Canada: Section 11: Good, Bad And Ambiguous

Last Updated: May 15 2014
Article by James B. Musgrove and Jun Chao Meng

The Competition Bureau has recently implemented a policy of using its section 11 investigative powers to assist in all inquiries into reviewable practices. Section 11 orders can be a powerful investigative tool, but past experiences illustrate that this approach is not without downside. Section 11 can increase the litigiousness from the very beginning of a file and lead to protracted and expensive proceedings. It may also force the Bureau to disclose its allegations fairly early in the inquiry process, making it more challenging to adjust the scope and focus of the inquiry. In this note, we review some of the key cases relating to the Bureau's historical use of its section 11 powers and examine the implications of this new policy, and whether, on balance, it is likely to benefit the Bureau.


Section 11 of the Competition Act allows the Commissioner of Competition (Commissioner) to apply for court orders to gather information to assist in his or her Inquiries. The scope of information which may be gathered under section 11 is broad and the Commissioner's powers are significant. Over the years various issues and disputes have arisen with respect to the Commissioner's use and attempted use of the section 11 powers, and these are explored below.

Recently, the Commissioner has implemented a policy of using section 11 powers to assist in all reviewable practice Inquiries which he undertakes. This is a new approach for the Competition Bureau (Bureau). Previously, section 11 powers had been used in some cases, but other information gathering techniques, including the voluntary production of information, have also been used fairly extensively as an alternative to use of formal section 11 powers. In this note we examine the implications of this new policy and whether, on balance, it is likely to benefit the Bureau in the long run.


Section 11 of the Competition Act1 (the Act) is one of the principal investigative tools available to the Commissioner. The other main tools include the ability to obtain search warrants (section 15 of the Act); search computer systems (section 16 of the Act); and intercept electronic communications (conduct wiretaps) with respect to certain offences under the Act.2 While not unique, section 11 grants the Commissioner broad and, for the Commissioner, a very efficient mechanism to gather information.

Within section 11 the Commissioner is granted three broad investigative powers. One is to require attendance of persons to be examined under oath or affirmation with respect to matters relevant to an Inquiry which the Commissioner is undertaking (section 11(1)(a)). Secondly, section 11 allows for orders that persons produce records and documents specified in the order relevant to an Inquiry by the Commissioner (section 11(1)(b)). In addition to being required to produce records in the possession of a Canadian entity, section 11(2) provides that if records are sought from a corporation, the order can be extended to affiliates of the corporation, whether in Canada or abroad. This application of the provision has been subject to challenge3 but the issue remains undecided. Finally, pursuant to section 11(1)(c), persons may be ordered to provide a written return under oath or affirmation, answering questions relevant to the Commissioner's Inquiry.

Therefore, under section 11, a person who has information – but not necessarily, or even usually, the subject of an investigation – may be ordered to attend and answer questions under oath, provide relevant records, including records from affiliates abroad, and answer questions relevant to the Inquiry.

In addition to the breadth of the information gathering available under section 11, and the fact that it applies not merely to those who are the subject or target of an Inquiry, but to anyone who is likely to have information relevant to the Inquiry, the circumstances under which section 11 orders may be issued by the court are also broad. Whenever the court is satisfied that the person has or is likely to have relevant information and that an Inquiry is being made under section 10 of the Act, the order may be granted. Under section 10, Inquiries must be initiated whenever any six persons resident in Canada apply for an Inquiry into a matter. Inquiries must also be initiated whenever the Minister of Industry directs the Commissioner to inquire into a matter. As well, Inquiries may be commenced whenever: (a) the Commissioner has reason to believe that a person has contravened an order under the Act (including orders prohibiting use of intellectual property rights (section 32), injunctions (section 33), prohibition orders in conjunction with convictions (section 34), or orders under Parts VII.I or VIII); (b) the Commissioner has reason to believe an offence under Parts V or VI of the Act (essentially, all the substantive offences) has been or is about to be committed; or (c) the Commissioner has reason to believe grounds exist for the making of an order under Part VII.I or VIII (the deceptive marketing practices and reviewable conduct provisions, including the merger provisions).

It is noteworthy that the Commissioner need not have reasonable and probable grounds to believe something – he or she merely has to have "reason to believe" that one of these three conditions exists. The Commissioner does not even have to have reason to believe that those circumstances have been met if there is a six person complaint, or if the Minister of Industry directs him or her to commence an Inquiry.

As a result of the foregoing, there is a broad ability to make orders under section 11. Such orders may affect a broad range of persons, and the information subject to production is broad.

