Moose, Maple Syrup and Monopolies: Is Canada Finally Taking on Its Oligarchs?
The anti-monopoly movement has hit Canada, where a political economy revolution has changed the nation's antitrust laws from among the weakest in the world. As goes Canada, so goes the world?
Welcome to BIG, a newsletter on the politics of monopoly power. If you’d like to sign up to receive issues over email, you can do so here.
One theme this year for BIG is the global reach of the anti-monopoly movement. I often get emails from readers who live abroad, including enforcers, and they notice the same trends we see in America. And that is because philosophies of governance are usually transnational, as are their impacts. More fundamentally, firms like Google, Apple, Meta, Spotify, Bayer, TikTok, et al are global.
While the U.S. government is the most important competition regulator, non-U.S. enforcers matter as well. To take a recent example, yesterday the European Union blocked Amazon’s takeover of iRobot, tanking that stock by 30%. That acquisition is under investigation by the Federal Trade Commission, but the FTC may not need to bring a case, because the EU did it for them.
The EU action is not unusual at this point, as the anti-monopoly philosophy is spreading, and laws and corporate behavior worldwide are changing as a result. But you don’t have to look across the Atlantic to find a dramatic shift. One nation that is surprisingly interesting in its competition dynamics is Canada, which compared to the U.S. has historically had a much larger state sector but also physically shares our infrastructure, such as railroads and waterways.
I get a lot of feedback from Canadian readers, who tell me how their pleasant society conceals a corporatized meanness underneath. And indeed, as it turns out, Canada has traditionally had one of the weakest competition frameworks in the world, a tolerance for monopolies most of us would find shocking. But there’s also a remarkably positive story here, since in the last few months, the government has initiated a wholesale revolution in its anti-monopoly regime, spurred in part by the intellectual movement in the U.S.
I’ve asked Keldon Bester, the Executive Director of CAMP, the Canadian Anti-Monopoly Project, to fill us in on what’s going on in Canada.
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Moose, Maple Syrup and Monopolies
by Keldon Bester
All over the world, there’s an anti-monopoly revolution happening, as we begin to fight back against the threats to our sovereignty posed by big tech and dominant firms. But for some reason, up north in Canada where I live, that trend seemed to have passed us by, at least until recently.
Canada is a country that most outsiders think of as polite and well-run, with a national health care service, friendly, and competent. But up close, living here, it’s really a nation of monopolies and oligarchs. For instance, there’s the Irving family, which owns much of our province of New Brunswick. Then there’s the Weston family, which dominates the grocery sector and was at the center of a 15-year bread price fixing cartel. And who can forget the Rogers family, a single clan that controls Canada’s largest telecommunications and media conglomerate?
I could do this all day. The point is, historically our government has been close with domestic oligarchs as part of our governance regime. But we’ve also been close with foreign monopolies, because Canada operates in part as a branch plant economy and cheap labour outpost for global giants. Politically, we even have our own antitrust bar, competition lawyers who freak out whenever anyone tries to do anything about monopolies.
But Canada is starting to catch up with the rest of the world and turn against the economic philosophy that has made us so cozy with monopoly. And that story was kicked off with a brutal loss. In 2022, our competition regulator, a courageous official named Matthew Boswell, diverged from the path taken by his predecessors and challenged one of the most ossified sectors in the Canadian economy, the telecom industry.
Rogers and Shaw, two dominant telecom providers, sought to merge, and were obviously going to raise prices if they did so. But Canada has an antitrust specialty court called the Competition Tribunal, staffed by white collar antitrust defense, pro-monopoly lawyers. In the case of Rogers and Shaw, the Tribunal, in a decision authored by former corporate lawyer turned Chief Justice Paul Crampton, let the merger go through. Crampton rejected the challenge for the reasons you’d expect. Crampton bought the multi-million dollar complex price analysis presented by the defense, the kind promoted in the 1970s by Robert Bork in the United States, and found that this merger wouldn’t raise prices thanks to a remedy that relied on a slew of generous contracts between supposed competitors. It's an absurd decision; Canadians already pay some of the highest prices for wireless and home internet in the world, but so goes Canada in competition law.
