Canada: Competition Law And Foreign Investment Review In Canada - Top 10 Issues For 2014

In our annual forecast of the year ahead for Canadian competition and foreign investment review law, we evaluate how developments in 2013 will influence these areas of the law in 2014. Below we set out the Top 10 key issues and trends to watch for this year.

1. A Green Light for Class Actions by Indirect Purchasers

The Supreme Court of Canada issued an important trilogy of decisions in October 2013 on competition class actions. Resolving a dispute between certain provincial courts of appeal, the Court held that indirect purchasers are entitled to assert claims for damages and restitution in class actions relying upon alleged competition law offences. (Indirect purchasers are entities that are one or more steps removed from defendant manufacturers and suppliers in the chain of distribution, such as retailers and consumers.) The Court also set a relatively low bar for certification of competition class actions.

While the Supreme Court of Canada acknowledged in its decisions that indirect purchaser claims raise evidentiary difficulties, it nonetheless held that the complexities involved in these claims do not justify either (a) denying indirect purchasers a right of action, or (b) refusing certification. The Court concluded that any evidentiary difficulties should be dealt with at or prior to a trial.

The Supreme Court of Canada decisions have been characterized by some as "plaintiff-friendly". Indeed, the decisions may well lead to an increase in competition class actions in 2014 and beyond. However, while competition class action plaintiffs may welcome these decisions, it also must be emphasized that the Court has in no way absolved plaintiffs (indirect or otherwise) of the difficult burden of proving their claims at trial, including with respect to damages.

2. Supreme Court of Canada to Rule on Tervita Case – What Impact on Merger Reviews?

The Supreme Court of Canada will deal with another important competition law case in 2014 when it hears an appeal of the Federal Court of Appeal's decision of July 2013 in the Tervita matter. The Court has been asked to determine whether the Federal Court of Appeal was correct in upholding an order of the Competition Tribunal from May 2012 requiring Tervita (formerly CCS) to divest the Babkirk hazardous waste landfill site following its acquisition of Complete Environmental Inc. This will be the first time that the Supreme Court of Canada has considered a merger review case since it decided the Southam matter in 1997.

One of the issues raised by the appeal is whether the Competition Tribunal erred in its approach to deciding that Tervita's acquisition of the landfill would prevent competition substantially by eliminating a prospective new entrant. The Court's decision in this regard could have important implications for the scope of the Competition Tribunal's inquiry in determining the likely effect of a proposed merger, including the limits, if any, on the Tribunal's assessment of future market outcomes. The Court will also consider the interpretation of the Competition Act's efficiency defence, which can permit mergers that otherwise would prevent or lessen competition substantially. Canada is one of the few jurisdictions to allow for such a defence, at least in express terms, and so the scope of its application is always of great interest.

3. Abuse of Dominance – Is a New Approach in the Offing?

The Competition Act's abuse of dominance provisions will also be the subject of an important court hearing in 2014, as the Federal Court of Appeal is scheduled to consider the Commissioner of Competition's appeal of the Competition Tribunal's April 2013 order in the Toronto Real Estate Board (TREB) matter. In this case, the Tribunal dismissed the Commissioner's application alleging that TREB had abused a dominant position in the market for residential real estate brokerage services by implementing rules that limit how member brokers and agents can provide certain information to consumers over the Internet. The Tribunal decided that the abuse of dominance provisions did not apply because TREB does not compete in any relevant market, and thus did not fit within the required elements of the abuse of dominance provisions. In particular, the Tribunal held that the conduct in question did not disadvantage any competitors of TREB, since TREB does not compete with its members (or anyone else) in the provision of residential real estate brokerage services.

The TREB appeal will require the Federal Court of Appeal to revisit its 2006 decision in Canada Pipe, where it held (agreeing with the Commissioner's submission at the time) that the abuse of dominance provisions require that the impugned conduct of a dominant party have (in object or effect) an "exclusionary, disciplinary or predatory" impact on the dominant party's competitors. It is evident that the Commissioner now regards this requirement as being too restrictive. The Commissioner has also expressed concern that, if the TREB decision is upheld, trade associations may be tempted to develop rules aimed at circumventing the abuse of dominance provisions. Indeed, Competition Bureau officials have stated that if the Bureau is unsuccessful on the TREB appeal, the Bureau may seek amendments to the abuse of dominance provisions to address the limitations it now perceives as having been imposed by Canada Pipe. Accordingly, 2014 may witness another important turning point for abuse of dominance enforcement in Canada.

