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blue-sky (verb)
: to offer ideas that are conceived by unrestrained imagination or optimism.
Hosted by Erin O’Toole, President and Managing Director of ADIT North America. Erin is the former Member of Parliament for Durham and former leader of the Conservative Party of Canada. The Blue Skies political podcast explores issues facing Canada and the world in a format that brings together thought leaders for an informed and engaging conversation.
Hon. Erin O'Toole 0:00
We live in an age of political polarization and preference bubbles of economic change, rising threats and a rapidly changing world. Canada needs to stay relevant. We need more smart conversations. We need to dive into critical issues and big ideas with passion and unrestrained optimism. I'm Erin O'Toole, welcome to the blue skies podcast. Welcome to Blue Skies. We big picture things here. We blue sky issues on this podcast. And the hope is we can look at trends, emerging issues, and big picture issues that will affect you, whether your household issues or work, and where our economy is going. And today, we're going to do that with a very special guest. We're going to look at the emerging economy, the new economy, the digital economy, the impact of AI, the fact that people are expecting more competition, more choice, driven by both consumer and by regulation. And we're going to talk to one of the leading voices in Canada on this discussion. We have Vass Bednar with us here today, who is the Executive Director of the McMaster University's Masters of Public Policy Program, which includes a range of public policy issues, including the competition issues we'll talk about today. She's also a podcast host, so she's going to help me bring up my A game here today on blue sky. She's the host of the lately podcast, hosted and sponsored by the Globe and Mail. I recommend that you check it out. Lots of smart issues on that podcast. She's also the co author, along with Denise Hearn, of the Big Fix how companies capture markets and harm Canadians. Vass, welcome to Blue Skies.
Vass Bednar 1:39
Thank you for having me. I can't wait to blue sky with you.
Hon. Erin O'Toole 1:44
Well, you have been an important voice in the last few years. As I as I said, as we were chit chatting before we started, you were really becoming a force in competition law and public policy discussion, just as I was tailing out of my my public service, but you've continued to be a voice on these emerging issues. And let's start with the book. You've got a busy life career. What led you and Denise to write a book on, literally, competition law and the changing global economy?
Vass Bednar 2:17
You know, a series of happy accidents. Erin, believe it or not, so the big fix is the product of a new prize through McGill University that's in partnership with Sutherland press. And each year it's kind of like a like a mini Massey lecture. They sponsor, effectively, sponsor, invite a Canadian author, in our case, two of us to they commission a book on a on an issue that is pertinent to the Canadian economy. So they've got some latitude there. So McGill had decided that they wanted to do something on competition, and then I suppose, kind of in their scouting, they thought we'd make a great pair. We had already been working together on a couple of other things. Denise Hearn is incredible. She's a dual citizen. She's co author of the myth of capitalism. So to her credit, she had experience co authoring. But back to what you know, maybe made us say yes, Say Yes to the Dress. I was on family leave. My son was three months old when we received the invitation to take on this project, and I I was interested in in thinking in that way, thinking in book you your brain must calibrate, you know, for different audiences, different formats. I knew how to do op eds, I knew how to do policy research reports, and I guess I knew how to tweet and blog. But I was curious what it would be like to tell these stories, and if we could say something bigger and kind of be more more effective. So great constraint, great challenge. We had less than a year. We had 100 pages. So the book is a short king, but we've had a lot of fascinating conversations since then. And as Denise told me, you know, there was this moment we were working in the book, and she was like, you know, this is about 40% of the work, and it was so much intellectual. I was like, Oh my God. Like, what is the other 60% and she was like, it's translating, it's socializing, it's like talking about it in different ways. And she was right, because I would say writing something is only part of the battle, and I've sort of seen that in policies change too, but I've been so honored, and I felt lucky to sort of be a catalyst, you know, a spark for some conversations, really, just by pointing to things and kind of asking questions, I would say that's all I really do. Yeah,
Hon. Erin O'Toole 4:33
you're asking questions because we need some potentially new solutions, and that's what I'm sure your students getting their masters in public policy are looking at, but let's look at the title, the big fix so our lack of competition here, or the fact that some big players, in your view, have captured markets, that's harming Canadians. You're calling that out right at the top. Walk people through a couple of examples on how Canadians are being harmed. We paying more? Are we getting inferior service? Is it making us less competitive for value added products? Give a couple of examples that people can get a sense on how this is a negative or a drag on our economy.
