Canada: Perspective: Is The Price Right? Alberta Court Adopts Restrictive Approach To Canadian Price Discrimination Law

The Competition Act's price discrimination provision (section 50(1)(a)) prohibits a supplier from engaging in a practice of granting price concessions or other monetary advantages to one purchaser, which are not available to competing purchasers, in respect of a sale of goods of like quality and quantity.

The prohibition against price discrimination has been part of Canadian competition law in one form or another since the mid-1930s. Despite its longevity, the price discrimination provision is rarely the subject of judicial consideration, whether in the context of enforcement proceedings brought by the Competition Bureau or civil actions initiated by private plaintiffs.

That is why the recent Alberta Court of Queen's Bench decision in Polar Ice Inc. v. Arctic Glacier Inc. is worth noting (2007 ABQB 717, December 12, 2007). In this case, the Court upheld the plaintiff's allegations of price discrimination against the defendant. However, the Court's analysis and conclusions are questionable as a matter of law. Indeed, if this decision were to be followed, it would significantly alter the generally accepted interpretation of the price discrimination provisions in the Competition Act and severely limit the pricing flexibility of many suppliers in Canada by requiring them to proactively offer lower prices to competing purchasers whenever they extend a discount to a particular customer.

A more detailed discussion of the decision and its implications follows.

Summary Of Decision

Polar Ice Inc. ("Polar") operates an ice-making plant in Edmonton. Arctic Glacier Inc. ("Arctic") is the largest supplier of ice in Manitoba, Saskatchewan and Alberta. Indeed, the evidence before the Court was that Arctic had a virtual monopoly in Alberta for the supply of ice to grocery stores, liquor stores, service stations, small confectionary stores and concrete supply companies.

Polar alleged that Arctic had engaged in a deliberate campaign to interfere with Polar's contractual relations and commercial interests. Among other things, Polar alleged that Artic had:

  • refused to honour a contract to supply a customer that had also ordered ice from Polar unless that customer agreed to purchase exclusively from Arctic;
  • offered improper payments to certain of the foregoing customer's employees in order to obtain an exclusive supply agreement; and
  • violated the Competition Act's price discrimination provision by offering targeted lower pricing to certain of its customers that were also current or prospective customers of Polar without offering the same pricing to competitors of these customers.

Mr. Justice R. P. Marceau of the Court of Queen's Bench of Alberta upheld Polar's claim. With respect to the price discrimination issue specifically, Mr. Justice Marceau interpreted section 50(1)(a) as making it illegal for suppliers to "target a specific competitor". He then concluded as follows:

I am satisfied that in each case in Edmonton where Polar had secured or was on the point of securing a contract to supply ice to Sobeys grocery stores and to liquor stores which previously had obtained their ice from Arctic, Arctic either matched the price offered by Polar or undercut that price. More importantly, Arctic did not lower the price it charged to other grocery stores in the area who were in competition with the Sobeys stores which had been approached by Polar. Similarly, it did not offer the same lower price it gave Athlone, Liquor Depot and Spirits Liquor to liquor outlets in competition with those stores. I find that it selectively offered the lower prices specifically because of Polar's competition and that Arctic's action in lowering its price in these circumstances was specifically directed to meeting that competition. In some cases (i.e. the 10 Sobeys corporate stores), Arctic's actions resulted in Polar losing a contract. In other cases (the six Sobeys franchise stores), Arctic was unsuccessful in achieving that end...

The offers made by Arctic to match or even undercut Polar's price to the liquor outlets and Sobeys were direct and deliberate attempts to induce those businesses to breach their contracts with Polar... Arctic offered its "competitive pricing" only to Polar's current or prospective customers. The price it offered to competitors of these customers remained the same. This was a direct contravention of s. 50(1)(a) of the Competition Act.

Although he upheld Polar's claim under section 50(1)(a), Mr. Justice Marceau ruled that Polar had failed to prove specific loss or damage suffered as a result of Arctic's conduct in relation to Sobeys and the liquor outlets. Accordingly, he did not award any damages for violation of the Competition Act. However, he did award Polar $50,000 in damages suffered as a result of Arctic's overall conduct.


Section 50(1)(a) of the Competition Act makes it a criminal offence for "every one engaged in business" to be a party or privy to or assist in,

any sale that discriminates to his knowledge, directly or indirectly, against competitors of a purchaser of articles from him in that any discount, rebate, allowance, price concession or other advantage is granted to the purchaser over and above any discount, rebate, allowance, price concession or other advantage that, at the time the articles are sold to the purchaser, is available to the competitors in respect of a sale of articles of like quality and quantity...

There are several problems with the Court's analysis of this provision in the Polar case.