As noted above, in addition to section 11 orders, the Commissioner also has the ability to apply for search warrants and to search computer systems. He or she also has the power to seek wiretaps – but that is limited to specific criminal offences. The ability to obtain search warrants or to search computer systems is co-extensive with the ability to apply for section 11 orders, by way of the conduct under the Act which triggers a possible application, but the test is slightly different. Here, a six person complaint or direction from the Minister does not suffice. The Commissioner has to satisfy the court that there are reasonable grounds to believe the relevant order has been contravened, or that grounds exist for the making of an order under Parts VII.I or VIII, or that an offence under Part VI or VII has been or is about to be committed, and that there are reasonable grounds to believe that there are records on the premises that will afford evidence of the above. By contrast, as noted above, all that needs to be shown for a section 11 order is that an Inquiry is being conducted and that a person is likely to have information relevant to the Inquiry. In order for an Inquiry to be made, the Commissioner need only have "reason to believe." So, as noted, it is a slightly different and lesser formulation necessary to obtain a section 11 order than a search warrant.

Although section 11 orders are broadly similar to search warrants, at least with respect to the power to access records, section 11 orders have a great practical advantage over search warrants – and wiretaps – for the Commissioner. For returns of documents and of information (section 11 (1)(b) and 11(1)(c), as opposed to examination under oath – section 11(1)(a)), the costs of seeking information pursuant to a section 11 order are relatively modest for the Commissioner. They are, however, as noted in the Labatt case,4 potentially very high for the party subject to the order.


a) Judicial Challenges

Not surprisingly, given the issues involved and the stakes in many cases, there have been significant disputes over the years with regard to whether or not section 11 is contrary to the right against self-incrimination or unreasonable search or seizure, or whether it may constitute an unconstitutional deprivation of liberty. Reasonably consistently, the courts have found that the section 11 powers are constitutional.5

Also over the years, various parties have sought to stay the execution of section 11 orders on various grounds – including that the commencement of a proceeding brings to an end an Inquiry under which section 11 orders may be sought; that the order is beyond the jurisdiction of the court; that the order constitutes an improper invasion of privacy; or that parties are improperly excluded from the very section 11 proceedings in which their information is sought.6 In these cases, the courts have generally found, in broad terms, that section 11 is an administrative and evidence gathering procedure but it does not determine the rights of persons, and therefore, generally, the courts have permitted the section 11 order information gathering to proceed. Similarly, the courts have been reasonably consistent that the Commissioner does not have to provide significant information as to the basis for commencing an Inquiry.7

As noted above, in order to commence an Inquiry – which is a predicate for seeking a section 11 order – the Commissioner does not have to have reasonable and probable grounds to believe that relevant conduct has been committed – he or she merely has to have "reason to believe." This was confirmed in the case of R.L. Crain Inc. v. Couture,8 in which the court concluded that there is no requirement on the Commissioner to disclose the grounds for his or her suspicion "or even that the suspicion be reasonable." That may go slightly beyond what the courts were comfortable with, however. In Canada (Commissioner of Competition) v. Air Canada,9 the court found that a section 11 order can be set aside if it is shown that the order was granted on the basis of misleading or incomplete facts. While the court in the Air Canada case refused to set aside the challenged section 11 order, it went somewhat further than the previous decisions, noting that granting of the order is discretionary, and does not authorize the issuing of an order on "a whim." The court determined that the section 11 order would not be granted on the basis of a bald assertion that an Inquiry had been commenced, but rather that the court is likely to require some description of the nature of the alleged conduct and the basis of the Commissioner's decision to commence an Inquiry. The court indicated that it would have been permitted to refuse to grant an order where there is insufficient evidence to support a conclusion that a bona fide Inquiry had been commenced.

The most recent set of challenges to the section 11 powers arose in respect to their potential extraterritorial effect. This issue was raised in the series of Toshiba cases,10 and the recently abandoned Royal Bank of Scotland challenge11 dealing with the use of section 11 orders to gather information from abroad. The Toshiba litigation was ongoing from the time the section 11 order was issued, on August 29, 2007, until the Bureau eventually discontinued the underlying Inquiry, after Toshiba was denied leave to appeal to the Supreme Court of Canada in December 2011.

b) The Labatt Case

The relatively recent case involving the purchase by Labatt of Lakeport Brewing12 resulted in some excitement surrounding the section 11 process. In that case – somewhat surprisingly, given the deference which the courts have generally shown the Bureau in section 11 matters – the Federal Court was highly critical of the Bureau's resort to a second section 11 order in the context of a merger examination. It noted, amongst other things, the heavy duty on an applicant for an exparte order to make full and frank disclosure and ensure that the court is apprised of all of the relevant facts, including informing the court of any points of fact or law known to it which favour the other side. The court explained that some latitude is frequently given in ex-parte situations when there is urgency, but in many cases – including that case – the Commissioner does not face urgency in bringing section 11 applications ex-parte.

