Canada needs to promote greater competition among businesses by modernizing its laws, the country's antitrust regulator said on Thursday, citing a study of data from 2000 to 2020.
The study found that competitive intensity, a measure of how hard businesses feel they need to work to gain advantage over competitors, had fallen.
"The result of this decline in competitive intensity is that both consumers and businesses have seen fewer of the benefits that a more competitive economy has to offer, such as lower prices, greater choice and more innovation," Competition Bureau Canada said in a statement.
Canada's weak competition laws have been long blamed for allowing a few players dominate industries ranging from banks to telecoms and groceries. Prime Minister Justin Trudeau has promised to amend the Competition Act to help reduce prices.
The Competition Bureau said its study found that profits and price mark-ups both rose during the 20-year period, and the increases were generally greater for firms already earning high profits and mark-ups.
Concentration - which indicates to what extent a few companies dominate an industry - rose in the most concentrated industries and the number of highly concentrated industries increased.
The largest firms in industries are being less challenged by their smaller competitors over time and fewer firms have entered industries overall, the bureau said.
"Our findings further highlight the need to modernize Canada's competition laws and adopt a whole-of-government approach to promote competition," Competition Commissioner Matthew Boswell said.
"Taking action to increase competition will drive lower prices and make life more affordable for Canadians," Boswell said.
