Insight

Competitive Balance

Major amendments to Canada’s Competition Act were rushed through Parliament this June with scarcely any debate. They will likely have enormous antitrust ramifications—and businesses had better be ready.

Blaring megaphone sounds the alarm
DF

David Feldman and Peter Flynn

September 29, 2022 04:30 PM

The government of Canada has now passed significant amendments to the Competition Act via its Budget Implementation Act, 2022, No. 1 (BIA), which received Royal Assent this June 23. The inclusion of these changes in the BIA—a budget bill—ensured that there was no opportunity for meaningful debate on their merits, and indeed there was not even a prospect of making modest revisions to the proposed language, which was passed exactly as it was introduced. Although the private sector had no ability to shape or influence these changes, it must now adapt to them.

Remarkably, this is the second time in a row that the Competition Act—a core piece of economic legislation in Canada—has been substantially amended via a budget bill. This mirrors the experience of 2009, when the then-Conservative government adopted the same approach, which at the time generated considerable criticism from many quarters—including the then-Liberal opposition, which, now governing, has done the very same thing.

Abuse of Dominance Amendments

In our view, the changes most likely to have a meaningful impact on large businesses in Canada are the amendments to the abuse-of-dominance provision.

In short, it is now possible for private litigants, with the permission of the Competition Tribunal, to commence litigation against larger companies alleging that they are dominant and engaged in substantial anticompetitive conduct. In so doing, these private litigants will be able to seek financial penalties—payable to the government—of up to triple the amount of the benefit gained by the dominant firm, or, where that amount cannot be determined, 3% of that company’s global revenue. It is entirely plausible that in certain circumstances, these penalties may amount to tens or hundreds of millions of dollars. It is of course less clear at the moment how inclined the Competition Tribunal will be to issue such penalties.

This all stands in marked contrast to how the law of abuse of dominance has operated in Canada since it was last amended 13 years ago—and indeed since its creation in 1986. The Competition Bureau itself has, until now, always served an important “gatekeeper” function as the only party that had standing to bring such cases. The bureau, notwithstanding its tremendous expertise in such matters, its extensive information-gathering power and its considerable resources, has always been extremely judicious in bringing these cases, with the result that most Canadian businesses would generally not have viewed an abuse-of-dominance proceeding as a likely occurrence. This was in part because in many instances, following a detailed investigation and a discussion with the firm or firms in question, the Competition Bureau exercised its expert judgment not to commence litigation. This situation has been fundamentally disrupted by the Competition Act amendments, and we would expect in the coming years (or even months) to see private litigants bring or threaten to bring abuse-of-dominance cases, incentivized by the leverage the new penalties may give them in settlement discussions.

Other Changes

In addition to the changes to the abuse-of-dominance provisions described above, the 2022 amendments also include the following significant changes:

  • The criminalization of wage-fixing and no-poach agreements. Effective next year, employers in Canada will have to exercise extreme care that they are not engaged in any agreements or arrangements with one another that could be said to fix or control salaries, wages or other terms of employment, or to solicit or hire one another’s employees.
  • Increased, and potentially unlimited, monetary penalties for criminal cartel offenses, such as price-fixing, also effective a year from now. The practical effect of this delay is likely to be minimal, as cartel offenses are already subject to large fines, imprisonment and class-action liability—considerable disincentives for engaging in such conduct.
  • The explicit addition of “drip pricing,” where an initial price is advertised but additional non-optional fees are included in the final price, making that initial price unobtainable, to the definition of misleading advertising.
  • The introduction of an anti-avoidance provision intended to ensure that the parties to a merger transaction cannot deliberately structure a transaction to avoid pre-notification obligations.

The Next Round

It is widely understood that the government has in mind further significant amendments to the Competition Act. The Commissioner of Competition has been calling for an overhaul of the act—much, but not all, of which will have been accomplished via the BIA amendments. The most notable major area only minimally affected by the BIA is that of mergers, including the efficiencies defense, which we would expect to be an area of heavy focus in any subsequent amendments.

The Competition Bureau itself has, until now, always served an important “gatekeeper” function as the only party that had standing to bring such cases."

It is also understood that the government will engage in some form of consultation before proceeding with further changes. The nature of such consultation—and the willingness of the government to allow its proposals to be influenced by the Canadian competition bar and the private sector more broadly—remains to be seen, however. In our view, especially following successive rounds of forcing through changes in budget bills, it is imperative that Canada get these next changes right, and that can be done only through in-depth engagement with stakeholders outside the federal government, who can bring their informed and diverse perspectives to bear.

This article was first published on Stikeman Elliott LLP’s Knowledge Hub and originally appeared at www.stikeman.com. All rights reserved.