Purpose Of Provision

First, the Court misconstrues the purpose of section 50(1)(a) by concluding that it is designed to prevent suppliers from targeting competitors. In fact, the objective of the provision is to create a level playing field among competing purchasers that buy articles of similar quality and quantity from a supplier. In other words, the focus of section 50(1)(a) is on competition between purchasers and not suppliers.

Section 50(1)(a) can be contrasted in this regard with section 50(1)(c) of the Competition Act, which is indeed designed to prevent suppliers from disciplining or harming their competitors. Thus, this provision makes it illegal for a supplier to sell the same product in different regions of Canada at different prices where this has "the effect or tendency of substantially lessening competition or eliminating a competitor ... or [is] designed to have such effect".

Like Quality And Quantity

Second, as noted above, section 50(1)(a) contains a series of discrete elements, all of which must be satisfied in order for there to be an offence. Of key importance is that the offence applies only to discriminatory pricing "in respect of a sale of articles of like quality and quantity". This means that it is not unlawful for a supplier to distinguish in its pricing between competing customers that buy different amounts of product. In other words, if competing customers A and B purchase 5,000 and 15,000 units, respectively, of the same product, the supplier is entitled to grant B more favourable pricing than A based on its larger volume of purchases. Furthermore, this discount need not be supported by reference to any cost justification.

The Court makes no reference in Polar to the question of "like quality and quantity". There is only a finding that Arctic offered to match or even undercut Polar's prices to specific customers (Sobeys and the liquor outlets), which the Court held was sufficient to contravene section 50(1)(a). However, section 50(1)(a) would apply only if, among other things, it were proved that the competing customers also purchased at least the same quantity of ice as the "preferred" customers in this instance. The Court does not address this point and it is not clear whether it was part of the evidence offered and simply omitted from the decision, or was erroneously ignored.


The final difficulty with the Court's decision is its apparent assumption that section 50(1)(a) is violated if a supplier that provides special pricing to one customer (or a select group of customers) does not then "offer an across-the-board lower price" to all competitors of that customer (or customers).

Section 50(1)(a) does not require a supplier to "offer" price concessions to competing customers. The only requirement is that the same prices must be made "available" to competing purchasers (all else being equal). This is in contrast to section 51 of the Competition Act, which requires that certain allowances provided by suppliers for promotional purposes be "offered" to competing customers on proportionate terms.

While the meaning of the term "available" in this context has not been definitively determined and is the subject of some debate, the generally accepted interpretation is that a supplier has no obligation to pro-actively disclose and offer specific price concessions granted to one customer to all other competing customers. The only obligation is that the price concession be made "available" to these competing customers in like circumstances, i.e., they would be entitled to the concession if they meet the relevant criteria and request it.

The Competition Bureau takes a somewhat different view in its Price Discrimination Enforcement Guidelines. Although the Bureau acknowledges that there is a difference between the obligation to make a price concession "available" to customers and the obligation to "offer" it to customers, the Guidelines attenuate this distinction by expanding the circumstances in which the Bureau expects suppliers to take pro-active steps to offer a price concession to all of its customers who purchase the same or greater quantities of similar products.

For example, the Guidelines state that if a supplier unilaterally decides to offer a price concession to a customer, it should disclose the price concession to all other competing purchasers of articles of like quality and quantity. Similarly, if a supplier negotiates a price concession with a customer, the Guidelines state that disclosure should be made to other competing customers unless the negotiations were initiated by the first customer and it agreed to provide a service in exchange for the concession. In those latter circumstances, the supplier's sole obligation is to respond to initiatives of competing customers who ask for a similar deal on similar terms. Otherwise, it appears that the Bureau would expect suppliers to offer broad disclosure of even negotiated price concessions.

The Bureau's Guidelines do not have the force of law. Nor have they been judicially considered or endorsed. The Guidelines are simply an articulation of the Bureau's views on section 50(1)(a) for enforcement purposes. In respect of the "available" issue specifically, the Bureau's position introduces distinctions and qualifications that go beyond the plain meaning of the statutory language.

Taken at face value, the Polar case might offer support to the Bureau's view that unilateral price concessions must be pro-actively communicated to all competing customers, at least in some circumstances. However, it is difficult to credit any precedential value to the decision, given that the Court does not address the distinction between the concepts of "offer" and "make available", nor even acknowledge that such a distinction exists.


Polar's allegations against Arctic might have fit more comfortably under the Competition Act's abuse of dominance provision than section 50(1)(a). However, there is no right of private action under the Competition Act for conduct constituting an abuse of dominance. Therefore, Polar could not have brought a claim for damages under that section.

It is perhaps understandable in the circumstances why the Court would sympathize with Polar's price discrimination claim against Arctic. Nonetheless, the Court's conclusions are based on a faulty interpretation of section 50(1)(a) and the decision raises more questions for future cases under Canadian price discrimination law than it resolves.

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.