Category: Law

MIL OSI Translation. Canadian French to English –

Source: Government of Canada – in French 1

Notes for an address by Matthew Boswell, Commissioner of Competition at the Canadian Bar Association Fall Competition Conference – “The New Era of Competition Enforcement in Canada” – September 2024

Notes for an address by Matthew Boswell, Commissioner of Competition

Canadian Bar Association Fall Competition Conference

September 2024

(The speech delivered is authoritative)

Good morning.

I am pleased to be with you again this year for the Fall Conference on Competition Law.

I would like to begin by reiterating that we are gathered today on the traditional, unceded territory of the Algonquin Anishinaabe people.

We gather as the spectacular colours of fall take hold here. One of the centrepieces of this seasonal transformation – here as in much of Canada – is undoubtedly the maple tree.

The growth of the maple tree provides us with a good analogy for the changes: including the dramatic changes in competition law in Canada that I will tell you about today.

At first, maple trees grow upwards… very quickly. Then they spread outwards to create their large canopy.

The evolution of competition law in Canada has followed a similar path.

That’s why I’m here today to talk about the recent round of amendments to the Competition Act. What these changes mean for the legal community and many of your clients. And what they mean for all Canadians. I’ll also talk about what’s not changing with these recent reforms. So let’s get started.

The new era

Ahead of recent amendments to the Competition Act in 2021, the government made significant investments in the Bureau’s budget to strengthen our ability to enforce the law and promote greater competition.

These budget increases have enabled us to equip ourselves to meet the needs of Canada’s modern economy. In particular, we created our Digital Enforcement and Intelligence Branch, which leverages data and technology to support our enforcement and competition advocacy work.

However, despite these new resources, we did not have the legislative tools necessary to take the enforcement action that the general public, and parliamentarians, expect.

As you know, since 2022, Canadian competition law has undergone three waves of amendments. Let me summarize the highlights:

The amendments began in 2022 with the criminalization of wage-fixing and no-poaching agreements, and increased maximum fines and penalties. Then, in 2023, the outdated efficiency defense was eliminated, the abuse of dominance rules were strengthened, and the Bureau was given formal market study powers. Finally, earlier this year, amendments equipped the Bureau to more effectively review mergers, including through the introduction of structural presumptions, and strengthened the provisions on deceptive marketing practices, particularly with respect to false claims of discounts, partial pricing, and unsubstantiated environmental claims.

That’s a lot of changes in two years.

Not surprisingly, Canada’s legal community has taken note and is actively working to assess the impact of these far-reaching changes. The result is a growing consensus: we have entered a “new era” of competition law, compliance and enforcement.

In your newsletters, many of you have used words to describe these changes: “landmark,” “transformative,” “radical change,” and even “profound reform.”

The Globe and Mail, in a July 2024 editorial, called it “a new era of competition law for consumers.”

The broad consensus on the need for reform is not new. The feeling that Canada needs to do more to promote competition has been on everyone’s minds for some time.

Three years ago, I joined you – more than two years into my mandate and still virtually due to the COVID-19 pandemic – to call for a comprehensive review of the Competition Act. At the time, it was almost a wild hope.

And yet, we have come so far since then!

This move was driven by a groundswell of Canadians calling for change in response to an economy where competition simply wasn’t working. People were clear: they want more competition.

The desire for meaningful reform grew stronger in the House of Commons and the Senate, where unanimous all-party support provided the momentum needed to make these changes a reality.

The details of these recent changes may not be universally agreed upon, as is rarely the case with laws. But there is unanimity that these efforts to modernize our laws are a legitimate and unavoidable response to the need to “do more.”

This new era of competition law enforcement should be seen as a generational shift, rather than a radical one.

Just as no one blames the maple tree for growing and thriving by adapting to its environment, our laws must respond to the needs and challenges of our economy as it exists today. With these changes, the government and Parliament are seeking to equip the Office with the right tools to achieve the results we all want: a vibrant and competitive Canadian economy.

To return to the maple analogy, I see this new era a bit like the firmly spread branches of that robust tree. The brilliant canopy grew from an idea: increased competition will stimulate growth and benefit the public interest. It is a goal we all want to achieve.

These changes are also consistent with the type of vastgovernment-wide competition program[in English only] that I am calling for to help solve Canada’s productivity problems.

