While monopoly can affect all Canadians, small towns and communities are often on the front lines of the consequences of market power. Small and remote communities in Canada often have the least choice for needed goods and services, making them more vulnerable to anti-competitive practices and consolidation. Small towns are also more vulnerable to monopsony power, the ability of a single buyer to influence markets, including the market for labour.
When small towns become dependent on dominant firms, particularly those resulting from acquisitions by outside players, those communities lose not only jobs and potentially reinvested profits, but control over the future of their town. Beyond just businesses, consolidation can extend to government services, moving decision making power further from the individuals that make up these communities.
Key to countering this trend is supporting the growth of diverse businesses in small towns across Canada. One of the purposes of the current Competition Act is ensuring that small and medium sized businesses have an equitable opportunity to compete in the Canadian economy, but this goal is often overshadowed by the Act’s focus on economic efficiency. Canada’s competition law also focuses on empirically substantial harms within markets, undervaluing the costs of anti-competitive behaviour in relatively small markets. Canada needs competition policy that enables the entry and flourishing of new businesses, rather than supporting the creation of theoretically efficient oligopolies.
CAMP advocates for competition policy that recognizes and responds to the costs of consolidation and monopsony power on small towns across Canada, and supports vibrant economic communities of all sizes.
