Canada: Anti-trust Year In Review: Developments In Canada

Last Updated: May 14 2009
Article by Mark C. Katz and Jim Dinning

A. Legislative Developments

During Canada's October 2008 election, the Conservative party promised to introduce several far-reaching changes to Canada's Competition Act (the "Act"), including:

  • a new criminal conspiracy offence focussed on "hard core" cartel conduct such as price fixing and market allocation, with other types of potentially anticompetitive agreements to be dealt with on a separate non-criminal track;
  • new maximum penalties for cartels and bidrigging of CDN$25 million (approximately US$20.5 million) in fines and 14 years in prison (up from the current maximum of CDN$10 million (approximately US$8.2 million) in fines and five years' imprisonment);
  • new fines for abuse of dominance (up to CDN$10 million (approximately US$8.2 million) for initial offenders and CDN$15 million (approximately US$12.3 million) for repeat offenders); and
  • repeal of the Act's criminal offences for price discrimination, promotional allowances and predatory pricing.

The Conservatives received a plurality of seats in the House of Commons following the October 2008 election and formed a minority government. In early 2009, as part of its budget legislation, the Conservative government introduced a variety of amendments to the Act,1 including changes largely following those described in their election platform, but also other significant proposed amendments, such as:

  • amending the merger notification process under the Act to mirror the U.S. Hart-Scott- Rodino Antitrust Improvements Act process;
  • reducing to one year the three-year waiting period following closing within which the Commissioner currently may challenge a completed merger;
  • increasing one of the thresholds for merger notification from CDN$50 million (approximately US$41 million) to CDN$70 million (approximately US$57 million) (the "size of transaction" test); and
  • de-criminalization of the price maintenance offence.

The above proposed amendments largely follow the recommendations contained in a June 2008 report released by the Competition Policy Review Panel (the "Panel") on Canada's competition and investment policies.2 The Panel was created in July 2007 by the federal government with the mandate of examining how to improve the domestic and international competitiveness of the Canadian economy.

B. Mergers

1. Production Orders

Among its various investigative powers, the Competition Bureau is entitled to apply ex parte to a judge for orders requiring the production of documents and other information. The use of these orders has been controversial, with the business and legal communities expressing concern over the Bureau's general unwillingness to consult with parties prior to seeking such orders, and the tendency of such orders to be overbroad and poorly drafted.

On January 28, 2008, a Federal Court judge took the unusual step of setting aside two Bureau production orders obtained in the course of a merger investigation on the grounds that the Bureau's applications for the orders were "misleading, inaccurate and incomplete".3 As a result of this criticism, the Minister of Industry ordered an investigation into the Bureau's processes and procedures for obtaining production orders. The report was publicly released on August 13, 2008.4 Although largely refraining from finding fault with the Bureau, the report offered several helpful suggestions that could, if implemented, alleviate some of the concerns about the use of production orders. These recommendations include encouraging the Bureau to engage in pre-application dialogue with parties where feasible, limiting the number of custodians whose documents must be searched, discouraging production orders from being sought in furtherance of a criminal inquiry against a person who is a suspect at the time of the application and requiring the Commissioner of Competition to inform the court of any point of fact or law known to the Commissioner why a requested production order should not be granted.

2. Review of Transportation Mergers

In July 2008, the Department of Transport released draft Guidelines for Mergers & Acquisitions involving Transportation Undertakings5 regarding the new merger review provisions of the Canada Transportation Act ("CTA") that came into force in June 2007.6 Under the CTA merger review provisions, any proposed transaction that is required to be notified under the merger provisions of the Competition Act and which "involves" a federal "transportation undertaking" must also be notified to the Minister of Transport. If the Minister determines that the proposed transaction "raises issues with respect to the public interest as it relates to national transportation", then the transaction cannot be completed unless approved (potentially subject to modifications or conditions) by the federal Cabinet. If no public interest issues are raised, there is no further review under the CTA.

The draft guidelines set out a series of factors relevant to determining whether a proposed transaction raises public interest issues relating to national transportation. These include economic (e.g. the transaction's impact on prices and employment), social (e.g. the transaction's impact on low-income workers and Canadian sovereignty), environmental, security and safety factors. Many of the economic factors overlap with issues dealt with under the Competition Act (e.g. impact on prices, service quality and Canadian competitiveness). However, the draft guidelines do not clarify whether the Minister of Transport will refrain from reviewing a proposed merger where it raises only public interest issues that relate to competition.

C. Cartels

1. Enforcement

Charges were laid in June 2008 against 13 individuals and 11 companies accused of fixing gasoline prices in Quebec.7 While many defendants have indicated their intent to vigorously contest the charges, certain individuals and companies have pleaded guilty and agreed to pay fines exceeding CDN$2 million (approximately US$1.6 million) in total.8 One individual defendant pleaded guilty and agreed to be sentenced to 12 months' imprisonment to be served in the community.9 Also of note is that the Bureau used wiretaps as part of its investigation.

