Originally published in Blakes Bulletin on
Competition/International Trade, October 2008
Implications for Competition Act and the Investment Canada
Rarely do competition law issues make their way into an election
campaign. However, as we recently reported, during the federal
election campaign, Prime Minister Stephen Harper announced that his
government would introduce a package of amendments designed to
"strengthen" Canada's competition laws, "to
protect Canadians from anti-competitive practices and from other
abuses" and to position Canada to compete in the global
economy by "fostering open markets".
Having been re-elected, these campaign promises are very likely
to become law. The proposed amendments reflect the government's
view that the enforcement provisions in the Competition
Act are "no longer significant enough to effectively
deter anti-competitive behaviour" and that amendments to the
Investment Canada Act are required "to position
Canada to compete in the global economy". These initiatives
will have profound consequences for businesses operating in
The proposed amendments to the Competition Act include
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
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
(AMPs – 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. The
fine for individuals will be 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 years.
Empowering the Competition Tribunal 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
With respect to the Investment Canada Act, the
government's proposals include:
Amending the Act to increase the threshold for foreign
investment reviews from the current level of C$295 million in gross
asset value to C$1 billion in enterprise value, with the
increase to be phased in over four years.
Requiring the responsible Minister to give reasons if an
investment is disallowed and enabling the Minister to provide
reasons for allowing the investment.
Establishing a new national security review mechanism
in the Act.
According to the re-elected Conservative Party, these proposals
are "based on the recommendations of the Competition Policy
Review Panel" released in June 2008. While some of the
proposals with respect to the Competition Act are
uncontroversial, such as the introduction of a non-criminal track
for price discrimination, other areas are likely to generate
significant pushback amongst interested stakeholders, such as
changes to the cartel laws and the introduction of significant
monetary fines for various contraventions of the non-criminal
provisions of the Act.
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