Op-Eds
Published in the Globe and Mail on April 8, 2013
By Kristian Behrens
Many politicians and business leaders think that creating clusters of economic activity will be a silver bullet for solving a variety of regional or national economic problems. Bold claims that successful economic clusters drive prosperity nationwide require bold evidence – and that evidence is lacking.
The widening gap in Canada-U.S. per capita gross domestic product (GDP) is of concern to both policy makers and ordinary Canadians. Canadian firms’ relative underinvestment in information technology, for example, may explain a large part of the difference in economic performance north and south of the border.
Yet, according to some, the…
Posted in the National Post on March 20, 2013
By Finn Poschmann and Philippe Bergevin
The irony of Finance Minister Jim Flaherty’s hounding of bank mortgage lenders, for advertising competitive market terms, should be lost on none. Perhaps he believes lenders will extend daft, risky loans, or that low market interest rates will tease borrowers into taking on debt they can ill afford. In Ottawa, however, risky lending begins at home: Federal Crown financial corporations, for which Mr. Flaherty’s government is responsible, beat the market competition every time.
Today’s budget, and the next one, are opportunities to do something about it. By expanding on Budget 2012, which took steps toward reining in the market‘…
Published in the Financial Post on April 3, 2012
By Benjamin Dachis
The recent failure of Aveos Fleet Performance Inc., the company that provides heavy maintenance services for Air Canada, has led to a House of Commons investigation into whether Air Canada violated the law that made Air Canada a private airline. This law is just one example of the backward Canadian aviation policies that the government should repeal.
The federal government privatized Air Canada in 1988 with the Air Canada Public Participation Act. The act requires that Air Canada maintain operational and overhaul centres in Winnipeg, Montreal and Mississauga, keep its head office in Montreal and offer services in English or French.
In 2004,…
Published in the Financial Post on June 29, 2011
By Finn Poschmann
The federal Parliament in 2009 handed Canada’s competition commissioner, Melanie Aitken, awesome legal power, and she is using it. She is free to do so — pending potential court reversals, or pending legislative change — but the current law raises serious concerns among economists and legal scholars. It also threatens big costs for businesses — which are inevitably passed to consumers — and a potential chill on competitive behaviour.
The concerns arise from amendments to the Competition Act in 2009, which gave power to the commissioner, through the Competition Tribunal, to seek from businesses that she believes have offended particular non-criminal…
Published in the Financial Post on March 16, 2011
By Philippe Bergevin
Visa and MasterCard, the two biggest credit cards companies operating in Canada, are currently targets of serious allegations. The Commissioner of Competition alleged in a recent referral to the Competition Tribunal that these companies, through rules they impose on merchants, have limited competition in the marketplace, resulting in increased costs to businesses and, ultimately, consumers.
These allegations have been vigorously disputed by the two targeted companies. Further, some of the economic arguments underpinning the legal case are, in my view, flawed and the solutions prescribed by the commissioner are unlikely to foster, and may…
