Keith Mack
Canada's antitrust laws are set out in a single federal statute, the Competition Act. The Act is administered and enforced by the Competition Bureau and the Public Prosecutions Service of Canada. The purpose of the Act is to maintain and encourage competition in Canada, and it addresses mergers, criminal matters, and reviewable practices. The Act contains both criminal and civil provisions aimed at preventing anti-competitive practices in the marketplace. It covers economic activities related to both goods and services, with some exemptions, such as collective bargaining, amateur sports, and securities underwriting. The Competition Act also provides private parties with the right to sue and seek damages for violations of its criminal provisions.
| Characteristics | Values |
|---|---|
| Competition law in Canada | Set out in a single federal statute, the Competition Act |
| Purpose of the Act | To maintain and encourage competition in Canada |
| Administered and enforced by | The Competition Bureau and the Public Prosecutions Service of Canada |
| Addressed categories of conduct | Mergers, criminal matters and reviewable practices |
| Merger definition | Acquisition or establishment of control or a significant interest in a business |
| Provisions | Civil and criminal, relating to advertising, marketing, false and misleading advertising, exclusive dealing, tied selling, and vertical market restriction |
| Private parties | Can sue to recover damages suffered due to a violation of criminal provisions; can bring applications directly to the Competition Tribunal |
| Amendments | Significant changes introduced in 2022 with three waves of amendments; most recent changes received royal assent on June 20, 2024 |
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What You'll Learn
The Competition Act
Canada's antitrust laws are set out in a single federal statute, the Competition Act. The Act came into effect on June 19, 1986, replacing the Combines Investigation Act, 1923. It has since undergone several amendments, with the most recent changes taking place in June 2024. The Competition Act contains both criminal and civil provisions aimed at preventing anti-competitive practices in the marketplace. The Act covers all economic activities involving goods and services, except for those specifically exempted, such as collective bargaining, amateur sports, securities underwriting, or industries regulated by federal or provincial governments.
The purpose of the Competition Act is to maintain and encourage competition in Canada, promoting efficiency and adaptability in the Canadian economy. It seeks to expand opportunities for Canadian participation in global markets while recognizing the role of foreign competition. The Act ensures that small and medium-sized enterprises have equitable opportunities in the domestic economy, and it aims to provide consumers with competitive prices and product choices.
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Merger control
Canada's antitrust laws are set out in the Competition Act, which addresses mergers, criminal matters, and reviewable practices. The Act defines a merger as the acquisition or establishment of control over a business, whether by purchase, lease, amalgamation, or otherwise.
The Bureau, as part of the Competition Act, plays a crucial role in merger control. It can challenge a transaction within one year of "substantial completion" if the parties filed the necessary notifications or requested an ARC. In cases where no filings were made, the Bureau has up to three years to challenge the transaction after substantial completion. The purpose of this differentiation is to encourage parties to submit relevant information to the Bureau, even if their transactions fall below the pre-merger notification thresholds.
The Investment Canada Act (ICA) is another key legislation governing foreign acquisitions of Canadian businesses. It involves two aspects: net benefit review and national security review. The Canadian government can assess whether foreign acquisitions exceeding prescribed thresholds will provide a "net benefit" to the economy, considering various factors. Additionally, the government may investigate any foreign investment to determine if it poses a threat to Canada's national security. The government has several options to address these situations, including prohibiting investments, ordering unwinding of investments, or imposing conditions on investors.
The Competition Act's merger review process is considered robust and capable of handling digital mergers. Recent amendments to the Act aim to enhance its ability to prevent anticompetitive mergers in the digital space. The Act provides private parties with the right to initiate legal proceedings and seek damages for violations of its criminal provisions. However, in practice, private parties often rely on government enforcement actions and focus on proving their damages.
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Private enforcement
Canada's antitrust laws are set out in the federal statute, the Competition Act. The Act is primarily enforced by the Competition Bureau and the Public Prosecutions Service of Canada. However, private parties can also enforce most provisions.
In recent years, there has been a significant shift towards expanding private enforcement of the Competition Act. In 2024, Parliament abandoned its previous measured approach and opened the doors of the Tribunal to private litigants seeking to enforce the civil provisions of the Act. These changes will come into force on June 20, 2025, and are expected to have a substantial impact on antitrust enforcement in Canada.
