The Royal Commission on Corporate Concentration was established in 2020 to investigate the impact of corporate concentration on the Canadian economy. The commission was tasked with examining the effects of large corporations on competition, innovation, and job creation.
One of the key areas of focus for the commission was the growing trend of mergers and acquisitions in Canada. Between 2015 and 2020, the number of mergers and acquisitions in Canada increased by 50%. This trend was driven in part by the growing presence of foreign investors in the Canadian market.
The commission also investigated the impact of corporate concentration on small and medium-sized businesses. Research showed that small businesses are more likely to be acquired by larger corporations, leading to a loss of independence and innovation. In 2019, it was estimated that over 10,000 small businesses in Canada were acquired by larger corporations.
The commission's work was informed by research and data from a range of sources, including government statistics and industry reports.
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Impact
The Royal Commission on Corporate Concentration had a significant impact on the Canadian economy. The Commission's findings led to a major overhaul of the country's competition laws.
The Commission's report highlighted the dangers of unchecked corporate power, citing the example of the Bank of Commerce, which had become a dominant player in the Canadian banking industry. This dominance led to reduced competition and higher prices for consumers.
The Commission's recommendations led to the creation of the Competition Act, which prohibited anti-competitive business practices. This new law gave the government the power to investigate and prosecute companies that engaged in anti-competitive behavior.
The Commission's work also led to the breakup of the Bank of Commerce, which was forced to merge with the Merchants Bank to create the Royal Bank of Canada. This merger reduced the number of major banks in Canada from five to four, increasing competition and reducing prices for consumers.
The impact of the Commission's work was felt across the Canadian economy, from the banking industry to manufacturing and retail. The Commission's findings and recommendations helped to create a more competitive and equitable market for businesses and consumers alike.
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Overview
Canada's corporate landscape has undergone significant changes between 1996 and 2007, with a decline in corporate ownership concentration.
The incidence of ownership stakes of 20% or larger has decreased from 60% to 41% of the total population of publicly listed Canadian firms.
Regional disparities among provinces remain important, with Ontario, Alberta, and British Columbia having the most widely-held firms, while Quebec and Atlantic Canada show the most concentrated corporate ownership patterns.
Canada's state-owned enterprise (SOE) sector is larger than previously thought, with the provincial Crown sector alone being significantly bigger than the federal sector, whether measured by assets, employees, or contribution to national GDP.
Provincial Crown corporations contribute significantly to Canada's economy, with their assets, employees, and GDP contribution being nearly two and a half times larger than the federal sector alone.
The province of Quebec operates under civil law, which differs from the common law used in the other nine provinces of Canada.
In Quebec, dominant shareholders hold a higher percentage of voting rights, with a wider gap between their voting rights and cash-flow rights compared to the rest of Canada.
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