Recent developments in Competition Law: The Perspective of the Bureau of Competition Policy

Howard I. Wetston, Q.C.
Director of Investigation and Research
Bureau of Competition Policy
Consumer and Corporate Affairs Canada

Presentation to The Law Society of Upper Canada
Toronto, Ontario

April 26, 1991

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I. Introduction

Diligent law enforcement and compliance policy are the primary tools of the Bureau of Competition Policy (the Bureau) for maintaining and encouraging competition in the marketplace. But continuous Canadian Charter of Rights and Freedoms (the Charter) challenges are creating some uncertainty about the manner and degree of the Bureau's enforcement response.

This paper explains the Bureau's perspective on recent developments in Canadian competition law. It provides some practical guidance on which business practices may, or may not, violate the law.

The paper also addresses important case law developments in areas of abuse of dominance, refusal to deal and merger consent orders. It must be stressed that many cases involving the Bureau are currently under appeal, thus limiting our conclusions. This paper will bear in mind these limitations.

As part of the Bureau's compliance program, the Merger Enforcement Guidelines have just been published, and publication is planned later this year of enforcement guidelines dealing with price discrimination and predatory pricing. Drafts of these last two guidelines have already been released for the purposes of consultation. One of the purposes of these guidelines is to make the Bureau's enforcement policies more transparent. The underlying theory is that this will facilitate business's understanding of the limits imposed by the Competition Act (the Act).

II. Major Constitutional Challenges

All legislation in Canada must meet various Charter standards and many existing laws have already been tested. Obviously we are facing extensive and important challenges to the 1986 Competition Act. Litigation will undoubtedly continue as courts consider the Charter's meaning and its application to the Act.

A. Conspiracy

In R. v. Nova Scotia Pharmaceutical Society (No. 2) (PANS) and in L'Association québécoise des pharmaciens propriétaires c.R. (AQPP), courts in Nova Scotia and Quebec, respectively, found that the main conspiracy provision of the Act violates the Charter.

It was held in both cases that the single intent requirement of s. 45(1)(c) means an accused may be convicted for entering into an agreement even if there is a reasonable doubt that that person knew or ought to have known competition would be lessened unduly. In the view of the courts, this result conflicts with the notions of fundamental justice protected by s. 7 of the Charter because it allows for the conviction and imprisonment of a person without a sufficient finding of criminal intent. In other words, the "morally innocent" could be convicted.

The courts also concluded that the meaning of the word "unduly" was too vague and uncertain. This uncertainty was considered to deprive accused of their right to fundamental justice, to make full answer and defence, and to a fair trial, thus violating ss. 7, 11(a) and 11(d) of the Charter.

The PANS appeal was heard in February, and the Nova Scotia Court of Appeal delivered its judgment on April 24, 1991. It found that s. 45(1)(c) did not violate the Charter in either respect. Due to this finding, the Court found it unnecessary to deal with arguments justifying the section under s. 1 of the Charter.

In addressing the issue of the mental element, the Court found the section consistent with the mens rea requirements of s. 7 of the Charter. However, the Court rejected the Crown's contention that a single intent was sufficient. Instead, it declared that "some degree of mens rea must attach to each essential element of the offence if the provision is to comply with s. 7 of the Charter" (p. 17), and also noted that:

The Court concluded that, contrary to the conclusion of the trial court that prior jurisprudence on s. 45(1)(c) only imposed a single intent requirement, the Supreme Court of Canada's decision in the Atlantic Sugar case changed the law into a double intent offence. In doing so, it rested its decision on a point argued by neither party to the appeal. It also did not consider the reasoning of courts in other post-Sugar cases. For example, in 1983, Mr. Justice Anderson stated, in the Newspapers case:

The Court did not explicitly indicate whether the constitutionally-requisite degree of mens rea was subjective or objective intent, though it suggested that the Atlantic Sugar decision had imposed a subjective intent requirement:

On the vagueness issue, the Court essentially adopted the Crown's position. It held that the word unduly was not so vague that it allows a "standardless sweep" which prevents a person from knowing in advance with a high degree of certainty what conduct is prohibited and what is not. While acknowledging that the word "is admittedly imprecise" (pp. 31-2), the Court found sufficient guidance within the statute itself in terms of its exemptions and exceptions, its tests and focus on competitive effects, and in the case law to provide "warning and notice to parties entering agreements of the type of conduct that runs the risk of being found illegal" (p. 28). It also noted that unduly benefitted the accused, as it required the Crown to prove "an undue or excessive impact on competition in the marketplace" instead of any lessening of competition (p. 32). The Court further said nobody is in a better position to know the likely effect of an agreement on competition than the parties to it. The Court therefore concluded parties who enter into an agreement with the intention to lessen competition unduly cannot complain when it is held the competitive effect of the agreement is undue.