Vass Bednar 5:13
It's a total drag. And I mean, I would say all of the above and more. So I think typically, we take that consumer centric view in a competition sense, right? And we think about ourselves first, and that's totally cool, right? Choice, competition for prices, bringing price down, innovation, best possible products. But our lack of competition in a range of sectors also hurts entrepreneurs and workers, right? Which goes back to that broader drag on the economy. So if we have restrictions around labor. When we have dominant gig platforms that don't let people kind of coexist on multiple platforms, we constrain people's ability to negotiate for their wages and to take their labor elsewhere. And then for entrepreneurs, something we touch on in the book is not just about we talk a lot about access to capital in the startup phase. And you know, at what, at what elements, what, what time periods of sort of a startups life cycle. But there's also this whole access to market conversation, and Denise has done amazing work on this in a US context. But what are the actual kind of structural barriers to a new entrant coming? Because a lot of what we say often with the big fix is that getting this thing called more competition is about more than just counting the number of competitors. Like, if you're going to replicate and reinforce structural barriers to more competitors, then you're not able to achieve more competition. And there's no better example of this than in grocery right where you know, in theory, more grocers or another giant grocer could come here, but until we actually reconcile and recognize more fully, maybe this is true in airlines too, and the Bureau's now pretty far down the road on on an airline market study, you know, we're just not appreciating what it means to try to try to compete, and that's some of what we were trying to do with the big fix is sort of show how markets have changed over time, but also what it means and how we need to change. I think there was a version of the book where we just went sector by sector and talked about, like, how much things suck. But that wasn't the vibe that we wanted to bring. We wanted to bring a sense of optimism and joyfulness that actually, Canada also does get some things right, and that better is possible because it is possible, and markets are kind of made and remade all the time. But you want me to give you more specific, specific, no, no, no, this is great, although
Hon. Erin O'Toole 7:35
when you say better is always possible, it's reminding me of political debates in the House of Commons. I'm trying to sorry, but let, let me. Let me break that down even more because and full trend transparency to our listeners, when before politics, especially for five years, when I was the corporate lawyer in house, lawyer for Procter and Gamble, I worked on a lot of competition, antitrust issues because PNG, when I was hired. They just bought Gillette, so in personal care, and, you know, consumer goods, they were the leading category leader in in almost all sectors. And so competition and abuse of dominant position was a real concern for for the company. And I did a lot of this competition law. But when you say barriers to entry, and let's use grocery which you raised. You know, the barriers to entry? Are they regulatory, or are they just, you know, Loblaws, for example, is the largest purchaser of electricity in in Ontario, because they have the freezers, they have the stores and all that sort of stuff. So if you and I wanted to to start a grocery store, the barrier to entry is more just the capital needed, right? Or are there structural things, or are there historic things that are giving us fewer players, because I laughed when I saw Francois Philippe champagne, somebody i i respect when he say I'm going to go out and find another grocer to come to Canada. Is it really that simple talk me through that,
Vass Bednar 9:03
you know, I loved, I loved that he tried. I love that he was so transparent. And I, I do appreciate the idea that maybe if we just ask nicely, we'll kind of get more competition in our markets, right? Because that's what we were kind of doing. So he must have incredible insights into why firms have said, like, we're not going to come here, right? We do know that Trader Joe's parent company scoped coming here a few years ago. That could have partially been because of, you know, real estate, right? The major grocers are also real estate investment trusts a lot of the time, and landlords, you know it better than me, but Trader Joe's, say it did come to Canada. Trader Joe's is about 85% private label products, right? TJ is all their different names. So the type of competition that they represent in grocery, where it's more of a closed ecosystem, I think, is getting a little bit out of step with what what we're sort of hoping for in a brick and mortar. Context when we shop. And I think we've become used to, you know online that sometimes you know online marketplaces, they may own