We can achieve this by doing the right thing: opening markets, setting their rules, enforcing them, and giving everyone a fair chance at growth, opportunity and investment.

What to expect for the future

Many of you will want to know how this modernized Competition Act will affect your clients. The changes are significant and far-reaching, and I understand that it is important for you to hear what the Bureau has to say about this new reality and how we will enforce the law going forward.

From my perspective, there are four major changes that will define the way the Office works, thinks and reacts.

First, more law enforcement action is to be expected.

I think it will come from both the Bureau and the expanded private access regime.

These legislative changes have given the Bureau the tools it needs to take meaningful enforcement action. This means that anti-competitive conduct will no longer fall through the cracks, as it did in the past, due to gaps in the legislation. It also means that there will be greater demand on the Competition Tribunal and other courts.

And, to the delight of many in the room, I am sure, this will result in more case law.

Second, we should expect faster and much less technocratic implementation.

The Competition Act now includes simplified legal tests, a reverse onus and rebuttable presumptions for mergers. And as I mentioned a moment ago, the efficiency defence has been repealed.

These changes will allow the Bureau to sort through cases and conduct investigations more quickly. They should also help to achieve results based on reasons that are understandable to ordinary people.

To illustrate how these changes will simplify our work, we no longer have the burden of hundreds of paragraphs of complex mathematical formulas to determine whether a merger would violate the Competition Act.

It was high time to bring some common sense back into our competition legislation.

The third thing you can expect is a strengthening of corrective measures.

We see this in the new merger remedial standard, the broader range of remedies available under section 90.1, and our new civil mechanism to enforce consent agreements. We also see it in the changes to maximum fines and penalties across the Act. We are now better able to seek real and meaningful sanctions when violations occur. This means that the days of absurdly low financial penalties are over.

Private claimants will now be able to seek redress by applying to the Competition Tribunal.

All of these changes translate into a law enforcement approach that is strict and diligent: those who break the law will face significant consequences for their actions.

The fourth and final thing we can expect from this new era is a more people-centered approach to law enforcement.

Implicitly, these changes ensure that the Act better reflects the current needs of the Canadian public in competition law matters, for example:

What serves the public interest? Opening the door to public interest litigation will help answer this question. Recognizing the importance of competition to workers through the new wage-fixing and non-poaching offences, and by expressly incorporating the term “personnel” into the merger provisions. Ensuring that Canadian consumers are better protected from deceptive marketing practices, including by preventing the dissemination of partial pricing and false representations that mislead consumers and harm competitors. Strengthened protections for whistleblowers, complainants and others who come forward and provide assistance under the Act, under the new anti-retaliation provision.

Overall, the amendments to the Competition Act result in a stronger legal framework for enforcement in Canada, and a system that is more responsive to public needs. A system that is much less tolerant of anti-competitive behaviour that misleads Canadian consumers, artificially drives up prices and keeps wages low, and limits productivity and innovation.

Just as I talked about how this new era will affect the way the Office works, let’s now talk about how this new era will affect the choices businesses make.

There are four areas I want to highlight today that I think will be of particular interest to you.

Mergers

Let’s start with effective merger control. Strong rules are vital because they are the Bureau’s first line of defense in its efforts to protect the competitiveness of our economy.

For the vast majority of mergers, things will not change in this new era. But in some cases, there are significant changes that deserve attention.

First, more mergers are now subject to prior merger notice requirements. And, regardless of prior notice, in all cases where we seek an injunction, a merger cannot close until the injunction is heard and determined. These changes clearly reaffirm the preventive purpose of merger review.

Second, transactions that were not notified will be subject to a longer limitation period during which we can, if necessary, file a claim after the transaction has closed. In practical terms, this means that there is now less risk that anti-competitive transactions will escape our notice.

Third, we can expect a greater dose of healthy skepticism about merger proposals in concentrated sectors. This is the result of the repeal of the efficiency defence and the creation of rebuttable structural presumptions. This puts an end to what was – in my view – an overly permissive approach to mergers or, as one of my predecessors described it, “the weakest merger legislation of any of our peer countries.”

Fourth, among other notable changes regarding mergers, the standard for remedies is now much stricter. This will move us toward remedies that, in both intent and effect, fully preserve and protect competition from anticompetitive mergers. This is a significant improvement over the situation that prevailed just a year ago.

