On November 20, 2012, the C.D. Howe Institute's Competition
Policy Council—a group comprised of top-ranked academics and
practitioners active in competition policy—published a report calling for the Competition
Bureau to clarify the scope of the Regulated Conduct Doctrine
("RCD") and characterizing it as a "back door route
to cartels". The RCD is a legal doctrine enshrined in section
45(7) of the Competition Act which immunizes
regulated entities from prosecution in circumstances where their
conduct would otherwise be illegal under the Act. It was
described by Grange J.A. in R. v. Independent Order of
"The doctrine simply means that a person obeying a valid
provincial statute may, in certain circumstances, be exempted from
the provisions of a valid federal statute. But there can be no
exemption unless there is a direction or at least an authorization
to perform the prohibited act."
The Council met on November 8, 2012 to discuss the soundness and
policy implications of the RCD, with its roundtable discussions
culminating in the November 20 report. The Council concluded
that the Bureau's published bulletin on the doctrine was vague,
and recommended that the Bureau refine its view of Competition
Act enforcement in regulated sectors.
The Council further voiced concern that, in the merger review
context, firms pursuing pro-competitive mergers may be required to
seek the approval of two regulatory agencies - first the regulator,
and then the Bureau - adding costs and uncertainty to the
entire process. Nevertheless, the Council recommended that the
Bureau opine on the economic effects of mergers within regulated
industries by explicitly identifying the economic costs and
inefficiencies of anti-competitive behaviour that is protected by
provincial and federal legislation.
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