Experts call for removing bureaucratic formalism and amending competition law to make Canada more competitive

Experts testifying before the Commons Commission called for lowering trade barriers between states, reforming Canadian legislation on competition, and improving readiness for the digital economy to make the country more competitive. ..

Experts were invited by the House of Commons Industrial Science and Technology Standing CommitteeHas met over the past few weeks to conduct a series of studies on Canada’s competitiveness.

Interstate trade barriers

Trevor Tombe, an associate professor at the University of Calgary, Told the committee Last week, interstate trade barriers reduced Canada’s national productivity, competitiveness and economic prosperity.

Internal trade costs cannot be specifically observed, according to Tonbe, but across state boundaries due to “tens of thousands of individually modest but collectively important differences in rules, regulations, standards and certifications.” Costs are being added to the companies that do business.

Examples can be found in agricultural inspections, labeling requirements, or differences between state standards and trade and service certification.

Trade barriers between states could add up to 8 percent to the cost of shipping from one manufacturing state to another, Tombe said. If services are included, the average cost of trade between states is 8 to 15 percent.

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Economist Trevor Tombe poses on November 23, 2017 at the Taylor Family Digital Library at the University of Calgary in Calgary, Canada. (Jeff McIntosh / The Canadian Press)

“There are hundreds of professional associations and vocational licensing authorities operating primarily at the state level, which means that barriers may exist for individuals who want to serve buyers in non-regulated states. There is sex, to do so, “said Tombe.

Domestic trade can also reduce Canada’s overall productivity. According to Tonbe, if Canada liberalizes domestic trade in commodities, the country’s productivity could increase by about 4%. This means that Canada’s economy will grow by nearly $ 90 billion annually, exceeding $ 2,000 per person, or $ 5,000 to $ 6,000 per person. home.

Competitiveness in the digital economy

Jim Balsily, chairman of the Canadian Innovator Council, said: Told the committee Canada must develop institutional and policy capacities to make the intangible economy more competitive.

According to Valsiri, Canada has only traditional production-based economic policies that are becoming less important due to the digital transformation of the industry as a whole.

Prior to the COVID-19 pandemic, Canada’s per capita GDP was 3% lower than 2010 levels, and the United States experienced a 35% increase over the same period by aligning economic policy with digital transformation. Said.

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Jim Balsily of the Canadian Innovator Council appeared as a witness to the Commons Privacy and Ethics Committee in Ottawa on Thursday, May 10, 2018, hearing witnesses about the infringement of personal information involving Cambridge Analytica and Facebook. (Sean Kilpatrick / Canadian Press)

“In traditional economies, competition was synonymous with low cost. To attract multinational investors, businesses cut off bureaucratic formalism, offered land at concessional rates, and tax incentives. I knew that this economic activity would bring fair benefits to the host, “Valsilie said. “But as economic interests shift more and more to IP owners, and more recently to data, this strategy has led to the acquisition of low-rent areas in the global economy.”

To improve Canada’s competitiveness, Valsiri proposed rebuilding the Canadian Economic Council, a former royal company owned by the Government of Canada, which conducted a federal economic and policy analysis.

“Appropriate regulation of IP and data-driven economies can restore the dynamism of competitive markets, so IP and data giants are investigating antitrust laws by US federal and state authorities, the EU and others. I have received it, “says Valsiri.

Reform of Canadian competition law

Valsiri’s call for further preparation for the digital economy was the same as that of Vas Bednar, Secretary-General of the Master of Public Policy in the Digital Society Program at McMaster University. Canadian competition law..

“Canada is said to be taking competition policy seriously and tolerating a high concentration of businesses to increase its international competitiveness,” said Bednar. April 15 Committee.. “In my opinion, the law has structural restrictions that hinder its ability to curb anti-competitive practices, especially in today’s digital economy.”

Mr Bednar said the lack of reform could allow the government to overlook anti-competitive mergers and actions and would not be able to impose effective fines to curb such actions.

Bednar gave the example of grocery store company Loblaw, who “allowed price-fixing of bread and may have colluded wages with other grocery stores in the pandemic.”

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Customers will load groceries at the Metro Store in Montreal, Canada, on April 15, 2019. (Ryan Remiorz / The Canadian Press)

Following Amazon and Facebook playbooks, she said the company is using its own advertising platform, Robro Media, to increase market share through targeted advertising. Essentials at a cheaper price.

According to Benard, Canada’s competition policy has been silent about such activities because it did not fully understand how legislation and policy guidelines create a competitive advantage for data.

“Simply put, the Canadian Department of Competition does not have a toolkit for the digital economy,” said Bednar.

“As part of modernization, we critically consider how to redefine’control’by quantity and abundance of data, and understand the competitive harm that can result from a dominant company with a large amount of data. need to do it. Information, “she said.