Earlier today, Canada’s Minister of Finance tabled the weighty Bill C-10, the Budget Implementation Act. Included in this Bill are proposals to significantly amend the Competition Act and the Investment Canada Act. If passed, these amendments would implement the principal recommendations of the government’s blue-ribbon Competition Policy Review Panel, which tabled its report in June 2008. The proposed amendments to the Competition Act include:
- Repealing the existing criminal conspiracy provisions and replacing them with a per se criminal offence to address hard-core cartels and a civil provision to deal with other types of agreements between competitors that have anti-competitive effects;
- Broadening the bid-rigging provisions to include arrangements to withdraw bids or tenders;
- Repealing the criminal price discrimination, promotional allowances and predatory pricing provisions;
- Decriminalizing the resale price maintenance provision and accompanying the new civil provision with a right of private access to the Competition Tribunal;
- Increasing the fines or prison terms for criminal offences and increasing administrative monetary penalties for deceptive marketing practices and misleading advertising;
- Granting the Competition Tribunal the power to order administrative monetary penalties of up to $10 million for violation of the abuse of dominance position provision (or $15 million for a subsequent violation);
- Significantly changing the merger notification process to provide for a two-stage review process. The initial review period would be set at 30 days and the Commissioner of Competition would be empowered to initiate a second stage review that would extend the review period for an additional period ending 30 days following compliance with a second request for information;
- Reducing the three-year period during which the Commissioner of Competition currently may challenge a completed merger to one year;
- Increasing the transaction size threshold from $50 million to $70 million and indexing this threshold to GDP;
- Repealing the special abuse of dominance position rules and penalties for dominant air passenger service; and
- Creating additional classes of transactions that are exempt from the merger notification provisions of the Competition Act.
The proposed amendments to the Investment Canada Act include:
- Empowering the Minister of Industry to review foreign investments that could threaten national security, regardless of their size;
- Empowering the Governor in Council to take any measures it considers advisable to protect national security, including prohibiting acquisitions by non-Canadians;
- Substantially increasing the review threshold for acquisitions of control of any Canadian business, except a cultural business, to $1 billion, which increase would be phased in over a five-year period; and changing the measurement standard from gross assets to the enterprise value of the acquired business;
- Eliminating the lower review thresholds for the transportation sector, financial services and uranium production (retaining the lower threshold for cultural businesses); and
- Prescribing a maximum 45-day time frame for the Minister to issue opinions.
While the Competition Bureau and the Investment Review Division are situated within Industry Canada, these amendments are being proposed in the context of a budget bill sponsored by the Minister of Finance. This has important consequences from a timing perspective. Budget legislation generally passes through the parliamentary process on an expedited basis and with significantly less committee consultation than do amendments proposed in a stand-alone bill. It is expected that Bill C-10 will be sent to the Finance Committee (and not the Industry Committee). This may occur as early as the week of February 23, 2009.