The News Rundown
- Economic and Corporate Competitiveness
- Inflation and rising prices have been gouging Canadians for many years now. Part of this is due to Canada's oligopolies, defined as a state of limited competition, in which a market is shared by a small number of producers or sellers.
- Oligopolies can be found in many different sectors, from groceries, to airlines, to cell phone carriers, to banks, and even our beer companies.
- Canadians are all too familiar with the illusion of choice. WestJet or Air Canada? Loblaws or Sobeys? The Big Five banks? Even 63% of our beer comes from two multinational behemoths. The telecom industry, considered one of Canada’s most egregious oligopolies, will likely consolidate further, with the Rogers and Shaw merger now going through. The deal has sparked heaps of controversy, at least partially because the companies have exploited weaknesses in Canada’s anti-monopoly law, the Competition Act. A few companies dominate Canada, and why that hurts the rest of us.
- What sort of problems do monopolies create in Canada? Does it really matter that we only have one major movie-theatre chain or one blueberry producer? For one, customers tend to get worse, more-expensive products because of the lack of competition. Almost every other country in the world pays less than we do for cell service, for instance. The same goes for groceries. Monopolies hurt workers, too, since they have fewer employment options. That results in lower wages and worse working conditions.
- Canada has always feared that if we don’t let our homegrown companies get huge, we’ll get swamped by American competitors. That’s why there’s a tension between Canadian politicians, who often say they’re pro-competition, and the law, which incentivizes consolidation.
- Competition Commissioner Matthew Boswell has said our laws are not adequate. He doesn’t have enough power in his role to do the things Canadians expect him to do, because of some incredible legal loopholes that no other major developed nation has when it comes to competition. One is the efficiencies defence, which basically allows a merger to go through if it will benefit shareholders. It doesn’t matter if consumers get screwed over.
- A 2019 Statistics Canada report looked into mobile wireless trends in Canada and broke down services offered into five levels of SMS, voice minutes, and data usage plans, with prices increasing with each level.
- It found that Canada has the "highest or second highest Purchasing Power Parity-adjusted prices in all five level baskets" when compared to Australia, France, Germany, Italy, Japan, the U.K. and the U.S.
- According to a 2021 report by Open Media, a registered non-profit organization, Canada’s average data usage “is fourth lowest among included countries, while its average revenue per user is the highest.”
- Canada also has a smaller scale of mobile network operators, global accounting firm PwC found in a 2021 report. “The smaller scale of Canadian MNOs results in lower bargaining power, less favourable contract terms and higher costs,” it concluded.
- Canada’s telecom sector is currently dominated by three large carriers -- Rogers, BCE Inc., which owns Bell Media, and Telus Corp. Their hold on the industry has long been a concern of academics, who have called for regulators to increase competition for mobile and internet services in Canada.
- So how can we fix the Canadian oligopoly problem, and make it so that Canadians are better served in our country?
- Firstly, strengthening competition regulations and enforcing them rigorously is essential. Canada should review and update its competition laws to prevent anti-competitive practices such as price-fixing, market allocation, and abuse of market power. Empowering the Competition Bureau with the resources and authority needed to investigate and prosecute anti-competitive behavior is crucial to maintaining a competitive landscape.
- Secondly, promoting market entry and competition is vital. Lowering barriers to entry, such as reducing regulatory obstacles and licensing requirements, can encourage new businesses to enter markets dominated by oligopolies. This increased competition can lead to lower prices, improved product quality, and greater choice for consumers. Additionally, supporting startups and small businesses through grants, loans, and mentorship programs can foster entrepreneurship and innovation, ultimately benefiting consumers.
- Furthermore, enhancing merger and acquisition scrutiny is necessary to prevent further consolidation of corporate power. Regulators should carefully evaluate proposed mergers and acquisitions involving dominant firms to ensure that they do not lead to anti-competitive behavior or higher prices for consumers. This increased scrutiny can help maintain a level playing field for both established companies and newcomers.
