Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Cancel Anytime
Enjoy Unlimited Digital Access
Get full access to
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Investment bankers have spring fever.

A burst of merger and acquisition activity – including Canadian Pacific Railway Ltd.’s proposed US$25.2-billion purchase of Kansas City Southern and Rogers Communications Inc.’s $20.4-billion offer to acquire Shaw Communications Inc. – is the clearest sign yet that companies of all kinds are eyeing more scale in the postpandemic economy.

Large companies increased their dominance during the COVID-19 crisis. Now megadeals are poised to transform key industries, making this a critical moment for antitrust authorities around the world.

Story continues below advertisement

Bigger is better in the business world. So, naturally companies bulk up to position themselves for growth, whether here at home or abroad. But as the deal flow increases, there’s concern this wave of M&A could erode competition in certain industries.

Canada’s Competition Bureau, however, seems ill-prepared to assess the after-effects of market consolidation because it has insufficient power, tools and financial resources compared to antitrust watchdogs in other countries.

The Trudeau government, which plans to unveil the federal budget on April 19, would be wise to use the opportunity to rejuvenate the independent law enforcement agency given a predicted surge in deals this year.

“Competition is more important than ever, given the rapid growth of the digital economy and the role of competitive markets in the economic recovery,” said Sophie Paluck-Bastien, a Competition Bureau spokesperson.

“Many other jurisdictions, including the United States, the United Kingdom, Australia, Germany and New Zealand, are already taking action to ensure they have the right tools to tackle competition issues in the data-driven digital economy.”

Canada cannot afford to lag.

By its own admission, the Competition Bureau lacks both the clout and capacity to keep big companies in check. Commissioner of Competition Matthew Boswell has previously said the Competition Bureau, unlike other antitrust authorities, can’t compel parties to hand over information for market studies. So how can it accurately gauge competition or assess the impact of major deals?

Story continues below advertisement

It’s also saddled with outdated legislation. Section 96 of the Competition Act, for instance, provides a loophole for companies doing deals. Known as the efficiencies exception, the provision limits the Competition Bureau’s ability to intercede if companies show that expected efficiencies from a merger would eclipse any potential reduction of competition. That sets a high bar for intervention – a standard that’s reinforced by legal precedent.

The legislation must be changed because the Competition Bureau needs latitude to intervene on deals if they could impair future competition.

Additionally, companies should face stiffer fines if they misuse their market position. Currently, the maximum financial penalties that can be imposed for civil offences, such as abuse of dominance, under the Competition Act is $10-million for a first offence and $15-million for subsequent offences. For large companies, that’s just the cost of doing business.

Ottawa should also increase the Competition Bureau’s allowance. One wonders what kind of penny pinching goes on given its annual budget is a paltry $51.96-million.

“The bureau supports any measure that ensures Canada is equipped with modern legislation and tools that are appropriate for the digital age,” added Ms. Paluck-Bastien.

This M&A deal cycle is crunch time for antitrust authorities. It’s been 13 years since the Competition Policy Review Panel aptly concluded that Canada suffers from “insufficient entrepreneurial ambition.”

Story continues below advertisement

That problem has festered for far too long. Not only has there been a decline in the number of publicly traded companies over the years, market consolidation and M&A activity have increased – trends that don’t bode well for competition.

A 2019 study, entitled Are Industries Becoming More Concentrated? The Canadian Perspective, argues that large companies have become “more dominant” in recent decades and that increased market concentration has led to higher profit margins for those businesses.

“We also find that the trend of consolidation is rather widespread and has affected over half of the Canadian industries,” the study said.

Authors Ray Bawania and Yelena Larkin, both of York University in Toronto, also conclude that “weak antitrust legislation and practices” and “increasing barriers to entry” have reduced competition.

There are tentative signs, however, the Trudeau government is mulling corrective action. The bureau’s Mr. Boswell was asked to provide the government with his input on the effectiveness of competition policy tools, marketplace frameworks and investigative and judicial processes.

Separately, the House of Commons standing committee on industry, science and technology plans to study competitiveness in Canada.

Story continues below advertisement

It’s problematic that our Competition Bureau has a reputation for largely rubber-stamping large deals. Canada deserves a world-class antitrust authority. The future of competition depends on it.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies