Canada has some of the most expensive elevators in the world — and as a result, we have far fewer of them per capita than most countries in the world.
It’s a symptom of a much larger problem involving regulation, competition, housing affordability and Canada’s relationship with the United States.
The two countries have effectively isolated themselves from the global elevator market by maintaining their own unique technical standards. While most of the world follows European regulations, North America requires different testing, sizing and certification rules that make it harder for international competitors to enter the market.
The result is a highly concentrated industry dominated by four big multinational firms, where elevators cost far more to install, maintain and modernize than they do in Europe or Asia. As Canada becomes more urbanized and relies increasingly on condos and apartment buildings, these added construction costs are rippling through the housing market.
Worse still, two members of the Big Four – Finland’s Kone and Germany’s TK Elevator – are now set to merge in a $34 billion (U.S.) deal that will create the largest manufacturer in the world and tighten the oligopoly even further.
Stephen Smith is the executive director of the Center for Building North America, a research group that studies elevator markets around the world. He joins Do Not Pass Go to discuss how Canada needs to detach itself from U.S. standards and move closer to Europe in order to address the housing crisis and open its market to players outside of the oligopoly.
Smith’s Globe and Mail piece, referenced in this episode, is here, while his recent report on the global elevator market is here.
