Proposed changes to Canada’s Competition Act could kneecap our already faltering economy

From the Macdonald Laurier Institute

No party wants to be seen as soft on “big business” but that is a bad reason to pass potentially harmful, counterproductive competition policy legislation.

The recent federal budget was widely panned – in particular by the entrepreneurial class – for its proposal to raise the capital gains inclusion rate. As it turns out, “soak the rich” might sound like clever politics (it’s not) but it’s definitely a poor narrative if your goal is to incentivize and encourage risk-taking and investment.

But while this damaging measure in the federal budget has at least drawn plenty of public ire, other harmful legislative changes are afoot that are getting virtually no attention at all. They’re contained in Bill C-59 – the omnibus bill still wending its way through Parliament to enact measures contained in last fall’s economic statement – and consist of major proposed amendments to Canada’s Competition Act. The lack of coverage and debate on these changes is all the more concerning given that, if enacted, they could have a long-term negative impact on our economy comparable to the capital gains inclusion rate hike.

Worst of all, the most potentially damaging changes weren’t even in the original bill, but were brought forward by the NDP at the House of Commons Standing Committee on Finance, and are lifted directly from a previous submission made to the committee by the Commissioner of Competition himself. In effect, they would change competition law to put a new onus on businesses to prove a negative: that having a large market share isn’t harmful to consumers.

MPs on the committee have acknowledged they don’t really understand the changes – they involve a “concentration index” described as “the sum of the squares of the market shares of the suppliers or customers” – but the government itself previously cast doubt on the need for this additional change. It’s obvious that a lot of politics are at play here: no party wants to be seen as soft on “big business.” But this is about much more than “big business.” It’s about whether we want to enshrine in law unfounded, and potentially very harmful, assumptions about how competition operates in the real world.

The changes in question are what are known in legal circles as “structural presumptions” – which, as the name implies, involve creating presumptions in law based on market “structure” – in this case, regarding the concentration level of a given market. Presumptions in law matter, because they determine which side in a competition dispute – the regulatory authority, or the impugned would-be merging parties – bears the burden of proof.

So why is this a bad idea? There are at least three reasons.

First of all, the very premise is faulty: most economists consider concentration measures alone (as opposed to market power) to be a poor proxy for the level of competition that prevails in a given market. In fact, competition for customers often increases concentration.

This may strike most people as counterintuitive. But because robust competition often leads to one company in particular offering lower prices, higher quality, or more innovative products, those who break from the pack tend to attract more customers and increase their market share. In this respect, higher concentration can actually signal more, rather than less, competition.

Second, structural presumptions for mergers are not codified in the US or any other developed country other than Germany (and even then, at a 40 percent combined share rather than 30 percent). In other words, at a time when Canada’s economy is suffering from the significant dual risks of stalled productivity growth and net foreign investment flight, the amendments proposed by the NDP would introduce one of the most onerous competition laws in the world.

There is a crucial distinction between parliamentarians putting such wording into legislation – which bind the courts – and regulatory agencies putting them in enforcement guidelines, which leave courts with a degree of discretion.

Incorporating structural presumptions into legislation surpasses what most advanced economies do and could lead to false negatives (blocking mergers that would, if permitted, actually benefit consumers), chill innovation (as companies seeking to up their game in the hopes of selling or merging are deterred from even bothering), and result in more orphaned Canadian businesses (as companies elect not to acquire Canadian operations on global transactions).

Finally, the impact on merger review will not be a simplification but will likely just fetter the discretion and judgment of the expert and impartial Competition Tribunal in determining which mergers are truly harmful for consumers and give more power to the Competition Bureau, the head of which is appointed by the federal Cabinet. Although the Competition Bureau is considered an independent law enforcement agency, it must still make its case before a court (the Tribunal, in this case).The battleground at the Tribunal will shift from focusing on the likely effect of the merger on consumers to instead entertaining arguments between the Bureau’s and companies’ opposing arguments about defining the relevant market and shares.

Even if, after further study, the government decided that rebuttable structural presumptions are desirable, C-59 already repeals subsection 92(2) of the Competition Act, which allows the Tribunal to develop the relevance of market shares through case law – a far better process than a blanket rule in legislation. Nothing prevents the Bureau from incorporating structural presumptions as an enforcement screen for mergers in its guidelines, which is what the United States has done for decades, rather than putting strict (and therefore inflexible) metrics into statute and regulations.

No one disputes that Canada needs a healthy dose of competition in a wide range of sectors. But codifying dubious rules around mergers risks doing more harm than good. In asking for structural presumptions to be codified, the Competition Bureau is missing the mark. Most proposed mergers that will get caught by these changes should in fact be permitted on the basis that consumers would be better off – and the uncertainty of being an extreme outlier on the global stage in terms of competition policy will create yet another disincentive to start and grow businesses in Canada.

This is the opposite of what Canada needs right now. Rather than looking for ill-advised shortcuts that entangle more companies in litigation and punt disputes about market definition rather than effects to the Tribunal, the Bureau should be focusing on doing its existing job better: building evidence-backed cases against mergers that would actually harm Canadians.

Aaron Wudrick is the domestic policy director at the Macdonald-Laurier Institute.

Related Topics:#AaronWudrick #BillC-59 #CompetitionAct #InsidePolicy #MacdonaldLaurierInstitute

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RFK Jr. planning new restrictions on drug advertising: report

Published on June 19, 2025

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MxM News

Quick Hit:

The Trump administration is reportedly weighing new restrictions on pharmaceutical ads—an effort long backed by Health Secretary Robert F. Kennedy Jr. Proposals include stricter disclosure rules and ending tax breaks.