It now appears that the Supreme Court of Canada will be asked to adjudicate on these issues. An appeal was filed with the Court in May.

The impact of the decisions in PANS and AQPP on recent Bureau operations should not be minimized. Some conspiracy prosecutions have been side-tracked, settlement negotiations have become more complicated and cases have generally been protracted. We are spending considerable time and resources on various challenges, motions to quash, injunctions and other matters. We are hopeful that a number of these situations will be resolved, following this decision.

Conspiracy to lessen competition results in lower output, higher prices and reduced incentives for innovation and efficiency. Conspiracies are essentially frauds on the marketplace. In recognition of the seriousness of this offence, corporations are liable under the Act's current provisions to a fine of $10 million for a single charge. Individuals can be imprisoned for up to five years. The Act also provides, as an added deterrent, for civil liability for damages flowing from conspiratorial activity.

The conspiracy provisions of the Act are vitally important to the Government's economic strategy. Similar laws have been enacted by virtually all of Canada's major trading partners. These provisions, which account for more than 25 percent of Bureau enforcement activity, have been a critical part of Canada's competition legislation since 1889. Practitioners and academics agree such a law is vital for total economic welfare.

The Bureau will continue to seek penalties that deter collusion. The recent Flour case, R. v. Maple Leaf Mills Ltd., set a new benchmark for highest total fines for any charge under Canadian competition law. On December 7, 1990, Maple Leaf Mills Ltd., Ogilvie Mills Ltd., Robin Hood Multifoods Inc. and Parrish & Heimbecker Ltd. pleaded guilty in the Ontario Court (General Division) to charges of bid-rigging on government wheat flour tenders for food aid programs between 1975 and 1987. In addition to a prohibition order regarding conduct for future government flour tenders, the three largest mills agreed to pay fines of $1 million each. Soo Line Mills Ltd., B.P. Kent Flour Mills Ltd. and Dover Industries Ltd. recently pleaded guilty to the same charges and were fined a total of $180 000. The total fines to date are $3 405 000. The last firm charged, Rogers Foods Ltd., remains before the courts.

The Flour case is consistent with the Bureau's enforcement policy to give inquiries into collusive behaviour high priority. The Government will continue to strive for penalties that have a deterrent effect on anticompetitive practices. The Bureau will not hesitate to recommend to the Attorney General that individuals be charged in appropriate conspiracy and bid-rigging cases. Counsel should expect such charges where individuals actively participate in the offence. Through higher fines, the Bureau is determined to make clear that conspiracy and bid-rigging are socially and economically unacceptable in the Canadian marketplace.

B. Merger Policy

Mr. Justice Philippon of the Quebec Superior Court ruled last April in Alex Couture Inc. v. Attorney-General of Canada (Couture) that ss. 91-103 of the merger provisions in the Competition Act are inconsistent with certain rights protected by the Charter and the Canadian Bill of Rights. To briefly summarize Mr. Justice Philippon's decision, these sections were found to constitute unjustifiable limits on the right to freedom of association as guaranteed by s. 2(d) of the Charter and s. 1(e) of the Canadian Bill of Rights. Furthermore, the Competition Tribunal (the Tribunal), as constituted pursuant to the Competition Tribunal Act, was found to lack the guarantees of independence and impartiality required as a matter of constitutional principle of a body exercising such powers as are conferred upon the Tribunal. This is because it includes lay members with connections to private and public institutions. It was further held that legislative provisions do no t ensure the independence and impartiality of either lay or judicial members of the Tribunal.

An appeal in Couture was heard by the Quebec Court of Appeal in December 1990. The Attorney General put forward arguments that the existing rules and regulations of the Tribunal offer all the necessary guarantees of individual members' impartiality when ruling on matters before them. Moreover, full powers of appeal lie from the Tribunal's decisions to the Federal Court of Appeal. The Attorney General also argued that the rights to freedom of association found in the Charter apply to individuals, not corporations. Even if the Charter is found to apply to corporations, the Competition Act does not prohibit all mergers, only those which lessen or prevent competition substantially.

