Originally published in Blakes Bulletin on Competition,
As part of the Conservative election platform, Prime Minister
Stephen Harper announced today that, if re-elected on October 14th,
his government will introduce a package of amendments designed to
"strengthen" Canada's competition laws and "to
protect Canadians from anticompetitive practices and from other
The proposals reflect the current government's view that the
enforcement provisions in the Competition Act are "no
longer significant enough to effectively deter anticompetitive
behaviour" and contemplate sweeping changes to the Act as
An increase in the maximum penalties for
cartels and bid-rigging to a C$25 million fine and 14 years
in prison. (The current maximum penalties are C$10 million
and five years).
The introduction of a non-criminal track with
a corresponding lower evidentiary threshold for offences such as
price discrimination, promotional allowances and predatory
The introduction of administrative monetary
penalties (up to C$10 million, and C$15 million for repeat
offenders) for companies found to have breached the abuse
of dominance provisions of the Act.
Increased civil penalties for deceptive
marketing – up to C$750,000 for a first civil offence,
and up to C$1 million thereafter. (The current maximum is
Increased maximum prison terms for
criminal deceptive marketing from five years to 14
Empowering the Competition Tribunal with the ability to
order restitution to victims of deceptive marketing
practices, including the ability to freeze assets
and prevent the disposal of property to ensure that money remains
available for restitution.
An increase in penalties for
obstructing Competition Bureau investigations to a
C$100,000 maximum fine and up to 10 years imprisonment. (The
current maximum penalties are C$5,000 and two years).
According to the government backgrounder, these proposals are
"based on the recommendations of the Competition Policy Review
Panel" released last June. Interestingly, however, these
proposals reach much further than the panel's recommendations
and appear to be based, at least in part, on Bill C-454, a private
member's bill introduced by a Bloc MP, which received second
reading and was in Committee at the time Parliament was dissolved
for the upcoming election.
While some of the Prime Minister's proposals are
non-controversial, such as the introduction of a non-criminal track
for price discrimination, other areas are likely to generate
significant pushback amongst interested stakeholders. For example,
the introduction of high monetary fines for contravention of the
civil provisions of the Act runs the risk of chilling
pro-competitive behaviour, as companies may shy away from
aggressive and legitimate competition for fear of being fined. Such
provisions may also be subject to constitutional challenge, as high
monetary fines arguably are criminal in nature but, under the
proposed changes, could be imposed based on a civil burden of
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