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OECD Economic Surveys: Canada 2016

image of OECD Economic Surveys: Canada 2016

This 2016 OECD Economic Survey of the Canada examines recent economic developments, policies and prospects. The special chapters cover: Network sector competition; Small business dynamism.

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Strengthening competition in network sectors and the internal market

Canada’s productivity performance has lagged that of many other OECD countries, despite some improvement in recent years. One measure to enhance overall efficiency would be to strengthen competition on the domestic market to drive future multi-factor productivity improvements. The potential gains are large: about a half a percent per year over a fairly long horizon. This chapter focuses on increasing competition in network sectors, including energy, telecommunication services and broadcasting, and transportation, which are key inputs to production in the broader economy. Improving regulatory conditions, efficiency and/or cost competitiveness could yield more productive outcomes in these sectors, as well as in downstream industries. Competition could also be increased by lowering barriers to interprovincial trade and the movement of labour, which act to fragment Canada’s already small domestic market. To this end, reforms of the Agreement on Internal Trade and measures to reduce sectoral barriers to trade are also discussed.

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