David Feldman is an associate in the Competition & Foreign Investment Group of Stikeman Elliott. He assists clients with the review of transactions under the Competition Act and the Investment Canada Act. David also advises on compliance issues related to the Competition Act, federal and provincial marketing and advertising laws and regulations, as well as various other regulatory issues.

Peter Flynn is an associate in the Competition & Foreign Investment Group of Stikeman Elliott. His practice focuses on the review of transactions under the Competition Act and the Investment Canada Act. Under the Competition Act, Peter advises on all aspects of competition law, including complex merger review, joint ventures and strategic alliances, criminal and civil investigations, regulatory compliance matters and misleading advertising.

Headline Image: ISTOCK/Wenjin Chen, ISTOCK/Dane_Mark

Related Articles

Growing Canadian Business Abroad


by Didier Culat

Canadian entrepreneurs looking to expand their businesses beyond the geographic confines of their home dominion must consider a vast range of questions to ensure they’re fit to branch out. Here’s a quick primer.

Green arrows rising with Canada in backdrop

Latinflation


by Alejandra Daroch, Domingo Russi, and Jaime Carey Astaburuaga

Long a beacon of economic stability in South America, Chile has been buffeted lately by the global rise in inflation. Can a key element of its monetary policy help it weather the storm?

Waves crashing into lighthouse

The Antipodean Advantage


by Gordon Grieve and Tony Britten-Jones

As the pandemic recedes, Australia remains one of the best countries in which to invest. The commercial law experts at Piper Alderman review the country’s advantages when it comes to outside money looking for outsized returns.

Man pointing to cave wall

Hobbling the War Machine


by Shawn C.D. Neylan

Since late spring, the Canadian government has been actively sanctioning business and political entities, as well as numerous individuals, with alleged ties to Vladimir Putin and the Russian military, including some in Belarus. You can’t tell the players without a scorecard—so here’s an overview.

Military tank with prohibited symbol

It’s Official: Options for Challenging “Official Marks” in Canada


by Jamie-Lynn Kraft and Philip Lapin

“Official marks” are a strangely obscure corner of Canadian intellectual-property law. What are they, what explains their strength and what can a business owner in search of a trademark do to challenge them?

Two griffins on royal crest

The Future of Trade is Digital


by Alan de Rochefort-Reynolds, Daniel Allman, and Jo Feldman

Digital information increasingly drives bilateral and multilateral trade throughout the Indo-Pacific region. It behooves countries to devise agreements governing the use and exchange of the enormous amounts of vital data generated every day.

Neon colored boxes in circle with black background

The Carbon Conundrum


by Martin Hamer and Natalie Kopplow

Companies that trade internationally might soon face a “carbon tariff” when importing certain goods into the European Union. Why is the EU doing this—and how will it affect world trade?

Power plant billowing smoke

Rental House of Cards


by Tyler D’Angelo

The pandemic devastated uncountable businesses worldwide. A recent court case involving some of Canada’s most venerable companies and pension funds sheds light on the stringency of the country’s commercial leases—and the judiciary’s reluctance to meddle in sophisticated commercial contracts amid a “black swan” event.

Toppling house of cards

"Lawyer of the Year"


Lawyer in suit smiles for professional headshot

Kevin M. Levy

Technology Law

Miami, FL

2025

History Eraser


by Gregory Sirico

Penguin Random House and several other major book publishing houses filed litigation against Florida education leaders who recently passed a book ban law.

Penguin logo in front of black and white books

"Lawyer of the Year"


Man in suit and tie smiling for professional headshot

Dylan D. Rudolph

Litigation - ERISA

San Francisco, CA

2025

Scarlett Law Group: Mastering TBI Trial Law


by Justin Smulison

Randall H. Scarlett shares successes in traumatic brain injury cases, fueling Scarlett Law Group's growth across Northern California with specialized insights.

Two lawyers, suited, standing in front of law firm sign

"Lawyer of the Year"


Lawyer poses for professional firm headshot

Mindi M. Richter

Copyright Law

Tampa, FL

2025

One of the Greatest Ever...


by Justin Smulison

Steve Yerrid, a top catastrophic injury lawyer, has secured over 300 verdicts of $1M+ and has been recognized as "Lawyer of the Year" multiple times in Tampa.

Lawyer in blue suit poses in office for headshot

IN PARTNERSHIP

Georgia Car Accident: How to File a Car Accident Case


by Robert Hammers

In a car accident in Georgia? Read this guide for key steps from actions at the scene to settlement talks and lawsuit filing. Stay informed and prepared.