Despite the ruling in Couture, the Tribunal's ruling in the NutraSweet case, infra, confirms that it has the jurisdiction to hear applications brought by the Director of Investigation and Research. The Bureau fully intends to make applications where appropriate. For example, on November 29, 1990, an application was filed challenging the acquisition by Southam Inc. (Southam) of various publishing interests in British Columbia's lower mainland. In addition, the Bureau filed an application with the Tribunal in February 1991 challenging the July 1990 acquisition of Ontario Rendering Company Limited by Hillsdown Holdings (Canada) Limited.

Southam filed a statement of claim in the Federal Court on December 3, 1990 seeking a stay of proceedings. The company raised similar constitutional arguments as in Couture. The essence of Southam's claim was the high cost of unnecessary litigation should the courts ultimately determine the Tribunal to be unconstitutional.

On February 13, 1991 the Federal Court held the potential harm to the public interest in granting the stay was greater than the potential harm to Southam in allowing the proceedings to continue. On this "balance of convenience" argument, the application was denied.

At least in this case, the decision on the interlocutory motions means the Tribunal can now proceed with considering the substantive merits of the merger. In this regard, the Federal Court has confirmed the public interest in maintaining and preserving competition. Southam has indicated that it will appeal these findings.

C. Misleading Advertising

R. v. Wholesale Travel Group Inc. (Wholesale Travel) involves a challenge to the constitutional validity of a section providing a defence to the misleading advertising provisions of the Competition Act.

In Wholesale Travel, the accused were jointly charged with five counts of misleading advertising. A majority of the Ontario Court of Appeal upheld the constitutionality of s. 52(1) establishing the offence, but found that ss. 60(2)(c) and (d) were unconstitutional. Sections 60(2)(a) and (b) were held to be valid only after the words "he establishes that" were declared of no force and effect.

The court held that ss. 60(2)(c) and (d) impose a positive obligation on the accused to retract forthwith a misleading representation as a precondition to availing itself of the defence of due diligence. An accused who failed to do so could be convicted of the offence even if that person acted with due diligence. Since the defence is not always open to an accused unless corrective measures are taken forthwith, and the accused risks imprisonment upon conviction, the fundamental justice guarantee in s. 7 of the Charter was held to be violated.

The combined effect of s. 52(1)(a) and ss. 60(2)(a) and (b) is to create a strict liability offence for which due diligence is a defence. The words "he establishes that" place the burden of proof on the accused. Since this makes it possible to convict even though the court may entertain a reasonable doubt about guilt, the majority held the presumption of innocence guaranteed by s. 11(d) of the Charter is violated. Argument was heard in February of this year before the Supreme Court and a decision is expected this autumn.

If this decision is upheld by the Supreme Court, severing ss. 60(2)(c) and (d) from s. 60 effectively means that advertisers would likely publish fewer correction notices. Nevertheless, many businesses have found it makes good sense to correct advertising errors. In priorizing inquiries and recommending prosecutions to the Attorney General, the Bureau often considers whether corrective measures have been taken.

Severing ss. 60(2)(c) and (d) from the Act means that the due diligence defence will be more readily available to an accused. Combined with striking out the reverse onus provision, this means that the Bureau will have to be more mindful of this defence during the evidence-gathering stage of investigations. Accordingly, the Bureau may have to use formal powers, such as searches, more frequently on misleading advertising inquiries than in the past.

III. Tribunal Matters

A. Abuse of Dominance

Last October, the judicial members of the Tribunal, who are also judges of the Federal Court, concluded in Director of Investigation and Research v. NutraSweet Co. (NutraSweet) that the Tribunal was validly constituted. It was held a "reasonable, informed person" would see that protection exists against potential lay member bias.

It was held the legislation makes adequate arrangements for tenure and reappointment to the Tribunal. The Tribunal's validity was also upheld because the Competition Tribunal Act provides for judicial review of Tribunal findings, as well as appeals to the Federal Court of Appeal.

Regarding Dr. Frank Roseman's participation in both the Tribunal and the Restrictive Trade Practices Commission, the Tribunal said that it would be impossible for a matter which had been commenced before the Commission to come before the Tribunal. Therefore, Dr. Roseman could not reasonably be seen to have an institutional bias against any matter coming before the Tribunal.

NutraSweet was the first case involving the new civil abuse of dominance provisions of the Act. The case was an inquiry into the Bureau's claim that exclusionary practices had prevented the development of an efficient and competitive market environment. The Tribunal found there were impediments to the efficient operation of the aspartame artificial sweetener market. It ordered NutraSweet not to enforce exclusionary clauses in its contracts with domestic companies that obliged these companies to purchase all their aspartame from NutraSweet.

