Collusion and Combines in Canada, 1880–1890

Abstract

It is a little-known fact that Canada adopted its own antitrust laws one year before the landmark Sherman Antitrust Act of 1890. The Anti-Combines Act of 1889 was adopted after a decade in which ‘combines’ (the Canadian equivalent of ‘trusts’) grew more numerous. From their numbers, Canadian historians, legal scholars and economists inferred that consume welfare was hindered. However, price and output evidence has never been marshalled to provide even a first step towards assessing the veracity of this claim. This paper undertakes that task. I highlight that the output from industries accused of collusion increased faster than national output in the decade before the passage of the Act and that their prices accordingly fell faster than the national price index. I argue that these findings militate for the position that the origins of Canada’s Anti-Combines Act were rooted in rent-seeking processes similar to those that American scholars have found driving the Sherman Antitrust Act of 1890.

Keywords: canadian economic history, competition policy, anti-combines act

JEL Classification: K21, L40, L51