Canada’s response to the monopoly problem abroad should include tackling the monopoly problem at home

Keldon Bester is the executive director of the Canadian Anti-Monopoly Project (CAMP) and a fellow at the Centre for International Governance Innovation (CIGI)

While the prospect of closing a deal is always tempting, Canadians should be relieved that over the weekend we walked away from a deal that would have traded away more of our ability to have a say over the future of our own economy. 

 We are fortunate to have learned, before conceding more, that any agreement with the Trump Administration is not worth the paper it’s printed on. 

But more than the belligerence of a given administration, the turmoil is a reminder of the danger of monopoly, the excess dependence on any one actor, whether a company or a country, to our economic future.  

Canada is subject to monopoly, both at home and abroad, and the reality of the former will colour our response to the latter. 

Retaliatory tariffs have a role to play in creating leverage for future trading negotiations with the U.S. By design, tariffs are distortionary, favouring domestic companies and products and services from tariff-free nations. This is a suitable goal for industrial and trade policy, but we should reckon with its potential consequences on Canadians. Canada needs to match this response to economic coercion with a bold approach for making the markets we depend on every day free of monopoly. 

After decades of consolidation, many of the markets Canadians interact with daily are oligopolies that offer limited choice. Where that choice is limited, the cost of tariffs can be passed to consumers already concerned with how to make ends meet. 

The remedy to this is to break open the oligopolies that were already keeping the cost of living high before the trade war even began. 

With its proposed Whole of Government Competition Plan, the federal government is already laying the foundation for this approach. With ambitions beyond cutting red tape, this plan could become the platform for a rethinking of the economic policy that encouraged consolidation across the economy. 

While recent focus has understandably centred the federal government, provinces have an important role to play in making markets work for Canadians amid a trade war. Manitoba is already moving in this direction, breaking down the barriers that have prevented open competition in important markets. 

In times of crisis, there is always the instinct to hunker down and prepare for the worst. But this ongoing trade dispute is one of the best opportunities to tackle the longstanding bottlenecks that have made the Canadian economy more monopolized and vulnerable to external shocks.  

To put up a strong defense in this trade war while protecting the interests of everyday Canadians, and to create the conditions for a more dynamic and resilient economy tomorrow, Canada should: 

• Continue to diversify trading relationships at home and abroad, aggressively expanding trading relationships while removing provincial trade barriers to create a single market within Canada 

• Accelerate the federal government’s Whole of Government Competition Plan with a focus on markets where retaliatory tariffs are introduced, as well as foundational sectors like transportation, finance, and digital markets 

• Recognize and expand the important role of the provinces in breaking open oligopolies in the areas beyond federal jurisdiction 

Canada is feeling the sting of monopolized markets at home and abroad. The recent breakdown of trade talks is a reminder that Canada remains dangerously exposed to the whims of a single player on the global stage.  

Reclaiming control of our economic and political destiny means recognizing that this danger is present in markets across the country and that something can be done about it.