and operate within the marketplace, right? But we don't always appreciate how, in a grocery context, you know to come to compete. You're competing with the parent company that then Loblaw does know. It knows everything about its competitors, on products on the shelves. It knows their price point. It knows how popular they are. It knows where they're popular. Even knows kind of who's buying them. And that raises questions of, is that just the structural advantage that the parent company deserves, right? Or are there other prices that people are paying right? Suppliers are paying that. They're giving up, giving up some also proprietary information just to participate, just to be on the shelf. So that's some of the kind of below the surface elements that that we looked at, and we looked at, sort of private labels, and also consolidation and kind of, it can be a sort of aha moment to see, you know, the parent food companies. And I think groceries can be a nice place to start, just because it's part of it's, you know, an unavoidable part of our everyday. And it's been interesting that in this by Canada micro patriotic movement, that it has started with grocery right? It started with, you know, what we literally consume, and as for where it's going to go from there, I I'm waiting for it to butt heads with our competition realities, right? Because I don't think this. I don't think economic nationalism. Sorry, I'm taking us on a on a tangent, but I don't think it's about getting that we need to make and manufacture everything, that we need to reshore everything, or sort of have everything just in this country. But I understand why people are switching away from dominant American products. Yeah, especially now your question was, yeah. Your question is, is it? Is the barrier, regulatory, structural have certain firms kind of remade rules in their favor to the extent that there are, you know, egregious regulatory barriers. Like, I do think more and more people are on board with general, broad regulatory modernization. Like, everyone wants government to work better. But I think there are different visions about like, what it means to have have government kind of work more effectively. But that's, I think, the role, the role of democracy and the role of actors in markets to sort of help help us understand when and how they can, frankly, work better. I'm just saying the same phrase over and over again.
Hon. Erin O'Toole 12:36
No, no, no. Listen. I think a lot of Canadians would have seen this firsthand. And when I was conservative leader, I raised the fact that, you know, during the pandemic, there were temporary rises to salaries of grocery workers and stuff buying, you know, was essential at but then there was also some of the grocers, Loblaws of Metro slapped extra supplier fees, as you said, using that sort of big position, and I publicly praised when Sobeys didn't follow along, yeah, but then after after COVID, you saw some of the salaries come down, and so it's kind of like we don't have to pay them as much. And when the when the big players, and if there's just a few of them, they move in lockstep. That's an example of when you're saying that the workers, 100% suffer, you know, the suppliers, the small farmer, the small manufacturer, they suffer, right?
Vass Bednar 13:27
Absolutely no perfect example. And you know, that's the the hero pay, somehow ending all around the same time is a great example, also because it inspired a very fast policy follow, and that very next year, near with near unanimous support, legislation was passed that updated the Competition Act that said that was illegal because it actually wasn't wage fixing wasn't explicitly illegal on the Competition Act, if you want to, if you want to have a laugh, and I should say, if you want to laugh, even more, like I got into all of this stuff totally by accident. McGill had asked me to write a paper. It was fall of 2020, it was doing some freelancing, and they we were on the phone, and they were like, so I get I told them the papers I wanted to write, and they were just like, that's cool. We want a paper on competition like, just state of competition policy. How does it work? Where is it going? Do you think you can do that? And I Googled, what is competition policy? They could probably hear me typing. They're like, fast. And I was like, you know, I know a little bit, which was true. I was like, I know a little bit. I do want to learn more. So this would be a great forcing function. Like, yes, I could totally do this. And the more I learned, I was like, Oh, it must be really dumb. Like, there's no way the law is structured to work this way, that this can't be what it means. And I would call my smart friends, they're like, yeah, no, that's totally it. Yeah, that's it. I was like, oh, and that's what led me to sort of do some storytelling or like blog posts and Rex to riches or op eds to sort of sort of point to things. So that's why I say happy accidents for the book and for other thinking. I. Yeah.
