TORONTO – Canadians pay more for their cell phones and other telecom services due in large part to Canadian governments restricting or preventing foreign competition, says a new study from public policy think tank The Fraser Institute.
The study, Walled from Competition: Measuring Protected Industries in Canada, examines Canadian protectionism – barring foreign companies from operating in Canada, restricting foreign ownership, requiring key employees to be Canadian citizens, and protectionism in other developed countries – with a spotlight on specific industries such as telecommunications and air transportation.
Foreign competition is restricted or prevented in 30.6% of Canada’s economy, meaning that almost one of every three dollars of the total value of all goods and services produced in Canada is shielded from competition, continues the study. This means that established players have less incentive to cut costs and prices and improve services.
The study adds that Canada ranks 59th out of 62 countries in telecommunications competition and 54th out of 62 countries (well below the United States and United Kingdom) in air transportation competition, which it says helps explain the comparatively high prices in these sectors.
“When governments in Canada protect industries, Canadian consumers pay higher prices, have less choice and/or less innovations compared to consumers in other countries,” said Vincent Geloso, Fraser Institute senior fellow and author of the study, in its news release. “If provincial and federal policymakers want to help improve living standards for Canadian families, they should remove barriers to competition and allow companies to freely compete for our business.”
The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 87 think-tanks. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being.
