The Big Fix: Vass Bednar, Denise Hearn tackle competition in Canada in new book

Two public policy and economics experts have teamed up to take a closer look at the state of business competition in Canada, making a bid for the country’s regulators to take more of an all-hands-on-deck approach to regulation. Vass Bednar and Denise Hearn’s new book, The Big Fix, explores what competition policy could accomplish, why Canadian policy has failed up to now, and the authors’ suggestions for what needs to change. Bednar is the executive director of McMaster University’s master of public policy program whose expertise is the intersections between policy and the innovation ecosystem. Hearn is an applied researcher who advises governments, financial institutions, companies, and nonprofits on antitrust, economic policy, and new economic thinking. “When we talk about concentrated markets, we shake our fists at the telcos, and we say, ‘Oh, we just need another competitor, and that will solve the challenge,’” Hearn offered as an example to The Wire Report in an interview with the authors. “This is part of what we wanted to provoke in the book, is to really say we have to look at how companies are operating in markets, the market realities, and how they actually see themselves,” said Hearn, who previously co-authored The Myth of Capitalism: Monopolies and the Death of Competition. The ‘everything companies’ Partway through the book, Bednar and Hearn dissect the notion of the “everything company” – a moniker for firms that have broadened the scope of services they offer into multiple industries. While Canada’s telecoms are an oft-cited example of large companies that continue to expand their scope of services, Hearn explained that she and Bednar want to make clear in their book the distinction that companies in general are no longer simply competing within just one industry. “They want to own assets across industries, and that makes it much more complex, in a way, to really understand the full picture of all of the different collections of assets that companies have and how they can leverage their dominance in one sector into another one,” Hearn said. Within the chapter is a breakdown of the ecosystem of brands owned by Rogers Communications Inc. and Telus Corp. From The Big Fix: How Companies Capture Markets and Harm Canadians by Denise Hearn and Vass Bednar, Copyright 2024, courtesy of Sutherland House Books. Beyond its telecommunications and TV services, Rogers offers services such as smart home monitoring and has recently furthered its grasp of Toronto’s sports scene with its purchase of BCE Inc.’s stake in Maple Leaf Sports and Entertainment (MLSE). There is additionally its subsidiary Rogers Bank, offering credit card services and cash-back rewards which, the book notes, allows it to obtain greater detail on customers’ purchasing habits. From The Big Fix: How Companies Capture Markets and Harm Canadians by Denise Hearn and Vass Bednar, Copyright 2024, courtesy of Sutherland House Books. Telus, meanwhile, has Telus Health, its virtual health appointment platform and suite of related services, as well as its agriculture and consumer goods business which provides digital and data services to the food and agriculture industry. In August, Telus chief financial officer Doug French spoke to The Logic about the company’s plan to turn properties that used to host its old copper-cable network into rental housing properties through Telus Living. After converting much of its network to fibre, about 200 properties have been freed up. The first two buildings are under construction in British Columbia, The Logic reports, with another 16 companies identified for future development. In September, Telus announced it is launching a new app through which homeowners can track their energy usage. For its part, Bell has been public about its “transformation journey” this year. The company plans to put the money made through its MLSE deal with Rogers toward reducing its debt levels and supporting its “ongoing transformation from telco to techco.” Earlier this month, Bell picked up a workflow automation firm, HGC Technologies, through its cloud-services company FX innovation – another firm it had acquired in 2023. Bell also announced the acquisition of two other technical services companies for its FX Innovation division earlier this summer, being Mississauga-based Stratejm and Halifax-based CloudKettle Inc. Bednar, who is also a senior fellow at the Centre for International Governance Innovation, notes that such evolutions to the “everything company” are not necessarily damaging, but should be recognized. “We're not saying it's bad. I think that word ‘bad,’ the ‘B’ word, comes up a lot in competition. But we're saying it's important, and that it's different, and that it's distinct, and that we need to start to recognize it,” said Bednar, who also authors a newsletter on Canadian startups and public policy. Taking a new approach to competition In the book, Bednar and Hearn assert that addressing competition in Canada will require an “all-hands-on-deck regulatory approach.” The authors explore where such an approach has been implemented before, looking to the United States for inspiration. They note that in a July 2021 government order, the U.S. established, among other efforts, the White House Competition Council, which includes the heads of more than 19 government agencies. Bednar and Hearn also note the order affirms that, when working to bolster “national champions” to compete with foreign giants, the country’s stance is not to tolerate domestic monopolization, but instead promote competition and innovation by firms of all sizes, at home and worldwide. “Canada should take note,” the pair write. What could Canada’s ‘Big Fix’ look like? It is in the last chapter that Hearn and Bednar lay out their pitches for how Canada could be more proactive in protecting and promoting competition. Hearn argued it requires a “holistic approach.” “At this point, we don't have any sort of countervailing force to the power of large corporations other than the state. You need to really use the full power of the state to respond to the challenges that are posed by the sort of undemocratic rule of large companies that impose their will on us,” she said. For one, they suggest the Competition Bureau could provide proactive policy statements more often, which they posit would improve public engagement with the bureau, “and signal forthcoming policy discussion.” They also warn of the risks of slow regulators. “It took the CRTC about thirty years to address internet companies as broadcasters, because regulators wanted to encourage innovation and thus exempted the internet from broadcasting obligations that have since been imposed. We can’t afford that kind of regulatory lag with other emergent market shifts like generative artificial intelligence,” they write in the book. Bednar and Hearn discussed with The Wire Report the role of the CRTC, Canada’s independent quasi-judicial regulatory body covering the country’s communication systems. Bednar said the CRTC has demonstrated it is part of the “scaffolding” of the whole-of-government approach, citing the regulator’s contested August decision ordering Bell Canada, Bell Aliant, and Bell MTS, along with Saskatchewan Telecommunications Holding Corp. (SaskTel), and Telus to provide competitors wholesale access to their existing fibre networks. “To us, that’s whole-of-government in action. That decision isn't the result of a competition case. It's not a remedy. It's not politicized. It's actually just good policy,” Bednar said. “They previewed that it was likely. They said they were studying it. People had time to get their ducks in a row. People had time to come to Parliament Hill and protest, and then they went forward.” The book goes on to more deeply examine such options as passing new legislation, collaboration between the federal and provincial governments, and taking a “more democratic approach to competition policy.” “As we're looking ahead, we see this opportunity for Canada to take a more comprehensive, holistic, integrated approach to regulating markets, instead of leaving it up to one bureau, nested at one ministry. And we have the ideas to prove it… It's something that can be operationalized,” Bednar told The Wire Report. Bednar and Hearn’s suggestions take into consideration a full spate of areas in which to intervene, including protecting people as both consumers and workers. “I think what we really want to emphasize is that these are everyday issues that Canadians face in their day-to-day lives… whether it's waking up and brushing their teeth with a toothbrush from Amazon, or taking their dog to the vet – these market power issues really impact every single aspect of our lives,” Hearn said of the book’s purpose. “We care about these issues not because we care about competition in and of itself, but because we care about creating an economy that works for everyone – that works for citizens, consumers, workers, independent business owners, startups. We want people to have a chance to flourish in Canada's economy, and we think that this is an important tool to help us do that.” The Big Fix was published Oct. 15, 2024. hdaley@thewirereport.ca

The Big Fix: Vass Bednar, Denise Hearn tackle competition in Canada in new book

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By Hannah Daley
| October 16, 2024

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