Canada: Canadian Competition Law Compliance: The Bureau Shows Us The Money

Last Updated: September 30 2014
Article by James B. Musgrove, Janine MacNeil and Jun Chao Meng

I.    Introduction

On September 18, 2014, the Commissioner of Competition released a Draft Updated Corporate Compliance Programs Bulletin (Draft Bulletin). The Competition Bureau's Corporate Compliance Programs Bulletin was first released in 1997 and most recently revised in 2010. The Draft Bulletin will be available for public comment until November 17, 2014.

The Draft Bulletin makes a number of notable changes to the Bureau's approach to corporate compliance programs, the most significant of which is the creation of an incentive program—by way of reduced fines and other benefits—for leniency program participants who have a credible and effective corporate compliance program.

Other less fundamental but nonetheless significant changes include the following:

  • The addition of two new elements (risk assessment and compliance program evaluation) seen by the Bureau as essential to ensure that a compliance program is "credible and effective", and refinements to existing elements;
  • Increased emphasis on the role of a company's compliance officer;
  • The appointment of a Chief Compliance Officer (CCO) at the Bureau, whose role will be to assess corporate compliance programs in connection with applications for reduced penalty;1 and
  • Significant additional guidance provided by way of hypothetical examples.

The Draft Bulletin continues to emphasize the need to foster a culture of compliance, the fact that one-size-fits-all compliance does not work, and the importance of commitment from top management to corporate compliance.

II.    Compliance is No Longer Just its Own Reward

We have previously indicated that a corporate compliance program can help ensure that companies comply with competition laws and facilitate detection of contraventions. The Bureau has noted that a credible and effective program can provide a number of other benefits, including:

  • Maintaining a good business reputation, and attracting customers and suppliers who value ethically-operated companies;
  • Provision of early warning of potentially illegal conduct;
  • Reduction of exposure of the company and its officers, directors and employees to criminal, civil or penal liability;
  • Reduction of the risk of adverse publicity or fines, and the disruption resulting from investigation, prosecution and litigation;
  • Reduction of uncertainty as to what is or is not legal, allowing both more aggressive competition where lawful and a reduction in the risk of contravention; and
  • Increased sensitivity to potentially anti-competitive conduct by the company's competitors, suppliers or customers.

In addition, as noted at the outset, the Draft Bulletin also expressly proposes that a credible and effective corporate compliance program may qualify businesses for a reduced fine recommendation by the Bureau to the Public Prosecution Service of Canada (PPSC) in connection with an application under the Bureau's Leniency Program.2 This represents a major departure from the current approach—and makes the Bureau one of the few competition/ antitrust enforcers willing to "put its money where its guidance is" and offer tangible incentives for effective compliance programs, even those which have failed.

Since the incentives will apply only to those who participate in the Leniency Program, any reduction will be on top of the already reduced fine under the Leniency Program guidelines. In his speech introducing the policy, the Commissioner was asked what level of reduction would be offered. He declined to note a particular figure, preferring to mention case-by-case flexibility, but suggested that the Bureau may consider something in the order of 5% to 10%.

The Bureau makes clear that the mere pre-existence of a compliance program will not automatically garner a company favourable treatment, but that a credible and effective program will be treated as a mitigating factor in the Bureau's recommendations to the PPSC under the Leniency Program, and also remedies sought by the Commissioner for contravention of the civil reviewable offences.

The pre-existence of a credible and effective compliance program will also increase the chances of a company receiving consideration for alternate case resolution. It may also determine whether the Bureau will pursue criminal or civil remedies for a matter that can be reviewed either criminally or civilly (such as the false or misleading representations and deceptive marketing practices provisions). In addition, it may support a due diligence defence where available under the legislation enforced by the Commissioner3.

Implementing a credible and effective program, or strengthening an existing program, after the offence has been committed can also have a favourable impact on the Bureau's sentencing recommendations or remedies sought, though to a lesser degree than in a case of a credible and effective pre-existing program.

