There’s news from south of the border to discuss. We’ll be doing that later today, and then again repeatedly for the foreseeable future, but first, here’s your regularly scheduled Wednesday podcast episode drop.
I figured you could use a good meaty conversation about competition policy. My guests on the podcast this week are Denise Hearn and Vass Bednar. They’ve just published a data-packed book on all the ways Canadian companies keep their prices high and their competitors out, The Big Fix: How Companies Capture Markets and Harm Canadians.
Hearn is a resident senior fellow at the Columbia Center on Sustainable Investment at Columbia University, although she’s actually Canadian. She’s the co-author of the zestily titled The Myth of Capitalism. Bednar is the executive director of McMaster University’s Master of Public Policy in Digital Society program. Vass has a Substack, of course, and a Globe podcast, and she speaks in a kind of geek hipster-speak that soon characterized our conversation. I’m not sure I’ve ever said “tentacular” so many times in a single hour.
The story the two tell is one we’re hearing more and more: it’s hard for consumers to get a break, and hard for new companies to break into mature markets. Often the reason is the same: because large incumbent companies work hard to present an illusion of consumer choice and to make conditions inhospitable to new or smaller companies. In the book they discuss groceries, movie distribution, live concert promotion, and a bunch of other fields.
“Meat processing is highly concentrated with four companies controlling 71 per cent of pork processing in Canada, with Maple Leaf controlling approximately 40 per cent and Olymel, approximately 10 per cent nationally. Beef processing has just two U.S. corporations, Cargill and JBS with 99 per cent of the federally inspected beef slaughter capacity in the Canadian market. JBS and Cargill, along with others, were recently sued by the U.S. Department of Justice for allegedly using the data broker Agri Stats to fix the prices of numerous meat and poultry products.”
The title of this week’s episode comes from my surprise at reading what is, in some circles, common knowledge: that Paderno, which I think of as a prestige artisanal small-batch pots-and-pans company from Prince Edward Island, is now wholly owned by Canadian Tire. Which is going to make it tough for me to break into the pots-and-pans market if this Substack thing doesn’t work out. You start to see why words like “tentacular” come to mind.
We’re in a bit of a competition moment. The latest edition of Sutherland Quarterly is Fleeced, a look at the very cozy arrangements Canada’s big banks have made at their customers’ expense, by Andrew Spence, a former bank executive. Competition, or the lack of it in Canada, is attracting bright young (well, younger than me) policy talent the way “innovation” or “the green transition” did 25 or 10 years ago, including Robin Shaban and Matthew Holmes in this discussion at my new perch, McGill’s Max Bell School of Public Policy. There’s even a think tank on competition issues, the Canadian Anti-Monopoly Project. And both Jagmeet Singh and Pierre Poilievre have started to suspect there may be more votes in standing up to big business than money in standing with it. The current government’s record on these files is, well, mixed.
Despite a recent update that passed this fractious House of Commons unanimously, Bednar and Hearn aren’t impressed by the Competition Act, which took 15 years to pass in the first place and doesn’t give the feds the bristles they need to go in and give some of these markets a proper scrubbing. They argue that every cabinet minister should have competition as part of their mandate, and that a permanent standing non-governmental advisory body should be created to hold government’s feet to the fire. I’ll believe that sort of thing is likely when I see it happening. But the first step toward recovery is talking about the problem on a podcast, so I’m pleased to have Hearn and Bednar on mine.
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I am grateful to be the Max Bell Foundation Senior Fellow at McGill University, the principal patron of this podcast. Antica Productions turns these interviews into a podcast every week. Kevin Breit wrote and performed the theme music. Andy Milne plays it on piano at the end of each episode. Thanks to all of them and to you. Please tell your friends to subscribe to The Paul Wells Show on their favourite podcast app, or here on the newsletter.
Hoodwinked by Big Paderno