Increasing Retail Monopoly Power Poses a Threat to Canada’s Post-Pandemic Economic Recovery [Op-Ed]

Date:

Share post:

Canada is currently grappling with a significant economic issue: market concentration. A select few corporations dominate key sectors, leading to reduced competition, rising prices and limited purchase options for consumers.

Canada’s grocery industry is a prime example of this. A recent report from the Competition Bureau found that a lack of competition in the grocery sector is resulting in higher food prices.

The grocery industry is dominated by five major players — Loblaws, Metro, Empire (the owner of Sobeys), Walmart and Costco. These five companies account for over three-quarters of all food sales in Canada.

The Bureau recommended four policies to encourage competition in the sector. These include establishing a grocery innovation strategy, encouraging new independent and international players, introducing legislation for consistent unit pricing and limiting property controls.

While independent grocery chains could be a viable alternative, they don’t occupy as large a presence of the market as they do in other countries. The Canadian grocery market is heavily concentrated and limits the ability of independent chains to compete by forcing them to purchase their products from larger chains.

History of monopolies

Hudson’s Bay at CF Toronto Eaton Centre – Photo by Dustin Fuhs

Canada’s economy has historically been marked by notable monopolies, thanks to its vast geographical expanse and relatively sparse population.

Entities like the Hudson’s Bay Company and Canadian Pacific Railway company played significant roles in the country’s development. This largely happened out of concern that domestic companies would be overwhelmed by American competitors unless they grew significantly.

Recent trends indicate this phenomenon is not only persisting, but intensifying. While Sobeys, Loblaws, Metro, Costco and Walmart dominate over 60 per cent of the grocery sector, Bell, Rogers and Telus command about 89 per cent of the wireless telecommunications market.

The concentration of power extends beyond these sectors. The banking industry in Canada is dominated by six banks — the Royal Bank of Canada, TD Bank, Scotiabank, the Bank of Montreal, CIBC and National Bank, which collectively control about 93 per cent of the industry.

Similarly, the beer market is largely controlled by two multinational giants, Anheuser-Busch InBev and Molson Coors.

And the Canadian telecommunications industry is still reeling from the recent merger between two of the industry’s giants, Rogers Communications and Shaw Communications. The implications of this deal are far-reaching.

The Rogers-Shaw merger

The Rogers-Shaw merger’s final approval came with 21 enforceable conditions Rogers and Videotron must adhere to, aimed at bolstering competition and reducing costs for customers.

The merger’s approval depended on Shaw selling its Freedom Mobile business to Quebecor’s Videotron. If Rogers breaches its conditions, it must pay up to $1 billion in damages. Videotron could be subject to $200 million in penalties if it fails to meet its commitments.

Innovation, Science and Industry Minister François-Philippe Champagne holds up a contract between the telecoms and the federal government as he speaks at a news conference about the Rogers-Shaw merger on Parliament Hill in Ottawa on March 31, 2023. THE CANADIAN PRESS/ Patrick Doyle

Despite these conditions, some remain skeptical about the impact of the merger on competition in Canada’s telecommunications sector.

Some critics have argued the merger may lead to higher prices for consumers and less innovation. Carleton University political economy professor Dwayne Winseck warned it could lead to a “tight oligopoly on steroids.”

On the flip side, other experts believe the merger could benefit consumers by accelerating the rollout of 5G networks and improving infrastructure and services, particularly in rural areas.

However, these benefits could be offset by the potential for higher prices and less competition. The merger could lead to a dominant market share in Ontario, reducing competition and potentially leading to higher internet prices.

This is particularly concerning, given Ontario’s average monthly price of home internet services is already higher than the national average. This situation underscores the need for a revamp of Canada’s competition laws.

Loopholes in competition law

The merger has sparked controversy because it exploited weaknesses in Canada’s anti-monopoly law, the Competition Act, to push the deal through.

The Competition Act has been criticized for failing to prevent acquisitions that allow large firms to eliminate competitive threats and solidify their dominance.

As Canada’s competition watchdog, the Competition Bureau can review mergers to determine if they will be harmful to competition. But since its introduction in 1986, the bureau has only challenged 18 mergers and has never won a challenge on final judgment.

The law also has a high bar for intervention in a merger, often favouring negotiated agreements that include concessions or remedies that address some of the competition concerns, but not necessarily all.

The Competition Commissioner, Matthew Boswell, believes the existing competition laws are inadequate. Boswell has been hamstrung by legal loopholes and unable to prevent anti-competitive mergers, like the Rogers-Shaw deal, from happening.

Challenges and opportunities

Along with rising consumer prices, limited purchase options and intensifying competition, the growth of monopolies in Canada has led to a host of other issues.

Monopolies have the potential to stifle innovation — a key driver of economic growth, as a lack of competition tends to dampen innovative efforts. Productivity growth, which is crucial for improving living standards, is also under threat, as monopolies can create an environment less conducive to efficiency and progress.

As Canada embarks on its post-pandemic economic recovery, policymakers must ensure economic resilience and inclusiveness while preventing existing monopoly issues from worsening.