Figure with clipboard assesses the scene of an accident

How a New Maryland Bike Safety Law Honors a Client’s Legacy


by Justin Smulison

Four-time Lawyer Of The Year Patrick Regan discusses how a client’s bicycling tragedy led to a result that improved Maryland traffic law to protect riders.

Group of lawyers posing for a photo

Trending Articles

2025 Best Lawyers Awards Announced: Honoring Outstanding Legal Professionals Across the U.S.


by Jennifer Verta

Introducing the 31st edition of The Best Lawyers in America and the fifth edition of Best Lawyers: Ones to Watch in America.

Digital map of the United States illuminated by numerous bright lights

Unveiling the 2025 Best Lawyers Awards Canada: Celebrating Legal Excellence


by Jennifer Verta

Presenting the 19th edition of The Best Lawyers in Canada and the 4th edition of Best Lawyers: Ones to Watch in Canada.

Digital map of Canadathis on illuminated by numerous bright lights

Legal Distinction on Display: 15th Edition of The Best Lawyers in France™


by Best Lawyers

The industry’s best lawyers and firms working in France are revealed in the newly released, comprehensive the 15th Edition of The Best Lawyers in France™.

French flag in front of country's outline

Announcing the 13th Edition of Best Lawyers Rankings in the United Kingdom


by Best Lawyers

Best Lawyers is proud to announce the newest edition of legal rankings in the United Kingdom, marking the 13th consecutive edition of awards in the country.

British flag in front of country's outline

Announcing the 16th Edition of the Best Lawyers in Germany Rankings


by Best Lawyers

Best Lawyers announces the 16th edition of The Best Lawyers in Germany™, featuring a unique set of rankings that highlights Germany's top legal talent.

German flag in front of country's outline

Prop 36 California 2024: California’s Path to Stricter Sentencing and Criminal Justice Reform


by Jennifer Verta

Explore how Prop 36 could shape California's sentencing laws and justice reform.

Illustrated Hands Breaking Chains Against a Bright Red Background

Celebrating Excellence in Law: 11th Edition of Best Lawyers in Italy™


by Best Lawyers

Best Lawyers announces the 11th edition of The Best Lawyers in Italy™, which features an elite list of awards showcasing Italy's current legal talent.

Italian flag in front of country's outline

Combating Nuclear Verdicts: Empirically Supported Strategies to Deflate the Effects of Anchoring Bias


by Sloan L. Abernathy

Sometimes a verdict can be the difference between amicability and nuclear level developments. But what is anchoring bias and how can strategy combat this?

Lawyer speaking in courtroom with crowd and judge in the foreground

Things to Do Before a Car Accident Happens to You


by Ellie Shaffer

In a car accident, certain things are beyond the point of no return, while some are well within an individual's control. Here's how to stay legally prepared.

Car dashcam recording street ahead

Tampa Appeals Court ‘Sends Clear Message,” Ensuring School Tax Referendum Stays on Ballot


by Gregory Sirico

Hillsborough County's tax referendum is back on the 2024 ballot, promising $177 million for schools and empowering residents to decide the future of education.

Graduation cap in air surrounded by pencils and money

The Push and Pitfalls of New York’s Attempt to Expand Wrongful Death Recovery


by Elizabeth M. Midgley and V. Christopher Potenza

The New York State Legislature recently went about updating certain wrongful death provisions and how they can be carried out in the future. Here's the latest.

Red tape blocking off a section of street

Find the Best Lawyers for Your Needs


by Jennifer Verta

Discover how Best Lawyers simplifies the attorney search process.

A focused woman with dark hair wearing a green top and beige blazer, working on a tablet in a dimly

Key Developments and Trends in U.S. Commercial Litigation


by Justin Smulison

Whether it's multibillion-dollar water cleanliness verdicts or college athletes vying for the right to compensation, the state of litigation remains strong.

Basketball sits in front of stacks of money

Is Premises Liability the Same as Negligence?


by Jeremy Wilson and Taylor Rodney Marks

In today's age, we are always on the move, often inhabiting spaces we don't own. But what happens when someone else's property injures you or someone you know?

A pair of silhouetted legs falling down a hole with yellow background

Woman on a Mission


by Rebecca Blackwell

Baker Botts partner and intellectual property chair Christa Brown-Sanford discusses how she juggles work, personal life, being a mentor and leadership duties.

Woman in green dress crossing her arms and posing for headshot

Best Lawyers Celebrates Women in the Law: Ninth Edition


by Alliccia Odeyemi

Released in both print and digital form, Best Lawyers Ninth Edition of Women in the Law features stories of inspiring leadership and timely legal issues.

Lawyer in green dress stands with hands on table and cityscape in background