Consumers and economy would benefit from reduction in regulation in professions, a Competition Bureau study finds
Ottawa, December 11, 2007 -- Canada's self-regulated professions should re-examine their rules to ensure they serve a public good and do not go too far in restricting competition, a Competition Bureau study says.
The Bureau's study, released today, found that rules that limit advertising, set prices for services and restrict who can offer professional services may go further than necessary to protect the public interest. Further, these rules can lead to higher prices, limit choice and restrict access to the type of information consumers need to make decisions.
"We understand that regulation plays a legitimate role in protecting consumers and meeting public policy goals," said Sheridan Scott, Commissioner of Competition. "However, not all the regulations we looked at appear necessary, and removing some of these restrictions could benefit consumers and the Canadian economy."
Recent studies have shown that Canada's professions are more regulated than their counterparts in other countries, possibly affecting their productivity and Canada's economic growth.
The Bureau's report focuses on five professions: accountants, lawyers, optometrists, pharmacists and real estate agents. While the examples contained within the study are based on these five professions, the principles and findings can be applied to any self-regulated profession.
Using information obtained from regulators and professional organizations as well as public documents, the Bureau uncovered numerous instances of rules that regulators should consider revising or removing to promote greater competition to serve consumers better and enhance productivity. Here are some examples:
* advertising regulations, and particularly those that restrict comparative advertising, which can help consumers make more informed decisions;
* suggested prices and rules regarding fee structures that can inhibit price competition and lead to higher prices, particularly when combined with a prohibition against advertising;
* limits on who can offer certain professional services, which lead to consumers paying higher prices or paying for more service than they really need; and
* uneven licensing requirements across the country that limit the number of professionals and restrict their ability to move where there is demand for their services.
For more information on the study, please refer to the backgrounder.
The Competition Bureau is an independent law enforcement agency. We contribute to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.
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