New Book Charts Roadmap For Smashing Corporate Monopoly Power In Canada

The Big Fix: How Companies Capture Markets And Harm Canadians. Denise Hearn and Vass Bednar. Sutherland House, 2024.

“If we would not submit to an emperor, we should not submit to an autocrat of trade” – U.S. Senator John Sherman, responsible for the Sherman Antitrust Act of 1890

Loblaws, Sobeys, Metro, Walmart, and Costco comprise 80% of Canada’s food and consumer staples retail sector. Telus Health and Express Scripts Canada account for 80% of private drug claims in Canada. RBC, TD Bank, Scotiabank, CIBC, and BMO own 85% of their market. Cineplex has amassed control over roughly 75% of the Canadian movie theatre box office market share.

These are just some of the horrifying statistics catalogued in great detail in The Big Fix. These figures represent the startling degree to which economic power has concentrated in the hands of just a few firms – while Canadian regulators have too often watched from the sidelines, at times unwilling and at times unable to stand in the way.

The accumulation of market share in the hands of a small number of massive corporations is not a theoretical matter. It’s a trend that enables these huge firms to use their dominance of markets to throttle competition from small businesses and startups, and take advantage of the lack of options available to shoppers by treating Canadian consumers like cash cows.

Take Loblaws, a firm which has turned fleecing consumers into an art form. In 2017, Loblaws was implicated in an industry-wide price-fixing scheme that is estimated to have increased the price of bread by at least $1.50 over 15 years, adding up to $1,170 from every Canadian. By way of apology, customers were offered a $25 gift card. That’s just one food item – consider how many items you buy, and how much money corporate price-fixing plots may have sucked out of your wallet over the years.

The chaos, fear, and uncertainty of the pandemic provided excellent cover for more daylight robbery heists to be perpetrated by the big grocery monopolists against Canadian consumers. Early in the book, The Big Fix provides solid data to back up a suspicion held by many Canadians: pandemic profiteering did account for a significant portion of the inflation in food prices felt at the time, putting one more worry on the backs of struggling families during an already stressful period.

Monopolies don’t just enable price-fixing, they can also lead to anti-competitive processes that stifle small businesses. The control that Cineplex has accrued over the movie theatre sector allows it to prohibit independent theatres from showing mainstream films at the same time as Cineplex theatres. This greatly diminishes the profits of independent theatres, which in turn hampers their financial ability to showcase less profitable – but very valuable – indie films and original Canadian movies. Many Canadians would love to support a mom-and-pop theatre, but this is difficult when a single firm controls 75% of the market share in this industry.

The monopolies of the 21st century use the same anti-competitive tactics as the dapper, moustachioed “robber barons” who controlled North American railroads in the 19th century – only supplemented by new innovations which would make the old-school robber barons incredibly jealous. The strategy today is to turn your firm into a financial ecosystem of sorts, through the endless acquisition of companies in new sectors. Rather than focusing on creating quality goods and services in one industry, you simply boost profits to shareholders by gobbling up more and more firms.

Thus, the once-iconic Hudson’s Bay Company is now owned by American businessman Richard Baker, who in a 2020 interview with the Globe and Mail touted his dismal vision of the HBC: “We’re not a department store chain. We’re a holding company that owns many billions of dollars of real estate…”. We find ourselves in a surreal situation in which Rogers is also the principal owner of the Toronto Blue Jays, and Canadian Tire owns Mark’s, Party City, Helly Hansen, and Sportcheck – a subsidiary, Canadian Tire Financial Services, even offers credit cards.

It is a shame that The Big Fix does not go into how monopolies have come to dominate the newspaper business. In my province of B.C., Black Press and Glacier Media have swallowed up almost every community newspaper – laying off staff and gutting local content in the process. Black Press has even been known to buy up both of the papers in one town, and subsequently shutter one of them. At one point, the book’s authors suggest that every major newspaper in Canada devote one reporter to covering issues surrounding competition in the economy. I find it unlikely that the Postmedia monopoly – which owns National Post, Financial Post, Vancouver Sun, Calgary Herald, and many more – would agree to this request.

To loosen the stranglehold of monopolies on the Canadian economy, the authors call for a whole-of-government approach in which challenging concentrated corporate power would become a national agenda – every ministry would be tasked with tackling anti-competitive practices in its own sphere, and reporting their results up a chain of command. They call for a Canadian version of the U.S. Robinson-Patman Act of 1936 (which protects small retail shops against competition from chain stores) and for the Ministries of Finance and Transportation to start using their “long-dormant” powers to block mergers.

Most importantly, they suggest that the Competition Bureau be reformed. It is currently nested under the Ministry of Innovation, Science, and Economic Development (ISED) – a potential conflict of interest which may be part of the reason why the bureau has never successfully blocked a merger. The authors call for the bureau to be pulled out from ISED, given independent enforcement authority, and allocated far more funding.

Details aside, one thing is certain: the first Canadian politician to start vocally and seriously taking on the power of the modern-day robber barons will be generously rewarded by Canadian voters.