1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Product Market Competition and Economic Performance in Canada

This paper examines the strength of product market competition and economic performance in Canada and discusses way in which the institutional framework governing competition policy could be improved. Competitive forces are comparatively strong and administrative and economic regulations inhibiting competition are amongst the lowest in the OECD countries. However, Canada’s regulated conduct doctrine exempts anti-competitive behaviour when required by regulation, and thus significant parts of the economy remain shielded from the competition law. This is a particular problem with provincial government regulation. Restrictions on internal trade also continue to exist, and implementation of the Agreement on Internal Trade is less effective than it could be. More attention needs to be focussed on removing those regulations that restrain competition, particularly in professional services. In network industries, competition has largely been absent in the electricity sector. While it is widely recognised that reforms are necessary, those undertaken in the past have mainly been aimed at bringing in private-sector investment, while avoiding full competition in generation and in retail markets. Canada has more significant restrictions on foreign ownership than almost any other OECD country, notably in airlines, telecommunications and broadcasting, and their removal could improve performance in these sectors.

English

Keywords: regulatory policies, productivity and growth, Canada, network industries, competition, antitrust law, market structure
JEL: K23: Law and Economics / Regulation and Business Law / Regulated Industries and Administrative Law; O51: Economic Development, Innovation, Technological Change, and Growth / Economywide Country Studies / Economywide Country Studies: U.S.; Canada; L16: Industrial Organization / Market Structure, Firm Strategy, and Market Performance / Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices; L11: Industrial Organization / Market Structure, Firm Strategy, and Market Performance / Production, Pricing, and Market Structure; Size Distribution of Firms; L40: Industrial Organization / Antitrust Issues and Policies / Antitrust Issues and Policies: General; K21: Law and Economics / Regulation and Business Law / Antitrust Law; L43: Industrial Organization / Antitrust Issues and Policies / Legal Monopolies and Regulation or Deregulation
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