Big business and competition in Atlantic Canada

The Irvings and Sobeys have built some of Atlantic Canada's largest businesses. I'd like to see more owners willing to invest for decades and more companies capable of taking on major projects. I also want new businesses to have room to grow and challenge them.

Those goals can reinforce each other. A large company can be a startup's first customer, train its future founders, or finance an investment that smaller firms could never attempt. It can also make life difficult for competitors and suppliers who have few alternatives.

What would help us keep the investment while building a more innovative, competitive economy?

The large businesses we have

Several families and business groups have built substantial operations in the region:

Sources: company descriptions from JDI, Irving Oil, Ocean Capital, Empire, Oxford, Eastlink, McCain and Cooke. These are separate businesses and ownership structures, including the distinct Irving groups.

Family control can give a business more time

A family planning to own a business for decades can accept years of spending before an investment pays off. Managers whose jobs depend on the share price or the next earnings report may find that harder. That patience can give the business an advantage. When it leads to a new plant, better equipment or years of worker training, the region benefits too.

There is evidence behind the concern about quarterly pressure. Research comparing similar publicly listed and privately held US firms found that listed companies invested less and responded less strongly to investment opportunities. The difference was larger in industries where share prices were particularly sensitive to current earnings. The authors interpreted the pattern as consistent with managers putting too much weight on near-term results.

Family control and private ownership aren't identical, though. Empire is publicly traded and controlled through the Sobey family's voting shares. A controlling shareholder can give management some protection from market pressure even in a listed company.

Nor does a long ownership horizon guarantee investment. Another study of large US firms found that family-controlled businesses spent less on long-term investment, particularly research and development. Owners with much of their wealth in one business may be reluctant to take risks.

Large investments can help other companies grow

Delivering the naval shipbuilding contracts Irving won requires years of investment and coordination. Work on that scale also creates opportunities for firms that could never build an entire ship themselves.

Newfoundland's Genoa Design provides the detailed designs and digital models used to build ships. Its partnership with Seaspan has spanned several major shipbuilding programs. Their 2025 polar-icebreaker contract continued design work into construction. Genoa also has experience on American naval and coast guard projects, so its expertise serves customers on both sides of the border.

Large firms can also train future founders. Employees learn how an industry works, then see an opportunity to build something of their own.

Tania Babina and Sabrina Howell studied what happened when US tax incentives changed the cost of corporate research. For the 1990–2005 period they examined, the main federal credit generally covered 20% of eligible research spending above a calculated base. Its value changed with firms' research histories, and the credit briefly lapsed in 1995–96. States also introduced or changed their own credits.

These credits reduced companies' tax bills when they spent on qualifying research, making that research cheaper. The researchers used differences in those incentives to isolate the effect of extra R&D spending. Firms that did more research as a result produced more employee-founded startups, especially in high-tech industries. Those startups were also more likely to attract venture capital.

Atlantic Canada already uses research credits. Nova Scotia, New Brunswick, and Newfoundland and Labrador each offer a 15% refundable R&D credit on eligible spending. Refundable means a qualifying company can receive money even when it owes no income tax, which makes the credit useful to businesses still working toward a profit. PEI has no provincial R&D credit; federal incentives are available across the region.

The US evidence strengthens the case for keeping these broad research incentives. Their benefits can extend beyond the company claiming them to people who later start businesses. I would focus on clear eligibility and predictable refunds, so smaller companies can plan around the support too. Before raising the rate, provinces should assess how much additional research the credits produce and whether that work helps new firms emerge.

For Atlantic employers, that suggests a useful role beyond buying from suppliers: license technology they do not plan to develop, invest in promising former employees, or become an early customer. Founders can use the industry's knowledge without having to build a business whose only purpose is serving their former employer.

Experienced owners and operators can also contribute money, introductions and practical advice. I would like more of our region's business success to finance the next generation of independent companies.

When a large customer becomes a constraint

A smaller business can grow alongside a large customer for years. The risk is that it becomes so dependent on that customer that it cannot negotiate a decent return or afford to develop products of its own.

