Those are great questions.
There are no level playing fields in the global marketplace. I wish I could say the free market involves fair play, but there aren't any level playing fields. Certainly our competitors offer their forest industries much greater percentage investment in research. If you look at the Scandinavian countries, they spend much more in research and technology to support their forest industries than we do, and that's something simple we can do.
Our competitors are also a lot less diffident, a lot less modest in branding their products in the international marketplace. We go as Canadians and in a way damn ourselves with faint praise, whereas they're quite aggressive for their own products. That's another partnership with government that would really help.
Could we do more to level the playing field? The answer is yes, we could do a lot more. Are there limits? Yes, there are limits, and you'll find the successful countries haven't been targeting individual companies; instead, they've been targeting sectors. The brilliance of the Finland model is in creating a partnership for sectors to succeed through business conditions--not by subsidizing, but by creating the winning conditions.
“Timid” is probably not the word I would use for the Competition Bureau. I'd say they've been anything but timid. Our perception is they suffer from two problems. One is their legal mandate, which is to ask whether narrowing competition would lead to increased prices. Maintaining low prices in Canada is a public good, but it's only one public good. If you're going to shut five towns by doing that, you should balance off the two public goods.
Unlike a cabinet system, this is a regulatory system with only one public good as its reference point; in that way, they don't take into account the economic impact of their decisions. We could live with that, except that within that mandate they're most often based upon an outdated economic model. They assume that if we consolidate, prices will go up. Well, we export most of what we make. We take the global price, and whether we're fragmented or consolidated, the global price is whatever Brazil or China pushes it down to. Our customers, both in Canada and all over North America, are more consolidated than we are, so if two companies come together and find efficiencies, do you think our customers give us a break? If we find three cents a tonne efficiency, they'll take three and a half cents out of our hides, because they are more consolidated and have more market power than we do. It's just an empirical fallacy that when you consolidate, prices go up, because the marketplace continually squeezes you down. We disagree with their economics, and empirical studies support the simple fact that consolidation actually leads to synergies and price reductions.
Would it lead to more outside ownership? On the contrary, it would not. If you're a company headquartered in Canada and you want to acquire Canadian assets, the Competition Bureau is standing right in your way, because they don't want to see consolidation in Canada; as a result, you have to invest your money in the U.S. or Europe to find new acquisitions, because if you invest in Canada, they say it's too much consolidation. Getting a large Canadian champion has been a fight against the Competition Bureau, which tells you not to become big in Canada; become big by investing outside Canada.
I don't think that's what we want; I think we want investment in Canada.