The Liberal government’s 23-move cabinet shuffle last week missed out on one sensible extra move. As a major review of Canada’s competition policy continues, it’s a good time to highlight competition’s crucial importance in the economy by giving it its very own minister. An effective and dedicated competition minister might actually raise Canadians’ incomes by thousands of dollars a year.
At the moment, competition policy is the responsibility of the minister of innovation, science and industry, who is currently François-Philippe Champagne, one of only seven ministers left unshuffled last week. Many observers think Champagne has been effective in executing the government’s priorities. But his portfolio is vast and he is known mainly for his efforts to drum up investment. It would be better for policy and for the country if advocacy for competition and oversight of its enforcement by the Competition Bureau were given to a new minister of competition, who could also more easily stickhandle future reforms.
The Bureau’s enforcement role would need to remain independent but the new minister could oversee its priority setting, budget and performance management and also have the power to direct it to initiate market studies. Giving the minister this role could allay concerns about enhanced market-study powers leading to Bureau overreach. A minister, representing the government and accountable to voters, would authorize such studies and set boundaries and terms of reference.
Even more importantly, the minister would have a key job at the cabinet table: to be an advocate for consumers and take the most pro-competitive approach on every policy his or her colleagues introduced. This is best done by a person explicitly responsible for competition and therefore held accountable by the media and the public. When cabinet — or, to be realistic, the Prime Minister’s Office — decided against the most competitive approach, this minister would have to explain why. A minister in this role would tie the government to the mast when considering anti-competitive action. Overriding his or her objections would, at the least, lead to bad headlines. And when clearly more-competitive options had been passed over, the minister of competition would face tough questions which the government might change its behaviour in order to try to avoid. Finally, if competition reform languished, questions would emerge about the minister’s effectiveness.
A minister for competition is an extension of suggestions from the Competition Bureau itself and international practice. Australia has recently appointed an assistant minister of competition. And the Bureau has suggested that governments assess both existing and new policies through a competition lens. That would be a useful start, even if such assessments risk becoming but one more skimmed page on already lengthy box-checking cabinet submissions that ministers and staff may or may not read or internalize. A similar option would be to create an independent parliamentary competition officer — though only to call out government behaviour after it had happened. There needs to be a whole-of-government focus on competition within the government.
How might this structure have played out in past debates? In 2019, Ottawa passed legislation to allow the minister of transport to unilaterally reject the views of the Competition Bureau in merger cases. A minister of competition could have tried to stop that. He or she could also have promoted competitive measures in areas as varied as pharmaceutical policy, supply management or open banking. One group or another in society is always trying to tilt competition in its favour, so there is no end of policies where keeping the playing field level needs a strong advocate. Other obvious concerns are postal services, labour mobility and internal trade. In fact, it’s telling that internal trade was dropped as an explicit cabinet portfolio in this shuffle.
An advocate for competition with a clear mandate to promote competition at the cabinet table could tackle these issues better than a minister of industry whose purview includes responsibility for sectors, like telecom, that have significant competition issues. The debate on how much to shelter such industries from competition for industrial policy purposes should not take place inside one minister’s brain. It should be fought out at cabinet table, with a strong advocate for competition going up against those who would hand out protectionist favours.
But the main reason to appoint yet another cabinet minister (with yet another office, staff and limousine) is that raising the government’s and the public’s focus on competition could increase Canadians’ well-being. We are among the world’s worst performers on barriers to entry, whether to domestic or foreign would-be competitors, and government involvement in business operations. A minister for competition — an inside advocate for competition — would help tackle the anti-competitive conduct sanctioned by governments.
Australia embarked on ambitious competition reforms during the 1990s. Its Productivity Commission has estimated they increased annual GDP by at least 2.5 per cent. If greater competition had the same effect in this country, that would amount to about $C4,400 in higher average incomes year after year. A Canadian minister who helped achieve that would be a very popular person.
It’s not too late for a shuffle postscript.
Benjamin Dachis is Associate Vice President of Public Affairs at the C.D. Howe Institute.
