Canada: Blowing The Whistle On Cartels In Canada

Last Updated: September 23 2013
Article by Mark C. Katz and Erika Douglas

Cartel enforcement in Canada is heavily dependent on the use of informants. This is explained by two principal factors: first, cartel conduct is, by its very nature, secretive and carried out in the shadows of business life. Second, Canada's Competition Bureau, which is responsible for investigating cartels, is subject to budget constraints that limit its ability to expose and detect cartel conduct on its own.

In recognition of these realities, the Competition Bureau employs several tools to encourage informants to come forward with incriminating evidence. The best known of these tools is the Bureau's Immunity/Leniency program, where the Bureau will recommend favourable prosecution and sentencing treatment for parties who come forward with evidence of cartel conduct in which they are involved. This favourable treatment will vary depending upon the timeliness of the information and cooperation provided. For example, parties who are "first in" to report a cartel may be eligible to receive full immunity from prosecution. Subsequent parties who disclose, while subject to prosecution and penalty, can still receive substantial reductions in the fines that they would otherwise have to pay (potentially as high as 50 per cent).

Working off the axiom that "there is no honour among thieves," the Immunity/Leniency program aims to disrupt cartel conduct by encouraging participants to be first in line to claim favourable treatment. And by all accounts, the Bureau's program has been very successful – a large majority of the cartel cases prosecuted by the Bureau in recent years were first detected because of information provided under the program.

The Competition Act also contains special "whistleblower" protections for persons who come forward with information on cartel (and other criminal) offences. Under these provisions, the Competition Bureau must protect the identities of whistleblowers who request assurances of confidentiality in return for reporting on alleged offences. In addition, employers are broadly prohibited from taking any steps against employees (or independent contractors) who, while acting in good faith and on the basis of reasonable belief, (i) disclose a Competition Act offence (that has been or is going to be committed) to the Bureau; (ii) refuse to do anything that is an offence under the Competition Act; (iii) do anything that is required to be done in order that an offence not be committed under the Competition Act; or (iv) state an intention to do any of the above. (The Canadian Criminal Code also contains a general prohibition against employer reprisals, although it is limited to cases where the employee has provided information to a person whose duty it is to enforce federal laws; unlike the Competition Act protections, the Criminal Code offence does not apply to situations where the employee refuses to engage in criminal conduct or insists on taking actions to avoid criminal conduct.)

The Competition Act's whistleblower provisions were enacted in 1999. Interestingly, they were suggested by individual members of Parliament during the course of an examination of other proposed amendments to the Competition Act. They were not brought forward at the behest of the Competition Bureau nor were they part of the original amendment Bill proposed by the government at the time. They also were enacted over the objections of the Canadian Bar Association, which argued that employers should not be required to continue to deal with employees or contractors in whom they have lost confidence. The CBA commented that since an employee's complaint to the Bureau could be expected to sour the work environment, an employer acting in good faith should be entitled to terminate an employee either with notice or damages in lieu of notice. The CBA also noted that a report on the issue by the Honourable Mr. Justice Charles L. Dubin in 1997 had concluded that there was no need to amend the Competition Act to protect employee whistleblowers because existing processes already provide adequate protections.

There have not been any "whistleblower" decisions under the Competition Act provisions since they were enacted in 1999. Indeed, it is fair to say that the existence of these protections has been one of the better-kept secrets under the Competition Act, with few people even aware that there are formal legislative protections prohibiting employer reprisals against whistleblowers.

That is about to change. Earlier this year, Commissioner of Competition John Pecman announced the launch of the Bureau's new Whistleblowing Initiative. According to the Commissioner, the initiative is designed to encourage members of the public to come forward if they have reasonable grounds to believe that an offence under the Competition Act has been or is about to be committed.

The Whistleblowing Initiative does not add new protections to those already contained in the Competition Act. Rather, its main purpose seems to be to make the public aware that these protections exist in order to encourage more "self-reporting" of potential cartel and other criminal offences. Encouraging whistleblowing makes available a channel of information that is not dependent upon the immunity/leniency process and thus could help the Bureau obtain convictions without having to cut deals with cartel participants themselves.

The Whistleblowing Initiative is part of a broader global trend whereby competition and other regulatory authorities encourage employees and other insiders to report suspected offences. The financial crisis of 2008 proved to be an important impetus for whistleblowing legislation, with the U.S. Dodd-Frank Act serving as a prominent example. Most notably, the Dodd-Frank Act offers financial rewards for eligible persons who provide information to the United States Securities Exchange Commission regarding alleged violations of U.S. securities laws. Pursuant to this legislation, individuals can receive between 10 per cent to 30 per cent of fines collected by the authorities in connection with unlawful conduct. According to the SEC, the financial incentives offered by the Dodd-Frank Act have resulted in "high quality" tips that are saving SEC investigators substantial time and resources.

Closer to home, the Canada Revenue Agency plans to initiate a program to pay financial rewards for informing on Canadian taxpayers who evade taxes on foreign property and transactions.  The CRA will reward up to 15 per cent of the federal tax collected (not including penalties, interest and provincial taxes) on tax assessments or reassessments greater than $100,000.  (The reward will be taxable, of course).

Financial "bounties" are not part of the Whistleblowing Initiative, nor are they provided for in the Competition Act. However, other competition authorities have adopted this route. For example, the U.K. offers whistleblowers up to €100,000 for information relating to the existence of a cartel. Not surprisingly, given the Dodd-Frank experience, the possibility of paying bounties for information disclosing antitrust offences is also under examination in the United States.

Even without the prospect of financial incentives in Canada, the Whistleblowing Initiative raises serious issues for companies and their counsel. Unlike the immunity/leniency process, which is typically undertaken by corporate applicants and therefore subject to their supervision and control, whistleblowing encourages individual employees to bypass their employers and report to the Bureau directly. Moreover, any attempt by the employer to exert control over the situation could give rise to allegations that the Competition Act's prohibition against employer reprisals has been breached. Note that these protections not only prohibit sanctions such as terminations, demotions and suspensions, but also any measure to "harass or otherwise disadvantage an employee, or deny an employee a benefit of employment." In other words, companies and their counsel may not only have to deal with the substantive aspects of a cartel investigation, they also will have to worry about how to manage the whistleblower so as not to violate the Competition Act's whistleblower protections.

Consider also the following scenario. As noted by the CBA, the continued presence of a whistleblower in a company's workforce could poison the work environment, with fellow employees taking a dim view of someone whose actions may have placed their conduct under scrutiny. What if these fellow employees take to snubbing or shunning the whistleblower and the company turns a blind eye to that conduct? Could that constitute illegal harassment under the Competition Act's whistleblower provisions? Is the company required to discipline its other employees to prevent this type of "second hand" harassment? We have no concrete answers to these questions yet. But the Bureau's new-found emphasis on whistleblowing could bring issues such as these to the forefront very soon.

How to mitigate the challenges presented by whistleblowing? The obvious answer, first of all, is not to engage in cartel offences to begin with. But the second step is to ensure that your company has an effective competition compliance program with robust reporting/enforcement mechanisms. Employees should be taught that their first recourse must be to use internal channels should they have concerns about illegal conduct. However, that option will only be feasible if there are effective reporting channels in place. If, on the other hand, employees who want to do the right thing fear that they may be disciplined if they raise concerns, or see their concerns ignored, or conclude that wrongdoers will not be subject to serious sanctions, they will have every incentive to "blow the whistle" on their employers and approach the Bureau directly. The Bureau's Whistleblowing Initiative now, as never before, offers a roadmap to pursue that option.

Previously published CBA.ORG

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Mark C. Katz
In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.