In their view, corporate size, the number of players and market share are not the determinants of a competitive market. Even an apparent monopoly structure generates competitive forces, assuming the market is open and not protected by some government decree. We need a better phrase to capture this reality. That means removing restrictions on ownership and letting the competitive-merger process operate. Canada's airlines, telecommunications firms, bookstores, banks and others are shielded by ownership rules and various restrictions.
Foreign banks run a regulatory gauntlet to set up business in Canada.
All this skews the natural market away from competition. The owners and managers of firms are behaving exactly as competitors should, identifying trends, understanding their markets and making entrepreneurial decisions in the quest for efficiency and profits. When the Bay connects Zellers with K Mart, competition in Canadian retailing will intensify. CN Rail's takeover of Illinois Central captures an opportunity to streamline rail transport across the continent. Terence Corcoran is a columnist with the Globe and Mail's Report on Business.