4. Regulated Industries Under Scrutiny – Advocacy and Enforcement

The Commissioner placed a great deal of emphasis in 2013 on reigniting the Bureau's "advocacy" efforts, particularly in regulated sectors of the Canadian economy. For example, the Commissioner announced a Bureau initiative to solicit public input on the sectors of the economy in which the Bureau could play a targeted role in advocating for increased competition. The Bureau has also created a dedicated "Advocacy Portal" on its website to identify its efforts in this regard. Specific "advocacy" initiatives in 2013 included Bureau submissions on wireless telecommunications, website domain names and pharmacists (telecom, the digital economy, health care and self-regulated professions all being areas of particular interest to the Bureau). The Bureau is also reviewing advertising restrictions imposed by certain professional associations, and the Bureau has confirmed that it is studying the Ontario beer industry with a view to potentially advocating for greater competition in how beer is sold at retail in that province. In addition to continued advocacy efforts affecting regulated sectors, 2014 may see the Bureau take steps to clarify the so-called "regulated conduct defence". This defence can apply in certain circumstances to shield from Competition Act review conduct that is directed or authorized by statute or regulation. For example, the Commissioner announced that the Bureau will be reviewing its Regulated Conduct Bulletin, which currently sets out a relatively narrower scope for the regulated conduct defence than many commentators argue is applicable. Participants in regulated sectors of the economy should also note that the Commissioner has intimated that the Bureau is looking for an appropriate case to help judicially clarify the scope of this defence.

5. Patent Assertion Entities – Will They Be an Issue in Canada?

Competition authorities and legislators in the United States have been paying close attention to the conduct of patent assertion entities, which are firms whose businesses focus on the acquisition and assertion of patents against parties who are already using the patented technology. Critics of patent assertion entities argue that they impede innovation and competition.

In the United States, for example, the Federal Trade Commission has considered the potential harm caused by patent assertion entities in various workshops and reports. The U.S. House of Representatives also passed the Innovation Act in December 2013, which introduces reforms aimed at curbing patent assertion entity activity. While the Competition Bureau has yet to engage in any public study or consultation on the impact of patent assertion entities in Canada, it has emphasized the digital economy as a priority, and the activities of patent assertion entities fall squarely within this space. The Commissioner has also indicated an intention to update the Bureau's Intellectual Property Enforcement Guidelines (IPEG) in 2014. An update to the IPEG, which were issued in 2000, could open the door for the Bureau to clarify its position on the Competition Act's potential application to anti-competitive conduct involving patents, including patent assertion entities.

6. "Pay-for-Delay" – Will the Bureau Take Action?

Pay-for-delay settlements, or "reverse payments", saw significant attention from competition enforcement authorities in 2013. These arrangements typically involve consideration flowing from a branded drug manufacturer to a generic manufacturer in order to settle a patent challenge by a generic. Part of the settlement may involve a commitment by the generic manufacturer to enter the market at a later date than it might otherwise enter. A U.S. Supreme Court decision released in June 2013 held that pay-for-delay settlements have the potential to adversely affect competition, but are not per se illegal such that their full competitive implications must be assessed under a "rule of reason" analysis. The European Commission also imposed significant fines on several branded and generic pharmaceutical companies in 2013 for delaying the market entry of generic medicines through pay-for-delay settlements.

The Bureau did not take similar enforcement action in 2013 but has made it clear that the pharmaceutical sector is a priority area. In November 2013, for example, the Bureau held a workshop focused on competition issues in the pharmaceutical industry. The question for 2014 is whether the Bureau will now follow other competition enforcement authorities by taking action on pay-for-delay settlements and, if so, under which provisions of the Competition Act.

7. Continued Enforcement Activity in Misleading Advertising

The Bureau initiated or settled several high-profile marketing cases in 2013, including in the telecommunications sector and other consumer sectors such as automobiles, furniture and residential water heaters. The Bureau's focus on misleading representations in areas that "hit close to home for Canadians" will no doubt continue in 2014. Specific areas for potential Bureau enforcement in the coming year include the use of false or misleading testimonials or reviews on websites, improper disclosure of key pricing terms and ordinary sales price representations. The Bureau has expressly stated that it is seeing more complaints with respect to ordinary sales price representations and that retailers can expect to see more activity from the Bureau in this area.

One issue to watch for is whether the Bureau will continue to bring contested proceedings for alleged misleading representations (as it has in recent years) or whether it will return to favouring negotiated resolution of these cases. In August 2013, the Ontario Superior Court dismissed the Bureau's allegations of false and misleading advertising against Rogers Communications Inc. Two other contested misleading advertising cases initiated by the Commissioner currently remain before the Courts and could be decided in 2014. The outcome of these cases may go a long way towards influencing whether the Bureau will continue to aggressively litigate misleading advertising cases or be more willing to accept alternative forms of case resolution.