It wasn’t just Rogers and Shaw, of course. As 2023 wound to a close the Liberals approved the takeover of a competitor bank by the country’s largest financial institution, RBC. Before that the federal Minister of Transport approved two rounds of airline consolidations, one of which Canadians had to rely on the European Commission to stop.
The reason for monopolies in Canada is not just judges and political leadership, but one of the weakest antitrust laws in the world. Enacted in 1986, Canada’s Competition Act has several important flaws that make it tough to use. Unlike the American antitrust laws, the Canadian law explicitly allowed what is known as an ‘efficiencies’ defense, meaning that firms can merge to monopoly if they can show that any harms are outweighed by projected cost savings. There was also no private right of action, meaning all cases would have to be brought by the government. And cases are heard in the big law dominated Competition Tribunal.
Why did Canadians pass such a law? It was written, as many of our laws are, in the shadow of the United States and its far larger firms. The hope at the time was that Canadian monopolists, with enough market power, could hold off their more brash American counterparts. It was a bad theory, but no different than the classic attempt to have ‘national champion’ firms operate on behalf of the state. The result was a land of monopolies. Competition cases are few and far between, with our sole federal enforcer the Competition Bureau, outgunned and held back by our weak law. In markets across the economy Canadians have less choice and face higher prices than international counterparts.
Boswell’s loss in what should have been a slam dunk case happened just as the pandemic moment fostered an inflationary episode. As in the United States, Canada has a concentrated and cozy grocery sector, which saw its profits rise while Canadians struggled to put food on the table. Then the Canadian government passed a law mandating that tech giants negotiate with Canadian news publishers over revenue, similar to the Journalism Competition and Protection Act legislation proposed by Senator Amy Klobuchar. Despite their alleged commitments to an open internet, Meta and Google threatened to tank Canada’s already ailing news industry by blocking access to news.
Seeing corporate power flexed firsthand creates the conditions for action, and the end of 2023 was a turning point for Canada’s relationship with monopoly. Spurred by the political bite of the rising cost of living, in the fall of 2023 the Liberal government introduced the most important reforms to Canada’s competition laws since their introduction, with the first batch of changes becoming law just before the holidays.
The changes put forward by the federal government are revolutionary. The ones that have become law already remove the efficiencies defense for mergers and crack open enforcement of abuses of corporate dominance. Changes to come will allow private parties to seek injunctions and damages for anticompetitive conduct, which will move power from the state to individual Canadians. Proposed changes will also bring market structure back into merger enforcement, give teeth to the laws against agreements that kill competition, and bring right-to-repair into our competition laws.
Just as American antitrust lawyers are upset by a climate where they have to face challenges, Canadian antitrust lawyers are even angrier, calling these changes “ill-considered” and “breathtaking.” Canadian biglaw firm McMillan sent out an alert with what their clients will see as an alarming statement, writing that “competition and antitrust law the world over appears to be in a period of transformation, but Canada is now a serious contender for the most statutory change in the shortest period of time.”
The changes are the biggest ratcheting up of Canada’s laws in the nearly 40 years they’ve been on the books. Accordingly, the Liberal government under Prime Minister Justin Trudeau deserves credit for beginning to take corporate power seriously. The changes to the Competition Act work in concert with the federal government’s steps in response to the power of Big Tech, with bills last year to mandate contributions from technology companies to support Canadian cultural content and our ailing news industry. But what had been missing prior to reform of Canada’s competition law were tools that went to the heart of dismantling that power rather than redistributing its spoils.