Hon. Erin O'Toole 15:00
Well, now what I call my smart friends, I call you on competition. So man, how you are now the You are now the guru. So you've raised a really important issue, I think, because there's a bit of a slight generation difference between us, my sense and when I first started following your commentary, and I've met a few other people kind of commenting on these issues and pushing for open banking and a whole range of things. Is there a generational piece here where technology combined with a more maybe aware consumer, I might describe it that way, are demanding some of these reforms, and is technology breaking down these barriers where, yeah, it's hard to start a chartered bank, but with technology, it lets you in Uber Eats. And some of these deliveries is even mixing up grocery because you can, you know, if they have the ability to deal with smaller players, they could deliver you your food that you'd normally go to one of the big grocers with is technology an enabler here to encourage competition? And is that why a younger generation, millennials and sort of Gen z's, are wanting reform in all these big sectors? I put a lot out there, but I really see a general generational shift where younger Canadians are demanding this a lot more than, say, the xers or certainly the boomers. Your
Vass Bednar 16:26
Your point on demand, I think, is really, really sharp, right? We've seen, but we've seen the power of people in tons of instances, and Canadians of all ages, right? So a lot of people covered the Loblaw, you know, boycott. There's that viral Loblaw, Reddit. But there was also just pushback when Shoppers Drug Mart, owned by Loblaw, announced they were going to have an exclusive arrangement with the insurer, with an insurer, Manulife, right where, though, in Ontario, it's actually illegal in Quebec to do that, to have that kind of vertical integration. So but people, sort of intuitively, we're like, this doesn't seem like it's going to be good for people. This locking people in or, you know, it just doesn't. You don't need to know competition law to sort of have that reaction. And because of the reaction, they walked it back. So to me, that's the power of people. But I see a generation that, through through social media, has also a sense of humor, right? In terms of, there are a lot of memes about our lack of competition. I've seen great tiktoks YouTube videos where I feel it's almost somewhat cool to be anti monopoly, right? And that's, it's a way to learn about, it's a way to learn about what is an abuse of dominance, right? Like, what are companies able to do and when you see a more robust Competition Bureau do things like slap the wrist of Cineplex with a historic fine by saying you are misleading people by charging them an extra dollar, $1.50 for your convenience fee, like you are advertising online a price for a movie ticket That is unattainable. It's not about the dollar $50.50. Wasn't really ruining anyone, though $1 is $1 it was the principle, right? And suddenly we see the role of the state in our everyday lives. We like to, you know, sometimes go to the movies. It's also kind of has its own issues in terms of the streaming wars and fewer films being made and fewer films coming to the theater, separate issue. But, you know, I think there's been a democratization of the entire competition conversation that made some people uncomfortable, because for a long time, it has just been economists and lawyers sort of speaking a particular language, and now it is much more part of our everyday but people that don't talk about like section 92 or the merger review threshold, people speak at their dinner table about the cost of things, or the lack of choice, or whether or not they're going to take a vacation, because if they, you know, have enough points, or if the price of Things are going up. So people are observant, and I think talking about and sometimes around competition issues in ways that decision makers can pay much better attention to.
Hon. Erin O'Toole 19:12
And what about so do you two things then? So there is a bit of a demand, as you said, driven by a number of reasons. Demand will this generation demand changes to foreign ownership restrictions? Will they demand a sort of modernization of competition laws? Conservatives just released an open banking policy paper, some of some of the elements were in our platform in 2021 is this going to be the expectation that younger voters are saying, catch up with the times? We're expecting more choice, more competition and more fairness? I
Vass Bednar 19:52
I think people are hoping for that. I mean, with telecom and the foreign ownership it still reinforces how we structured that market, right? Which is one? The companies that invested in the physical infrastructure get to also charge rent on top of that. In other markets, you've seen that be decoupled, there's also, it's also a market that's shifting with more municipal broadband, right owned by a city like the city of Toronto, that then allows competition on top of the physical infrastructure, which can help kind of drive prices down on for on foreign competitors. I mean, yes, we hear people saying, more and more, well, we want more competition, but I don't think we always have alignment in terms of how we how exactly we achieve that. And I mean, one of our most sacred cows in this country, or at least what, what comes out of it. Supply Management also seems like it's resurging in terms of back, you know, back on the potential chopping block. And it's an area that's actually really hard to have a good kind of common public conversation on, because the system is so, I think, challenging to appreciate, and we've lost a sense of its roots where we kind of wanted to set a wage floor for farmers. And, you know, at times, it annoys people, but it comes up in competition. In competition chats quite a bit, and maybe causes us to miss more of the research we need, or investigations or commentary into consolidation and things like insurance markets, right? Health insurance, small business insurance. It's not as maybe sexy or fun to talk about those sectors, but it's another way that the cost of doing business goes up for everyone, because it also gets passed, probably passed on to you and I at the end of the day, right? If, if a business is it's not necessarily just eating into their profits, it can kind of inflate the price of what's coming forward. So I do think people will have their eyes on, yeah, what are we doing for competition and to have more of it? It's just also that question of, What does more competition look and feel like, and and what does it look like in this new global context too, right, where we're recalibrating some of our or many where recalibrating our trade, our approach to trade, and things like that. Long way of saying, like, Yes, I think people will keep pushing for change.