NutraSweet has filed a notice of its intention to appeal to the Federal Court. No grounds have yet been filed, but the company indicated it intends to raise both substantive and constitutional issues on appeal.

The case represents an important first step in creating guidance on a number of issues. The Tribunal offered interpretations of hitherto-undefined terms in s. 79, namely "control," "class or species of business" and "practice of anticompetitive acts," including the question of whether different individual anticompetitive acts taken together may constitute a practice. In applying the statutory language, the Tribunal also had to deal with issues of relevant product and geographic markets, barriers to entry and market foreclosure. Finally, the Tribunal made clear that, notwithstanding the effect of exclusivity clauses used by a firm with about a 95 percent market share in inhibiting entry by new suppliers, this structural situation was not enough by itself to satisfy the requirements of s. 79. The Bureau was required not only to establish that a practice of anticompetitive acts existed, but also to establish that there was an anticompetitive purpose for each of the acts.

NutraSweet clearly does not authorize challenges to exclusionary clauses in every contract. In the first instance, exclusionary clauses will raise concerns only if they lessen competition substantially. Circumstances may exist where exclusionary clauses will have little or no effect on competition. The Bureau recognizes that these clauses may even be procompetitive. Secondly, where the effect on competition is substantial, the purpose of the clauses is critical. In the Tribunal's view, NutraSweet engaged in these practices for the purposes of impeding new entry and inhibiting expansion of firms already in the market, not because the clauses were required for the efficient distribution of the product.

B. Refusal to Deal

(i) Chrysler

Director of Investigation and Research v. Chrysler Canada Ltd. (Chrysler) was the first non-merger application filed with the Tribunal. On October 18, 1989, the Tribunal ordered Chrysler Canada Ltd. to resupply automotive parts to Richard Brunet, the complainant, on usual trade terms. The supply order is currently under appeal.

A contempt order was later sought against Chrysler Canada for not following the terms of the Tribunal's supply order. Chrysler Canada appealed on jurisdictional grounds to the Federal Court of Appeal where it was held the Tribunal is not a superior court. As a result, it has no power to punish for contempt committed ex facie curiae or outside the presence of the Tribunal. The court further found this power was not clearly conferred on the Tribunal by the Competition Tribunal Act.

The Attorney General can rely on the s. 74 criminal contempt provisions in the Act if a Tribunal ruling is breached. Nevertheless, the Tribunal's power with respect to contempt should be clarified. Applications for leave to appeal are under consideration by the Supreme Court.

As an interesting sidebar to the case, Mr. Brunet filed a claim in Quebec Superior Court on September 25, 1990 for damages of $166 635 against Chrysler Canada and Chrysler Corporation. This proceeding was commenced as a s. 36 private right of action because of Chrysler Canada's refusal to comply with the Tribunal's supply order.

(ii) Xerox

In Director of Investigation and Research v. Xerox Canada Inc. (Xerox) the Tribunal ordered on November 2, 1990 that Xerox Canada Inc. once again supply parts to Exdos Corp., an independent photocopier company, on usual trade terms. The Tribunal further held that s. 75 of the Act is constitutionally valid. It found that the section's objective is to promote or preserve competition and does not interfere with provincial jurisdiction.

The Xerox case is under appeal to the Federal Court of Appeal on the supply order, as well as the constitutionality of s. 75. The company has agreed to abide by the decision on the constitutionality of the Tribunal in the NutraSweet appeal.

Both Xerox and Chrysler involved suppliers who actively encouraged dealers to develop market opportunities. Once the dealers developed these markets, they began competing with the companies that originally supplied them. The suppliers then cut off supplies, substantially affecting the dealers' business.

Section 75(1), as drafted, requires no proof of adverse competitive effect for an order to be made. Critics claim this section may be used to strike down a procompetitive dealer termination. In Xerox the Tribunal said it should exercise its discretion if the refusal to deal lessened competition. It commented at page 78: "The immediate effect of an order to supply is to open up channels of distribution and free competitive forces hindered by lack of access to supplies. The section's objective is to promote or preserve competition."

This decision has been enormously instructive for Bureau enforcement policy regarding refusal to deal cases. As a matter of policy, the Bureau has been concentrating on refusal to deal applications where there is a lessening of competition. Given the large number of complaints filed with the Bureau in this area, priority has been given to cases with the aforementioned significant economic impact.

