A recent report states that Canada’s economy now experiences reduced levels of competition compared to the past.

An examination of two decades of data reveals that competition is deteriorating rather than improving, according to the Competition Bureau.

Canada’s Competition Bureau, the federal agency responsible for ensuring healthy competition among Canadian companies, has released a new report.

According to the report, which analyzed data spanning the years 2000 to 2020, there is a concerning trend of reduced competition in various sectors of Canada’s economy. The report delved into detailed statistics on profits, business establishment, and other relevant metrics from Statistics Canada and various government departments.

It concluded that Canada’s “competitive intensity,” or the degree to which companies vie for consumer spending, has declined over this two-decade period. Surprisingly, industries that were highly concentrated in 2000 became even more concentrated by 2020, with fewer players controlling them. Furthermore, the report noted an increase in the number of industries considered highly concentrated during this time frame.

Although the report lacked specific remedies to address the issue and reverse the ongoing trend, it broadly emphasized the necessity of a “whole-of-government approach” to promote competition. Additionally, the report suggested the need for a comprehensive reform of competition laws to empower the bureau to play a more active role in addressing these challenges.

This call for reform is not new, as the bureau had previously made similar requests, most recently in a report on Canada’s grocery industry, highlighting the industry’s lack of competitiveness and its resulting impact on consumer prices. The bureau has advocated for legislative changes that would grant them the authority to compel companies to provide confidential information when required, as the current system relies largely on voluntary cooperation. Furthermore, the bureau has proposed a comprehensive overhaul of Canada’s Competition Act, with an emphasis on prioritizing consumer welfare and closing the loopholes that have allowed the approval of the majority of merger proposals.

“Merger review for the bureau is the first line of defence against concentration,” an official for the bureau said Thursday. “We need a strong Competition Act that lets us gather the information we need go after and the conduct we want to go after and really get remedies.”

Although the report didn’t specifically identify any industries as performing better or worse, it did highlight a broader trend: “the leading companies maintain their dominance for longer periods, with reduced competition and fewer new entrants challenging them,” stated Bester in an interview on Thursday.

“That leads to stagnation and a loss of dynamism.”