It bears repeating: the vast majority of mergers reviewed under the Competition Act are not complex and are cleared quickly. That will not change.

But for complex cases, especially those that raise significant competition issues, expect us to come knocking. In those cases, some parties will simply need to be well-prepared to explain their merger plans. But for ill-advised transactions that are particularly anticompetitive, in this new era, those ideas should never leave the boardroom.

I recognize that having good guidance in this area is essential. That is why we will soon be launching a comprehensive review of the merger enforcement guidelines. We will also take this opportunity to ensure that we have modern guidelines that reflect the digital economy and the most recent case law.

As part of this process, we will be publishing a discussion paper in the coming weeks that will include questions for your consideration. We hope that you will participate in this process to help us make these guidelines as useful and rigorous as possible.

A draft of the revised guidelines will follow. We value your input and that of your clients. Your contributions to our guidance contribute to greater clarity for everyone.

Monopolistic practices

Let’s move on to the second point on the list of notable changes: monopolistic practices.

It is not bad to be big. Companies that grow by innovating and competing on the merits should not be punished – this is an essential foundation of the competitive process.

The recent changes do not change our view on this. What does change is our ability to clearly define offenders and the very real possibility of applying meaningful sanctions in the event of a violation. These changes finally bring us in line with our peers.

In this new era, we now have a simplified test for determining whether there has been an abuse of dominance requiring a prohibition order. This will help us stop any conduct by dominant firms that has harmed competition in the market or was intended to do so.

We can also count on a significant improvement in the provision on civil agreements. This will allow us to tackle a broader range of anti-competitive agreements. It is accompanied by more effective remedies to address harm and promote compliance.

In this area, we have published newguidelines for property controlsfor public consultation. We consider our position to be strong but responsible. However, we remain open to other points of view. We invite you to provide us with your comments before finalizing these guidelines.

Finally, on this point, we are preparing additional guidance on restrictive trade practices and we will also consult on this draft guidance.

Deceptive business practices

Next, let’s look at how this new era will affect our enforcement work in the area of deceptive marketing practices.

This is an area where the Bureau needed an enforcement framework that was relevant to our times. We needed the tools to do the best job possible in combating these long-standing practices that harm consumers and competition.

First, partial pricing. As you know, we have had many successes in pursuing those who engage in this anti-competitive practice.

Just earlier this week, the Competition Tribunal released its decision in the Cineplex partial pricing case. This is a resounding victory for Canadians, and a concrete example of our new era of competition enforcement.

I know that Cineplex has announced its intention to appeal. However, I want to point out that this is the first decision made by the Tribunal under the recent amendments to the Competition Act, which include the possibility of imposing higher administrative monetary penalties.

This decision sends a strong message: companies must not practice partial pricing and must display their full prices up front whenever additional charges are mandatory for consumers. Companies that do not comply with the law are exposed to significant financial penalties.

Of course, we have also recently obtained two consent agreements in this area, against TicketNetwork and SiriusXM Canada. We also have several other investigations underway. The lesson is clear: expect a response and consequences if you engage in false or misleading practices by advertising prices that are unattainable due to fees that are not disclosed in the offer.

We will now turn to an area that has been the subject of much discussion: the provisions relating to environmental reporting and greenwashing. I can assure you that at the Bureau, we have heard loud and clear that there is a strong desire for guidance on these new provisions in the Act. We have already acted and we will continue to act expeditiously on this issue.

While these changes are significant, it is important to remember that our laws already prohibited greenwashing and unsubstantiated performance claims.

The Competition Act has long contained provisions prohibiting false or misleading representations to promote a product or business interest. Take, for example, the action we brought against Keurig Canada in 2022. Our investigation found that the company’s claims about the recyclability of its single-serve coffee pods were false or misleading. Keurig agreed to pay a $3 million penalty.

Similarly, performance claims that are not based on adequate or appropriate testing have been prohibited in Canada since the 1930s. By extension, the Bureau has long advised companies that these provisions apply to environmental claims. Not only have we issued guidance and warnings for many years, but we have also taken enforcement action in high-profile cases.

Based on our past actions, you can see that these new provisions represent an evolution – not a revolution – in the fight against misleading marketing practices. This means that advertisers are expected to base their environmental claims on solid foundations, so that they are not considered false or misleading to consumers.