8. Civil Actions Alleging Conspiracy – New Grounds for Concern?

Amendments to the Competition Act effective in 2010 significantly altered the scope of the criminal conspiracy provisions in section 45 of the Act to change the offence from a prohibition on agreements that would unduly lessen competition to instead prohibit agreements between competitors on specified matters such as price fixing and market allocation without the need to prove competitive impact, but subject to a statutory defence for ancillary restraints reasonably necessary for the implementation of a broader (lawful) agreement. To date, most of the limited case law has taken a reasonable approach to the new conspiracy offence and interpreted it as not intended to prohibit common commercial conduct, e.g., in the context of franchise arrangements. However, in some recent cases, defendants have been unsuccessful in striking conspiracy claims or opposing class certification based on unusual allegations of violations of section 45 and/or common law conspiracy allegations.

In one case arising out of the Tervita acquisition of the Babkirk site noted above, Secure Energy, a competitor of Tervita in some areas and an unsuccessful bidder for Complete, the company that owned the Babkirk site, made a claim in a civil action that Tervita and Complete unlawfully conspired to cause Complete to abort its negotiations with Secure contrary to section 45, and to cause injury to Secure. An Alberta Court declined to strike either of these claims, holding that a determination of whether the relevant persons were "competitors" for the purposes of section 45 should be made after consideration of the evidence, and finding sufficient evidence to infer a predominant intention of the alleged conspirators to harm Secure for the purposes of the common law tort of conspiracy. Similarly, one of the above-noted class action cases considered by the Supreme Court, in which class certification was restored, involves an allegation that agreements between Microsoft Canada and its U.S. parent constituted a common law tort of conspiracy intended to injure indirect purchasers of Microsoft products (even though an agreement between a parent and a subsidiary is exempt from section 45 of the Act). These cases illustrate the uncertainty relating to the potential scope of section 45 and may signal a renewed interest in common law conspiracy claims. Particularly if they continue to survive preliminary challenges, the risk of such claims may increasingly factor into business decisions.

9. U.S./Canada Price Differentials – Is a Prohibition on Geographic Price Discrimination the Solution?

The Canadian government has been paying close attention to price differentials between Canada and the United States for consumer goods, which a Canadian Senate study found are, on average, 15% costlier in Canada. In the last federal budget, the government reduced import tariffs on certain consumer goods, a move it hoped would translate into lower retail prices. Further unspecified action was promised by the government to combat "geographic price discrimination against Canadians" in its latest Throne Speech, delivered in October 2013.

Potential changes to the Competition Act to address geographic price differentials are reportedly being assessed in light of international trade agreements. The government is expected to ask the Bureau how it could better address the cross-border price differences, although Bureau representatives recently reminded a Senate committee that they are not price regulators. Despite this statement, the Commissioner has indicated that he was pleased to see the government moving forward with further action to protect consumers and end price disparities. Legislation to address price discrepancies could well have popular appeal, but may add a new layer of regulatory complexity for cross-border businesses.

10. Foreign Investment Review – Continued Heightened Scrutiny

Following a number of high profile investments in Canada by foreign state-owned enterprises, the federal government passed legislation in 2013 that introduced a broad definition of "state-owned enterprise" (SOE) in the Investment Canada Act (ICA) and provided for a separate, lower net benefit review threshold that will be applicable to acquisitions of Canadian businesses by SOEs upon passage of implementing regulations. Where SOE control or influence is involved, the amendments also introduced new deeming powers for the Minister of Industry that could, with retroactive application, impose net benefit reviews on (i) direct acquisitions of control of Canadian businesses by entities that would otherwise qualify as "Canadian" under the ICA, and (ii) direct acquisitions of certain minority interests in Canadian businesses that would not previously have been subject to a net benefit review under the ICA.

In addition, in October 2013, Industry Minister James Moore announced that the Canadian government had, pursuant to the ICA, rejected the proposed acquisition by Accelero Capital Holdings of Allstream, a provider of telecommunications services to businesses in Canada, because of national security concerns. (The ICA's national security review process is distinct from the "net benefit" review process under that legislation, and involves separate considerations.) The Minister did not provide any detailed explanation for this decision, which appears to be the first time since the national security review provisions were added to the ICA in March 2009 that the Canadian government has publicly announced a prohibition of a proposed investment on national security grounds following a completed review.

The spotlight on the role of foreign investment in Canada is likely to continue in 2014, as the federal government grapples with the implementation of the new SOE rules and net benefit review thresholds, and further refines its use of the national security review process. This will take place in the context of continuing debate over whether the government's recent measures are inordinately discouraging foreign investment, particularly in the oil and gas sector. Foreign investors, most particularly foreign SOEs and potential investors in sensitive sectors, will have to continue to be mindful in 2014 of the ICA review processes and potential implications for proposed transactions.

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
Related Video
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.