Key Details:

Two key proposals under review: requiring longer side-effect disclosures in TV ads and removing pharma’s tax deduction for ad spending.
In 2024, drug companies spent $10.8 billion on direct-to-consumer ads, with AbbVie and Pfizer among the top spenders.
RFK Jr. and HHS officials say the goal is to restore “rigorous oversight” over drug promotions, though no final decision has been made.

Diving Deeper:

According to a Bloomberg report, the Trump administration is advancing plans to rein in direct-to-consumer pharmaceutical advertising—a practice legal only in the U.S. and New Zealand. Rather than banning the ads outright, which could lead to lawsuits, officials are eyeing legal and financial hurdles to limit their spread. These include mandating extended disclosures of side effects and ending tax deductions for ad spending—two measures that could severely limit ad volume, especially on TV.

Health and Human Services Secretary Robert F. Kennedy Jr., who has long called for tougher restrictions on drug marketing, is closely aligned with the effort. “We are exploring ways to restore more rigorous oversight and improve the quality of information presented to American consumers,” said HHS spokesman Andrew Nixon in a written statement. Kennedy himself told Sen. Josh Hawley in May that an announcement on tax policy changes could come “within the next few weeks.”

The ad market at stake is enormous. Drugmakers spent $10.8 billion last year promoting treatments directly to consumers, per data from MediaRadar. AbbVie led the pack, shelling out $2 billion—largely to market its anti-inflammatory drugs Skyrizi and Rinvoq, which alone earned the company over $5 billion in Q1 of 2025.

AbbVie’s chief commercial officer Jeff Stewart admitted during a May conference that new restrictions could force the company to “pivot,” possibly by shifting marketing toward disease awareness campaigns or digital platforms.

Pharma’s deep roots in broadcast advertising—making up 59% of its ad spend in 2024—suggest the impact could be dramatic. That shift would mark a reversal of policy changes made in 1997, when the FDA relaxed requirements for side-effect disclosures, opening the floodgates for modern TV drug commercials.

Supporters of stricter oversight argue that U.S. drug consumption is inflated because of these ads, while critics warn of economic consequences. Jim Potter of the Coalition for Healthcare Communication noted that reinstating tougher ad rules could make broadcast placements “impractical.” Harvard professor Meredith Rosenthal agreed, adding that while ads sometimes encourage patients to seek care, they can also push costly brand-name drugs over generics.

Beyond disclosure rules, the administration is considering changes to the tax code—specifically eliminating the industry’s ability to write off advertising as a business expense. This idea was floated during talks over Trump’s original tax reform but was ultimately dropped from the final bill.

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Canada’s critical minerals are key to negotiating with Trump

Published on June 18, 2025

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From Resource Works

By Geoff Russ

The United States wants to break its reliance on China for minerals, giving Canada a distinct advantage.

Trade issues were top of mind when United States President Donald Trump landed in Kananaskis, Alberta, for the G7 Summit. As he was met by Prime Minister Mark Carney, Canada’s vast supply of critical minerals loomed large over a potential trade deal between North America’s two largest countries.

Although Trump’s appearance at the G7 Summit was cut short by the outbreak of open hostilities between Iran and Israel, the occasion still marked a turning point in commercial and economic relations between Canada and the U.S. Whether they worsen or improve remains to be seen, but given Trump’s strategy of breaking American dependence on China for critical minerals, Canada is in a favourable position.

Despite the president’s early exit, he and Prime Minister Carney signed an accord that pledged to strike a Canada-US trade deal within 30 days.

Canada’s minerals are a natural advantage during trade talks due to the rise in worldwide demand for them. Without the minerals that Canada can produce and export, it is impossible to power modern industries like defence, renewable energy, and electric vehicles (EV).

Nickel, gallium, germanium, cobalt, graphite, and tungsten can all be found in Canada, and the U.S. will need them to maintain its leadership in the fields of technology and economics.

The fallout from Trump’s tough talk on tariff policy and his musings about annexing Canada have only increased the importance of mineral security. The president’s plan extends beyond the economy and is vital for his strategy of protecting American geopolitical interests.

Currently, the U.S. remains dependent on China for rare earth minerals, and this is a major handicap due to their rivalry with Beijing. Canada has been named as a key partner and ally in addressing that strategic gap.

Canada currently holds 34 critical minerals, offering a crucial potential advantage to the U.S. and a strategic alternative to the near-monopoly currently held by the Chinese. The Ring of Fire, a vast region of northern Ontario, is a treasure trove of critical minerals and has long been discussed as a future powerhouse of Canadian mining.

Ontario’s provincial government is spearheading the region’s development and is moving fast with legislation intended to speed up and streamline that process. In Ottawa, there is agreement between the Liberal government and Conservative opposition that the Ring of Fire needs to be developed to bolster the Canadian economy and national trade strategies.

Whether Canada comes away from the negotiations with the US in a stronger or weaker place will depend on the federal government’s willingness to make hard choices. One of those will be ramping up development, which can just as easily excite local communities as it can upset them.

One of the great drags on the Canadian economy over the past decade has been the inability to finish projects in a timely manner, especially in the natural resource sector. There was no good reason for the Trans Mountain pipeline expansion to take over a decade to complete, and for new mines to still take nearly twice that amount of time to be completed.

Canada is already an energy powerhouse and can very easily turn itself into a superpower in that sector. With that should come the ambition to unlock our mineral potential to complement that. Whether it be energy, water, uranium, or minerals, Canada has everything it needs to become the democratic world’s supplier of choice in the modern economy.

Given that world trade is in flux and its future is uncertain, it is better for Canada to enter that future from a place of strength, not weakness. There is no other choice.