OTTAWA — Victoria Lavrynenko, a resident of Canada for just over three years, has noticed a significant increase in grocery prices since her family moved from Ukraine. A package of four chicken breasts that once cost about $10 now ranges from 40 to 50 percent higher at a Loblaw store in her Ottawa neighborhood. Lavrynenko, who shops with her husband and son, finds it increasingly challenging to balance affordability and health in her grocery shopping due to rising costs in essentials like gas, clothing, and groceries. "It’s not good, especially when you have kids," she said.

Lavrynenko benefits from living in an area with multiple grocery options, including Loblaw’s Real Canadian Superstore, Metro, Food Basics, Produce Depot, and Farm Boy, all within a three-kilometer radius. This level of competition typically fosters better service and lower prices. However, many Canadians are calling for increased competition in the grocery sector to alleviate rising prices.

The Competition Bureau of Canada has identified several factors contributing to the rapid increase in grocery prices, including supply chain disruptions, higher input costs, and geopolitical events like Russia’s invasion of Ukraine. While grocery prices are a significant concern, they are not the only area where competition is lacking.

Many Canadians are frustrated with U.S. President Donald Trump’s protectionist tariffs, which contradict the free trade agreement he previously signed. However, advocates for competition argue that domestic barriers also hinder market competition, negatively impacting consumers and small businesses. The Competition Bureau suggests that enhancing competition could boost Canada’s GDP by as much as 2.5 percent over the next decade.

Prime Minister Mark Carney recently emphasized the need for bold actions in a pre-budget speech, raising questions about whether the government will take steps to improve competition. The issues extend beyond groceries to other sectors, including airlines, telecommunications, and banking, which are also shielded from foreign competition by legislation.

Matthew Boswell, commissioner of the Competition Bureau, noted that limited competition allows incumbent businesses to dictate market conditions. Tim Sargent, head of domestic policy at the Macdonald-Laurier Institute, highlighted that improving productivity in infrastructure industries like airlines and telecommunications could enhance competitiveness across various sectors.

Advocates for competition stress that the benefits extend beyond just lower prices. Competitive markets can lead to better services, more convenient hours, and increased innovation. A lack of competition can result in higher prices and stunted economic growth. The Competition Bureau's recent study indicates that concentrated industries are becoming more prevalent in Canada, with Boswell stating, "We’ve been getting worse over time."

Australia's National Competition Policy, implemented between 1995 and 2005, serves as a model for potential reforms in Canada. This policy extended competition laws to all sectors and resulted in a GDP growth of about 2.5 percent over a decade. Ryan Manucha, a research fellow at the C.D. Howe Institute, supports Boswell’s estimates, suggesting that similar gains are possible in Canada.

As Canada faces economic challenges, including trade tensions with China and a slowing global economy, the government is exploring ways to stimulate growth. Industry Minister Mélanie Joly stated that the Liberal government is committed to fostering competition as part of its affordability strategy. "Competition is another way we are lowering prices," she said, emphasizing its role in driving innovation.

Despite some initial steps toward increasing competition, significant barriers remain. The grocery sector, for instance, is highly concentrated, making it difficult for new entrants to compete. The telecommunications market, while a priority for the government, continues to be dominated by a few players, resulting in high cell phone bills for Canadians.

As the federal budget approaches, the question remains whether the government will take decisive action to enhance competition across various sectors, ultimately benefiting consumers and the economy.