“The Competition Policy Review Panel’s mandate was to examine and report on the laws and policies that will underpin Canada’s continued economic growth and development.
How can we continue to provide the well paying, challenging and fulfilling jobs that recent generations have enjoyed? What career opportunities will be available for our most talented and ambitious young men and women? Where will we find leadership in all sectors of our society and the determination to “compete to win”? Do we as Canadians have what it takes to be the best?
In the course of our deliberations and in submissions, research reports and consultations, it has been made clear that economic activity is increasingly being organized on a global basis. New and more aggressive competitors are emerging, and new technologies are reshaping entire industries. In this context, standing still is not an option. As a Panel, we have no doubt about the need to adapt and move forward.
How do we meet the challenges and capitalize on the opportunities presented by these changes?
We believe that we must embrace competition as savvy and determined players with a focus on Canada’s interests. We must skate harder, shoot harder and keep our elbows up in the corners, to use a recognizably Canadian metaphor.
We believe that Canadians need to become more active and willing participants in competitive markets here at home and around the world. We must not seek to insulate or protect ourselves from global competition, but to capitalize on it and harness it for our benefit.
Competition matters. It brings dynamism to our economy. It means good jobs for our citizens. It is not merely an economic concept. Being open to competition serves Canada’s national interest. This is the principle that anchors our report and informs our recommendations to the government.”
(Competition Policy Review Panel, Compete to Win: Final Report (2008))
OVERVIEW OF CANADA’S
COMPETITION ACT AMENDMENTS (2009, 2010)
Sweeping amendments to Canada’s Competition Act came into force in 2009 and 2010 that were the most significant changes to Canadian competition/antitrust law in twenty-five years and, in some cases, since competition law was introduced in Canada in 1889 (one year before the Sherman Act in the United States in 1890).
Amendments included changes to all of the cornerstone provisions of the Act including to the criminal conspiracy, bid-rigging, criminal pricing, price maintenance, abuse of dominance, misleading advertising and merger notification provisions. Some of the key changes included:
Conspiracy (Cartels). Introducing a U.S.-style two-track criminal conspiracy regime, with “per se” criminal offences for three types of “hard core” cartel agreements between actual or potential competitors under section 45 (price-fixing, market allocation and output restriction agreements) and a second civil track for other types of non-hard core anti-competitive agreements that may prevent or lessen competition substantially under section 90.1.
Conspiracy Penalties. Significantly increasing the penalties for criminal conspiracy offences with fines of up to Cdn. $25 million (per count) and/or imprisonment for up to 14 years.
Private Actions & Enforcement. Removing the former competitive effects test (the former “undueness” requirement) for criminal conspiracy offences under section 45, making it easier for private plaintiffs to commence civil actions and for the Competition Bureau to prove criminal conspiracy offences.
Bid-rigging. Introducing a new bid-rigging offence, making it a criminal offence to agree to withdraw a bid already made (in addition to the two existing offences: submitting a bid arrived at by agreement or agreeing not to bid).
Misleading Advertising. Significantly increasing the penalties for civil misleading advertising including “administrative monetary penalties” (essentially civil fines) of up to Cdn. $750,000 for individuals and Cdn. $10 million for corporations.
Criminal Pricing Provisions. Repealing the former criminal predatory pricing and price discrimination provisions of the Competition Act. This type of conduct may, however, still be challenged under the abuse of dominance provisions of the Competition Act (sections 78 and 79).
Price Maintenance. Replacing the former per se criminal price maintenance offence with a new civil provision that now includes a market effects test, which requires that an “adverse effect on competition” be shown in addition to the other required elements under the new civil section 76.
Abuse of Dominance. Introducing significant civil fines for the first time for abuse of dominance in Canada under section 79 of the Competition Act of Cdn. $10 million (Cdn. $15 million for subsequent orders).
Mergers. Introducing a new U.S.-style two-stage merger notification and review regime and increased Competition Bureau powers to request additional information from merging parties, including additional filing requirements and higher penalties for non-compliance. The size of transaction threshold was also increased with a new annual indexing formula to adjust the size of transaction threshold annually to reflect changes in Canada’s GDP. For the current thresholds, please see our mergers page.
Post-merger challenges. Reducing the period in which the Bureau may challenge completed mergers from three years to one year.
Domestic airline abuse of dominance provisions. Repealing former specific abuse of dominance provisions relating to domestic airlines.
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