Creating large powerful "domestic champion" companies is bad for consumers and bad for the economy, the country's activist competition watchdog said in a parting shot to Corporate Canada.

Melanie Aitken, who steps down Friday as head of the Competition Bureau, said she views firms "wrapping a deal in the flag" as a warning sign. "From our perspective, national champion-type arguments aren't relevant," Ms. Aitken said in an interview Thursday, her second-to-last day on the job after three years in charge.

"If you coddle companies at home by allowing them to exploit Canadian consumers in order to be big on the world stage, you have done your own people a disservice … If that's the way that a deal comes in, wrapping itself in the flag, I'm skeptical about the real efficiencies that are pushing the deal."

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The Competition Commissioner was not referring to any specific transaction.

But she acknowledged that the bureau is concerned about growing concentration in Canadian broadcasting and so-called "vertical integration" between content producers and the cable and satellite firms that control delivery.

Just last week, Ms. Aitken warned that the bureau could block BCE Inc.'s takeover of Astral Media. BCE head George Cope has argued to broadcast regulators that its $3.4-billion acquisition of Astral Media Inc. should go ahead, in part because Canada "needs companies with the scale to compete against foreign content companies like Netflix, Apple, Google and Amazon."

The transaction would leave BCE's Bell Media division with control of more than 100 radio stations and almost 90 television channels.

Ms. Aitken, 46, decided to leave her post two years before the end of her five-year mandate and return to Toronto, where she previously worked as a Bay Street prosecutor. At the bureau she helped implement an overhaul of the Competition Act, earning a reputation as a tough watchdog. But her detractors have accused her of politicizing the agency's work, tackling high-profile prosecutions to grab headlines, and career-building.

During her tenure she's gone after the real estate industry, credit card giants Visa and MasterCard, the telcos, Air Canada and most recently, the BCE-Astral deal. The bureau did, however, eventually approve the acquisition of stock-exchange operator TMX Group Inc. by Maple Group, made up of major banks and financial institutions, after initially expressing "serious concerns."

Ms. Aitken said she doesn't apologize if some of her work grabbed a lot of media attention.

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"To the extent that helps to inform Canadians about the work we do, that's a good thing and I don't apologize for that," she said. "Most of what we do flies under the radar screen."

Echoing comments made in a speech Thursday to the Canadian Bar Association in Gatineau, Que., Ms. Aitken also made the case for eventually giving the Competition Bureau the power to prosecute its own cases, as U.S. authorities do.

"Our model has certain challenges inherent in it, and if we are trying to shift the game on the criminal enforcement side, to be more suitably aggressive to the nature of the conduct, we are going to need the maximum agility and ability that we can have," Ms. Aitken said.

The Competition Bureau, with a staff of 400, can investigate and recommend prosecution. But the job of pursuing those cases falls to the Public Prosecution Service of Canada (PPSC), an independent federal agency that prosecutes a wide range of federal crimes, from terrorism to tax evasion.

Ms. Aitken said the PPSC has "other demands and other filters" that guide its operations, and that may hamper its ability to go after the kind of white collar crimes that are the focus of the Competition Bureau.

"The reality is that PPSC has other matters that it has to be concerned with, not just ours," she said. "That's a challenge that needs to be observed in the future."

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Ms. Aitken also decried the gap between the stiff penalties available to prosecutors under the Competition Act – $25-million fines and 14 years of jail time – and the considerably weaker punishment typically meted out by the courts. Only six individuals have ever been jailed in Canada for competition crimes. Without tough prosecution, Canada will get a reputation as a haven for conspirators around the world, she explained.

"There is a gap between what laws provide and what our judges mete out for crimes committed," she said. "We have one thing and we are delivering another."

Ms. Aitken said she hasn't decided what she'll do next. "The time to think of that comes on the weekend when this sinks in and I'm now no longer employed," she said.