The federal Competition Bureau has added dentistry to its roster of professions in its continuing review of how the policies and practices of the professions' self-regulatory associations may be lessening competition across the country.
Both health and self-regulating professions are priority areas for the bureau, an independent law-enforcement agency that uses criminal and civil prosecution to combat anti-competitive behaviour.
It has chosen to study dentists given the industry's importance to Canadians, both in terms of economic size and personal well-being, the agency said in a recent news release.
In 2006, Canadians spent $9.94 billion on dental services, about 95 per cent of which were private-sector expenditures. The study will look at the methods and practices used by dentistry's self-regulating colleges and associations in provinces across Canada.
|Business Edge photo illustration|
|Dentists say 'whatever we do will stand up to scrutiny' when the Competition Bureau does its review.|
"We welcome this inquiry," says Irwin Fefergrad of Toronto, registrar of the self-regulating Royal College of Dental Surgeons of Ontario. "We're open. We're transparent."
Fefergrad says that while dental organizations in some provinces have the dual role of regulator and industry association, his college's sole role is regulation. "We're not turf protectors," he adds.
And, with 11 government-appointed public representatives on the 25-seat council, "I think whatever we do will stand up to scrutiny," he says.
The Competition Bureau announcement came in the wake of the December 2007 release of its report, Self-Regulated Professions: Balancing Competition and Regulation, which looks at accountants, lawyers, optometrists, pharmacists and real estate agents.
The report, the first of its kind by the Ottawa-based bureau, notes policies and practices common among the self-regulatory professional associations that can have a detrimental impact on competition.
For instance, member professionals are subject to rules that govern their advertising, such as restrictions on comparative advertising. Suggested prices and rules regarding fee structures remain common. Professional associations continue to assert authority over who can offer professional services, which can lead to consumers paying higher prices.
And uneven licensing requirements impede inter-provincial mobility.
Earlier in 2007, the Competition Bureau applauded the Ontario government's decision that year to amend its Dental Hygiene Act to permit dental hygienists to work independently of dentists in tooth-scaling and root-planing treatments.
"We say some regulations are harming the public interest by limiting consumer choice, curtailing price competition and hurting the Canadian economy," Sheridan Scott, the bureau's commissioner of competition, said in a speech at the Economic Club of Toronto in December 2007 when the report was released.
"We call on the professions across Canada to re-examine their regulations in the light of our study and the simple question that, at its heart, it poses: 'Is there a true public interest behind every competition-limiting rule you have?' " The study of self-regulated professions is a key priority. The bureau is carrying out its review of professions in its role as advocate for a more competitive marketplace, and it is likely that the variety of professions to go under this agency's magnifying glass will continue to increase.
The study's findings are a warning shot, and the bureau has said that it will conduct a follow-up review of the targeted professions in two years to see if any of its recommendations were adopted. If they aren't, the professional associations may find themselves confronted with the brass knuckles from the bureau's enforcement arm.
How would professional practices fare in their day-to-day operations if the Competition Bureau's vision of a competitive-marketplace Utopia were to come into being?
Mark Katz of Toronto, a competition lawyer with Davies Ward Phillips & Vineberg LLP, says professions that use suggested-fee guides could find it challenging to adapt to a world without any.
"It would be harder for individual professionals to benchmark what they are doing in the marketplace compared with what others are doing," Katz says. "It would presumably make it a lot more difficult to practise.
"The Competition Bureau is advocating a certain position tied to their idea of a perfect world," he adds. "From their perspective, doing away with suggested-fee guides could further that vision. But it's a different story if you have to practise and run a business in the real world."
In a background paper released with its self-regulated professions report, the Competition Bureau acknowledges the prominence of Canada's professions in the country's service sector, which accounts for as much as 70 per cent of the overall economy.
A report by the Paris-based Organization for Economic Co-operation and Development (OECD) found that Canada is saddled with one of the heaviest regulatory regimes for the professions, the bureau notes.
Also, a Conference Board of Canada study found that professional services are in the bottom 20 per cent for relative labour productivity and that labour productivity in the professions in Canada is about half that of the professions in the United States.
"Given the significance of the professions in Canada, it is worrisome that recent evidence shows that they comprise one of the economy's least productive sectors," the bureau backgrounder says.
The bureau says competition concerns arise when regulation exceeds legitimate public-policy goals and limits competition. Examples in the self-regulated professions report include:
* Advertising rules often go beyond what is needed to protect consumers. For instance, lawyers are restricted from using comparative advertising on verifiable factors such as price and they are restricted on the size, style and content of their ads.
* In real estate, Ontario legislation limits price competition. The bureau report recommends that Ontario's real estate regulators remove the restriction that says consumers must pay a flat fee or a percentage of the selling price.
* The bureau report says regulators should consider allowing some professionals to offer more services than they currently do. For example, some accountants in some areas of Canada are not allowed to perform independent audits, despite an increasing shortage of affordable auditors for small to medium-sized businesses and not-for-profits.
Commissioner Scott said in her December 2007 speech that too many regulatory rules go beyond legitimate consumer protection.
"Our study found that rules that limit advertising, set prices for services and restrict who can offer some professional services may go beyond legitimate consumer protection. These rules can lead to higher prices, limit choice and restrict access to the type of information consumers need to make decisions."
(Brock Ketcham is an Edmonton-based writer who specializes in consumer and public policy issues. He can be reached at firstname.lastname@example.org)