stringent, it could deter business and end up limiting competition.

“I think that the structure of the act is sound,” he said. “That doesn’t mean that there aren’t things that couldn’t be improved. There’s always things that can be improved.”

Osborne says, ultimately, what worries him are efforts to change the essence of the law.

“We’re at an interesting inflection point, I think, where we have a number of groups that are pushing for competition law to do things that competition law is not traditionally meant to do,” he said. “They’re pushing for it to be a device to control inflation, and it’s not a device or tool to control inflation.”

It’s not yet clear what changes, if any, could come out of the federal review process. After gathering feedback earlier this year, the government says next steps could include further consultations or a published report, though it did not provide a timeline.

Boswell says he’s encouraged, because a more competitive marketplace isn’t just about lower prices.

“It drives innovation in the country. It drives productivity growth. And I don’t accept the notion that we’re somehow so different that we can’t have healthy competition in this country,” he said.