Industry Regulation and Competition Policy - Op Eds

As restrictions continue on in-person dining, COVID-19 has made restaurants increasingly dependent on food delivery platforms. Last month, the City of Toronto asked Ontario to temporarily cap the service fees restaurants are charged, which can be as high as 30 per cent of the bill.

There is superficial appeal to price caps, but taking economic guidance from Hippocrates – first, do no harm – they amount to quackery. Regulatory interventions need to be carefully dosed according to a precise diagnosis of market failure and the extent of the disease.

Instead of introducing new price cap regulations, Premier Doug Ford urged food delivery apps to slash commissions as a way to help out pandemic-stricken restaurants. This moral…

In Canada, if regulation doesn’t work, the answer always seems to be more regulation. And so it is now with wholesale internet rates.

In August, the Cabinet (mildly) criticized the CRTC’s new wholesale internet rates, noting that because they are so low, they may “undermine investment in high-quality networks.” This sentiment is justified, but the Cabinet needs to go much further. This is an opportunity for Canada to finally accept that our government-directed internet “market” is not working — and to create a system of real, authentic competition.

First, why is the CRTC setting internet rates anyway? Canada has a form of wholesale internet regulation that is unique in the world. In Canada, as in most countries,…

Two years ago, in another op-ed, I made an unpopular prediction. I guessed that the Federal Communications Commission (FCC)’s plan to scrap network neutrality rules in the United States would not break the internet. In fact, contrary to the dire forecasts of pro-regulation groups, I thought the measure wouldn’t amount to much of anything: that “net neutrality” legislation was pretty pointless — and so removing it would be uneventful, and certainly not bad for U.S. broadband.

My view was received with a fair amount of hostility. One reader memorably proposed on Twitter that I have intimate relations with my own eyeball. “You are clearly flexible enough and already blind,” he wrote.

I promised to check back in, in two…

Ontario Premier Doug Ford’s decision last fall to put the retailing of cannabis in the hands of the private sector was a good one. The province recently held a lottery to determine who would operate as a cannabis retailer.

The use of a lottery, as opposed to an auction or a “preferred suppliers” rule, to allocate retail outlets can be defended on two grounds. One is that the government did not wish to give excessive retail power to existing cannabis interests with deep pockets, or to other retailers such as Walmart or a pharmacy chain. An auction would likely have resulted in a concentration of retail power akin to the concentration of production power that exists at present. That concentration of production power already places…

On Oct. 17, Canada will be the second country in the world to have fully legalized production and retail distribution of recreational marijuana. There will be considerable international interest in the Canadian experiment, in order to understand what works and what does not. One of the prime objectives of legalization was to stamp out the black market. However, it is now clear that this is extremely unlikely. Both federal and different provincial governments should accept responsibility for this.

Black markets exist if there is insufficient legal supply or if they can offer comparable goods at lower cost. Based on available data on the number of licensed producers and medical-marijuana production and inventory levels, we estimate…