Copyright 2009, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Competition, Antitrust & Foreign Investment, February 2009

Further to our January 2009 Blakes Bulletin on Competition, Antitrust & Foreign Investment: Canadian Parliament Promises Competition and Foreign Investment Amendments, on February 6, 2009, the Canadian government introduced a bill before Parliament to implement certain provisions of the federal budget. The bill proposes far-reaching amendments to both the Competition Act and the Investment Canada Act (the ICA).

In respect of the Competition Act, the bill promises to protect consumers from anti-competitive behaviour as well as unscrupulous business practices. In this regard, it makes the following recommendations:

  • establishing a dual-track approach to agreements between competitors, with a limited anti-cartel provision and a civil provision to address other agreements that substantially prevent or lessen competition;
  • repealing the criminal provisions dealing with price discrimination and predatory pricing, thereby leaving them exclusively under the civil provisions of the Competition Act (abuse of dominance);
  • replacing the criminal resale price maintenance provision with a new civil provision that will address situations where price maintenance is having an adverse effect on competition;
  • introducing administrative monetary penalties for abuse of dominance;
  • increasing potential fines and terms of imprisonment for, among other things, conspiracies, bid-rigging, obstruction and failure to comply with a prohibition order;
  • introducing a second-request type process for mergers;
  • increasing the thresholds for mergers: size of transaction threshold will increase to C$70-million from the current C$50-million level, and will be reviewed annually; and
  • the Commissioner's right to challenge a merger before the Competition Tribunal will be limited to a period of up to one year after closing, as opposed to the current three years.

The bill, if passed, would also make various other changes, such as in the areas of bid-rigging and misleading advertising.

Regarding the ICA, the bill undertakes to modernize the legislation to encourage foreign investment and make certain that new investments cannot jeopardize Canada's national security. Of greatest significance to the ICA are the recommendations to:

  • introduce higher review thresholds for the Investment Canada Act; and
  • introduce a national security test pursuant to the Investment Canada Act.

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