Canada: Canada’s Budget Bill To Overhaul The Competition Act And Investment Canada Act

On Friday, February 6, 2009, Canada's Minister of Finance, James Flaherty, introduced in Parliament Bill C-10, the Budget Implementation Act, to implement fiscal and economic measures Canada is taking to deal with the current economic crisis and that were set out in the January 27, 2009 federal budget. The 558-page Bill C-10 is, however, much more than a usual budget bill. Not only does it implement the announced measures, but it also makes important changes to laws that are usually amended by specific amending legislation, rather than being rolled up into a budget bill.

Of important note is the fact that Bill C-10 converts a three-paragraph reference at page 178 of the 2009 federal budget into a significant overhaul to a number of key provisions of the Competition Act and the Investment Canada Act. The overhaul includes, as set out in more detail below, amendments to the Competition Act to create new U.S.-style "per se" offences and merger review processes, as well as changes to the Investment Canada Act to create a new national security criterion and remove existing constraints on transportation and other sectors.

The Competition Act and Investment Canada Act amendments in Bill C-10 are based on several recommendations of the government-appointed Competition Policy Review Panel, which published its report Compete to Win in June 2008. The federal budget did state that the government would implement those recommendations, but it is somewhat unusual for the government to include the amendment in a budget bill, rather than by way of separate bill amending the legislation. Typically, proposed amendments to the Competition Act and the Investment Canada Act of this magnitude would be considered and debated in Parliament and relevant parliamentary committees, sometimes for many months. As part of the budget implementation legislation, committee review is limited to a review by the Finance Committee and, given the state of the Canadian economy, there will be significant pressure to pass Bill C-10 as quickly as possible. As a result, unless the government agrees to split Bill C-10 or the Senate splits the bill, it could be that the proposed amendments to the Competition Act and the Investment Canada Act will pass with limited debate and consideration.

It is also noteworthy that a vote in Parliament on a budget bill can be a "confidence vote", and a lack of parliamentary support for Bill C-10 from a majority of the House of Commons (which is possible given the current minority status of the government) could possibly trigger a federal election. Given the current political climate in Canada (which is in the shadow of a recent federal election with little apparent appetite for a second election in a matter of months), Bill C-10 could for this reason as well be subject to very limited parliamentary scrutiny or debate.

The Investment Canada Act amendments that are detailed below will likely be welcomed by the business community as they will make it easier and less burdensome for foreigners to invest in Canada. The Competition Act amendments are, however, much more controversial. Many proposed amendments to the Competition Act, such as the new conspiracy provisions, the adoption of a U.S.-style second request merger review process or the introduction of administrative monetary penalties for abuse of dominance, may hurt Canada's competitiveness by increasing the cost of doing business in Canada.

Business enterprises, their associations and other stakeholders will need to act quickly to review the potential benefits and adverse effects of the amendments given the pressure to quickly pass Bill C-10. They will also need to move with haste to make any concerns known to the government, the Finance Committee and Members of Parliament. Second reading of Bill C-10 is expected soon and committee hearings will probably commence by the end of February.

What follows is an overview of the proposed amendments to the Competition Act and the Investment Canada Act.


The most noteworthy proposed amendments to the Competition Act include:

Conspiracy And Bid-Rigging

  • Introduction of a dual-track approach and increased penalties for anti-competitive arrangements between competitors. The criminal anti-cartel provision would be limited to hardcore "cartel-like" agreements aimed at fixing or otherwise controlling prices, maintaining, lessening or eliminating the production of a product, and allocating sales, territories, customers or markets, which would become "per se" offences for which it would no longer be necessary to prove an undue lessening of competition. Maximum prison terms under this new criminal anti-cartel provision would rise from 5 to 14 years, while maximum fines would rise from $10 million to $25 million. A new civil conspiracy provision would permit the Competition Tribunal to address other types of agreements between competitors that have anti-competitive effects.
  • Broadening of bid-rigging provisions and increased penalties. The bid-rigging provisions would be broadened to include arrangements to withdraw contract bids or tenders. Maximum imprisonment for bid-rigging offences would increase from 5 to 14 years.

Merger Review

  • Introduction of a two-stage (second request) merger review process. A new merger review process would be introduced to replace the current 14/42-day review periods for short-form and long-form notifications. The new process would replicate the U.S. Hart-Scott Rodino Antitrust Improvements Act process by requiring the submission of prescribed information, followed by an initial 30-day review period during which the proposed transaction could not be completed. The Commissioner of Competition could then extend this initial review period by making a "second request" for further information, after which time closing could only occur 30 days following receipt of the additional information (barring a challenge to the transaction by the Commissioner).
  • Increased merger notification thresholds. The monetary threshold for mandatory merger notification would rise from $50 million to $70 million. The threshold would be reviewed annually and adjusted based on GDP.
  • Additional exempt transactions. Additional classes of transactions (i.e., certain amalgamations) would be exempt from the merger notification requirement.
  • Reduced merger review limitation period. The amendments would reduce the current 3-year period during which the Commissioner may challenge a completed merger to only 1 year.

