This advertisement has not loaded yet, but your article continues below.
The Competition Bureau is busy with more guidelines and fines telling Canadian businesses how to conduct their affairs. It should butt out
The government's Competition Bureau website. Photo by Sean Kilpatrick/The Canadian Press files It is well-known that Canadas economy is uncompetitive and faces significant productivity problems. Not to worry: one of the countrys ace central-planning bureaus is here with updated strategies, new guidelines, increased litigious energy and more rules to tell businesses how to compete.
THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account.
- Share your thoughts and join the conversation in the comments.
- Enjoy additional articles per month.
- Get email updates from your favourite authors.
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account
- Share your thoughts and join the conversation in the comments
- Enjoy additional articles per month
- Get email updates from your favourite authors
Its all in the Competition Bureaus 2025-26 annual plan, which, to be fair, is not uniformly bad: it does include a sentence about enabling policy-makers to address interprovincial trade barriers. Overall, however, the Bureaus plans and recent activities underline its ideology that given enough data and government power, the way to improve business competition in Canada is via more planning, litigation and regulation.
Last week the Bureau issued guidelines on how companies can make environmental claims. Their goal is to facilitate compliance with the new greenwashing provisions added to the Competition Act last year. These provisions require companies environmental claims to be substantiated by internationally recognized methodology, which is not clearly determinable, and have already proven controversial: oil and gas companies and the Alberta and Saskatchewan governments have roundly denounced them. And they were behind RBCs decision this year to scrap a sustainable finance initiative.
According to the Competition Bureau, its guidelines do not prescribe when or how businesses can make environmental claims. But in fact they do exactly that. For example, the guidelines say businesses making claims about future environmental targets should have a concrete, realistic and verifiable plan to accomplish the objective, with interim targets. This stipulation for interim targets is prescriptive, while the fact that the Bureau itself decides what kind of plans are concrete, realistic or verifiable further restricts what businesses can claim. The Competition Bureau is over-reaching here: it has no special insight into how companies should make or execute its environmental plans, how to evaluate whether these plans are concrete or realistic, or what sorts of interim targets (if any) might make sense.
Despite the arbitrariness, potential penalties for running afoul of the guidelines are significant. For a first-time violation its up to the greater of $10 million or three times the value of the benefit derived from the deceptive conduct, or, if that amount cannot be reasonably determined, three per cent of the corporations annual worldwide gross revenue. How the Bureau might reasonably determine the value of the benefit derived from the deceptive conduct it does not say.
Even if companies manage not to incur penalties for their environmental claims, just trying to stay onside with the new rules is a significant burden. The guidelines run to nearly 8,000 words and are filled with ambiguities, such as which methodologies might count as internationally recognized or what types of plans are concrete, realistic, and verifiable.
Also last week, the Competition Bureau issued new guidance on competitor property controls for instance, an exclusivity clause under which a landlord cannot lease a unit to a competitor of an existing tenant. The Competition Bureau admits that in some cases such clauses can be pro-competitive: for instance, no retailer may be willing to make the necessary investments to become a key tenant in a new shopping plaza unless there is some certainty the surrounding space, at least initially, will not be leased by competitors. In this situation, an exclusivity clause would encourage investment and competition. The Competition Bureau suggests exclusivity clauses it deems pro-competitive would be allowed; in other cases, however, it could take tenants and landlords to court.
This advertisement has not loaded yet. This advertisement has not loaded yet, but your article continues below.Trouble is, the Competition Bureau is no more fit to declare that certain terms to which lessors and tenants agree are unjustified and therefore must be removed than it is to declare whether businesses environmental targets are realistic. The standard view in economics is that contracting parties in this case landlord and tenants will structure their transactions to maximize their joint surplus. Restrictions on these contracts and what clauses can be included therefore tend to destroy economic surplus, discourage investment and reduce economic activity.
In announcing its property control guidelines, the Competition Bureau highlighted its use of its litigious activities to investigate property controls by Sobeys and Loblaws parent companies, as well as its 2023 grocery market study, which attacked property controls. The Bureau seems to think its interventions can only increase grocery store competition and lower food prices.
Everyone agrees more competition is likely to reduce food prices. But what effect regulatory attacks on grocery companies, court battles and restrictions on grocers dealings with landlords will have on food prices, the Bureau did not say. More government rules making it harder to do business rarely help consumers.
Bookmark our website and support our journalism: Dont miss the business news you need to know add financialpost.com to your bookmarks and sign up for our newsletters here.
