Advances in Competition Policy Enforcement in the EU and North America
Edited by Abel M. Mateus and Teresa Moreira
Chapter 22: Recent Canadian Policy Towards Industry: Competition Policy, Industrial Policy and National Champions
Thomas W. Ross1 I. INTRODUCTION Industrial policy and competition policy have been linked in Canada almost from the beginning. Canada’s first Prime Minister, Sir John A. MacDonald, introduced perhaps the nation’s first significant industrial policy, the National Policy, in 1879.2 Erecting substantial tariff barriers to the importation of manufactured goods, this was MacDonald’s attempt to create a domestic manufacturing base (largely in central Canada – Ontario and Quebec) to reduce dependence on imports from the United States and the United Kingdom. In terms of its objective of creating that base, the National Policy was somewhat successful – but at a cost. For example, western farmers forced to pay high prices for domestically manufactured goods but sell their outputs in competitive North American (or broader) markets resented the special treatment granted to central Canada by the policy. Not surprisingly, the protection of a small market by high tariff bar- 1 The author gratefully acknowledges helpful discussions and communications with Bruce Doern, Donald McFetridge, William Stanbury and Lawrence White. He is particularly indebted to Marc Duhamel of Industry Canada for considerable assistance with the literature and Canadian data. He also wishes to acknowledge the very capable research assistance of Jennifer Ng; and the financial support of the Phelps Centre for the Study of Government and Business in the Sauder School of Business in the University of British Columbia. 2 Canada secured its independence from Great Britain in 1867. Others might argue that MacDonald’s 1871 promise to build a railroad across the country to British...