- In conclusion, reducing Canadian corporate oligopoly power is essential for making goods and services more affordable for Canadians. A competitive market environment encourages innovation, lowers prices, and provides consumers with more choices. By strengthening competition regulations, promoting market entry, and enhancing merger scrutiny, Canada can create a fairer and more consumer-centric marketplace that benefits all Canadians.
- Supplementals:
- https://www.wealthsimple.com/en-ca/magazine/canada-monopolies
- Electoral reform is the first idea that comes to mind when one says electoral reform. The truth of the matter is that electoral reform is hard to achieve because a party gets elected under a system, and that makes it difficult to change said system to something else. So the question is, what could be done to give the people more say in the democratic process?
- A policy found in Western provinces that lets people petition the government to adopt an issue and at the very least examine it. Some jurisdictions allow for outright questions changing laws to be made. Others have thresholds for that to happen while at a lower threshold Parliament would be compelled to examine the issue.
- A key framework of such legislation would allow any voter to submit proposed legislation or policy changes for consideration. It would also allow for constitutional referendum questions.
- In general Legislative or policy proposals have a smaller threshold than Constitutional questions. Questions may also require a broad cross-section of voters to sign the survey.
- In Alberta 10% of the total electors is required for legislative or policy proposals and 20% of total electors with the 20% threshold met in at least 2/3 of the electoral divisions.
- What follows depends on jurisdiction from outright enacting the citizen referendum to committees examining and then either drafting a Bill or throwing it back to the people with another referendum vote.
- Federally, simpler is better allowing for proposals to be brought forward directly and impacting legislation or striking legislation from the books.
- Canada already has mandatory retirement for Supreme Court judges and Senators which act as a term limit. The United States has term limits for the Presidency.
- Term limits serve a purpose of ensuring a continuing cycle of democracy and that the act of serving as an MP or even the Prime Minister doesn’t become a career ambition.
- In the earliest days of our country and many others, the government was built with the idea that the local farmer would serve for a few years and then go back home.
- Now we’ve seen cases where people enter the chamber in their 20s and make a career out of it.
- While these politicians may be effective leaders and Prime Minister’s of the past, it raises a question of if being a politician should be a career.
- If the answer to that question is no, then term limits are the answer.
- Term limits could have an impact and bring back the prestige and service of being an MP to be something that someone would do as a sacrifice for a few years at most.
- Term limits would also ensure a continued cycle of democracy in knowing that an MP, cabinet minister, or Prime Minister would only be around for a finite period of time.
- There would be no worry that they would find a way to continue their term indefinitely if their party and caucus agreed.
- With that it could also prevent catastrophic collapses as we saw with the Progressive Conservatives in 1993 and Liberals in 2011.
- Overall a safe blueprint for Canada would be that an individual would be able to be an MP for 10 years or elected at most 3 times, whichever is longer.
- This inherently places a term limit on the Prime Minister and cabinet ministers.
- A Prime Minister would be required to step down after serving in the role for 10 years or after being elected two times, whichever is longer.
- This means that had Justin Trudeau remained an MP he would have been required to step down in 2018. But upon becoming Prime Minister in 2015 he would have until at the latest October 2025 or two full majority mandates after being elected.
- Democracy can also be strengthened by giving people the ability to remove elected officials during their term and not just during elections.
- Recall legislation already exists in Alberta and British Columbia and many states in America.
- In Alberta it is a simple process requiring the signatures of 40% of eligible voters in a constituency and then a recall vote happens. If that vote is successful the MLA is recalled and a by-election is held.
- In BC a similar 40% threshold is required and if the petition meets all requirements the MLA ceases to hold the seat.
- Recall legislation ensures the MP in question at the federal level would remain accountable to their constituents.
- For recall legislation, term limits, and citizen referenda the devil is in the details as a government implementing such policies can poison them by making them very hard to enact.
- Canada has been lucky thus far that BC and Alberta have acted in a way that allows for these powers to be discharged in a way that’s feasible yet won’t be used egregiously.
