On November 20, 2012, amendments to the Criminal Code of
Canada under the Safe Streets and Communities Act (the SCCA)
came into force, restricting the availability of conditional
sentences for individuals convicted of certain offences, including
conspiracy to fix prices and bid-rigging under the Competition Act.
Conditional sentences are non-custodial punishments, such as house
arrest, that may only be assessed where the judge determines the
offender is not a danger to the community. While these amendments
were not specifically directed at Competition Act offences, the
result of the legislative changes is to eliminate the discretion to
allow for serving custodial sentences for serious Competition Act
offences in the community.
The SCCA, introduced in 2011, included a slate of amendments to
the Criminal Code and other legislation which the Department of
Justice stated were intended to "combat crime and
terrorism". Among other things, the SCCA provides that
conditional sentences are unavailable for all offences for which
the law prescribes a maximum term of imprisonment of 14 years or
more – this includes cartel agreements among competitors,
bid-rigging and willful or deceitful misleading advertising under
the Competition Act.
The sentencing changes now in effect under the SCCA follow upon
sweeping amendments to the Competition Act in March 2009, which,
among other changes, created a per se cartel offence (in effect
since March 2010, which prohibits agreements among competitors to
fix prices, allocate markets or limit production, whether or not
such an agreement had an impact on competition in a relevant
market) and increased the maximum punishment for offences such as
price-fixing, bid-rigging and willful or deceitful false
advertising from five to 14 years.
The new sentencing regime should also be considered in light of
the dissatisfaction recently expressed by the Federal Court with
joint sentencing recommendations for fines as part of agreements to
plead guilty with respect to criminal offences under the
Competition Act. In R. v Maxzone Auto Parts (Canada) Corp., a case
involving a charge of criminal conspiracy under section 46 of the
Competition Act (implementation of a foreign directed cartel),
Chief Justice Crampton of the Federal Court observed that "...
achieving effective general and specific deterrence requires that
individuals face a very real prospect of serving time in prison if
they are convicted for having engaged in such conduct".
Finding that past practice gave rise to "understandable
expectations" regarding sentencing, the Chief Justice
"reluctantly" imposed the jointly recommended sentence of
a substantial fine in that case.
A move toward custodial sentences for criminal convictions under
the Competition Act may have far-reaching implications for the
Competition Bureau's enforcement regime, including
participation in its Leniency Program, whereby an accused agrees to
cooperate with an investigation in exchange for a prosecutorial
recommendation of more lenient treatment. The removal of
conditional sentences (and judicial discontent over fines instead
of prison terms) may well discourage participation in the program,
as accused persons weigh the risks of what "leniency" may
entail. Indeed, if jail time is seen as the likely result of
criminal conviction for competition offences, there may well be
less cooperation, fewer guilty pleas and more contested trials on
the horizon in Canada.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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