Canada is a country where there is increasingly less competition in the market, a decline that has been observed for at least 20 years and continues today, a comprehensive study by the Competition Bureau found.
“This decline in competitive intensity has resulted in consumers and businesses benefitting less from the benefits that a more competitive economy can offer, such as lower prices, greater choice and more innovation,” he said.
First, analysts noted a gradual concentration of capital and competition among an ever-smaller number of players in more and more industries.
As the bureau explains, “concentration has increased in the most concentrated industries, and the number of highly concentrated industries has increased.”
At the same time, the largest companies in a given sector are experiencing “less and less intense competition from their smaller rivals.”
This dynamic makes it difficult for smaller companies, which have more difficulty competing with large, already established companies. This “suggests that many industries have lost momentum.”
Additionally, the Bureau notes that “both profits and margins increased overall, and these increases were generally greater among companies that already had higher profits and margins.”
In a press release, Competition Commissioner Matthew Boswell reiterated the “need” for Canada to “modernize Canada’s competition laws and adopt a whole-of-government approach to promoting competition.”
“Without the introduction of pro-competition measures, the decline in competitive intensity in Canada is likely to continue,” he writes.