Canada’s newfound confidence in tackling monopoly is not just the result of the rising cost of living and the excesses of global giants. It is also the product of the growing global movement against concentrated economic power. The work of organizations like the American Economic Liberties Project and Open Markets tackling the harms of corporate power have informed the efforts of Canadian civil society, including my own organization the Canadian Anti-Monopoly Project (CAMP). But unlike Americans, Canadians do not have a history of taking monopoly seriously to which we can return. Americans threw off the monopoly of the East India Company, Canadians can still buy scarves from the Hudson’s Bay Company. While our founding monopoly is a shadow of its former self, its continued existence represents an important difference in the political mentalities of our two countries. Rather than a return to tradition, to truly beat back the authoritarian threat of concentrated economic power Canadians will need to invent our own anti-monopoly future.
Building that future will take time, and there will be missteps along the way. Canada has spent decades down a path that has left major markets dominated by a handful of players and we must now engage in the work to not only change how we think about the possible futures of these markets but also to reverse that downward slide and reclaim our sovereignty.
The very real threat to sovereignty was made clear in the showdown last year between the federal government and the tech giants over funding for Canadian journalism. In a sharp break with the claims of supporting an open internet during the fights over net neutrality, Meta and Google threatened to cut off access to all Canadian news in response to the bill, with Meta quickly following through on its threat. Though concessions to Google eventually brought the search giant to the table, it could not be clearer the hold that the two corporations have over the already precarious future of journalism in Canada. Defying these challenges, like Amazon’s 2022 threat to pull out if Canada were to pursue aggressive competition reform, are key to Canada and our international partners resetting the balance of power between democracies and corporations.
What is promising in Canada though is that there is currently support across parties for a stronger line against monopolies. Though the Liberals introduced the competition reform bills, the other major federal parties have been competing to deliver a more competitive economy for Canadians. Prior to the Liberal reforms, opposition Conservatives introduced bills to remove the efficiencies defense for harmful mergers and open competition in Canada’s banking sector, the New Democratic Party (NDP) proposed far-reaching amendments to Canada’s competition law, and the Bloc Quebecois fought for amendments to tackle excessive pricing by dominant firms.
Growing antagonism against monopoly extends to action beyond just legislative reform. While the Liberals eventually approved the transaction, the Conservatives under the leadership of Pierre Poilievre called on the Deputy Prime Minister to block the acquisition of a competitor by the country’s largest financial institution to preserve competition in the mortgage market. In a time of rising food prices, the CEOs of major grocery retailers have been hauled in front of parliamentary committee to explain their rising profits in light of the financial struggles of Canadians. Though these moves can be written off as political posturing, they mark a recent shift in the relationship between policy makers and concentrated corporate power and create the foundation for the kind of real change we are beginning to see in Canada.
That foundation is critical as Canada remains very much at the start of our fight against concentrated economic power. Now that we have brought our competition policy tools up to speed with our international peers we need to put them to use, and regulators must be emboldened to do so. In a positive sign, the government has moved to reappoint Matthew Boswell, to another two year term. To make the most of these new tools, Boswell and Commissioners to follow will not only need a strong vision of a fairer and more democratic economy, but the political support to execute that vision. Taking a page from the Biden administration, Canada’s government must also understand that there are a wide array of policy tools that can be brought to bear in the fight to rebalance power in our economy.
Before the end of 2025 Canada will have had its next federal election. Whoever wins that election, taking the fight against corporate power from its infancy to maturity will be their responsibility. But more than a responsibility, it is an opportunity for that government to deliver real benefits to Canadians. By making markets across the economy serve people, an anti-monopoly approach to governing will be a core component of an effective and durable government. And that’s not just true in Canada, but everywhere.
Thanks for reading. Send me tips on weird monopolies, stories I’ve missed, or comments by clicking on the title of this newsletter. And if you liked this issue of BIG, you can sign up here for more issues of BIG, a newsletter on how to restore fair commerce, innovation and democracy. If you really liked it, read my book, Goliath: The 100-Year War Between Monopoly Power and Democracy.