Canada: Substantial Changes To The "Competition Act" And "Investment Canada Act" Enacted – Businesses Must React

Last Updated: March 18 2009
Article by Anthony F. Baldanza, Mark D. Magro and Douglas C. New

On March 12, 2009, after being expeditiously passed by both Houses of Parliament, Bill C-10 received Royal Assent and is now law.

For details on the key changes to the Competition Act and Investment Canada Act provided for in Bill C-10, please refer to our February 2009 bulletin, "Dramatic Changes to Canada's Competition and Foreign Investment Review Laws Proposed in Bill C-10", 1

In light of this development, we are recommending the following:

  • Businesses should review and appropriately revise their pricing policies in light of the decriminalization of price discrimination, predatory pricing, discriminatory promotional allowances and resale price maintenance, effective immediately. Henceforth, price discrimination, predatory pricing and discriminatory promotional allowances will only be problematic where they amount to an abuse of market power. Resale price maintenance will be subject to review where it is likely to have an "adverse effect on competition".
  • Businesses with market power in one or more markets should review and appropriately revise their trade practices in light of the significant potential administrative monetary penalties provided for in Bill C-10 for anticompetitive acts that substantially lessen or prevent competition .
  • All ongoing collaborations with competitors should be revisited in light of the dual-track approach for competitor collaborations to come into force March 2010
  • to ensure they do not offend the new per se offence for agreements between competitors to fix prices, allocate markets or customers, or fix output or supply (i.e. section 45). In the past, such collaborations would only give rise to criminal liability under the Competition Act if they "unduly" lessened or prevented competition. Effective in March 2010 these agreements will be per se illegal whether or not they lessen or prevent competition, unless a successful ancillary restraints defence or a regulated conduct defence can be established.2 Violators risk both criminal liability and liability for damages in private civil actions (including through class actions).
  • to ensure that such collaborations that do not fall within the above per se category and that were not pursued or were restricted in a manner no longer necessary, in light of the new civil review provision for competitor collaborations, be reconsidered.
  • Businesses should review and appropriately revise their competition law compliance programs in light of the Bill C-10 amendments to ensure they avoid behaviour that may violate the Competition Act as amended and to ensure they do not impose restrictions on their sales forces that are no longer legally mandated.
  • Businesses should be mindful that the size-of-transaction threshold for merger notification under the Competition Act is now C$70 million (up from C$50 million)3 in assets or gross revenues.
  • Businesses should consider that the review threshold for WTO investors under the Investment Canada Act will initially be, when the new provisions providing for such thresholds come into force,4 C$600 million and based on "enterprise value" rather than book value of assets (previously C$312 million)5 There also will no longer be a lower review threshold for investments in businesses that provide transportation services, engage in uranium mining or production, or provide financial services; however, investments in cultural businesses will still be subject to the lower thresholds.
  • Businesses should be mindful that the Investment Canada Act now incorporates a basis for reviewing investments on the grounds of national security and has retroactive effect as of February 6, 2009.


1 For a discussion of the events leading up to the enactment of Bill C-10, see our previous bulletins, "Re-election of Conservative Government Brings Proposed Changes to Canadian Competition and Foreign Investment Laws Closer to Reality",; "Prime Minister's First Response to the Report of the Competition Policy Review Panel",; and, "Competition Policy Review Panel Proposes National Competitiveness Agenda",

2 The ancillary restraints defence would generally require that the restriction (e.g. on price, territories, customers, etc.) was directly related and reasonably necessary to the objective of the broader agreement and, absent the restriction, the agreement would not be contrary to the revised section 45 of the Competition Act.

3 The C$70 million threshold will be adjusted annually for inflation.

4 We expect the new WTO threshold to come into force later this year.

5 The C$600 million threshold will be increased to C$1 billion over approximately a four-year period.

The Fasken Martineau Antitrust/Competition & Marketing Law Group has extensive experience in all areas of Canadian competition law and foreign investment review. Inquiries regarding compliance with such laws can be directed to any member of the Antitrust/Competition & Marketing Law Group.

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.

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