During the recent Federal election campaign the now re-elected Conservative government – which may or may not soon face a challenge in the House of Commons – announced that, if re-elected, it would implement a series of Competition Act amendments to, in the words of the platform, provide Canadians with a "strong consumer protection plan, to protect Canadians from anti-competitive practices and other abuses." The plan included a series of wide-ranging changes to the Competition Act, based in part on a report released in June 2008 by the Competition Policy Review Panel.1 The proposal also draws upon various Bills and proposals considered over the last few years. The proposals included:
- Establishing a non-criminal track, with a lower evidentiary threshold, for "lesser" anti-competitive offences, such as price discrimination, promotional allowances, predatory pricing and deceptive marketing.
It is not clear precisely what form this track might take. If, as has been proposed previously, the concept is that such conduct be dealt with as an instance of abuse of dominant market position, that is a possibility which is consistent with the views of most commentators. If it involves the creation of a new set of "offences," that may prove problematic.
- Introducing administrative monetary penalties of up to $10 million ($15 million for repeat offenders) for companies that abuse their dominant market position.
This proposal would fundamentally alter the nature of the reviewable conduct provisions. They had previously not included penalties, specifically because the framers of the Competition Act sought to avoid deterring aggressive competition, even by large firms. Introduction of a significant penalty will inevitably reduce the willingness of large firms to be aggressive. Sometimes this may benefit competition, but sometimes it will hurt consumers and competition.
- Empowering the Competition Tribunal to force companies to pay restitution to victims of deceptive marketing practices, including the ability to freeze assets and to prevent the disposal of property to ensure that money is available for victims.
- Raising civil penalties for deceptive marketing from the current maximum of $50,000 to up to $750,000 for a first "offence" and up to $1 million for repeat transgressors.
- Raising maximum penalties for criminal anti-competitive offences, namely hard-core cartels and bid-rigging offences, to a $25 million fine and 14 years in prison. (Currently, the maximum penalties are $10 million and five years in prison).
- Increasing penalties for obstructing Competition Tribunal investigations, up to a $100,000 maximum fine (for a summary offence) and up to 10 years' imprisonment (for an indictable offence); and
- Increasing maximum imprisonment terms for criminal deceptive marketing from five years to 14 years.
The increases in jail terms, in particular, are very significant. They are arguably out of step with other more serious criminal offences.
The announced amendment also included a series of non-competition law amendments, such as:
- increasing the frequency of gas pump and heating meter inspections;
- increasing fines for gas companies found to be overcharging consumers;
- preventing telecommunications companies from charging consumers for unsolicited incoming commercial text messages; and
- introducing anti-spam legislation.
These proposals have raised issues among stakeholders. Some concerns are noted above. As well, some commentators have pointed out that the high monetary fines proposed for civil contraventions of the Act are more accurately criminal in nature, and may be subject to constitutional challenge. Still others have wondered whether the implementation of certain proposals, such as anti-spam legislation, will be effective.
The policy announced during the election campaign, and confirmed in the recent Speech from the Throne, is fairly bare bones in nature. Of course, if there is a change in government this matter likely will be up in the air again, although these sorts of changes may prove popular with all parties in the House of Commons. Also, since no party enjoys a majority in the House of Commons, it is possible that after a Bill is introduced by the Government it will be subject to amendment through the legislative process. Over the last number of years, competition legislation has been subject to considerable debate and amendment through the committee process. This was true even under a majority government, but the issue is particularly acute in a minority situation.