Canada's Competition Policy Revisited: Some New Thoughts on an Old Story

G.P. Wood was a lecturer at the Department of Political Science, St. Francis Xavier University, Antigonish, Nova Scotia.

Against a background of extensive academic, governmental, and consultative experience in the field of economics, Professor Brecher describes the pattern of competition policy reform in Canada as “among the saddest experiences in Canadian public policy.” While the author is not alone in pointing out the “record of failure and frustration” in this field, he does depart from conventional explanations of the policy outcome.

In presenting his case, Professor Brecher highlights the major legislative developments in Canadian competition policy since the early 1950s and characterizes these developments as anything from weak to sterile. Rather than attributing this, as others have, simply to the pressure of business interests, Brecher probes more deeply. He argues that the outcome was not inevitable, but that the government “chose to narrow its own options far beyond the limits imposed by external forces.” While Brecher agrees that business pressure is very important in explaining the negative policy outcome, he argues that it was misunderstanding and ignorance about the economics of competition reform — a knowledge gap — within and outside the business sector which were key. Outmoded economic theories and misconceptions combined to exaggerate and heighten any misgivings and fears the business community had toward new competition legislation. It was far more hostile to reform in the field than it might have been with more accurate and complete knowledge. Public apathy did little to counteract the force of this hostility, and a lack of public understanding of the issue was aggravated by an “undereducated” yet highly critical press, marginal contributions by academics, and inaction and questionable studies by public servants and successive Cabinets.

According to Brecher, government perceptiveness and initiative were necessary ingredients for the success of competition policy reform, yet they were noticeably absent. He suggests, in conclusion, that a clearer public, governmental, and business understanding of the economics of competition and the goals of competition policy could have produced a different pattern of competition policy in Canada.

Professor Brecher’s work goes beyond clarifying the development of competition policy in Canada; his work is a valuable contribution to a better understanding of the dynamics of public policy-making in Ottawa.