In light of Chrysler and Xerox, we have had an increasing number of questions regarding dealer and franchise terminations in relation to s. 75. These terminations will be examined just like any other refusal complaint. Concerns will not likely be raised if the franchisor has legitimate business reasons for terminating the franchise. Legitimate reasons may include situations where a franchisee does not meet the terms of the franchise agreement, or does not act in the best interests of the franchisor or where a supplier may simply undertake changes in its system to make distribution more efficient.

However, where there is a lessening of competition, terminations will attract attention when they are caused by insufficient competition among suppliers in the market and when the other conditions of s. 75 are met: 1) the dealer who is cut off is substantially affected or precluded from carrying on business, 2) the dealer is unable to obtain adequate supplies anywhere in the market on usual trade terms, 3) the product is in ample supply and 4) the dealer is willing and able to meet usual trade terms.

C. Merger Consent Orders

One of the most important merger proceedings was concluded in February 1990 when the Tribunal issued a consent order in Director of Investigation and Research v. Imperial Oil Limited (Imperial).

This order required Imperial Oil to divest all of Texaco Canada Inc.'s assets in Atlantic Canada following public hearings and a preliminary decision on the merger. The company was ordered to divest the Eastern Passage Refinery and Marine Import Terminal in Dartmouth, Nova Scotia, four storage terminals and 224 service stations. Imperial Oil was also ordered to divest assets in other areas. Outside of the Atlantic region, Imperial Oil must divest nine storage terminals and 411 service stations. Under the terms of the order, the company also has a duty to supply a specific volume of gasoline to independent petroleum dealers in Ontario and Quebec for up to 10 years.

Concern about the consent order process has been expressed by some practitioners and businesspeople in the aftermath of this proceeding. In this unusually complex case, the process took seven months, and involved three amended consent orders and 16 days of hearings with extensive representations from 13 intervenors. This experience has raised questions about the time and certainty of the process. More specifically, concern has been expressed about the extensive role of intervenors and the double jeopardy problem of reaching accommodation with the Bureau and then facing the possibility of having to agree to a different arrangement to satisfy the Tribunal. This last concern raises a fundamental question as to whose responsibility it is to determine whether or not a merger, as modified by the terms of the consent order, would likely substantially lessen or prevent competition.

We have been examining methods in the Bureau which could assist in expediting consent orders. Also, the Tribunal is reviewing its rules of practice and procedure and has sought public input. Although we have studied the issues, we have no airtight solutions. It is possible that the only way to re-establish the consent order process is to try again.

Comments in several decisions have raised concerns about relying extensively on the use of expert testimony. It is apparent, without minimizing the importance of economic analysis, that consent orders may have to be supported by a greater combination of economic and industry expertise.

The Bureau will continue to make use of consent orders where possible. Imperial was only one of three consent order applications heard by the Tribunal to date. In ABB/Westinghouse, an order was granted 51 days after the filing of the application. This shows the merger review process leading to a consent order can be more certain and timely for the merging parties, as well as result in a decision that preserves competition in the marketplace.

In Reservec, a third consent order was issued by the Tribunal on July 7, 1989 and contained specific provisions relating to Air Canada, Canadian Airlines International and their merged computer reservation systems (CRS), called Gemini. The consent order set out detailed rules of conduct to govern the operation of Gemini and all other CRS companies operating in Canada who decide to establish a direct access link pursuant to the provisions of the order. This case did not commence under the terms of a consent order but was settled in the course of the litigation.

V. Enforcement Policy Guidelines

A. Merger Enforcement Guidelines

Mergers have become increasingly prevalent and complex in recent years, not only in Canada, but worldwide. It is therefore a priority to explain in a comprehensive manner Canada's merger enforcement policy.

After determining that merger guidelines were necessary, we then had to decide on the nature and scope--what type of guidelines would actually guide both the public and the review function within the Bureau. In preparing the guidelines, we paid particular attention to factors which reflect the challenges that Canada, an open trading nation, faces in an increasingly competitive world economy.

The Bureau circulated draft guidelines in November 1990. These received wide distribution in business, government, academic and legal circles. Following receipt of a number of comments, revised guidelines were prepared. These were released publicly on April 17, 1991.

This document is intended solely to provide enforcement guidelines. As such, it sets forth the general approach that is taken to merger review and is not a binding statement of the method in which the Bureau will exercise discretion in connection with any particular merger. Furthermore, the document does not purport to restate the law. Final interpretation of the law is the responsibility of the Tribunal and the courts.