South Korea has built globally competitive companies around large family-controlled groups, known as chaebol.

The OECD's 2024 economic survey describes large firms under pressure to keep improving because they compete internationally. They provide well-paid jobs. At the same time, smaller domestic firms often perform much worse: the survey puts small and medium manufacturers' productivity at roughly one-third of large firms'. Productivity here means the value produced per worker.

An earlier OECD examination of subcontracting found that suppliers could grow alongside their large customers without a corresponding improvement in profit margins. Weak bargaining power could leave them with less incentive and money to improve their own businesses. It also warned that some public support for suppliers could end up benefiting the large companies buying from them.

A supplier that lowers its production costs needs to keep enough of the savings to justify the investment. Having several potential customers helps: it can seek more orders and negotiate prices. A supplier dependent on one buyer may instead face demands to pass on all the savings. Improving production becomes less attractive if the customer takes the entire benefit.

Writing stronger rules may help, but dependence makes enforcement difficult. The OECD's 2018 work on Korea's business groups described suppliers reluctant to risk their customer relationships by pursuing remedies. It recommended improving their bargaining position through access to more buyers.

In Atlantic Canada, forestry shows how geography can create similar dependence. A woodlot owner needs a mill that buys the right species and grade and is close enough to leave a return after trucking costs. Several mills across the province may amount to only one workable buyer. An owner who cannot afford to switch has little room to negotiate a better price.

New Brunswick's 2012 private-woodlot task force was unusually direct about the structure it found. It described the Crown as a dominant seller and J.D. Irving as a dominant buyer, alongside many small woodlot owners selling to relatively few mills.

Crown wood represented about 56% of that market in 2010. Government used private sales to help set Crown prices, even though those sales were themselves influenced by Crown prices. The formula was not public. Owners near Maine and Quebec had more buyers; northeastern owners faced long hauls. The task force recommended better price information and access to new markets.

Government was also a participant in this market. The Auditor General's 2015 audit found that the department earned royalties from Crown timber while being responsible for encouraging private wood supply. More private sales could reduce its own revenue.

For a supplier, the freedom to turn down a poor offer depends on having somewhere else to sell. Better public information about buyers and prices can help firms find those options. Affordable transport and access to facilities determine whether they can use them.

Make room for competitors

The Competition Bureau's study of Canada from 2000 to 2020 found that leading firms became harder to challenge as profits and markups rose. A new business needs more than a willing founder: it needs access to premises, supplies and customers.

A small market may support only a few efficient operators. We should preserve the scale that makes production affordable while removing restrictions that keep a viable challenger out.

A new grocery store needs a suitable building, access to stock and enough customers. The Competition Bureau's grocery study found that established grocers could use property restrictions to keep competitors out of otherwise suitable sites.

A grocer could sell a property with a condition that prevented a future owner from opening another grocery store there. That restriction, called a covenant, stays attached to the land. A grocer renting space could also require its landlord to keep competing stores out of the same shopping centre through an exclusive lease clause.

Sobeys' parent, Empire, has committed to stop enforcing its restrictive covenants, including on properties it previously sold, and to stop registering new ones. It has also loosened some lease restrictions, although those commitments do not cover every exclusive lease. In September 2026, the Bureau reported progress by Sobeys and other grocers. The next result to look for is new stores using those sites.

New Zealand's grocery inquiry also identified difficulty obtaining wholesale supplies on competitive terms. Freeing up a building achieves little if the new store cannot buy stock at prices that let it compete.

Internet service has a different barrier: reaching homes through an expensive physical network. A new provider may be able to offer better service without being able to finance a second set of lines down every street.

The CRTC's 2024 fibre-access decision required large telephone companies to sell competitors access to their fibre networks. It also gave newly built fibre a temporary exemption to preserve an incentive to invest. The framework includes Bell Aliant, making it directly relevant here.

There are early results. By April 2026, the CRTC reported that dozens of providers were using fibre access to attract tens of thousands of new customers. Some were established telephone companies expanding into each other's territories. Customers had more options without waiting for a second network to be built.

