The Canadian Competition Bureau (the “Bureau”) has released a toolkit – Strengthening Canada’s economy through pro-competitive policies (the “Toolkit”) – to assist regulators and policymakers, at all levels of government, in maximizing competition in Canadian industries. The Toolkit offers a five-step process for policymakers to assess the impact of new and existing policies on competition, and tailor those policies to maximize the benefits of competition across the Canadian economy.
The Bureau suggests engaging in a competition assessment each time a new policy is proposed or an existing policy is reviewed. The Bureau’s five-step competition assessment process is summarized below:
Step 1: Identify the policy. The first step is to specify the underlying goals that the policy is designed to achieve and the proposed measures to achieve those goals.
Step 2: Assess whether the policy impacts competition. The second step involves an assessment of the impact of the proposed measures on competition, with reference to the following four indicators of a competitive marketplace:
- the ability of businesses to enter or expand in a market or operate across borders;
- the ability of businesses to set the price, quality and quantity of the products or services sold;
- the incentives for businesses to compete vigorously; and
- the potential for consumers to switch between competing businesses.
Step 3: Identify alternatives to address policy goals, if necessary. If the proposed policy measures will negatively impact any of the indicators of a competitive marketplace, the policymaker should consider whether the restrictions are necessary, narrowly cast and proportionate.
Step 4: Implement the best alternative. The fourth step is to implement the approach that achieves the policy goal(s) in the most pro-competitive way.
Step 5: Conduct an ex-post assessment. Following the implementation of any policy measures, policymakers should regularly review their effects on competition and make adjustments as needed.
The Toolkit provides examples to illustrate alternative approaches to regulation that mitigate anti-competitive effects based on positions previously advocated by the Bureau in relation to sales of alcohol, taxi services, financial services, Internet services and the airline industry. In addition, the Bureau specifically calls out certain regulatory measures that can impede competition. These measures include: the grant of exclusive rights and caps on the number of licences issued for a business activity, price caps, minimum quality standards, self-regulatory bodies, and requirements to publish business information. In each case, the Bureau proposes strategies for mitigating the negative effects of the measures on competition. The mitigation strategies are also based on the Bureau’s previously advocated positions. For example, the Bureau suggests publishing aggregated information in place of disaggregated information when policies require making business information publicly available.
The Toolkit will be useful for policy makers and regulatory bodies as well as businesses and other advocates in policy and regulatory processes. The Toolkit provides an accessible framework for addressing the competitive impact of policies, including in policy and other regulatory contexts that have not previously embraced competition policy objectives.