The Competition Bureau says profits and markups have increased over the last two decades as the state of competition in Canada has deteriorated.
The bureau published a report Thursday analyzing how competition evolved across industries between 2000 and 2020.
The report, which is said to be the first of its kind, looks at a broad range of indicators and concludes that competition intensity has decreased over that period of time.
It finds that between 2005 and 2018, the most concentrated industries got even more concentrated over time, while more industries came to be considered highly concentrated.
The bureau also reports that large firms are facing fewer challenges from smaller competitors, and fewer new companies are finding a foothold.
Entry and exit rates have declined between 2001 and 2022, suggesting industries across the economy have become less dynamic.
The bureau also analyzed profits and markups, and says both have increased over the last two decades.
Between 2002 and 2018, the average markup across industries rose by 6.7 per cent. However, for industries with the highest estimated markups, the average increased by 12.5 per cent.
There was a similar finding when it comes to profits, which rose more in higher-profit industries between 2000 and 2020.
Commissioner Matthew Boswell says the report highlights the need to modernize Canada's competition law and for governments to adopt pro-competitive policies.
"Without the adoption of pro-competitive policies, Canada risks continuing down the road of declining competitive intensity. Taking action to increase competition will drive lower prices and make life more affordable for Canadians," Boswell said in a news release.
