Canada's Competition Regime: What Does the Future Hold?
| Author | Melanie L. Aitken and Brian A. Facey |
| Pages | 481-527 |
A.
INTRODUCTION
Canadian competition laws have been
on the
books since 1889. They
have
been
changed
periodically,
usually (but
not
always) with much
debate
and
discussion. Changes most
often
follow
trends
in the
case
law
and the
government's
successes
and
failures
in the
courts.
Today
we
once again
find
ourselves
in the
midst
of
this debate
which,
together with
the
appointment
of a new
Commissioner
of
Com-
petition, Sheridan Scott,
on
January
12,
2004,
and the
impact
of
global-
ization, provide
an
appropriate opportunity
for us to
pause
to
reflect
on
where
we
have been
and
where
we are
going with this opaque area
of
law.
In
this paper
we
review proposed amendments
to the
Canadian
Competition
Act1
and
consider recent cases.
We
also review
the
often-
heated debates surrounding proposed amendments
to a
law, once "the
backwater," that have gone "mainstream."
In our
view,
these
debates
are
healthy, robust,
and
welcome. They reveal, however, that even
after
more
than
117
years
of
competition regulation
in
this
country,
the law
continues
to
defy
precise
meaning,
a
clear path,
or
even predictable
Melanie
L.
Aitken
is a
partner
at
Bennett Jones LLP.
Brian
A.
Facey
is a
partner
at
Blake
Cassels
&
Graydon LLP.
The
authors thank Evangelia
L.
Kriaris
of
Bennett
Jones
LLP for her
assistance.
R.S.C.
1985,
c.
C-34.
481
1
Canada's
Competition
Regime:
What
Does
the
Future Hold?
Melanie
L.
Aitken
and
Brian
A.
Facey
482
MELANIE
L.
AITKEN
AND
BRIAN
A.
FACEY
boundaries;
instead,
we
observe
a
continued search
for the
law's
proper
place among
Canada's
economic policies.
B.
PROPOSED
AMENDMENTS
TO THE
COMPETITION ACT
In
1999,
the
House
of
Commons Standing Committee
on
Industry, Sci-
ence
and
Technology commenced
a
review
of
Canada's competition
laws.
The
purpose
of
this review
was to
ensure that Canada's
Competi-
tion
Act was
keeping
up
with "the
forces
of
globalization, deregulation
and
rapid technological
change"
to
maintain
a
"competitive business
climate
conducive
to
innovation."2
The
Standing Committee's review
resulted
in the
release
of a
report
on
April
23,
2002,
entitled
A
Plan
to
Modernize Canada's Competition
Regime.3
The
Government
of
Canada responded
by
releasing
on
June
20,
2003
a
discussion paper entitled
Options
for
Amending
the
Competition
Act: Fostering
a
Competitive Marketplace.
The
Discussion Paper outlined
four
proposed amendments
to the
Competition
Act and
requested com-
ments
from
the
public.
All
comments were directed
to the
Public Policy
Forum, which released
a
summary thereof
in the
fall
2003.4
The
Discussion
Paper's
proposed amendments
can be
characterized
as
follows:
1)
amendments
to
strengthen
the
civil
provisions
of the
Competition
Act
through
the use of
administrative monetary
penalties,
restitution,
and a
civil
cause
of
action;
2)
reform
of the
conspiracy provisions;
3)
reform
of the
pricing
provisions;
and
4)
amendments
to
allow
for
inquiries into
the
state
of
competition.
The
effects
of
these proposed amendments
are far
ranging.
We
have
set out
below
an
overview
of the
proposed amendments, each
of
which
has
prompted considerable debate
in the
business
and
legal communi-
2
Canada,
Government Response
to the
Report
of
the
House
of
Commons Standing
Committee
on
Industry, Science
and
Technology
"A
Plan
to
Modernize
Canada's
Competition
Regime"
(October
1,
2002)
at
1.
3
Canada,
Report
of the
Standing Committee
on
Industry,
Science
and
Technolo-
gy, A
Plan
to
Modernize
Canada's
Competition Regime
(April
23,
2002).
4
National Consultation
on the
Competition
Act:
Summary
Report
on the
Submis-
sions
by
Intervenors,
online:
(accessed
February
2004)
at 15.
Canada's
Competition Regime
483
ties.
In
particular,
we
will
focus
on (1) the
potential
difficulties
associat-
ed
with
the
revised civil provisions;
(2)
reform
of the
criminal conspira-
cy
provision;
and (3)
proposed inquiries into
the
state
of
competition.
1)
Strengthening
the
Civil
Provisions
In
regulating anti-competitive conduct,
the
Competition
Act is
divided
into
two
principal parts: criminal
offences
and
civil reviewable prac-
tices.
The
criminal
offences
prohibit egregious anti-competitive con-
duct, such
as
conspiracies, bid-rigging,
and
false
or
misleading
representations,
to
name
a
few.
In
contrast,
the
civil
reviewable practices
provisions seek
to
prevent conduct that
may not be
anti-competitive
on
its
face,
but
could become
so
depending
on the
circumstances
of a
par-
ticular
case. Civil reviewable practices include such things
as
exclusive
dealing, abuse
of
dominant position,
and
mergers.
In
contrast
to
offences
that address conduct explicitly prohibited
under
the
Competition
Act, conduct
under
the
civil
provisions
may be
pro-competitive and, until
the
Competition Tribunal
finds
otherwise,
not
unlawful.
It is
because
of
this potential
for
pro-competitive
effects
that such conduct
is
dealt with
differently,
and it is
traditionally
not
con-
sidered appropriate
to
expose persons
to
civil
liability
in
connection
therewith.
The
Discussion Paper suggests
a
change
to
this traditional approach
through
the
enactment
of the
following three proposals
to
strengthen
the
civil
provisions
of the
Competition
Act:
a)
administrative monetary penalties
for
civil
reviewable matters;
b)
restitution
to
consumers
in
certain cases
of
deceptive marketing
practices;
and
c)
a
civil
cause
of
action.
These proposals were suggested
as
mechanisms that would encourage
voluntary compliance
and
provide
a
flexible
range
of
remedies
to
address
non-compliance.5
Although
the
Canadian Competition Bureau
provides
businesses
with guidance
on
complying with
the
Competition
Act
(i.e., through
the
publication
of
enforcement
guidelines
and
inter-
pretation bulletins),
the
Discussion Paper concluded that voluntary
compliance could only
be
fully
attained when
the
Competition
Act
included "appropriate incentives
to
encourage
businesses
to
refrain
5
Government
of
Canada,
Discussion
Paper,
Options
for
Amending
the
Competition
Act:
Fostering
a
Competitive
Marketplace
(Ottawa: June 2003)
at 5.
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