In July 2008, the Bureau announced that two individuals had been extradited to the United States for their role in a deceptive telemarketing scheme involving American consumers and had been found guilty and sentenced to a combined 42 years in prison by the U.S. Federal Court in the Southern District of Illinois.10 This is the first time that Canadian nationals have been extradited to a foreign jurisdiction for a competition-related offence.

On November 21, 2008, the Competition Bureau announced that Akzo Nobel Chemicals International BV had pleaded guilty to criminal charges for its role in an international cartel to fix the price of hydrogen peroxide sold in Canada.11 Akzo agreed to pay a fine of CDN$3.15 million (approximately US$2.6 million). This case is yet another example of an international cartel investigation where the Bureau benefited from the cooperation of an immunity applicant.

2. Draft Leniency Bulletin

In April 2008, the Bureau released a Draft Information Bulletin on Sentencing and Leniency in Cartel Cases (the "Draft Bulletin").12 The Draft Bulletin sets out the Bureau's suggested approach for recommending sentences in cartel cases, including when it will recommend that cartel participants that do not qualify for immunity may receive "lenient treatment" (i.e., a reduced penalty). For the most part, the Draft Bulletin's description of the Bureau's approach to sentencing recommendations reflects current practice. The key factor that the Bureau will consider in recommending a sentence in a cartel matter is the overall economic harm that was caused.

The leniency aspect of the Draft Bulletin is intended to complement the Bureau's information bulletin on its immunity program ("Immunity Bulletin").13 The Immunity Bulletin describes the circumstances in which the Bureau will recommend that persons be granted complete immunity from prosecution under the Act's criminal provisions. The Draft Bulletin, on the other hand, covers situations in which full immunity is not available, but where parties may still qualify for some sort of leniency.

According to the Draft Bulletin, the Bureau will recommend leniency where (i) the Director of Public Prosecutions has not yet filed criminal charges against the party, and (ii) where the party has terminated its participation in the illegal activity, cooperates with the Bureau's investigation and any subsequent prosecution, and admits guilt. The timeliness of the party's cooperation and the value of the evidence offered will also be considered. The first party eligible for a leniency recommendation will generally receive a reduction of up to 50% of the fine that otherwise would have been recommended and subsequent applicants will receive up to 30%.

A new version of the Bulletin is expected to be released in 2009.

D. Abuse of Dominance

In June 2008, the Bureau released its Information Bulletin on the Abuse of Dominance Provisions as Applied to the Telecommunications Industry.14

Although nothing in the Information Bulletin deviates from the Bureau's general enforcement approach, as described in the Draft Abuse Guidelines, the Bureau notes that unique characteristics of the telecommunications industry warrant particular consideration in determining whether abuse of dominance has occurred.15 To that end, the Information Bulletin describes the Bureau's approach under the abuse of dominance provisions with respect to conduct in the telecommunications industry to the extent that the Canadian Radio-television and Telecommunications Commission, Canada's telecommunications regulator, has decided to forbear from regulating such conduct.


1 Bill C-10, Budget Implementation Act, 2009, 2nd Sess., 40th Parl., 2009.

2 The Panel's report and related materials are available at .

3 Canada (Commissioner of Competition) v. Labatt Brewing Co., 2008 FC 59.

4 Brian Gover, REVIEW OF SECTION 11 OF THE COMPETITION ACT (June 19, 2008), available at nsf/en/02709e.html .


6 Canada Transportation Act, S.C. 1996, c. 10, § 53.1.

7 Press Release, Competition Bureau, Competition Bureau Uncovers Gasoline Cartel in Quebec (June 12, 2008), available at .

8 Press Release, Competition Bureau, Third Individual Pleads Guilty in Quebec Gasoline Cartel Case (October 31, 2008), available at http:// .

9 Id.

10 Press Release, Competition Bureau, Canadian Scammers Extradited to the U.S. Receive Lengthy Prison Sentences (July 30, 2008), available at .

11 Press Release, Competition Bureau, Akzo Nobel Chemicals International BV Fined $3.15 Million for its Role in an International Cartel (November 21, 2008), available at .

12 Competition Bureau Canada, DRAFT INFORMATION BULLETIN ON SENTENCING AND LENIENCY IN CARTEL CASES (April 2008), available at .

13 Competition Bureau Canada, IMMUNITY PROGRAM UNDER THE COMPETITION ACT (September 2000), available at .


15 The Information Bulletin notes: "The telecommunications industry is a network industry with large sunk costs and significant economies of scale, density, and scope, implying that some firms are likely to have larger market shares than might be typical in nonnetwork industries. Interconnection, both among competitors in the same market and across market boundaries (i.e., call termination), is widespread and in many respects necessary for firms to compete. Proper definition of the relevant market in the telecommunications industry poses particular challenges because the sector is dynamic, shaped by constant and rapid technological change. Finally, certain acts are more likely to be the subject of an abuse of dominance complaint in the telecommunications industry, given the nature of the sector." Id. § 1.4.

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.

Mark C. Katz
In association with
Related Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions