Opinion | Even in a tariff world, local competition is king
Andrew Paulley is a PhD student in Economics at the University of Toronto and a CAMP fellow.
The world trade environment looks a lot different for Canada than it did six months ago. As the August 1st deadline for a trade deal between Canada and the U.S. approaches, Canadians are rightly concerned about when the outcomes of this disruption will begin to show up at the checkout line.
But while COVID supply chain shocks and Trump’s tariffs have rightly increased the focus on global supply chains, the last stop on that chain, the surprisingly local markets consumers shop for and purchase goods in, remains as relevant as ever.
In many ways, tariffs can be abstract to the average consumer as there can be many steps along the supply chain between a tariff being paid at the boarder to a final product being purchased for a household. What the consumer ultimately sees at checkout is the sum of a layered and interlocking system that crosses global borders. But how consumers interact with the economy is still fundamentally local. May’s release of Statistics Canada’s 2023 survey of household spending showed that upwards of 70% of household consumption is spent locally, including housing, transportation, food, and recreation.
The local economy, and the strength of local competition in the economy must still be a focus for policymakers even in a time of tariffs and global uncertainty. This is particularly the case in three important everyday markets for Canadians – groceries, financial services, and housing.
Groceries
In 2019 the average Canadian household spent $7,536 on groceries, and by 2023 that number had jumped up by 15% to $8,659. Shopping for groceries is inherently a local activity, and while grocery delivery is becoming more popular in major cities, most food is still bought in person, especially in rural and remote areas. Grocery stores with limited local competition have the ability to raise prices, and do, because of how much consumers care about distance for their weekly grocery shop.
Economists have documented the relationship between grocery store prices, distance to other stores, and distance to communities in a variety of settings. Their findings will not surprise you. Consumers with few nearby grocery options pay higher prices and have less selection because they value a closer store even if traveling further means lower prices and more variety. The distances that matter are likely shorter than you think. Research shows that the locality of competition from consumers’ preference for staying close to home can be as small as four kilometres, even in rural areas.
Banking
While grocery stores have rightly captured much of the popular focus on competition, locality of competition is also important for some of the biggest ticket items on a family’s monthly budget – mortgages, car loans, and insurance. The demand for financial services is local, and the banks know it. There’s a reason you usually find the branches of major banks all on the same intersection. Researchers find that consumers choose banks closer to them even when they could get a better interest rate by going to a branch of another bank that is further away. They also find that when customers do switch banks they are twice as likely to switch to a bank just as close to them instead of one further away.
Betraying the usual assumptions of economists, studies show that banks “over branch” beyond what would be cost efficient to ensure consumers have close access to cater to these consumer preferences. But don’t worry, banks make up for that added expense in the form of higher rates on lending and lower rates on savings: Canada’s banks remain some of the most profitable in the world.
Housing
The banking oligopoly is an important input into a market that has generated the lion’s share of economic anxiety in recent years: housing. An overlooked piece of this puzzle is the degree to which neighbourhood attachment reduces the scope of a homebuyer’s choice set. A recent working paper found that 50% of renters who move do so within a mile of their last address. What does this mean for the price of housing and renting? In the words of the author, since renter’s preferences for where to live are very localized, landlords do not need to own property throughout the city to have additional pricing power, only enough property in a single neighbourhood. The result is that neighbourhoods with landlords that hold a large number of units in said neighbourhood experience higher vacancy rates and higher rents, even if those same landlords do not have a sizeable number of units throughout the rest of the city.
This pricing power appears most pronounced when it comes to corporate landlords. University of Waterloo scholars found that in Toronto’s rental market, corporate landlords, that is, real estate investment trusts (REITs), real estate operating companies (REOCs), asset managers, and private equity, charged upwards of 40% more than non-financial landlords.
Rather than arguing about whether this constitutes so-called “financialization” of housing, the real question is how can these corporations fill units while charging more for effectively the same stock? The answer is the market power gained from strategically purchasing swaths of units in the same neighbourhood, giving them a degree of control over hyper local rent prices.
Our recent rapt attention on international trade negotiations is warranted, but we can’t lose sight of the markets right in front of our faces. Rather than suggesting people drive further, move more of their shopping online, or be more willing to change neighbourhoods, we should take steps to build local markets that better serve Canadians. When discussing competition, prices, or options, from tariffs to development charges, we need to remember that local matters because it matters for consumers.
Canada’s competition policy needs to reflect this by paying attention to how ownership feeds the ability to control options and prices and take a strong stand against consolidation at the local level. We need more competition in our own neighbourhoods as much as we need it globally.
Letters: Cloudy Conditions
July 27, 2025Welcome to Letters from CAMP, a newsletter on anti-monopoly activity in Canada and abroad, brought to you by the Canadian Anti-Monopoly Project. In this instalment we have:
If you enjoy Letters, please considering sharing and supporting CAMP Now let’s dive in.
Microsoft Admits U.S. Cloud Law Trumps Foreign SovereigntyIn June, Microsoft’s Director of Public and Legal Affairs told French senators that if Microsoft received a request from the U.S. government to hand over data stored in France and relating to French persons, that it would comply, even if it meant violating the GDPR. This week, in a post on Canadian Cyber in Context, Alexander Rudolph laid out what this means for Canadians citizens and policymakers. The answer will not shock Letters readers: Microsoft will treat U.S. law as superseding the sovereignty of countries like Canada and France, putting sensitive data from individuals, corporations, and institutions alike at risk. To be fair, Microsoft finds themselves between a rock and a hard place. They are obliged to comply with U.S. law, and 2018’s CLOUD Act requires them to hand over the data, wherever its location. But leaving sensitive data available to U.S. authorities threatens Microsoft’s reputation as a provider for the private and public sector. This situation is not unique to Microsoft, and other U.S.-based communications and data storage providers like Amazon, Google, and Oracle are similarly beholden to the CLOUD Act. Microsoft’s admission to French officials reminds us of the inherent danger of placing so much of our digital infrastructure in the hands of a single country. Microsoft alone accounts for over 60% of the Canadian federal government’s cloud computing spend. If the security of that data cannot be guaranteed, no matter where it is housed, alternatives must be developed. Canada is not alone in this desire, and the erratic behavior of the U.S. is creating global demand for independent providers of digital infrastructure. But walking the walk on diversification is no small task. Whether lawmakers and industry will be able to muster the will for such an undertaking remains to be seen. But a growing focus on the intersection of digital sovereignty and national security, the time has never been riper for action. We’ll Pay What They Tell Us to PayThere has been fierce debate in recent years over what exactly has been driving inflation in economies around the world. But whether it’s supply chain disruptions, climate change, or tariffs, inflation presents an opportunity for monopolists to pass on cost increase to consumers instead of sharing the burden. We saw this in Canada in the years following the pandemic when grocery chains were able to hold their margins flat and reap hundreds of millions in additional profits as prices on store shelves rose. Without competition, dominant players have a free hand to raise prices and pocket the difference. This week, analysis by the Wall Street Journal found that despites claims to contrary, Amazon has been hiking the cost of essential products in the U.S., heading in a different direction than competitors like Walmart and Target. While one could be quick to blame tariffs for the elevated prices, increase have occurred in domestically produced staples like canned soup. Tariff explanations also don’t explain the contrary actions of Amazon’s competitors, who have been holding steady or even slashing the prices of similar products. These actions are a reminder that there is rarely one true price for the goods we pay for, and dominant retailers have tremendous power to shape the menu of choices available to us. As capacity for algorithmic and surveillance pricing by monopolists increases, we need to be vigilant to ensure consumers are not taken advantage of. That means greater transparency in how pricing decisions are made, restricting the use of sensitive corporate and individual data, and of course maintaining competitive markets where sellers fight hard for consumer dollars. The pace of inflation may have abated, but work remains to build the competitive markets that will protect consumers from future pricing surges. 📚 What We’re Reading 📚
