OTTAWA – Noting even “prior to the pandemic, there was already mounting concern that a rise of market power was contributing to sluggish growth, stagnant wages and deeper economic inequality in advanced economies, including Canada,” the Competition Bureau released a report on the outcome of its June 2021 Competition and Growth Summit, which suggests Canada’s telecommunication sector needs more competition.
The report, titled Canada Needs More Competition, is based on a three-day summit that brought “together leading thinkers from government, academia and business, as well as the heads of independent competition authorities from Canada, the United States, United Kingdom, Australia and New Zealand.” Hundreds of people attended the virtual conference from over 20 countries.
At the conference there was “a palpable sense that competition policy has reached an inflection point,” the report reads. Furthermore, there was concern “current marketplace frameworks could not always address the challenges of the digital age.”
The report indicates the past year has “brought these concerns into much sharper relief as our dependence on services provided by digital giants has grown while consolidation is likely to accelerate across a wide range of sectors.” While the report does not examine the telecommunications market specifically, in Canada there has been considerable concern that a lack of competition and increasing market power of only a few companies in the sector has been detrimental to consumers. This sentiment is evident in the reaction to the CRTC’s recent wholesale rate decision, which you can read about here, here and here.
The Bureau’s report seems to acknowledge that there is a problem in the telecommunications sector by both pointing to a general concern about how rising market power and consolidation are affecting consumers and later indicating greater competition could be fostered in the telecommunications (among other) sectors specifically, by re-evaluating foreign investment restrictions through a competition impact assessment, as suggested by panelists at the summit.
Assuming the Competition Bureau likely agrees with the panellists, the report suggests it is interested in fostering greater competition in the sector moving forward.