As you know, we are leadingconsultationson these new provisions and we will carefully examine the reactions received. In the meantime, I invite interested parties to read the special edition ofVolume 7 of the Collection of Deceptive Commercial Practices. It contains useful advice on how to comply with the pre-existing provisions of the Act in relation to environmental reporting.

Private access

Finally, I will share with you some thoughts on the changes to the private access regime in this new era.

The amendments have created a much more robust private enforcement system. It now extends to most of our civil provisions. It is available to a wider range of claimants. It is accompanied by a relaxation of the test used to determine whether a case can proceed and allows the court to order the payment of money.

We welcome and support these changes, as they will support the work of the Office, lead to more case law and provide access to private remedies.

The impact of these changes is already visible. Private access is being used as a tool in abuse of dominance cases, including Apotex and JAMP Pharma. And this is just the beginning. More significant changes to the Act will come into force in June 2025.

We will be monitoring cases closely and scrutinizing them for opportunities to intervene and provide the Bureau’s perspective, particularly if important legal issues are at stake. And I am sure many of you in this room will do the same.

We plan to update our Private Access Procedures Information Bulletin in light of these important changes, including the factors we will consider in deciding whether to intervene.

I also want to make it clear that we recognise the importance of having a well-resourced Competition Tribunal. As we move into a new era where we intend to bring more cases before the Tribunal, and we anticipate an increasing number of private access cases, this will only become more important to ensure that we adjudicate quickly and efficiently.

What comes next

I have spent a good deal of my time today explaining to you what I believe the changes to the Competition Act will do to the enforcement of the Act. And, therefore, what they will do to your work.

Yes, there is broad public support for modernizing the Competition Act, and these changes bring Canada in line with international best practices. And yes, some of the changes are still a bit rough; they will need to be sanded down to a smoother finish, whether through guidance or case law. That is to be expected. After all, this is a framework law, not a code.

However, despite these significant changes, it is also important to note what is not changing. This is still a framework law focused on maintaining and promoting competition in Canada, not a sector-specific regulation or price control regime.

The Competition Act remains subject to strong due process protections, evidentiary requirements and clearance standards to ensure fairness for all parties and to weed out clearly unmeritorious cases. The Bureau will, of course, continue to enforce the law in a transparent, predictable and rigorous manner. In other words, while the maple tree’s canopy has expanded, its roots have remained the same.

When it comes to ensuring fair and equitable competition in Canada, we have been working to do so for almost as long as Canada has existed. It is not talked about enough. The new laws are a response to an old problem.

In 1889, Canada became the first country in the world to adopt modern antitrust legislation. Our legislation, like that of the United States, was a response to the serious problems faced by people in these young, emerging markets. This tradition, which dates back more than 135 years, continued into the 20th century. In the 1920s, Prime Minister Mackenzie King himself introduced the Combines Investigation Act, which became the basis for today’s Competition Act, for first reading.

Then, in the 1980s, the Competition Act was amended through Bill C-91 – legislative changes that, according to a statement by the then minister responsible for that portfolio, were necessary to adapt the Act to the demands of a modern marketplace.

This brings us to today’s changes, the final step in a long journey.

As I explained at the beginning of my speech, a generational change in competition law is here. Finally.

Which brings us back to the maple analogy:

These are new branches that complete the canopy of Canada’s competition tree. They cover a larger area with the rules and enforcement framework needed to keep pace with today’s economy. But this canopy is consistent with previous principles. These changes build on the Bureau’s long history of commitment to transparent, evidence-based enforcement.

Conclusion

In closing, I would like to reiterate that we are entering a new era of competition law enforcement in Canada. Today, we have much stronger legislation that finally addresses many of the long-standing deficiencies in the Competition Act.

As I indicated, we are developing guidance to clarify the effects of these changes for the Office and for your clients. We want you to help us refine it.

However, the message from Canadians and parliamentarians has been clear: they want stronger and more active enforcement. These recent amendments have given us the tools to achieve this.

I would like to leave you with a clear conclusion: in this new era, you must expect a more aggressive and active authority, which will use all the tools at its disposal in the interests of Canada, its people and its economy.

These changes are long overdue, and it is now up to me, as Commissioner of Competition, to ensure that they are implemented in a way that meets the high expectations of the Canadian public and parliamentarians.

So, fasten your seat belt.

THANKS.

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and/or sentence structure not be perfect.

MIL Translation OSI