Hon. Erin O'Toole 22:12
I'm glad you raised the geopolitical aspects of this, because even the grocery model, as you we talked about Champagne going out and searching for another grocer for Canada in the middle of the pandemic. You may recall this, Couche-Tard, Quebec giant in in retail sales and convenience, tried to buy for the French grocery chain, and was turned down. And so by France, it was considered food security. It was too important to national security. Supply Management. I love, by the way, how you called it sacred cow, and you didn't even bat a bat an eyelash when you were talking dairy and cows. It was well played. The the US subsidizes agriculture to $1 amount more than we spend on the military. So, you know, how can we? Can we open up our market when other people are protecting or, or, you know, having their own sacred cows? Or can we do it in stages? Do we open up only if they reciprocate? What do you think I
Vass Bednar 23:23
I think it could be interesting to think about, you know, products of supply management may not need as much supply management, if that makes sense, like that. I think cheese is an interesting it's just like, Okay, if it's not the raw material, the direct raw material itself, like, what is the role and should that market be more kind of open and free? I think we've lost sight, like back to kind of history and context and why that kind of system works, right? It's not because government wanted to legislate a cartel for fun, or something like that. But that's how it comes up, right, where people are like, Oh, we, you know, we legislate a cartel, all this stuff. And I sometimes worry about that conversation, because I see it as a distraction from some bigger issues and big tech issues. And I sort of worry that it's a shiny debate that gets a physiological response from us as Canadians, that we revisit. So I'm very open to a better, broader public debate, revisiting what works, what doesn't, what do we want in this marketplace? And also, you know, Denise and I have looked at the US, they've had more price volatility on eggs over time, more, you know, extreme price changes. Their supply right now is more increasingly contaminated by avian flu. Guess what else you need to make vaccines for avian flu. Spoiler alert, eggs and they actually slaughter a lot of cows just to protect just. Protect certain markets so and actually under under Cosma or USMA, or whatever the agreement is that you people used to respect on free trade for North America, there have been two formal challenges on supply management. So when American monopolists are coming for our system, I think we also need to ask, like, Who could this benefit and who could this hurt? And, you know, are there arguments for elements of that? Yes, protectionism to be to be maintained, but I'm actually, it's actually, I'm still learning more about it, you know what I mean.
Hon. Erin O'Toole 25:38
So I had a, really, I was at an event last night talking trade, and the first question was supply, supply management. And I had, I had a role in the European trade negotiations as the Parliamentary Secretary for trade. And my, my joke used to be that the Minister Ed Fast went to Paris to talk cheese and the Carl SEC Erin O'Toole went to Paris, Ontario to get yelled at by dairy farmers because we were allowing in more more foreign cheese. The system was originally set up because eggs and milk especially could be frozen like like meats could and and it was about stopping the bailing out of farms having, sort of, as you said, a floor, you know, of of what farms could earn. But now, you know, they break up milks into proteins. And we saw like pizza kits being imported into Canada. And they were really secret ways to send cheese into Canada. And so the secret pizza kit missions, that is and so I think as long as we are treating farming families fair, and we we see fairness reciprocated with other other parties, I think, I think we can touch the sacred cows. It's just a matter of having these honest discussions and being fair about it. But I want to move on to another area that I think a lot of people should know about, and maybe don't. They probably know that since Chat GPT about two or three years ago, more people are becoming aware of of artificial intelligence and just how AI could really change the way we work, change expectations in the economy, and right now, with the exception of recent Chinese deep sea disruption, the the sort of ownership of big data, data centers, cloud AI, has been a few large players in the United States, and the geopolitical ramifications of that have concerned me for some time now. We see the United States, you know, acting in a way that is not within its democratic and multilateral traditions. I'll say that politely. Talk. Yeah. Thank you. Talk a little bit about us antitrust policy, and you know, particularly what some of the tech leaders call the Wrath of Khan. So Lina Khan, who is disrupting sort of competition law, or antitrust law in the United States, for our listeners probably don't know this degree of competition law issues. Who was Lina Khan because she was kind of a wunderkind. Still is, you know what still is? Yeah, still young, I should say. But you know, came Tell, tell her story a little bit, and why a lot of Silicon Valley people may have become Maga because of some of the reforms that were on the horizon with LIna Khan.