Innovation Through Domination: America’s AI Action PlanThis week, the White House released its’ new AI Action Plan, supposedly intended to support innovation and the development of artificial intelligence products and services. But closer examination of the plan by Asad Ramzanali, Director of AI and Tech Policy at the Vanderbilt Policy Accelerator, shows us that the real goal is to ensure that U.S. Big Tech remains dominant, even at the expense of American innovation. A key issue is that the action plan boasts of directing the Federal Trade Commission (FTC) to abandon antitrust investigations that would otherwise protect competition in the evolving market for AI. This takes the pressure off of firms like Microsoft, Amazon, and Alphabet who have been under FTC scrutiny for anticompetitive practices around their domination in AI markets. Ramzanali shows that time and time again, American antitrust investigations and litigation have been the driver of change in markets dominated by a handful of players and given space for new challengers to thrive. Alongside directives to speed up development of data centers at the cost of the environment and our health, and veiled threats to foreign countries wishing to regulate the deployment of AI systems, the action plan is one more sign that Big Tech has the ear of the Trump White House. As a world leader in the development of AI capabilities, America needs a real action plan that supports competition and innovation instead of a grab bag of Big Tech handouts. If you have any monopoly tips or stories you'd like to share, drop us a line at hello@antimonopoly.ca
Follow CAMP on Twitter LinkedIn Instagram or Facebook |
Letters: Mountain Monopolists
July 20, 2025Welcome to Letters from CAMP, a newsletter on anti-monopoly activity in Canada and abroad, brought to you by the Canadian Anti-Monopoly Project. In this instalment we have:
If you enjoy Letters, please considering sharing and supporting CAMP Now let’s dive in.
Competition Bureau Leaves Alberta Tourists Out in the ColdIt’s the storyline for at least one 80’s movie you shouldn’t go back and rewatch. A monopolist comes to a sleepy ski town and threatens to buy up the local hotel while the authorities stand by, leaving it up to the community to stop the takeover. A climactic ski race is involved. That’s exactly what happened this week when the Competition Bureau quietly closed its investigation into an alleged Rocky Mountain monopoly. Well, not quite, but close enough. In 2024, Colorado-based VIAD was allowed to acquire the Jasper SkyTram, an attraction providing panoramic views of the majestic Rocky Mountains in Alberta. This, according to nearby Mt. Norquay ski resort owner Adam Waterous, put VIAD’s market share of the sightseeing sector in Banff and Jasper national parks above 90%, an eye-watering figure in any non-Google market. In response, Mr. Waterous filed a complaint with Canada’s Competition Bureau and the enforcer began an investigation. VIAD and its subsidiary Pursuit have been allowed to amass quite the recreation empire in the Rockies. The company owns gondolas, lake cruises, a bus line, and ten hotels in the two national parks, with the majority in Jasper. In the past decade, the company was allowed to purchase eight hotels, bringing its market share north of 80% according to Mr. Waterous. If these market share numbers are accurate, they reflect a level of concentration well above what Canada’s reformed competition law considers grounds for concern. It's unlikely that we’ll ever know exactly why the Competition Bureau decided to close its Rocky Mountain monopoly case, but the saga shines a light on consolidation in an area of the economy important to Albertans and visitors from around the world. Mountain vacations may not be a necessity, but Canadians and tourists alike deserve competition for their business when they decide to spend their hard-earned cash on them. Highlight: CAMP’s Competition Case TrackingCompetition law in Canada is hard to keep up with. Today, the Competition Bureau is effectively a black box. Once an investigation is announced the story can go quiet for years while the Bureau does its work, and accessing documents requires navigating the federal court system. While the Bureau has improved communication with the public, the quiet closing of the Rocky Mountain investigation shows there is room for improvement. It’s still far from the transparency of regulators like the UK’s Competition and Markets Authority (CMA) which maintains a list of ongoing cases and when the public can expect