The evidence on prices is less conclusive. The CRTC's 2026 market report shows that Canada's Internet price index rose slightly in 2025. I couldn't find an estimate showing how much the fibre decision itself changed Nova Scotia prices. So far, the clearest result is more providers winning customers; lower local prices still need to be demonstrated.

Where a network is expensive to duplicate, firms can pay to use it and compete for customers. The owner earns revenue from that access as well as its own services. Access that is too expensive leaves competitors unable to operate; pricing it too cheaply can discourage the next network investment.

Give businesses more customers and fewer obstacles

Some barriers come from public rules that make it expensive to reach another market or start a business in the first place. Removing them would help suppliers find buyers and make it easier for newcomers to compete.

The OECD's 2025 survey of Canada recommends reducing interprovincial trade barriers. Different trucking rules raise delivery costs, while repeated licensing and certification requirements make it harder to work across provincial borders. The report calls for more recognition of other provinces' standards and qualifications.

Some of that work is underway. Nova Scotia changed its commercial-vehicle rules in June 2025 to accept more vehicles registered elsewhere in Canada, subject to conditions such as route weight limits. Governments also agreed to mutual recognition for many goods, allowing a product approved in one province to be sold in another without duplicate requirements. The agreement has exceptions; food and alcohol were excluded.

I would keep pushing that work, including the remaining exclusions, and check whether businesses can actually use the new rules. A company should be able to find out what it needs to sell in another province without hiring someone to interpret several overlapping systems.

Distance still limits who can buy a load of timber. For a manufacturer, engineering firm or software company, easier access to customers elsewhere can make the local market much less limiting. We should make it as easy as possible for Atlantic firms to reach them.

A large incumbent can spread the cost of permits, lawyers and paperwork across a substantial business. A founder has to cover those costs before knowing whether enough customers will buy the product. Unnecessary requirements can protect the established company from a new competitor.

There is evidence that simplifying entry helps. In Mexico, a reform combined business-registration procedures into a simpler process. Research by Miriam Bruhn found about a 5% increase in registered businesses in eligible industries. She and David McKenzie also studied a similar reform in Brazil that failed to increase registrations. Easier registration can help when it removes a real obstacle; it cannot create demand for a business.

Nova Scotia should review the steps owners face when opening or expanding. Duplicate applications, unclear timelines and repeated certification are places to start. Ask which requirements protect a specific public interest and which could be removed or satisfied once. Publish the requirements and expected decision times together, so an owner can plan the investment.

Health, safety and environmental standards should specify what a business must achieve. Where different methods can meet the same standard, firms should have room to choose. Predictable rules leave owners more time and money to spend on customers, equipment and staff.

Three priorities for Atlantic Canada

First, provincial governments should finish making it easier to trade and work across borders, including recognition of qualifications and simpler transport requirements. For businesses facing hiring and delivery costs, a larger accessible market is more useful than another small local support program. Progress should mean fewer repeat approvals and less time spent getting permission to operate.

Second, large buyers should create more opportunities for independent companies to win work. Publish upcoming needs and qualification requirements, offer paid trials where a new product needs testing, and use contracts that let suppliers sell their own technology elsewhere. Genoa's work across shipyards shows the kind of business we want more firms to be able to build. Owners and experienced employees can also help finance new ventures beyond their existing supply chains.

Third, governments and regulators should remove restrictions that prevent new firms from competing: sites kept unavailable to competitors, essential services offered on unfair terms, and public deals that exclude other capable firms. Governments should publish the terms of major land, infrastructure and financial deals, with reasons for choosing the recipient. Other qualified firms should be able to see how they could compete for similar work. Where a restriction blocks competition, removing it matters more than funding a challenger that must still operate under it.

Large investments remain worth pursuing. As with Nova Scotia's data-centre opportunity, public support should come with explicit commitments and reported results. I want our large companies to keep investing here, and our next generation of founders to have a fair chance to build alongside them. We should make it easier for firms to win customers and finance their growth without needing a special arrangement with government.