Vass Bednar 28:47
Hmm, wow, I don't, I don't know if she, if she tipped them over to maga, but you're right. People were really paying attention to her leadership. This is a person who, as an as an early 30s racialized woman was named head of the Federal Trade Commission. Kind of became very buzzy with a paper she wrote at Columbia University building from, you know, a seminal paper called the antitrust paradox, calling it the Amazons antitrust paradox, and sort of saying based on the behaviors that this company exhibits, you know, it sort of suggests that there are other ways to look at how firms are harmed, outside of just price right consumers like what the harm is in different marketplaces, because Amazon was doing things like disciplining competitors if they were, if they had their had their product for a cheaper price, hosted on their own website, or using excessive, aggressive price discrimination, to competitors that they wanted to drive out of the marketplace, as they somewhat infamously did with diapers.com. But. Yeah, so, you know, Under her leadership, she really kind of tested and stretched the law. It became a very, kind of energetic, more activist. FTC, they also have a different presence on social media. Back to your earlier question of younger, younger generations. We are very demure and very mindful here in Canada, and we're polite. We don't, you know if we're doing a preliminary investigation, we don't say anything. And you know that way, you don't affect a company's valuation or other prospects or kind of public opinion. But in the US, you know, the day a merger is announced, you will see Lina Khan, through her FTC account, say, Hey, we're going to take a look at this. Like, whoa. Microsoft wants to buy Blizzard, Activision, Blizzard, like, this is huge. Like, yeah, we're going to be investigating this before it goes forward. And I think that kind of, that kind of connection to meeting, maybe meeting people where they are helps people at least see again, back to that role of the state, and kind of kind of what it what it is and what's happening there. There was worry that her focus on mergers would sort of chill innovation and investment. She brought forward a lot of very consumer centric reforms that can seem quite simple, like freeing people from subscription traps. There's actually comparable legislation at the provincial level here in Ontario that's being consulted on right now, and that's just this idea. You know, it should be as easy to unsubscribe from something as it is to subscribe. Now, does that? Does that unleash productivity in the economy? Probably not, but it does help recognize a new kind of business behavior that has become ubiquitous and was sort of harmful and annoying for people. So she was, you know, the Wall Street I think the Wall Street Journal had like an opinion piece a week about how terrible she was. But at the same time, if you tuned into any part of the Democratic National Convention. A lot of what that party was taking credit for and celebrating were those kind of micro interventions for everyday people, things like capping the price of insulin, which has since been uncapped, making hearing aids more accessible, right? So I don't think that stuff was turning Anyone, anyone Maga and because it's not the big tech stuff, sort of stretching the law and sort of looking at it. But just yesterday, I think the FTC did decide to move forward with the reviews to merger guidelines that were recommended under Khan. I think it will be interesting to see what kind of voice and influence she chooses to have in this next stage right, because she's got many seasons ahead of her. Is she going to be a professor at Columbia? She going to be a columnist and a researcher. She going to be not trolling, but, you know, doing more public commentary, talking about the current FTC. Do Do we want that? Do we benefit? Like, is she essentially a new check in terms of this scattered Check, check and balances, but I mean zooming out, fascinating, a young, young regulator, young reformer. We definitely don't see that in Canada, right? Not that we necessarily need to. It's just, you know, she was a, I think, refreshing, unusual and contentious selection, but probably revived antitrust and the conversation more than anyone else might have.