The Bureau notes that it may view compliance programs with suspicion where a manager participated in or condoned the contravention. That may indicate that management was not in fact committed to compliance, or cause the Bureau to view the program as a sham. The Bureau notes that contravention of the law despite the existence of a compliance program may be considered an aggravating factor for individuals. Similarly, a program implemented for appearances only, used to conceal evidence, or to obstruct justice, may also be considered an aggravating factor.

Finally, the Draft Bulletin highlights a new element that the Bureau will consider: third party corporate compliance programs. When determining the treatment of a particular compliance program, the Bureau will evaluate the extent to which the company encourages, requires and facilitates the implementation of credible and effective compliance programs with third parties.

The Bureau notes that companies applying for fine mitigation under the Leniency Program should be prepared to provide the Bureau with timely access to relevant records and employees, so that it may assess whether the compliance program is credible and effective. This suggests an active review of its procedures in order to, potentially, access a lower fine recommendation. Some companies may be concerned about the level of inspection that will be undertaken. There may be issues of privilege to consider as well.

III.    Elements of a Credible and Effective Corporate Compliance Program

Another major area of change is the addition of two new elements fundamental to a credible and effective corporate compliance program: corporate compliance risk assessment and compliance program evaluation. Some of the existing elements have been enhanced as well. It is important to note that the Bureau has set the bar fairly high for qualifying as a "credible and effective" compliance program. As noted, it will effectively audit the program where companies seek favourable treatment.

The Draft Bulletin points out that the need for corporate compliance applies across all sectors, including to small and medium enterprises (SMEs). A SME should develop a corporate compliance program that is commensurate with its size and the risks inherent in its business. The new hypothetical examples in the Appendices demonstrate that the Bureau will take into account SMEs' more limited resources and sophistication in evaluating the credibility and effectiveness of their corporate compliance programs. However, the Bureau also states that resource constraints "in no way negate the necessity for such [compliance] programs."

1.    Compliance Program Evaluation

The first new element fundamental to a credible and effective compliance program—in the Bureau's view—involves the continuous evaluation of the program to ensure that it is achieving the goal of promoting compliance. It is necessary to monitor new developments in the law and the company's business so that the program captures new or emerging risks. Employees should be notified of any changes in the law or jurisprudence that impact the business' risk exposure.

In addition to substantive areas, the program's overall design, its implementation, and impact should also be assessed continuously. Regular evaluation also provides an opportunity to refresh the training material and presentation style to ensure that employees remain engaged and that the training methods are working (e.g., whether employees are willing to use the reporting system, the written policies are easily understood, the auditing function able to detect illegal conduct, etc.). The Bureau notes that the evaluation should also extend to the resources provided to support the compliance program.

The Bureau recommends that a compliance officer regularly undertake review of the program and be given the authority to make any necessary changes. To evaluate the effectiveness of the existing program, the compliance officer could conduct surveys, informal post-training meetings, focus groups, and exit interviews. Testing employees' knowledge of the law and the program and their attitudes about compliance can also provide a measure of the effectiveness of existing programs.

2.    Corporate Compliance Risk Assessment

The second new requirement outlined in the Draft Bulletin is the need for corporate compliance risk assessment by the compliance officer, in conjunction with management. A thorough assessment of the potential risks faced by a company will allow it to properly design compliance strategies that address those risks. One approach is to identify the individuals in the business who have the greatest opportunity to contravene the law—usually individuals who are likely to contact competitors, such as those in sales and marketing roles.

The Draft Bulletin highlights the need to tailor compliance programs to the specific risks faced, and to develop proportionate compliance measures to deal with those risks, taking into account things such as the size of the business, the nature of the industry, and internal culture. When conducting the risk assessment, the compliance officer and management should also consider risk factors such as:

  • Whether employees participate in trade associations with competitors;
  • Whether the business regularly recruits employees from competitors;
  • Whether markets are characterized by a small number of competitors;
  • Whether it is common practice to have, or it is easy to gain, competitor intelligence within the sector;
  • Whether joint ventures among competitors are common; and
  • Whether competitors of the business are also its customers.

