Hacker News Reader

> The fear being that if Canada deregulates fully and opens critical sectors like telecomms etc. to full competition we will completely lose these industries to US (or Chinese, etc.) interests.

I have never understood the reluctance of successive governments to allow foreign competition in our telecom markets. Telus, Shaw, Bell, and Rogers are all widely held public companies. They answer to global shareholders.

Yet, I can accept the argument writ large that some degree of sovereign relatedness for significant industries is sensible in a world where many foreign companies receive illicit government support for strategic reasons.

The best solution to bring down prices while protecting corporate sovereignty is a state-owned provincial provider. Mobile prices in Saskatchewan are significantly lower because of SaskTel. At times, yes, even a boring state-owned telecom is a good thing. Rogers/Telus/etc resist this notion, yet prices are evidentially a great deal cheaper in that province.

IMHO, the feds should create a fund to help provinces and municipalities build their own public broadband and mobile infrastructure, with the stated aim of competing with big-telecom.

I suspect that for every well-run public corporation, there are a dozen that are bloated and wasteful, and should have died long ago. SaskTel seems like one of the good ones, but it’s not that way because it’s a public corporation.

This doesn’t happen because people involved are less competent, it’s just that if they make some bad decisions or have some bad luck, they won’t be forced to answer to reality by the market by e.g. running out of money or being beaten by competition. Public corporations are too easy to keep going by continuing to fund through state coffers; to shut them down suggests that leaders made a mistake, so instead we throw good money after bad. It may not have been a mistake to attempt a public option, however even good ideas can fail for lots of reasons, and incentives just make it too hard to fail when it should.

To me the LCBO is the shining example of this: any reasonable analysis that compares with private competition for alcohol sales (e.g. Alberta, BC) would find Ontario has much worse store coverage, worse selection and lower net revenue per unit of alcohol .. yet, no politician would dare visit such an idea, since it suggests government (and its leaders) and ineffective.

The best thing would be to do a Yozma-style funding program. The government offers to match investment and provides clear buy-out terms for successful cases. If you lower the downside risk, you’ll get the competition you want in the space.

I'm not a fan of the LCBO's regulatory or wholesaling/importing arms, but.

I grew up in Alberta. Privatization of liquor there happened just around when I turned 18. LCBO vs the typical Alberta "liquor barn" type operation is no contest: the LCBO wins. On selection, on service, on presentation.

There are just a handful of decent wine shops in Edmonton when I visit. Their selection is meh. Almost every decent sized LCBO has a "Vintages" selection with a decently currated selection of wines. They are actually the superior retail experience, and they treat their employees far better on the whole.

The LCBO is also the single biggest importer of liquor in North America last I looked. Many European producers actually produce special labels and product just for the LCBO, because it buys in quantity for all of Ontario.

Politicians don't dare visit privatizing it not because of the suggestion it might make them look ineffective but because the LCBO brings in an obscene amount of revenue.

(The wine industry in Ontario is actually something I know a lot about. The real problem here is the regulatory side of things, and also the regulatory capture that what I call the "Niagara VQA Mafia" has over the domestic wine market. Becoming a wine producer in this province is stupid, it's been locked down to the same handful of meh grapes in an essentially locked in set of growing regions with no room for innovation, and the gov't totally destroys you on excise taxes, etc. not to mention the cut the LCBO takes from you)

Don't they sell weed now too? How's that working out?

No, they don't.

You’re missing the point.

Alberta has many kinds of liquor stores that optimize for different things, such as price, convenience or selection, all based on market demand. Last time I checked, they had far more SKUs overall (distribution is still centralized by the government for taxation and regulation).

Your experience at the LCBO might be great, but this is coming from less efficient operation. Would the private market support a “Vintages” section in every store and unionized cashiers at $30/hr? Probably not. Why should Ontario taxpayers be effectively subsidizing the alcohol retail experience in Ontario? It’s a ridiculous proposition.

The LCBO brings in a lot of revenue, but with a monopoly on most alcohol sales this is inevitable. Every privatization study (including the Liberals’ own study which they ignored) says that privatization would have no impact on revenues, which improving almost everything for the consumer (more convenience, more selection albeit via specialized stores, etc.)

> I have never understood the reluctance of successive governments to allow foreign competition in our telecom markets. Telus, Shaw, Bell, and Rogers are all widely held public companies. They answer to global shareholders.

Especially since it's a huge opportunity for profits for Canadian companies.

In Europe telecoms became an open market where any European carrier could setup shop anywhere else in Europe. The result was that the more efficient operators managed to grow considerably. Just take a look at the French Orange Telecom [0]

Opening the Canadian market to the USA or Europe would mean that Canadian companies could setup shops and disrupt the market in foreign countries. There's no reasons they would get crushed by their foreign competitors in an open market.

I mean, I remember the times when everyone had a BlackBerry phone and when Nortel was still a thing. These two companies were very much Canadians and killing it abroad.

[0] https://en.wikipedia.org/wiki/Orange_S.A.#Operations

Also consider T-Mobile is Deutsche Telekom in the USA

We should do two things:

1. Pick a couple of industries and specialize in them 2. Deregulate everything

This way, we can compete as a small country without getting screwed as consumers across the board.

I think Sweden followed this model with cars and something else.

This is a correct point of view. It's just plain old localized oligarchy.

> You could say "ok, disband the regulation and let them compete" but many times that just leads to the total collapse of certain domestic industries because they simply can't compete with US capital.

What’s wrong with this if it leads to lower costs for consumers and better service?

Canada wants to maintain a domestic industry, in part to not be held to the whims of another country's governing body. When the people that control your information flow, your food production, etc. are not within your jurisdiction, you're effectively at the mercy of both them and the government of their country.

> in part to not be held to the whims of another country's governing body.

Just because the industry is foreign doesn’t mean it isn’t subject to local regulation and oversight.

... and largely, when American companies set up shop in Canada, they create a wholly owned subsidiary that is a Canadian company. I.e. McDonald's Canada and General Motors Canada are separate entities from their parent organizations.

Fun fact posted here before: The McDonald's locations that were recently shuttered in Russia were specifically founded by McDonald's Canada.

The only thing Canadian about Rogers is the dividends. None of the technologies they operate are Canadian.

Local industry can't compete because the costs are too high, so the government acts by protecting the local industry and increasing costs everywhere.

Welcome to the protectionism vicious cycle.

There is more to domestic policy than being able to go to the foreign-owned big-box store in your foreign-made sweats to buy foreign-made underwear that is 5 cents cheaper. Especially if that savings is only used to pay for the higher cost of internet infrastructure owned by a handful of oligarchs and used to distribute foreign-made content consumed in your sweats while quaffing beer made by foreign-owned cartels and eating popcorn grown by foreign-subsidized farmers.

It's not so great for people who don't see themselves only as consumers of a service. It's not a simple linear change.