Canada: Amendments To The Competition Act And The Investment Canada Act Granted Swift Passage

On March 12, 2009 major changes to Canada's competition law and foreign investment review process became law. These changes, which were described in our February 11, 2009 Client Update, have important implications for current business practices and transactions.

Competition Act

The new law has substantially altered the merger notification process to parallel in many respects the current U.S. system. There is now only one type of notification form with a waiting period of 30 days. Like the U.S., the 30 day waiting period can be extended if the Commissioner of Competition issues a request for additional information. If the U.S. experience is any guide, it can be expected that this second request for information will be very extensive, increasing compliance costs and delaying timing for proposed transactions that require a more in-depth examination. However, as the overwhelming majority of mergers do not raise any substantial competition issues, the second request should not be issued frequently. Most mergers should continue to be reviewed within a 30 day time period.

A positive change for business is the reduction, from 3 years to 1 year, of the period during which the Commissioner of Competition may challenge a merger after it has been substantially completed. As well, unlike the U.S., it is still the case that parties may be exempted from notification by either receiving an advance ruling certificate or being granted a waiver from notification because substantially similar information was supplied with the request for an advance ruling certificate.

The new law also contains a major reform of the criminal conspiracy provision. Now agreements between competitors that relate to fixing prices, allocating customers or markets or agreeing on supply, will be illegal regardless of the effects on competition. All other types of agreements between competitors would be reviewed under a new civil provision where remedial action could only be taken if such agreements would or would likely lessen or prevent competition substantially.

This new criminal conspiracy provision raises a host of questions as to how it will operate in practice and will create a period of uncertainty. For example, an agreement between a manufacturer and a wholesaler that limits where the wholesaler may sell could be problematic if the manufacturer also competes with the wholesaler. Although such a situation is clearly not anti-competitive in most cases and is far removed from the "hard core" criminal cartel activity that the new per se law is designed to attack, it may nevertheless be caught by the strict wording of the new criminal conspiracy provision. Further, while a new defence has been created for "ancillary restraints", it is not at all clear how such a provision will be applied in practice. In light of the new criminal law, businesses will need to review their agreements with competitors to see if changes should be made.

Implementation of the new criminal and civil conspiracy provisions have been delayed by one Barristers & Solicitors / year in order to allow businesses some time to review their conduct and hopefully for the Commissioner of Competition and the Director of Public Prosecutions to provide some practical guidance on how the new law will be enforced.

In other changes, the elimination of the criminal price discrimination, promotional allowance, price maintenance and predatory pricing provisions should provide many businesses with greater flexibility in terms of the pricing practices and policies they may choose to pursue. For example, resale price maintenance programs are no longer per se criminally illegal, but will be reviewed under a new civil provision and must be shown to have or likely to have an adverse effect on competition before a remedial order could be granted. Similarly, businesses that are not dominant in any market may be less concerned with offering different pricing and terms of trade to customers that compete with one another and that are purchasing similar quantity and quality of goods.

On the other hand, firms that are dominant in their markets will need to review their current practices and policies in light of the addition of new significant administrative monetary penalties to the abuse of dominance provision. The Competition Tribunal may now order penalties of up to $10 million for an initial order and $15 million for a subsequent order for anti-competitive conduct by a dominant firm that has had, is having or is likely to have the effect of substantially lessening or preventing competition.

Investment Canada Act

In general, the significant increase in the size of the thresholds for the review of direct acquisitions of control (albeit on the new basis of as yet undefined "enterprise value" and not book value) should significantly reduce the number of transactions that will be subject to review. The amendments also now eliminate the special review threshold for businesses engaged in transportation, financial services and uranium production, although the review threshold for cultural businesses has not been changed. This is a positive development for timing and certainty in respect of acquisitions of Canadian businesses by foreign purchasers. The changes to the threshold limits are not yet in force and will only be in force when the Government decides to implement them, likely when regulations defining "enterprise value" are ready to be implemented.

On the other hand, the new power to review transactions based on their impact on national security raises uncertainty as to when and how it will be used. This power applies to transactions regardless of size and in some cases even where there may not have been a change of control. It is expected that it will not be used very often and would need to involve genuine national security concerns to be consistent with Canada's international trade obligations.


With unprecedented speed, significant changes to Canada's competition and foreign investment laws have been made. While some of these changes provide more flexibility and certainty, other changes have created potential new risks that should be evaluated in the context of current conduct, agreements and practices. In particular, businesses will need to review their agreements with competitors to see if these require amendments to ensure they do not run afoul of the new criminal conspiracy provision.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific 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.