This study presents the foundations and objectives of business regulation in Canada. An overview of the main theoretical findings in regulatory economics over the past 10 years and a price-cap analysis of regulation introduced in England in 1984 provide key lessons and recommendations for improving the effectiveness of regulatory mechanisms in Canada: promote deregulation, promote price-cap regulation in full disclosure contexts, promote price-cap regulation with marked competition in incomplete disclosure contexts where the existence of information annuities can be tolerated, promote incentive regulation with marked competition in incomplete disclosure contexts where the existence of information annuities is difficult to accept, and finally establish an appropriate body, independent of governments and regulated companies, to review regulation and to inform and educate the public about these changes.