The court noted that the applicant has a duty to place before the court all matters which are relevant to the court's assessment of the application. In the Labatt case, the court found that the Commissioner had not met the burden. Amongst other things, she had not ensured that the representations which were made to the Justice granting the first section 11 order were brought to the court's attention on the second application, including the representation that the information sought in the first order would likely be sufficient. The court specifically stated that it was not a "rubber stamp" and had a right of oversight regarding the question of whether the information sought was appropriate. The court also found that there was overlap between the two section 11 orders, a fact which it was not aware of when it made the second order. The court also criticized the Commissioner for failing to bring before the court evidence of the Respondent's expressed concern with respect to the breadth of information demanded of it. Ultimately, the court concluded that the material put before the court on the section 11 application was "misleading, inaccurate and incomplete."13 The section 11 order was set aside.

The Commissioner did not appeal the decision. Instead, she commissioned an opinion on the Bureau's process for obtaining orders under section 11 from Mr. Brian Grover, a private practitioner (the Report).14 The Report extensively reviewed the section 11 powers and commented on them. Included in these comments were observations that the statute requires, or at least strongly encourages, ex-parte rather than on-notice applications. The Report commented adversely on the decisions in both Air Canada and Labatt that courts have more than a rubber stamp supervisory role in issuing section 11 orders. Somewhat extraordinarily, the Report offered the view that the conclusions of the Federal Court in Labatt "were not warranted and the court erred in exercising its discretion to vacate the November 2007 s. 11 order. Nevertheless, the decision was a discretionary one and, as such, the prospects of overturning the decision at the Federal Court of Appeal were not favourable."15 The Report also critiqued the analysis of the Federal Court in the Labatt case in detail. In response, the Canadian Bar Association, by letter dated September 4, 2008,16 provided a comment, including a refutation of the statement in the Report that it had been consulted, a correction of the Canadian Bar Association's stated position with respect to section 11 orders, and commentary respecting the criticism of the decision of the Federal Court in the Labatt case, amongst other things.

c) Practical Issues

In addition to the history of judicial challenges with respect to section 11, there have been notable practical – sometimes public – controversies with respect to its use. In the first such large scale issue, section 11 orders were used extensively in relation to the Bureau's film distribution Inquiry between 2000 and 2002.17 The Inquiry did not proceed but there was very substantial controversy with respect to what was alleged to be an overuse of section 11 powers. Estimates were that the cost of responding in this case likely exceeded $20 million. The upshot was commitment by the Bureau that a Senior Bureau officer – Mr. Peter Humber in that case – would oversee all future section 11 applications.

A few years later, a similar controversy arose in connection with the Bureau's investigation of the proposed merger between CHUM and CTV.18 In that case, over thirty (30) section 11 orders were served on a multitude of advertisers, broadcasters and advertising agencies, creating a huge amount of work by these entities in responding, yet the Bureau closed its merger investigation prior to receiving responses to the section 11 orders. This again provoked a significant outcry with respect to the use, and alleged abuse, of the section 11 powers.

In November 2005, the Bureau issued an Information Bulletin on section 1119 dealing with, amongst other things, the ex-parte nature of the proceeding, the scope of information subject to the orders, the court's function in issuing orders, the right of the person subject to Inquiry, service of the orders, the court from which orders would be sought, the approach to compliance with the order – including whether or not its scope could be negotiated with the Bureau. This Bulletin was released without any public consultation by the Bureau. The National Competition Law Section of the Canadian Bar Association responded by letter dated February 6, 2007.20 That response took issue with a number of aspects of the Bulletin, including the ability to seek documents from abroad, whether the issuing court's role is broader than that of a mere functionary, whether or not the order should always be sought on an ex-parte basis, the appropriate venue for the application, service of section 11 orders, the right of a person whose conduct is inquired into to attend legal examinations, the ability to agree between the parties and the Commissioner as to whether an order has been complied with, and the issue of sealing court documents, amongst other things – in other words, the issues which have formed the basis of much of the litigation and controversy surrounding section 11 over the years.

To read this article in full, please click here.

Originally published by Canadian Competition Law Review.


1 RSC 1985, c C-34, s 11.

2 Ibid, ss 15-16; Criminal Code, RSC 1985 c C-46, s 183-184.

3 See infra notes 10 and 11.

4 Canada (Commissioner of Competition) v Labatt Brewing Co, 2008 FC 59, 323 FTR 115 [Labatt]. Compliance with the initial section 11 order cost Labatt approximately $750,000 in external costs alone.