Hon. Erin O'Toole 33:35
Yeah, and you know, if you think about antitrust, breaking up the trust, well, you know, I think she was tackling things that needed to be tackled. And if you, if you compare when I was leaving law school, the Microsoft investigations of software bundling and all these sorts of stuff, the trouble is, by the time the FTC looked at sort of the abuse of dominant position of Microsoft, Google was, was pushing out free versions of Word, and yeah, like the world had changed. And so the law became stale. In this case, the law is way, way behind where, where we're going, in terms of cloud, in in terms of data, and then data being used for training large language models and AI. And right now, we see a few large, large, giant companies leading in all these areas. And data is now a commodity, and are people being protected? Are people conscious? Is there? Is their choice? And so I think my worry with the sort of approach that the tech grows, if you want to call them head on, Lina Khan was they saw her. And. As a as a burden on M and A activity, and M and A activity can generate lots of fees and lots of lots of money for lawyers and a whole range of folks. But is it? Is it socially useful? Is it actually the public good,
particularly when you're talking about
like AI and driverless trucks. Part of the populism we see that Donald Trump has very effectively tapped has been a number of people left behind by globalization, the Rust Belt states, for example, well, suddenly you remove a ton of jobs like trucking and some logistics and things like this, from from technology. What do those people do? How? How you know? How can we make sure that we have a balance for society in terms of how technology is helping and and not hurting? And so I think she was trying to at least wrap her head around using antitrust principles to address the new economy. And what's fascinating is JD Vance, if you followed him, was a supporter a few years ago of Lina Khan for this working class voter perspective, yeah, but I haven't seen that that narrative survive becoming vice president. I think this the policy smart JD Vance saw what she was trying to do, which had that public protection mandate, that competition law had, I worry we lose that. And you know, what are your I worry too. So in the final piece here, VAs geopolitically AI could change the world, Big Data Cloud, large language models that that need data to to become smarter. This could change the way we work. This could change intellectual property change how the economy functions, and right now, most of it has been led by a few major players, all pretty much in the same zip code in the United States, all owned by large, influential tech billionaires, and All very close, it seems to the to the US president, what do you think about that, and where should Canada be? Should we align on that? Should we should we have concerns? Should we work with Europe, with with some of its concerns about data sovereignty and and ensuring there are competitors in the cloud space, in the AI space, because I think this is going to be an area, if we saw from JD Vance's speech in Paris, they want to dominate in this space. That is a charged word in competition circles. What are your thoughts on the AI antitrust and where we're going to go? Post Lina Khan,
Vass Bednar 38:01
it seems like we're returning to a kind of 1999 approach in the US, where explicitly they took on this, this regulatory approach of permissionless innovation, right? It wasn't just a vibe in the air. It was that. Was it hands off? Let's, let's let you know cool things come forward. And now I think 25 years later, we're trying to deal with the fallout from from that approach, right? So I think for Canada, one of the things we've historically done well as a country is we've often had a public competitor in the mix, right? For better or for worse, and I do get excited about the potential for more cloud, more competition in cloud, the approach of data sovereignty, again, you see the intersectionality of these issues with our sovereignty, as you said. But you know, the AI marketplace is already characterized by, you know, what we've seen with big tech writ large. It sort of replicates and entrenches a winner take all, a kind of handful approach. And though we we have seen that, you know, Stanford does this AI index every year. So you see some like fluctuations in terms of the top models. America's Next Top Model, top model, yeah, one, one of the consequent, you know, other than the environmental factors and the barriers to entry and the, you know, the compute power, etc, etc, that we bring up in the big fix is we talk about what generative AI does to markets and how it also pollutes and changes, you know, marketplaces. For instance, when you listen to a fake song, right, a computer generated song on your Spotify playlist, that means that humans didn't get even a paltry payout, right? So it's it allows us to also shift what gets made, what gets consumed. There's lots of kerfuffle with some of the Oscar nominees, whether or not they used AI and sort of their their background. So you know, you're very right in terms of the risks of the application of the technology. It almost feels like we haven't always found the right places to sort of strategically deploy it to achieve, you know what you said earlier, efficiency, productivity. And sometimes we're still maybe messing around and playing around with something that doesn't necessarily, certainly doesn't make your term paper any better. I can tell you that from a professor standpoint, it just doesn't right, because you avoid the work of of actually thinking. But sorry, that was a big question from you, and a rambling answer, but I'll close it, yeah, yeah. Sorry, I could bring it home. I could land the plane by sort of saying our bureau is now back to finally saying who you're investigating, looking at real page and algorithmic pricing, right? And I think that's a great example of how is AI changing marketplaces and potentially colluding, right and inflating prices. And you know the law better than me. So can Canadian competition law hold a software program as criminally liable to sort of be collusive, I'm not sure. I think we're going to find out. I think we're going to have to see if the law needs to be changed to fully consider like what it means. But one, if an algorithm is talking to another algorithm, and two, you know, when software is used to calibrate prices, to extract value in a sort of interesting way.
