Canada’s Competition Policy Must Be Strengthened to Improve Affordability

The cost of living is front and centre for families across the country. The strain shows up in grocery bills, rent increases, insurance renewals, and the rising cost of essential goods and services. These pressures are shaping household decisions and impacting confidence about the future. Addressing them is rightly a top economic priority.

Governments have responded with targeted relief, and that support matters. But no amount of temporary assistance will deliver lasting results if markets remain tilted against consumers and workers. Sustained progress on affordability requires tackling root causes: the structural forces that weigh on prices, wages, and opportunities across our economy. 

One of the most powerful tools available is competition, and it is a tool that governments at every level should use more deliberately.

Why Canada’s Competition Policy Matters for Economic Growth

The economic case for competition is straightforward. Competition keeps prices in check, forces firms to innovate, and drives productivity growth. Over time, that productivity growth is what supports higher wages and rising living standards. When competition is working well, we all benefit. When it doesn’t, we all pay the price. 

Evidence shows that over the past two decades, competition in Canada has weakened. Industries have become more concentrated, business dynamism has declined, and corporate profits and mark-ups have risen. Leading institutions, including the Bank of Canada, the OECD, and the IMF, have all warned that weak competition is now a real constraint on our economic performance. The message is increasingly clear and urgent: Canada needs more competition.

Unlocking the power of competition in our domestic economy is more important than ever as consumers, workers and businesses face strong headwinds. But there are reasons for optimism. The federal government has said it intends to be hawkish on competition and to support the Competition Bureau’s mandate. This builds on the government’s amendments to the Competition Act, which have strengthened our enforcement tools. And we are deploying those tools in sectors that matter for affordability, including food and housing.

How Canada’s Competition Policy Impacts Affordability

In groceries, our action led to a record price-fixing fine and spurred a class action that led to hundreds of millions of dollars in compensation for consumers. We have also moved to challenge property controls that quietly restrict competition and limit consumer choice. And we continue to scrutinize consolidation in food manufacturing that could push prices higher.

In housing, we’ve intervened against anti-competitive mergers involving construction materials and rental apartments. We secured guilty pleas in a social housing price-fixing scheme and launched a nationwide investigation into arrangements that may be artificially inflating real-estate commissions. We’ve also issued guidance to stop landlords from using algorithmic pricing tools to unfairly drive up rents.

The Limits of Enforcement in Competition Policy

There is, however, much more work for us to do. Competition enforcement does not provide the immediate relief of a tax cut, and it often involves long and complex litigation against well-resourced firms. Currently, we have an unprecedented volume of cases before the courts, including a major abuse-of-dominance case against Google and deceptive marketing cases involving Rogers, Cineplex, DoorDash and Canada’s Wonderland. These fights are essential to give the law teeth and protect consumers over the long term.

Still, enforcement alone is not enough. Canada’s competition policy works best when it is reinforced by regulations and public policies that encourage business entry, customer switching, and innovation. Many of the rules that shape competition sit outside competition law, in areas such as transportation, banking, public procurement, and occupational licensing. Ensuring that these regulatory frameworks promote rivalry rather than entrench incumbents can meaningfully improve affordability.

How to Strengthen Competition in Canada

In our retail grocery market study, we set out practical steps governments could take to make these markets more competitive. Manitoba has already acted on our advice, banning grocery property controls that block new stores from opening. Other provinces should follow Manitoba’s lead. We also recommended accessible and harmonized unit pricing requirements so that shoppers can compare prices more easily and reward sellers offering the best deals. The federal government has announced that it will include measures to implement unit price labelling as part of its National Food Security Strategy.

Pro-competitive reforms could also be advanced in many other sectors. Consider air travel. Our study of the airline sector shows that when an additional competitor enters a route, average fares fall by about 9%. In insurance, our research found that expanding data portability could save Canadians billions of dollars annually by making it easier to shop around. Other research finds that pro-competitive regulatory reforms could grow our economy by as much as 10% over time.

Policymakers are beginning to seize these opportunities. Beyond the examples above, competition considerations are shaping federal decisions in areas such as telecommunications, financial services, and labour market regulation. Provinces and territories are also acting by easing internal trade barriers, cutting red tape, and adopting more pro-competitive policies within their jurisdictions. IMF research suggests interprovincial trade barriers are equivalent to a 9% tariff nationwide, making continued progress essential to spur domestic competition and drive down costs. 

Building a Unified National Competition Strategy

Yet these initiatives, while promising, remain somewhat fragmented. They could and should be brought together into a coherent, whole-of-government competition agenda to drive deeper and more sustained progress. Other countries have shown what is possible. Australia has done this twice and has reaped significant benefits. In Canada, serious and practical proposals are already on the table for how a similar approach could work.

Canadians are looking for an economy that works better for them. Lower prices, real choice, and rising living standards are not competing goals; they reinforce one another. We have begun to lay the groundwork for a more competitive economy. The challenge now is to build on that momentum.

Our commitment at the Competition Bureau is to keep our foot on the gas, using every tool at our disposal. We ask governments at all levels to do the same. 

Making competition an economy-wide priority is how we deliver lasting affordability.