The Guidelines describe the merger enforcement policy of the Bureau under the Act. They are designed to achieve several purposes. First, they promote a better understanding of the Bureau's merger enforcement policy. Second, they provide a single unifying framework for evaluating the likely impact of mergers on competition in Canada. Third, they facilitate business planning by articulating to the business community, the legal profession, and other interested parties, the approach used by the Bureau in reviewing merger transactions. Fourth, in their application, the Guidelines are flexible enough to apply in diverse market conditions.

It is the Bureau's experience that only a small number of mergers are likely to "prevent or lessen competition substantially," the statutory test. Since the Competition Act came into force in 1986, nearly 5 000 mergers and acquisitions have occurred in Canada. About 15 percent posed competition issues that warranted an examination by the Bureau of two days or more. Only about 15 percent of these examinations proceeded any further.

The Guidelines provide that a prevention or lessening of competition can only result from a merger where the parties to the merger are, or would likely be, able to exercise a greater degree of market power, unilaterally or interdependently with others, than if the merger did not proceed.

Market power refers to the ability of firms to profitably influence price, quality, variety, service, advertising, innovation or other dimensions of competition. In evaluating whether the market power of the merging parties is likely to be greater than if the merger does not proceed, the focus is normally on the price dimension of competition.

The Merger Enforcement Guidelines provide greater certainty and understanding of the Bureau's approach to issues such as market definition, foreign competition, barriers to entry, failing firms and the trade-offs between efficiency gains and reduced competition.

Better quality information will streamline the process for all concerned. Clear "bright lines" have been established to maximize the guidance function. At the same time, considerable flexibility has been retained to ensure the application of "bright lines" and "rules of thumb" do not lead to inappropriate results. Blind adherence to the "bright lines" is not in the best interests of either the Bureau or the public.

The Bureau is committed to a review process that is expeditious, thorough and beneficial for all Canadians. The Guidelines do not represent a significant change in enforcement policy nor should they result in an increase in the number of mergers challenged. In fact, the numbers may even decrease given the greater certainty the Guidelines should provide. Assisted by this document, counsel should more easily be able to identify problematic transactions.

B. Price Discrimination and Predatory Pricing Guidelines

Draft price discrimination guidelines have also been circulated which explain the Bureau's policy concerning enforcement of s. 50(1)(a) of the Act. The Bureau considers the statutory language of the section permits a wider range of discounts, allowances and rebates than those previously considered.

The Bureau will not normally challenge price concessions such as functional discounts or incentive bonuses. Sellers can attach conditions to the granting of price concessions provided the same concessions are reasonably available to competing purchasers of like quality and quantity. These guidelines should normally permit buyers to bargain for better prices, and allow suppliers to be more innovative in reducing prices. Price concessions can then be granted with reduced fear of criminal investigation so that price competition spreads and consumers ultimately benefit.

As well, draft predatory pricing guidelines have been distributed. This document provides greater certainty about the application of s. 50(1)(c) of the Act to aggressive pricing behaviour.

The Bureau will likely challenge low pricing policies only when there is a substantial lessening of competition or elimination of a competitor due to below-cost pricing. If the alleged predator has little market power or barriers to entry in the industry are minimal, low prices are unlikely to adversely affect competition or warrant Bureau intervention.

The price discrimination and predatory pricing guidelines have a positive message. They should provide greater clarity about what business practices are acceptable. The Bureau believes that these guidelines should encourage business to develop competitive marketing strategies.

VI. Conclusion

Vigorous domestic competition is essential to the health of the economy. Not only does it promote greater economic welfare, it also positions firms to meet the challenges of international competition. An effective and well-understood competition law makes a vital contribution to this goal.

The Competition Act's effectiveness was demonstrated during the past year in cases such as NutraSweet and Xerox. Record fines were imposed in Flour. The Bureau obviously faces serious constitutional challenges, which may force reconsideration of key provisions.

The Bureau will continue to make an effort to clarify the meaning and boundaries of the Act. Jurisprudence and guidelines will help to explain the rules of the marketplace and provide a level playing field for business to participate in a competitive domestic and global economy.

The Competition Act works to remove impediments to free and open competition. It is designed to promote efficiency at home and expand opportunities abroad. Despite the fact that we are facing many challenges, the Bureau continues to pursue a variety of means to ensure continued enforcement of the law for the benefit of all Canadians.