Annual Report of the Commissioner of Competition for the year ending March 31, 2004

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Chapter 6: Modernizing Competition Law

The Competition Bureau is committed to ensuring that Canadian consumers and businesses receive the full benefit of an innovative and competitive marketplace, and to regularly reviewing the Competition Act and the Bureau's policies and enforcement guidelines for consistency with developing jurisprudence and economic thought. A modern, up-to-date legislative framework fosters economic growth, wealth creation, investment and innovation in Canada.

When changes are proposed to the legislation, or to the Bureau's approach to enforcing it, the Bureau actively seeks the views of its stakeholders and the public.

Review of and Proposed Amendments to the Competition Act

As reported in the Competition Bureau's 2002-2003 annual report, the House of Commons Standing Committee on Industry, Science and Technology reviewed the Competition Act and tabled its final report in April 2002. The Government of Canada tabled its response to the committee's report in October 2002. In June 2003, the Government launched a discussion paper entitled Options for Amending the Competition Act: Fostering a Competitive Marketplace to fulfill its commitment to consult widely with stakeholders on proposed amendments to the Act.

The discussion paper included four major proposals.

1. Strengthening the civil provisions of the Act with the following:
   • administrative monetary penalties for civil reviewable matters (except mergers);
   • restitution to consumers in certain cases of deceptive marketing practices; and
   • a civil cause of action making it possible to recover damages resulting from non-criminal anti-competitive conduct.
     
2. Reforming the conspiracy provisions with the inclusion of the following in the Act:
   • a criminal provision that would explicitly define clearly egregious anti-competitive agreements;
   • a civil provision that would review all other agreements among competitors or potential competitors that may substantially lessen competition; and
   • a clearance certificate to provide certainty and predictability to businesses.
     
3. Reforming the pricing provisions by doing the following:
   • repealing the criminal price discrimination, promotional allowances, geographic price discrimination and predatory pricing provisions of the Act; and
   • dealing with those behaviours under the civil provisions using a competition test.
     
4. Allowing an independent and impartial body to inquire into the functioning of Canadian markets.

The Public Policy Forum held consultations and invited interested stakeholders to submit written comments on the discussion paper. It received more than 100 submissions from a wide range of stakeholders. These are available on the Public Policy Forum Web site (www.ppforum.ca/competitionact/).

Based on comments received, the Public Policy Forum organized 11 round tables in various cities across Canada in November and December 2003. More than 100 stakeholders (legal and economic experts, academics, and representatives of small and medium-sized enterprises, large businesses and interest groups, including consumer associations) participated in the round tables. At the close of the fiscal year, the Public Policy Forum was in the process of finalizing a report to the Commissioner of Competition. The Commissioner will analyze the report to determine whether additional discussions and analyses are required.

Private Members' Bills

As adopted by the House of Commons Standing Committee on Industry, Science and Technology, Bill C-249, An Act to amend the Competition Act, sought to amend section 96 of the Act and make efficiencies a factor in the competition analysis of a proposed merger. Bill C-249 also required that gains in efficiency that benefit consumers be considered (for example, in the form of competitive prices and product choice). Bill C-249 would have eliminated the efficiencies defence under the existing law, replacing it with a single, fully integrated competition test. Consequently, efficiencies would be considered as part of the overall assessment of the effects of a merger on competition.

Bill C-249 was passed by the House of Commons on May 13, 2003, and sent to the Senate for approval. In the Senate, it received first reading on May 13, 2003, and second reading on September 17, 2003, and was referred to the Standing Committee on Banking, Trade and Commerce on September 17, 2003. Committee hearings were held from October 30 to November 6, 2003. Following prorogation of Parliament on November 12, 2003, the Bill was reinstated when a new session of Parliament began. It received first reading in the Senate on February 3, 2004.¹

Other private members' bills related to the work of the Bureau included the following:

• Bill C-353: an Act to establish an Energy Price Commission;
• Bill C-379: an Act to establish an Oil and Gas Ombudsman to investigate complaints relating to the business practices of suppliers of oil or gas;
• Bill C-381: an Act to prevent major vertically integrated gasoline suppliers from selling at the retail level; and
• Bill C-461: an Act requiring the Commissioner of Competition to launch an inquiry upon receiving 100 or more applications reflecting similar circumstances and allowing the initiation of class proceedings under the Competition Act.

Following the prorogation of Parliament, Bill C-353 and Bill C-461 were reinstated but did not pass first reading. Bill C-379 and Bill C-381 were not reinstated because their sponsor was nominated to the Senate.

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Footnotes

¹ Second reading took place on April 1, 2004, and the bill was then referred to the Standing Committee on Banking, Trade and Commerce on April 1, 2004. Bill C-249 died on the order paper on May 23, 2004, when Parliament was dissolved.