The Bureau recommends that where duties associated with a particular position are unlikely to change significantly from year to year, a risk assessment and mitigation strategy can be incorporated into the job description. However, there should be ongoing risk assessment to identify any new risks that may arise from a variety of sources, such as changes in the law, Bureau enforcement policies, the industry or even changes to business activities.

3.    Tone at the Top

The Bureau continues to emphasize that visible, clear and unequivocal support from senior management is essential to a credible and effective corporate compliance program. It must be clear that compliance with competition laws is fundamental to a company's policies in order for compliance to be taken seriously. In order for this to occur, and to create a climate of compliance, there needs to be true buy-in from management—right to the very top. The Bureau notes that the failure to execute is the main reason that compliance programs fail. Therefore, management must play an active and visible role, both at the time of the program's establishment and on an ongoing basis.

The Draft Bulletin recommends that a compliance officer be appointed within the company (with the involvement of the board of directors where one exists). It also notes that it is important for a compliance officer to be given sufficient authority and independence carry out the functions of that role. The Draft Bulletin indicates—somewhat controversially—that it is the Bureau's view that the compliance officer should report directly to the board on compliance issues, such as the implementation and effectiveness of the program, as well as any disciplinary actions or allegations of contraventions of the legislation enforced by the Commissioner. The compliance officer should be removable by the board. The Draft Bulletin also stresses that the board and management must commit sufficient financial, human resource and infrastructure resources to the compliance officer to ensure that the program can be fully implemented.

4.    Corporate Compliance Policies and Procedures

The Draft Bulletin echoes its predecessor in emphasizing that, to be effective, compliance programs must be designed and tailored to each company's particular needs and operations. The content of a compliance program should be made widely accessible to all employees and in a readily accessible format. The content should also be regularly updated to reflect changes in the business, the industry, the law, and the Bureau's enforcement policies.

The Draft Bulletin goes on to provide examples of internal controls that should be incorporated into compliance policies. For example, it indicates the Bureau's view that employees who handle purchases from suppliers who are also competitors should be distinct from employees responsible for sales and marketing functions; employees should obtain prior approval, and receive compliance training, prior to attending trade association meetings; and employee participation in trade associations should be limited to those that have also implemented credible and effective compliance programs. The Bureau also suggests that companies encourage third parties, such as trade associations, to address risks associated with their businesses, for example, by implementing their own credible and effective compliance programs.

5.    Training and Education

Both the Bureau's current Corporate Compliance Programs Bulletin and the updated Draft Bulletin note that an effective compliance program includes ongoing compliance training for all employees in a position to potentially engage in, or be exposed to, anti-competitive conduct. This goal is best achieved by demonstrating how compliance policies affect employees' daily activities. The Bureau does recognize that given the unique characteristics of each business, flexibility is required in the design and communication of compliance training and programs.

In general, training materials should include a manual, but small group seminars, workshops, and online training can also be effective methods. Effective training is ideally delivered by experts, such as a compliance officer or legal counsel, and should be delivered in a consistent manner throughout the organization. Opportunity for discussion and questions should be provided. Regular evaluation of the training program is also recommended, such as by testing employees' knowledge of the law and compliance policies.

The new Draft Bulletin also suggests making regular compliance training a performance review requirement for employees in medium and high-risk positions.

6.    Monitoring, Auditing, and Reporting Mechanisms

The Draft Bulletin indicates that monitoring, auditing, and reporting mechanisms are key to the success of any corporate compliance program. In our experience, this is frequently the most difficult element to implement.

Monitoring is preventative in nature and involves ongoing efforts to check against contraventions. Evidence of effective monitoring may provide a company with a due diligence defence, where available.