updates on them. At CAMP, we’re trying to make it easy to keep tabs on ongoing competition law cases in Canada with our Investigation Tracking program. The program provides a snapshot of what’s going on in key Canadian competition law cases, including case summary and analysis, relevant court documents, and references to similar cases in other jurisdictions. As investigations evolve or close, we’ll be updating our tracking pages to make sure you’re up to date on competition law in Canada. Just this week, we’ve added three ongoing cases to our roster, including the drip pricing lawsuit against delivery company DoorDash, the investigation into whether Kalibrate’s gas station pricing tools are muting competition, and an investigation of Dye and Durham’s invisible monopoly in real estate software. If you’ve got ideas on how we can improve our tracking, don’t hesitate to drop us a line at hello@antimonopoly.ca. 📚 What We’re Reading 📚
Price Discrimination Is Bad, ActuallyWe’re in a love-hate relationship with price discrimination, that is, selling the same thing at sometimes wildly different prices. For every outrage over Uber charging higher prices to users with lower phone batteries there is someone punishing themselves with multi-stage layover to save a few bucks on a flight or a movie theatre popcorn purchase at an estimated 1000% mark-up. Economists are particularly enamored with price discrimination, dreaming of a world where every buyer is matched to their perfect price. But a new study throws cold water on the idea that certain kinds of price discrimination should be taken for granted as beneficial to consumers. Price discrimination comes in several flavours, or degrees. Third-degree price discrimination sorts buyers by observable groups and provides different prices accordingly; think student or senior discounts. It’s this third-degree price discrimination that this new (and admittedly math-heavy) paper finds more problematic than initially understood. For decades, economists believed the word of antitrust villain Robert Bork, that the ability of a monopolist to charge different prices for the same goods would make consumers better off. This was the basis for the revolt against the U.S.’s Robinson-Patman Act, which banned companies from offering preferred discounts to buyers that could shut out smaller competitors. Using supermarket scanning data, Eugenio Miravete finds that engaging in third-degree price discrimination decreases output and welfare. In English: the ability to price discriminate across markets has the potential to harm consumers. While just one study, Miravete’s work is an important empirical contribution to the reassessment of long-held beliefs in the competition and antitrust space. As the cost of living remains a top priority for Canadians, policy makers need to revisit practices that have long been considered business as usual. If you have any monopoly tips or stories you'd like to share, drop us a line at hello@antimonopoly.ca
Follow CAMP on Twitter LinkedIn Instagram or Facebook |
Could publicly-owned grocery stores break Canada’s grocery oligopoly?
Ricochet Media
“In Canada, because of a lack of competition, grocery chains were able to fully pass on cost increases to customers, keeping their margins stable and earning higher dollar profits over a now larger cost base,” Bester explained in an email.
China approves Bunge's merger with Viterra with conditions on crop supply stability
Reuters
China’s market regulator has granted conditional approval for global agribusiness Bunge Global SA’s merger with Glencore-backed grain handler Viterra, it said on Monday, clearing the final hurdle for the $34 billion mega-deal announced two years ago.
The regulator said the merged company’s increased market share and control could potentially reduce competition in China’s imported soybean, barley, and rapeseed markets, and thus approved the deal with conditions.
Under these conditions, Bunge and Viterra committed to five obligations, including a requirement to report quarterly sales volumes to Chinese customers within 30 days after each quarter’s end.
They must also maintain a “timely, stable, reliable, and sufficient” supply of soybeans, rapeseed, and other agricultural products, making every effort to uphold this during global crop shortages.
China’s approval was the last regulatory green light Bunge needed after conditional approvals from Canada, the European Union, and other markets in recent months.
Letters: Pricing Power
July 13, 2025Welcome to Letters from CAMP, a newsletter on anti-monopoly activity in Canada and abroad, brought to you by the Canadian Anti-Monopoly Project. In this instalment we have:
If you enjoy Letters, please considering sharing and supporting CAMP Now let’s dive in.