At the same time, there is an opportunity to reshape the economic landscape to encourage competition and foster innovation, benefiting everyone involved in the market.

This journey towards a more prosperous future will require rigorous scrutiny of developments like the proposed Rogers-Shaw merger and the wisdom to navigate the interplay of monopolies, competition and the broader economy.

By Garros Gong, Ph.D. Student in Management Science, University of Waterloo

This article is republished from The Conversation under a Creative Commons license. Read the original article.

1 COMMENT

LEAVE A REPLY

Please enter your comment!
Please enter your name here

RELATED ARTICLES

Subscribe to the Newsletter

Subscribe

* indicates required

RECENT articles

Who Shopped HBC’s Men’s Floor, and Where They’ve Gone

Environics Analytics examines who shopped Hudson's Bay's men's clothing department and where those customers may have shifted following the retailer's closure.

Retail Insider Home Furnishings Report: Service, Value and Accessibility Reshape the Market

Canadian home furnishings retailers are adapting to slower demand by investing in service, accessibility, omnichannel retail and operational resilience. Retail Insider's latest Home Furnishings Report examines how evolving consumer behaviour is reshaping competition across furniture, décor, mattresses, lighting and related categories.

After lengthy search, Calgary Co-op names new CEO

The company had been without a permanent CEO since the departure of Ken Keelor in October 2024.

Empire Company Limited no longer enforcing restrictive covenants

The Competition Bureau Canada announced in late June it was expanding its investigation into Sobeys and continuing a campaign that has already led to voluntary concessions from major grocers and new legislation in Manitoba.

Retail Insider Ranked Third Globally in FeedSpot’s 2026 Retail Rankings

Retail Insider has been ranked third worldwide and first in Canada in FeedSpot's 2026 retail publication rankings, recognizing the publication's coverage of Canada's retail industry.

Trump’s proposed 50% tariffs on Canadian imports spark uncertainty for retailers, supply chains

Trump’s proposed 50% tariffs on Canadian imports are creating uncertainty for retailers, with leaders warning of higher costs and disrupted planning.

Home Hardware expands Quebec network as 90-year-old Matériaux Miron Plus joins Dealer-Owned system

Home Hardware says the move reflects its strategy of attracting established independent retailers rather than simply adding new locations. 

Taco Bell Canada launches Crispy Chicken Nuggets, new Baja Blast flavour as expansion accelerates

Limited-time offerings are intended to balance familiar favourites with fresh experiences that encourage repeat visits and generate buzz in an increasingly competitive quick-service market.

AI redesigns jobs, not cuts them: JLL study reveals business leaders expect workforce growth ahead

Global study finds organizations further in AI adoption anticipate workforce growth, prioritize full-time roles and focus on productivity

Alberta CEOs plan to invest, hire despite uncertainty: Business Council of Alberta 

65% of Alberta CEOs expect Alberta's economy to improve over the next year.

Trump’s New Tariffs Put Canada’s Food Economy at Risk

Sylvain Charlebois argues that Canada must urgently re-engage with Washington as new U.S. tariffs threaten alcohol, dairy and broader food-sector trade.

Daily Synopsis: Jul 20, 2026

Canadians turn to thrift stores, Trump threatens 50% tariff on Canada, HBC auction tied to world's biggest art fraud, KaleMart24 opening store, Flying Tiger opening 3rd GTA store, and other news.

Sleep Country Set for Major U.S. Expansion with Sleep Number Deal

The Fairfax-owned Canadian retailer is preparing to take control of more than 570 U.S. stores through a court-supervised acquisition valued at approximately US$701 million.

Retail Insider “Health & Beauty Report”: Scale, Integration and Trust Reshape the Market

Retail Insider's latest Health & Beauty Report examines how pharmacy services, loyalty ecosystems, wellness, digital care and consumer trust are reshaping Canada's health and beauty retail sector, with implications for retailers, brands, landlords, investors and the broader healthcare ecosystem.

Rains Opens Yorkdale Store as Canada Becomes Key Growth Market

Danish lifestyle brand Rains has opened its second Canadian store at Yorkdale as it expands retail, wholesale and e-commerce operations in Canada.

Rising costs outpace sales growth, eroding restaurant profitability: Restaurants Canada

Real commercial foodservice sales are expected to grow by 1.5% in 2026 (inflation-adjusted), a slight improvement over the Q1 forecast.

CFIB urges Premiers to champion tax relief and internal trade reform

The federal small business tax rate has remained frozen at 9% since 2019, and the Small Business Deduction threshold has been unchanged at $500,000 since 2009.

Consumer prices rise 2.8% year-over-year in June: Statistics Canada

Prices for food purchased from stores grew at a slower pace on a year-over-year basis in June (+3.9%) compared with May (+4.3%).

Staples Canada and Canada Post partner to provide new shipping tools for small businesses

Canada Post small business shipping services arrive at select Staples locations this summer.

High-end street-front retail investment coming to Calgary: Barclay Street Real Estate report

At the close of Q2 2026, Calgary’s retail market continued to demonstrate resilience and momentum.