The new amendments provide private litigants with easier access to the Competition Tribunal. The threshold for the Tribunal to grant leave for private enforcement applications has been lowered. Additionally, private litigants can now seek monetary relief from the Tribunal for anti-competitive conduct, providing a financial incentive for private enforcement. The Tribunal can order a party to pay an amount, capped at the value of the benefit derived from the anti-competitive conduct, to the applicant and any other affected persons.
While the full impact of these changes remains to be seen, they represent a fundamental shift in the enforcement of Canada's competition laws. Observers have noted that these amendments are likely to result in increased enforcement by private parties and may lead to a dramatic expansion of private antitrust litigation in Canada.
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Misleading advertising
Canada does have antitrust laws, which are set out in the federal Competition Act. The Act is primarily administered and enforced by the Competition Bureau and the Public Prosecutions Service of Canada. The Competition Bureau is also Canada's primary consumer protection enforcer.
The Competition Act contains criminal and civil provisions aimed at preventing anti-competitive practices in the marketplace. The Act applies to all economic activities (both goods and services) except those specifically exempted, such as collective bargaining, amateur sports, securities underwriting, or industries where price or output is regulated by federal or provincial governments.
Section 52 of the Competition Act is the general criminal misleading advertising provision. It is substantially similar to the civil provision but also requires that false or misleading claims be made intentionally ("knowingly or recklessly"). This means that subjective intent is required for criminal misleading advertising-related provisions.
One example of misleading advertising is "greenwashing," which involves making environmental claims that overstate or misrepresent the extent to which a product or service is "environmentally friendly." Greenwashing is governed by the civil and criminal false or misleading advertising provisions in the Act.
The Competition Act also provides private parties with a right to sue to recover actual damages suffered as a result of a violation of the Act's criminal provisions. Most provisions can be enforced by private parties, and significant recent amendments to the Act will likely result in increased enforcement by private actors.
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Anti-competitive agreements
Competition law in Canada is set out in the Competition Act, a federal statute. The Act is enforced by the Competition Bureau, an independent law enforcement agency, and the Public Prosecutions Service of Canada. The purpose of the Act is to maintain and encourage competition in Canada, addressing mergers, criminal matters, and reviewable practices.
The Competition Act contains provisions aimed at preventing anti-competitive practices in the marketplace. The Act applies to all economic activities involving goods and services, except those specifically exempted, such as collective bargaining, amateur sports, securities underwriting, or activities regulated by federal or provincial governments.
The Act defines a merger as the acquisition or establishment of control or a significant interest in a business, whether through the purchase or lease of shares, assets, or other means. The Act also addresses criminal matters, including false and misleading advertising.
In recent years, the Canadian government has introduced amendments to the Competition Act, specifically targeting anti-competitive agreements. These amendments have broadened the scope of Section 90.1 of the Act, which previously focused on competitor collaborations. The updated Section 90.1 now captures agreements between non-competitors that have the purpose or effect of harming competition. This expansion aims to prevent anti-competitive behaviour and allows for the imposition of significant fines.
The amendments also allow private parties to pursue claims and seek compensation for damages resulting from contraventions of Section 90.1. This empowers businesses and individuals to take legal action against anti-competitive practices. Additionally, the Act enables private parties to initiate proceedings and sue to recover actual damages suffered due to violations of the Act's criminal provisions.
To summarize, Canada's Competition Act serves as the primary legislation for maintaining fair competition in the country. Recent amendments have strengthened its ability to address anti-competitive agreements, including collaborations between competitors and non-competitors. These changes aim to promote a level playing field and protect Canadian consumers and businesses from harmful practices.
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Frequently asked questions
Yes, Canada has antitrust laws. The Competition Act is a federal statute that outlines the country's competition law.
The purpose of the Competition Act is to maintain and encourage competition in Canada. It addresses mergers, criminal matters, and reviewable practices.
The Competition Act is primarily enforced by the Competition Bureau, an independent law enforcement agency, and the Public Prosecutions Service of Canada. Most provisions can also be enforced by private parties.
