On March 12, 2009 Bill C-10, An Act to implement certain provisions of the budget tabled in Parliament on January 27, 2009 and related fiscal measures, received Royal Assent. The Bill repealed the provisions in the Competition Act (Canada) (the Act) dealing with criminal price discrimination, promotional allowances and price maintenance. These changes provide considerably greater flexibility to Canadian businesses in structuring their day-to-day business relationships and practices, and may provide franchisors with greater flexibility in dealing with franchisees on pricing matters. In particular, there will be greater latitude for a franchisor to influence a franchisee’s resale price, except in circumstances where doing so could have an “adverse effect on competition.”

The Bill also significantly increased the penalties for misleading advertising and deceptive marketing under the Act. The maximum penalty for criminal misleading advertising is now 14 years’ imprisonment and a fine in the discretion of the court. The maximum administrative monetary penalty for deceptive marketing has been increased to $10 million ($15 million for subsequent violations).

Additionally, both the criminal and civil provisions have been amended to clarify that they capture deceptive marketing practices which target persons outside of Canada. The Act also now allows interim injunctions against persons who make materially false or misleading representations to the public, and contains a framework for restitution-type monetary orders for those who purchased products based on a misrepresentation. For more information on the amendments to the Act, click here.