Hon. Erin O'Toole 41:22
No, I agree. Yeah, looking at algorithmic approaches to setting rents. Is that? Is that fair? Is that any competitive that's being looked at right now? I've said the law has to be used to address the modern economy. I think the US should move quickly on de minimis. I think temu, particularly with China's supply chain, with Uyghur forced labor in it, and terrible environments. All are de
Vass Bednar 41:50
minimis. It's crazy, like 150 or 200 it's, it's lower. I know I've looked at this, so it's, yes, far lower. It's far lower. In the US
Hon. Erin O'Toole 41:58
and we've, we've empowered bad actors in some cases. So I think the law is playing catch up. And it looks like Final thoughts from you on this. It looks like Canada's Competition Bureau has taken a bit of the Lina con page. They've had mixed success to date in terms of prosecutions and investigations, but it looks you may mention Cineplex. I think a lot of people saw that as as success and something understandable to most consumers. Where do you see Canada's Bureau going? And do you see them continuing down the Lena con sort of public public protection, public profile route, despite the fact that Lina Khan is no longer FTC chair.
Vass Bednar 42:44
I think the Competition Bureau is is really locked and loaded, right? So they've helped to modernize the law. They've been an active part of that. They did something so subversive, which is when there was a national open public consultation on the future of competition in Canada, the bureau published like, 50 ideas in French and English on its website. And like, I know it's sort of wonky to say that, but they are the regulator. They don't really have a ton of policy capacity, but for them to go on the record and be like, What's up everyone? Here's all the stuff we think would, you know, make our job better and be better for the economy, I think is really cool, because that ends up being kind of a litmus that says, well, of of this wit, of this wish list, where do we go? Right, like, how did we do? I'm quite hopeful. I I'm, I'm a fan, you know, open fan of Commissioner Boswell. His term comes up in 2026, so we could see, you know, leadership renewal. We could see him maybe going out with with a bang, and kind of really, really running for it. Who knows. But I do think Canada has an opportunity as that antitrust agenda kind of implodes and that whole of government approach implodes in the US, which also has advantages because they truly take a federated approach to competition enforcement, which we don't in Canada. Separate issue, I think we have an opportunity to take up the torch of smart stuff, smart business regulation, looking at business behaviors and really thinking hard about when we make new policy interventions, how that changes marketplaces, and thinking about if that's, if that's, you know, for better or for worse, if I wasn't a bit optimistic, which, like, is not in my true nature, I would not be able to do public policy work. Is the other thing. I mean, like, you wouldn't be either, right? Like you gotta, you gotta believe. You gotta believe 100%
Hon. Erin O'Toole 44:38
that's why I call this blue skies, and you've given me a perfect segue in podcasting world to my my ending. I always try to remain optimistic. Talk about the challenges, talk about potential solutions and some of the things we're facing, but blue sky opportunity and trying to end on a positive note. So I'm going to end with this. You've had the podcast the big fix. Book, you know, op eds and stuff. As I said, you've really established yourself as an important public policy voice. It's okay to say, wonk on this podcast, that's more than welcome. What's next for you? Where do you see? Your research, attention, your your public you sort of profile going next is it? Is it pushing for more of these reforms you ever going to run for public office? I think, I think that would be great, but I would never force that on anyone. What do you see yourself doing in five years to advance these issues that I think are important for Canadians?
Vass Bednar 45:39
I think in my heart, I'm kind of like a competent a consumer protections are more than on the on the competition side, right, like, when I find, like, Oh, these little pain points. Or here's how we could make this work better, in terms of how to do that work, maybe medium form writing, maybe some more kind of magazine length stuff. And yeah, I do, I do think about how to be more constructive in Canada. I think right now, my policy power is from being on the outside and an observer and someone who can push something, but also, you know, I'll show up at parliamentary committee and I'll have done my homework, kind of thing. I appreciate the question, because I actually am thinking a lot about it, kind of all the time is in this moment of like, the country is changing and the country is threatened. So like, what can we each do? What do we each want to do? Yeah, but there's, there's the writing and the thinking, and there's the actual kind of rolling up your sleeves and doing so I'm always trying to figure out how to find those opportunities to really roll up my sleeves and dig in.
Hon. Erin O'Toole 46:45
Oh, you're an important thought leader, and you rolled up your sleeves to talk about some of these issues here on blue skies today. Thank you for doing that. Vass Bedner, the Executive Director of McMasters, Master in Public Policy, an important voice. Check out her podcast, check out the big fix and today, thank you for blue skying these things with me, Vass.
Vass Bednar 47:07
thank you so much for having me. Bye.