Biden’s pressure for competition could dampen Canada’s post-pandemic recovery, industry warns – .

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Biden’s pressure for competition could dampen Canada’s post-pandemic recovery, industry warns – .


There has been a lack of political will over the years to push back the more monopolistic aspects of the Canadian economy

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OTTAWA – Industry groups warn that a recent push by President Joe Biden to further increase competition in the U.S. market could put Canada at a strategic disadvantage, which could even hamper Canada’s economic recovery at the same time. exit from the pandemic.

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Biden signed an executive order on July 9 aimed at limiting corporate dominance and encouraging more competitive policies in various industries, including shipping, healthcare, transportation and technology. The order did not present a specific mandate, but instead calls on US agencies to adopt policies that would limit corporate consolidation and open up the most monopolistic corners of the market.

If successful, observers say the policy could go a long way in creating a level playing field for small businesses and limiting the powers of large companies, including tech giants Google and Apple.

Similar concerns about a lack of competition persisted in Canada in the agriculture, mining, chemicals and retail sectors, including for small businesses in general. Of particular concern is Canada’s rail duopoly, shared between Canadian National (CN) and Canadian Pacific (CP). But the problem concerns a number of industries, from telecommunications to agriculture.

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Prime Minister Justin Trudeau’s Liberal government has touted its own economic stimulus package, including tens of billions of dollars in clean tech support and a proposed national child care program. But industry groups warn that these efforts will ultimately be in vain without a more comprehensive plan to make Canada’s transportation and other industries more competitive.

“In light of Biden’s proclamation, I think it is time for Canada to have a serious discussion and to deepen the examination of our capabilities, our choices for the business world and our efficiency.” , said Diane Brisebois, President and CEO of Retail Council of Canada.

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Brisebois, which represents some 45,000 storefronts across Canada, says its members have seen shipping prices rise by up to 400% during the pandemic, made worse by a global shortage of shipping containers. While these increases are due to temporary pandemic-related supply chain gaps, they also indicate a deeper structural weakness in the country’s infrastructure network that has caused pressure points on Canadian trade for decades. , she said.

His association and others have called on Ottawa to tackle the problem, saying the latest plans to increase social spending in Canada must be combined with more meaningful economic reforms.

“You can’t talk about social infrastructure without talking about economic infrastructure,” said Brisebois. “What the United States does will have an immediate impact on our economy and the country. So to ignore what is happening south of the border is to ignore the need for us to be competitive, ”she said.

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It’s a conversation we should have been having months ago … and it’s a conversation the government just wasn’t ready to have

Erin Gowriluk

Department officials are familiar with the problem, officials said, but there has been a lack of political will over the years to push back the more monopolistic aspects of the Canadian economy.

Canadian agricultural producers have been repeatedly squeezed by the limited shipping options for railways and port authorities to move their produce, often suffering from backlogs during harvest months as farmers are forced to compete with oil companies and miners for rail capacity. This in turn reduced production and in some cases caused losses not only for shippers but also for rail companies, who were forced to prioritize certain products during times of high demand.

“If the government isn’t even ready to have this conversation, then I don’t know how this country is going to fare in terms of post-pandemic recovery,” said Erin Gowriluk, CEO of Grain Growers of Canada. “It’s a conversation we should have had months ago in preparation for the recovery, and it’s a conversation the government just wasn’t prepared to have. “

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Mining companies have also been confronted with transport constraints, in particular for so-called “captive” shippers dependent on a single rail supplier. The operations of Vancouver-based mining giant Teck Resources, Canada’s largest rail shipper, are entirely captive of CP, for example.

“If you rely on rail to transport your product, the success or failure of your business depends a lot on how smooth and reliable that market access is,” said Brendan Marshall, vice president of economics at the Mining Association of Canada.

Marshall said Canadian governments have for years sought to “break the Da Vinci Code” of lack of competition in the transportation sector with little success.

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Ignoring what is happening south of the border is ignoring the need for us to be competitive

Diane Brisebois

Ottawa passed its Transportation and Modernization Act in 2018, which aimed to increase the powers of captive shippers and ease Canada’s rail constraints.

The Mining Association, along with other industries including chemicals and agriculture, had called on the government to introduce more transparent data sharing requirements that would give captive shippers a stronger footing in settling disputes. with CN and CP, as well as third-party arbitration as a means to better resolve disputes between railways and shippers.

But so far, efforts to improve data accessibility have been slow, he said, while other measures, including expanding interconnections on railways, have been confined to limited areas of the Canadian rail system, which has not given small shippers a significant competitive advantage. edge.

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Interconnection is a long-standing rail practice in which one company will move freight along a shorter route on behalf of a second company in order to provide more competitive prices to shippers.

While shippers don’t expect far-reaching reforms that loosen rail companies’ stranglehold on the market, Marshall said, forcing companies to disclose more data on shipping costs or car tracking information would yield small businesses a better platform to fight high prices. .

“What we want are the remedies available to shippers to actually work. And in our opinion, strong data disclosure is the fastest and fairest way to do it. “

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