Abuse Of Dominance

  • Introduction of administrative monetary penalties for all abuse cases. The amendments would enable the Tribunal to impose administrative monetary penalties of up to $10 million for corporate violations of the abuse of dominant position provision, and $15 million for each subsequent violation. Such penalties are currently restricted to conduct by a domestic airline.
  • Airline industry. All abuse of dominance provisions dealing specifically with the airline industry would be repealed.

Misleading Advertising And Deceptive Marketing Practices

  • Targeted individuals outside Canada. The amendments would extend the false and misleading advertising and deceptive marketing practices provisions to apply to companies targeting individuals who are outside Canada.
  • Clarifications. The amendments provide that in false or misleading advertising proceedings, it would not be necessary to establish that the impugned representation was made to the Canadian public or was made in a place accessible to the public. The "general impression test" – that the general impression and literal meaning will be considered in assessing if a representation is reviewable – applies to the deceptive marketing practices outlined in sections 74.01 and 74.02.
  • Increased penalties. The amendments would increase maximum imprisonment terms from 5 to 14 years for criminal offences. Administrative monetary penalties of up to $10 million ($15 million for subsequent violations) could be imposed by the Tribunal for corporate false and misleading advertising and deceptive marketing practices.

Other Important Amendments

  • Price discrimination and predatory pricing. The amendments propose to repeal the criminal provisions dealing with price discrimination, promotional allowances and predatory pricing.
  • Resale price maintenance. The criminal resale price maintenance provision would be repealed and replaced by a new civil price maintenance provision to address this practice when it has an anti-competitive effect. The amendment would also provide a right of private-party access to the Tribunal for price maintenance.
  • Increased penalties for obstruction and contraventions of section 11 court orders. The amendments propose to introduce penalties of up to 10 years' imprisonment and increased fines (from $50,000 up to $100,000) or both, for obstruction in connection with an inquiry or examination under the Competition Act. The amendments would also increase sanctions for contraventions of section 11 orders to imprisonment of up to 2 years and fines in the discretion of the court or both.


Important proposed amendments to the Investment Canada Act include:

  • Increased threshold for investments made by a WTO investor. The review threshold for acquisitions of control of a Canadian business (other than a cultural business) would increase to $1 billion over 5 years. The measurement standard would be changed from gross assets to the enterprise value of the acquired assets.
  • National security test and review procedure. The amendments would introduce a broad national security test and review process, authorizing the Minister of Industry to review investments that "could be injurious to national security", regardless of the size of transaction. Following the Minister's review and consultations with the Minister of Public Safety and Emergency Preparedness, the Minister would be required to refer transactions of concern to national security to the Governor in Council, who would have the ability to take any measures in respect of the investment that the Governor in Council considers advisable to protect national security, including prohibiting investments made by non-Canadians.
  • Elimination of lower threshold for transactions in non-cultural sectors. The amendments would eliminate the existing lower thresholds for review of transactions in the transportation, uranium production and financial services sectors. Only cultural businesses would remain subject to a lower threshold.
  • Written reasons for not approving an investment. Where the Minister of Industry is not satisfied that an investment is of net benefit to Canada, the Minister would be required to provide reasons for the decision to block the investment.
  • Disclosure of privileged information. Privileged information obtained during the review of an investment could be communicated or disclosed by the Minister of Industry to prescribed investigative bodies, or investigative bodies of a prescribed class, if the communication or disclosure was for the purposes of the administration or enforcement of national security provisions.
  • 45 days for ministerial opinions. The Minister of Industry would be forced to issue, within 45 days of the filing of an application for review, an opinion stating whether the Minister is satisfied that a proposed investment is likely to be of net benefit to Canada.
  • New undertakings. If the Minister of Industry believes that a non-Canadian has failed to comply with a written undertaking relating to an investment that the Minister is satisfied or is deemed to be satisfied is likely to be of net benefit to Canada, the Minister would be able to accept a new undertaking from the non-Canadian after the investment has been implemented.

About Ogilvy Renault

Ogilvy Renault LLP is a full-service law firm with close to 450 lawyers and patent and trade-mark agents practicing in the areas of business, litigation, intellectual property, and employment and labour. Ogilvy Renault has offices in Montréal, Ottawa, Québec, Toronto, and London (England), and serves some of the largest and most successful corporations in Canada and in more than 120 countries worldwide. Find out more at

Ogilvy Renault is the International Legal Alliance's Canadian Gold Award winner for 2008 in M&A and Corporate Finance.

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.

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.