- Energy and Projecting Canadian Power
- It's no secret that Canada has had a rough time on the world stage in the last half decade or so. Right after Justin Trudeau led the Liberals to a strong victory in the 2015 federal election, he declared that he would also guide Canada back to its rightful place on the global stage.
- Trudeau said at the time: “To this country’s friends all around the world, many of you have worried that Canada has lost its compassionate and constructive voice in the world. Well, I have a simple message for you. On behalf of 35 million Canadians: We’re back.”
- The "Canada is back on the world stage" has probably been one of Trudeau's biggest failures during his time as Prime Minister. Time and time again, the opportunity has arisen for Canada to assert its power as a first world democracy, and as a country with values of human rights, civil liberties, ethical natural resource production, and economic freedom.
- And time and time again, Trudeau has passed up those opportunities, letting other countries fill the void. While Canada doesn't have as much power as the United States or the EU or China on the world stage, we certainly should be up there, as a G7 country and one of the most stable democracies in the world.
- In the time that Trudeau has been in power, we have seen our relationship with China, and recently India, get worse. Saudi Arabia and other OPEC countries also don't think too highly of Trudeau's criticism of their human rights record, and even our allies in the US and NATO, have been at times bewildered by our reluctance to foster natural resource trade agreements, and the US in particular with our lack of defense spending.
- In 2019, now former Conservative Leader Erin O'Toole, said that “The ‘Canada is back’ tagline is probably the biggest failure of Justin Trudeau’s time as prime minister. We have never actually had more diplomatic disputes and declining relationships with countries ever in our history.”
- O’Toole quoted former Canadian foreign minister John Manley, who served under Liberal prime minister Jean Chretien, who said in 2018 in the wake of the Meng extradition affair that he didn’t think “Canada has ever been more alone in the world than it is today.”
- Since then, things have gotten worse. So how can Canada get back on the world stage for real, while still upholding Canadian values abroad?
- First of all, for Canada to be listened to abroad, we have to be worth listening to. Canada is rich in natural resources such as oil, gas, minerals, lumber, and agricultural products, and maximizing the benefits of these resources on the global stage requires a more careful consideration of economic, environmental, and geopolitical factors than we have seen from the current government. By strategically developing and exporting these resources, Canada can enhance its international prominence in several ways.
- Firstly, resource development and exports are central to Canada's economic well-being. These industries provide thousands of jobs, stimulate economic growth, and contribute significantly to government revenue through taxes and royalties. By expanding these sectors responsibly, Canada can strengthen its economic foundation and ensure a higher standard of living for its citizens. The revenue generated from resource exports can also be reinvested in education, healthcare, and infrastructure, further enhancing the country's global competitiveness.
- Resource development has sorely lagged under Trudeau, who has failed to get any meaningful pipeline built during his time in office, and oil that is exported east of Manitoba must go through the US, cutting the country in half. Eastern Canada has only one major pipeline, from Montreal through Southeast Ontario towards Chicago. It is ridiculous that Canadian exports cannot get to the other side of the coast.
- Secondly, increasing natural resource exports can bolster Canada's geopolitical influence. As a major exporter of resources, Canada can engage in mutually beneficial trade relationships with other nations, fostering diplomatic ties and promoting global stability. In an era of economic interdependence, countries that can offer valuable resources often have a seat at the international negotiation table, allowing Canada to assert itself on various global issues.
- When Germany was looking for a natural gas deal at the beginning of the Russian invasion of Ukraine, Trudeau said no, and told the German Chancellor to look at hydrogen instead. This was a massive deal opportunity wasted, just because we cannot get our resources to market.
- Coastal Gaslink, a major natural gas pipeline in BC, will be complete by the end of the year. This has been the only major natural gas pipeline completed in Trudeau's tenure, and as it doesn't cross provincial borders, doesn't even fall under federal jurisdiction.
- Moreover, responsible resource management is a hallmark of Canadian values. Canada has stringent environmental regulations and a commitment to sustainability. By exporting its resources, it can share these values with the world. Canadian companies often employ best practices in resource extraction and environmental protection, setting an example for others to follow. This can contribute to global efforts to combat climate change and promote responsible resource management worldwide.
