ENVIRONMENTAL AGREEMENT CERTIFICATES
As a result of amendments to the Competition Act on June 20 2024 under Bill C-59, a new mechanism was introduced allowing Canada’s Commissioner of Competition to issue environmental agreement certificates.
An environmental clearance certificate, where issued, confirms that the Commissioner is satisfied that a proposed agreement is both: (i) for the purpose of protecting the environment; and (ii) not likely to prevent or lessen competition substantially in a market (Competition Act, section 124.3(1)).
Where an environmental agreement certificate is valid and registered with Canada’s federal Competition Tribunal, the following sections of the Competition Act will not apply: sections 45 (criminal conspiracy agreements), 47 (criminal bid-rigging) and 90.1 (the civil agreements provision) (Competition Act, section 124.5).
An environmental agreement certificate can, therefore, provide an exception to the conspiracy/cartel related provisions of the Competition Act where it is validly issued and registered with the Competition Tribunal, providing comfort to parties to environment-related agreements that they do not face potential criminal competition law liability.
Environmental agreement certificates can be issued by the Commissioner of Competition for up to 10 years, which can be extended for further 10-year periods on the request of the parties to an agreement (Competition Act, section 124.3(6)).
Environmental agreement certificates do not, however, appear to be available for existing agreements. In this respect, section 124.3(1) of the Competition Act provides that the certificates are available for a party or parties “that propose to enter into an agreement or arrangement”).
Also, in its Guide to the June 2024 amendments to the Competition Act, the Competition Bureau states that “[b]usinesses considering collaborating with one another to protect the environment can seek a certificate from the Competition Bureau confirming that the Competition Act’s conspiracy, bid-rigging and civil agreement provisions will not apply to the collaboration.”
For more information about the conspiracy (section 45), bid-rigging (section 47) and civil agreements (section 90.1) provisions of the Competition Act, see: Conspiracy (Cartels) and Bid-Rigging.
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