Audits are designed to determine whether a contravention has occurred and, if so, to ensure that it has been dealt with appropriately. The exact procedure will vary depending on the company and its specific risks, but audits may be triggered by a particular event, or undertaken on a periodic or ad hoc basis.

An effective internal reporting mechanism should encourage employees to provide timely and reliable information so further investigation can be undertaken where necessary. Compliance programs should clearly identify the types of conduct that should be reported, and to whom. Employees in a position to engage in, or be exposed to, potential contraventions should also be educated on the Bureau's Immunity Program, Leniency Program and whistleblowing provisions. The new Draft Bulletin underscores the importance of guaranteeing any whistleblower strong protections against retaliation, including from management.

While the Bureau had previously indicated that senior management should investigate any compliance issues raised and take any necessary steps to prevent future contraventions, the Draft Bulletin instead stresses need for an independent compliance officer, who has access to the necessary resources to perform his/her duties, including conducting investigations, as management may be involved in the possible contravention or complicit through lack of action.

7.    Consistent Disciplinary Procedures and Incentives

Consistent disciplinary procedures and incentives demonstrate the company's commitment to compliance and the seriousness with which it views contraventions.

The Bureau recommends that a disciplinary code or policy clearly set out the consequences for breaches of the legislation enforced by the Commissioner or the compliance program, for example, suspension, demotion, dismissal, and even legal action—including where a manager fails to take reasonable steps to prevent or detect misconduct.

To further foster a culture of compliance, the Bureau suggests offering incentives to employees for performing in accordance with the compliance program.

All such policies, disciplinary or incentivizing, should be applied consistently. Any disciplinary action should also be properly documented, as it may be relevant to supporting a claim of due diligence.

IV.    Hypothetical Examples

In the Draft Bulletin, the Bureau provides significant new guidance through a number of hypothetical examples, outlining its approach to assessing the credibility and effectiveness of corporate compliance programs. Though the sample scenarios are fairly uncontroversial, they do provide insight into the Bureau's analytical approach and its priorities. These examples demonstrate the importance of commitment from senior management and a culture of compliance. "Paper and preach" approaches, or compliance programs for appearances only, will not benefit from any potentially lenient treatment described in the Draft Bulletin. The hypothetical examples also illustrate the Bureau's approach to assessing the conduct and compliance programs of SMEs and indicate an understanding that they typically have more limited resources than large companies.

V.    Conclusion

The updates set out in the Draft Bulletin signal the continuing importance of, and increasing Bureau attention to, corporate compliance programs. The references to favourable treatment that can potentially result from having a credible and effective compliance program, and the creation of a new incentive program, are both positive developments. As noted previously, the Bureau is a true trailblazer in this area amongst major competition/antitrust jurisdictions, and deserves credit for this courageous stance.

On the other hand, this draft guidance does create some potentially onerous requirements for companies seeking to ensure their compliance programs are up to the recommended standards, or those seeking to benefit from the incentive program. Companies should bear in mind that it is not sufficient to simply develop a corporate compliance program—a well designed program must be tailored, monitored, and updated continuously to ensure its continuing credibility and effectiveness.

This Bulletin is, if nothing else, an important signal that businesses need to review existing compliance programs—now and on an ongoing basis. For those which do not yet have programs, the Bulletin provides both encouragement and incentives to establish one.


1 The Commissioner of Competition noted in an accompanying speech on September 18, 2014 that the role of the CCO is still being determined.

2 It should be noted that the PPSC, and ultimately, the courts, have discretion whether to accept or reject the Bureau's recommendation, although the recommendation is usually determinative.

3 The Competition Act, Consumer Packaging and Labelling Act (except as it relates to food), Textile Labelling Act, and Precious Metals Marketing Act.

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

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.

James B. Musgrove
Janine MacNeil
Jun Chao Meng
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
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 you may opt out by clicking here

    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.

    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.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    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.

    By clicking Register you state you have read and agree to our Terms and Conditions