- In conclusion, increasing Canada's natural resource exports is not only an economic imperative but also a means of elevating the country's standing on the world stage. Responsible resource development and exports can fuel economic growth, enhance diplomatic relations, and demonstrate Canada's commitment to sustainability and responsible resource management. By harnessing its abundant resources, Canada can play a more significant role in shaping the global landscape while securing a prosperous future for its citizens.
- Supplementals:
- Resolving Western Alienation
- Western Alienation is a topic that has cropped up in the 80s, 90s, and most recently during Justin Trudeau’s tenure.
- The sense is that the west did not have equal power at the table compared to the east. This is still seen today in terms of many of Canada’s institutions.
- One of the major policy ideas that tackled western alienation head on was the idea of wholesale senate reform.
- Making the senate equal, elected, and effective would give all provinces an equal seat at the table.
- This is of course the Triple-E senate proposal.
- As a history lesson following the senate expense scandal the Harper government asked the Supreme Court a question of if the government could abolish the senate without opening the Constitution - the answer was no.
- This lead to Justin Trudeau appointing senators in a non-partisan manner as outlined by the Liberals but it doesn’t change the essence of the body.
- Major senate reform would see equal representation for all provinces. This is a sore spot for eastern provinces as they are guaranteed a number of senate seats.
- In reality, having each province have 5 senators doesn’t seem like something too far out of the realm of feasibility but asking Ontario and Quebec to give up their 24 seats each and Nova Scotia and New Brunswick to give up their 12 each would be a downgrade for them.
- PEI would gain a seat going from 4 to 5 and Newfoundland, Manitoba, Saskatchewan, Alberta, and BC would lose one going to 5.
- We’ll discuss after how this might be achieved.
- Senate elections are already carried out in Alberta and Prime Minister Stephen Harper did appoint Albertan senators from the list Alberta chose. But Senate elections in Alberta are non-binding.
- The triple-e senate proposal would make senate elections regular and binding.
- The senate under this proposal would also be able to be more effective acting as a counterweight to the House of Commons being a check on power representing the interests of the provinces across Canada equally.
- It’s not hard to imagine a world where BC, Alberta, Saskatchewan, Manitoba, Ontario, and Newfoundland would team up on an energy based policy representing half of all provinces when the House of Commons went another way.
- Or in the case of the carbon tax appeal which saw Alberta, Saskatchewan, Manitoba, Ontario, Quebec, and Newfoundland standing in support of Alberta.
- The inevitable question of how this would be implemented is a good one and it would require the opening of the Constitution.
- Such an act is often seen as Pandora’s Box in Canada and no one has attempted it.
- Such a play would need to be done in a way that respects the interests of all regions and modernizes the constitution.
- This means getting a proposal like the triple-e senate in there for the west but also listening to Quebec’s concerns regarding culture and identity.
- Indigenous Canadians would also need to be considered and careful thought would have to go into whether or not it is time to repeal the Indian Act and codify treaties, land rights, and more into the Constitution.
- For the fans of the Charter of Rights and Freedoms it would be a good time to modernize the charter granting true freedom of speech and solidifying rights for Canadians removing many arbitrary limits.
- These policy issues discussed today represent ideas for solutions that no political leader in power has sought to enact.
- They are difficult but one should ask what progress we make by playing it safe and moving around the margins of what those who came before did.
- They represent an opportunity to modernize Canada for the 21st century.
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Show Data
Episode Title: The Ideal Canada
Teaser: We look at some policies we would wish to enact in Canada, including promoting corporate competitiveness, a suite of democratic reforms and developing Canadian energy to project global power. Also, we look at the best way to resolve Western alienation.
Recorded Date: October 3, 2023
Release Date: October 15, 2023
Duration: 55:29
Edit Notes: None
Podcast Summary Notes
<Teaser>
<Download>
Duration: XX:XX
- Economic and Corporate Competitiveness
- Support us on Patreon
- Democratic Reform
- Energy and Projecting Canadian Power
- Resolving Western Alienation