Competition Compliance in Canada

• Pages: 173-186

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CHAPTER 16

COMPETITION COMPLIANCE IN CANADA

Businesses and their advisors should beware; Canada’s competition laws and enforcement

policies have recently been overhauled, including a toughening of the criminal provisions

respecting cartel conduct. A failure to appreciate and account for these significant changes could

lead to dire financial or personal outcomes, or undue restrictions on a company’s sales and

marketing practices.

On March 12, 2009, the Canadian government passed major amendments (the

“Amendments”) to Canada’s principal source of competition law, the Competition Act.1 The

amendments are far reaching and represent the most significant changes to the act since it was

introduced in 1986.2 For example, the act’s per se criminal price discrimination and price

maintenance provisions have been repealed, which should offer many businesses significant

added flexibility when pricing and distributing their products in Canada.

While Parliament has decriminalized some conduct, it has toughened the act’s criminal

provisions in other areas. The most profound amendment in this regard is the creation of the per

se offence of horizontal price-fixing. In the past, such agreements would only give rise to

criminal liability if they “unduly” prevented or lessened competition. As a result of these major

changes to the act, businesses will have to adopt fundamental changes in how they operate and

compete in Canada. And change they must, for the Amendments also include more severe

financial penalties and jail terms for those convicted of criminal offences.

In light of the Amendments, and the increased enforcement by Canadian competition

authorities, the importance of a credible and effective Canadian corporate compliance program

1. R.S.C. 1985, c. C-34 (the “Act”). The amendments were introduced through Bill C-10, the Budget

Implementation Act, 2009, which received Royal Assent on March 12, 2009. The amendments

reflect the Canadian government’s commitment to modernizing its competition and investment

regimes following the Competition Policy Review Panel’s 2008 recommendations (see

http://www.ic.gc.ca/eic/site/cprp-gepmc.nsf/eng/h_00040.html).

2. The most notable amendments to the Competition Act include: (1) repealing the per se criminal

price discrimination and promotional allowances provisions; (2) repealing the per se criminal price

maintenance provisions and replacing them with new civil provisions; (3) repealing the criminal

predatory pricing provisions; (4) introducing administrative monetary penalties (“AMPs”) for cases

of abuse of dominance of up to $10 million for a first offence and $15 million for subsequent

offences; (5) increasing penalties for deceptive marketing practices, including misleading

advertising; (6) introducing a two-track regime for addressing agreements between competitors

which will include a per se criminal conspiracy offence with respect to agreements between

competitors and potential competitors to fix prices, allocate markets or control supply; and a new

civil reviewable regime to deal with other types of anticompetitive agreements between competitors

and potential competitors; and (7) introducing a new merger review process for notifiable

transactions, which will include a 30-day initial waiting period and a “second request” process to

gather information and to delay closing.