Competition Bureau Advances Investigation into Amazon’s Alleged Abuse of DominanceThis week, the Competition Bureau announced it was moving forward with its investigation of Amazon’s conduct in online marketplaces, securing a court order to compel the e-commerce giant to produce documents related to the treatment of third-party sellers on its platform. The Bureau’s investigation seeks to determine whether Amazon’s practices have led to higher fees for third-party sellers along with higher prices on both Amazon and other online shopping sites. The investigation parallels existing cases against the e-commerce giant in other jurisdictions, particularly those brought by the U.S. Federal Trade Commission (FTC) and California’s Attorney General. The FTC’s case claims Amazon punishes sellers for offering lower prices on sites other than Amazon by “[burying] discounting sellers so far down in Amazon’s search results that they become effectively invisible.” It also alleges that Amazon conditions access to “Prime” eligibility on the use of its own fulfillment service, raising the proportion of seller revenue captured by Amazon. The Bureau is investigating whether the same conduct has been killing e-commerce competition in Canada. As more shopping moves online, policy makers must pay attention to the companies that increasingly function more like infrastructure than individual companies. Given its scale, many businesses cannot afford to forgo access to Amazon’s platform, making them vulnerable to the kind of exploitation detailed in the FTC’s case. This is borne out by data on the growing share of seller revenue captured by Amazon, rising from 19% to 45% over the past decade. As the rising cost of living continues to be a topline concern for Canadians, practices that strangle competition and eat into the margins on small businesses need to be addressed. A Round of Applause for the Lawyers Making Life Harder for FarmersA good rule of thumb is you should be worried anytime corporate lawyers are celebrating. After a multi-year wait, in early 2025 Canada’s Minister of Transport approved the purchase of grain handling company Viterra by global agri-business giant Bunge. This came despite a Competition Bureau investigation finding that the transaction would cost grain farmers nearly $20 million annually and a parallel study by University of Saskatchewan researchers that estimated annual harms in the hundreds of millions. But last week brought a reminder that all clouds have silver linings as the Canadian law firm McMillan celebrated their Merger Control Matter of the Year win for shepherding the multi-billion dollar transaction through the required global regulatory processes. Behind every good merger is a team of lawyers charging up to four figures an hour to make sure the deal closes. Regardless of their consequences – shuttered stores, higher prices, waves of layoffs – a closed merger is a win for the corporate law community. For decades, Canada had a competition law that catered to Bay Street’s appetite for consolidation. Mergers that monopolized Canadian markets at the expense of consumers and businesses were allowed in pursuit of the vaunted goal of efficiencies with no consideration of who, if anyone, might benefit from those efficiencies. While the game has changed after 2024’s “breathtaking” reform of Canada’s merger laws, the deck is still stacked against the average consumer, entrepreneur, or farmer. While Bunge-Viterra slipped in under the door, the next major food system merger will be a test of whether Canada’s competition law is up to the task. Until farmers rather than corporate lawyers are celebrating, we’ve got work to do. 📚What We’re Reading📚
Google’s Top Lawyer Calls Competition “Hot and Heavy” in Canadian PR PushMonopoly? What monopoly? This week, Google’s top lawyer Kent Walker told the host of the Public Policy Forum’s WONK podcast that he was optimistic about the outcome of Google’s many global antitrust challenges. Sidestepping the fact that Google has been declared a monopolist by U.S. judges not once but twice, Walker asserted that competition for the search giant was “hot and heavy,” going so far as to describe the current state of competition as “frothy and yeasty”. Upsetting baking metaphors aside, the podcast should be seen as the first salvo in a building PR push for Canada to abandon its efforts to rein in the search giant. Beyond run-of-the-mill lobbying, Big Tech companies are extremely adept at shaping the policy discussion at home and abroad to their benefit. While it was all smiles on the podcast, we can look at Trump’s push to kill the Digital Services Tax (DST) as a preview of the kind of pressure Canada will face if we want a say over the behaviour of American tech giants. While the dollar figures are lower than their American lobbying efforts, recent years have shown Big Tech more than willing to get creative with their shadowy efforts to influence Canadian policymaking. In 2023, the University of Toronto returned a previously undisclosed donation of $600,000 from Amazon amid faculty uproar that the shady donation gave the e-commerce giant influence over research and events related to Canadian competition policy. We need to take a page from the U of T faculty and stay vigilant to both hard and soft power efforts to bend Canadian laws in favour of Big Tech. If you have any monopoly tips or stories you'd like to share, drop us a line at hello@antimonopoly.ca
Follow CAMP on Twitter LinkedIn Instagram or Facebook |