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'Compete to Win' report says SPP too slow; promotes creation of a Canadian Competitiveness Council to set economic policy priorities

June 26, 2008
Posted by Brent Patterson

The federal government’s Competition Review Panel wants to scrap the ban on bank mergers, “lighten up its foreign ownership restrictions of uranium and airline assets, and liberalize the telecommunications industry,” according to the Globe and Mail today.

In its report, Compete to Win, the panel says that the Competition Bureau “should speed up its reviews of mergers and acquisitions, be more transparent about its expectations, and harmonize its expectations with those of the United States,” according to the Globe.

“Ottawa should stop worrying about the small mergers and acquisitions led by foreigners, and only review those deals worth more than $1-billion… And instead of approving those deals that can prove they are of 'net benefit' to Canada, it should focus instead on rejecting only those deals that 'would be contrary to Canada's national interest.'"

“This is sweet music to our ears,” says Thomas d'Aquino, head of the Canadian Council of Chief Executives, in the Globe article. “It really is a phenomenal blueprint for taking Canada into the 21st century, and unblocking a lot of the things we've all been talking about for 15 or 20 years.”

With respect to the Security and Prosperity Partnership, Compete to Win states:

"The chief mechanism to deal with Canada–US border issues, the Security and Prosperity Partnership (SPP), has yielded too little progress in improving crossborder flows. Indeed, Canada risks being side-swiped by the preoccupation the U.S. has with its southern border.The most recent SPP Summit confirms that little progress can be expected within a relevant time frame.

“In this context, the Panel believes that it is imperative to intensify our bilateral effort with the US, focusing on facilitating the flow of goods, services and people across the Canada–US border. If we are forced to choose between trilateral and bilateral efforts, the latter should be chosen. Enhanced public recognition of the benefits of the Canada–US trading relationship south of the border should also be part of this effort."

Among the specific recommendations in the report:

URANIUM MINING
"The Minister of Natural Resources should issue a policy directive to liberalize the non-resident ownership policy on uranium mining..."

COMPETITION
"The Minister of Industry should introduce amendments to the Competition Act (to) align the merger notification process under the Competition Act more closely with the merger review process in the United States..."

TAXATION
"The federal, provincial and territorial governments should continue to reduce corporate tax rates to create a competitive advantage for Canada, particularly relative to the United States."

INTERNAL TRADE
"The federal government should provide leadership in the elimination of all internal barriers between the provinces and territories that inhibit the free flow of goods, services and people by June 2011. Federal and provincial governments should establish by June 2009 a work plan to achieve this goal and provide interim reports on progress every six months."

CANADA-U.S. ECONOMIC TIES
"Addressing the thickening of the Canada–US border should be the number one trade priority for Canada, and requires heightened direct bilateral engagement at the highest political levels."

INTERNATIONAL TRADE AND INVESTMENT
"The federal government should set an ambitious timeline for concluding priority trade and investment agreements, led by the Minister of International Trade who should pursue a flexible, results-based approach, beginning by simplifying Canada’s model foreign investment protection agreements and streamlining our free trade agreements negotiating processes."

REGULATION
"Canada should harmonize its product and professional standards with those of the US, except in cases where, and then only to the extent that, it can be demonstrated that the impairment of the regulatory objective outweighs the competitiveness benefit that would arise from harmonizing."

COMPETITIVENESS COUNCIL
"The federal government should establish as expeditiously as possible an independent Canadian Competitiveness Council (and the) mandate should be to examine and report on, advocate for measures to improve, and to ensure sustained progress on, Canadian competitiveness."

The full 134-page report can be read here.