Competition and the high cost of everything

According to a recent article in The Economist, Canada and Australia have much in common – starting with resource-intensive economies, sparsely-populated territories, and dominant global infrastructure companies.

That’s the good news, in a way. Resource sectors help make both economies hum; and expertise in managing and financing infrastructure renewal is a key asset as floods, fire, hurricanes and typhoons wreck their havoc on the planet.

The bad news is that it’s tough to be a consumer in both nations, which suffer from relatively uncompetitive economies.

Canada may or may not have the highest cellphone rates on the planet – depending on whom you ask on what day – but we’re certainly up there (or down there) with the worst of them.

Loblaws and Sobeys control almost half the grocery market in Canada. (In the United States, the top six grocers control the same share of the market.)

Both Australia and Canada – collectively dubbed “Ozanada” by The Economist – are less open to foreign competition than most nations in the OECD.

And both suffer from what the magazine calls “toothless” competition cops.

Despite the gloomy news, we watchers in the CrowsNest spot some hopeful signs on the not-too-distant horizon.

The Competition Bureau of Canada, by now sensitive to criticism that it has done too little to act as a watchdog on food inflation, is expected to release a report on the grocery industry later this month.

Industry watchers feel that study may signal significant progress in fostering a more competitive retail grocery sector in Canada.

About time that happened.

The CRTC, which regulates the telecom industry, should also get tougher on Canada’s big players, who aren’t too keen on discount resellers which deliver cheaper WiFi and cellular services to Canadians.

Well, the CrowsNest believes competition promotes lowers consumer costs.

Bring it on!