5 See Canada (Director of Investigation and Research) v Canada (Restrictive Trade Practices Commission) (1985), 4 CPR (3d) 59, 18 DLR (4th) 750; Canada (Commissioner of Competition) v Air Canada, [2001] 1 FC 219, 8 C.P.R. (4th) 372 (FCTD) [Air Canada]; Ravenshoe Services Ltd. v Canada (2001) 15 CPR (4th) 543, 90 CRR (2d) 363 (Ont Sup Ct). Canadian courts have also found the predecessor to section 11, section 17 of the Combines Investigation Act, RSC 1970, c C-24, to be constitutional: see Transpacific Tours Ltd. (Canadian Pacific Air Holidays) v Canada (Director of Investigation and Research) (1986), 8 CPR (3d) 325, 25 DLR (4th) 202 (BCSC); Thompson Newspapers Ltd. v Canada (Director of Investigation and Research), [1990] 1 SCR 425, JE 90-575; Stelco Inc. v Canada (Attorney General), [1990] 1 SCR 617, 68 DLR (4th) 518; Samson v Canada, [1995] 3 FC 306, 64 CPR (3d) 417 (FCA). Note, however, the exception of R.L. Crain Inc. v Couture, (1983), 10 CCC (3d) 119, 6 DLR (4th) 478.

6 See, for example, Director of Investigation and Research v Warner Music Group Inc. (1997), 78 CPR (3d) 125, 141 FTR 26 (FCTD); Canadian Pacific Limited v Canada (Director of Investigation and Research) (1995), 61 CPR (3d) 137, 1995 CarswellOnt 2283 (Ont Ct J (Gen. Div)); North American Van Lines Canada Ltd. v Canada (Director of Investigation and Research) (1997), 136 FTR 16, 78 CPR (3d) 221 (FCTD); SGL Canada Inc. v Canada (Director of Investigation and Research) (1998), 86 ACWS (3d) 74, 1998 CarswellNat 2747 (FCTD) [SGL Canada].

7 See Irvine v Canada (Restrictive Trade Practices Commission), [1987] 1 SCR 181, 15 CPR (3d) 289; Samuel, Son & Co. v Canada (Restrictive Trade Practices Commission), [1988] 2 FC 523, 48 DLR (4th) 77 (FCTD).

8 (1983), 10 CCC (3d) 119, 6 DLR (4th) 478 (Sask QB). Note, however that the observation was in the context of a case which found the use of section 11 powers to be unconstitutional.

9 Air Canada, supra note 5; see also Re Softkey Software Products Inc. (1994), 84 FTR 153, 57 CPR (3d) 480 (FCTD) at para 5.

10 Canada (Commissioner of Competition ) v Toshiba of Canada Ltd., 2010 ONSC 659, 100 OR (3d) 535 [Toshiba], leave to appeal refused by 2011 ONSC 94, 278 OAC 71 [Toshiba Appeal], leave to appeal to the SCC refused by 430 NR 394 (note), 2011 CarswellNat 5074 [Toshiba Application to Appeal to SCC].

11 See Royal Bank of Scotland v Commissioner of Competition (30 November 2011), Court File 13010-11 (Ont Sup Ct, East Region) Quigley J. [RBS]; Competition Bureau, Announcement, "Competition Bureau Issues Statement Correcting Inaccurate Statement Made by the RBS Group" (14 November 2012), online: Competition Bureau ( ["CCB Corrects RBS Statement"]; Randall Palmer, "Britain may refuse to produce RBS Libor documents, Canada argues," Reuters (25 January 2010), online: Reuters (

12 Labatt, supra note 4.

13 Ibid at para 108.

14 Brian Grover, "Review of s. 11 of the Competition Act" (12 August 2008), online: Competition Bureau (

15 Ibid at part 8A.

16 Letter from Barry Zalmanowitz, Past Chair of the National Competition Law Section to Sheridan Scott, Commissioner of Competition and John H. Sims, Deputy Minister of Justice (4 September 2008), RE: Review of Section 11 of the Competition Act, online: Canadian Bar Association (

17 House of Commons, Evidence of the Standing Committee on Canadian Heritage, 38th Parl, 1st Sess, No 37 (10 May 2005), online: Parliament of Canada (

18 For more information, see Competition Bureau, Technical Backgrounder, "BGM/CHUM Technical Backgrounder" (28 November 2007), online: Competition Bureau (; see also Commissioner of Competition v Bell Globemedia Inc. and CHUM Limited and John D. McKellar C.M., Q.C. (1 September 2006), CT-2006-008 (Comp Trib), online: Competition Tribunal ( (Registered Consent Interim Agreement).

19 Competition Bureau, Bulletin, "Information Bulletin on Section 11 of the Competition Act" (November 2005), online: Competition Bureau (

20 Letter from James Musgrove, Chair of the National Competition Law Section to Sheridan Scott, Commissioner of Competition (6 February 2007) RE: Information Bulletin on Section 11 of the Competition Act, online: Canadian Bar Association (

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2014

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