Dental Industry Association of Canada

December 6, 2007

Dental Industry Association of Canada
150 Neptune Drive, Suite 601
Toronto, Ontario
M6A 2Y9

Attention: All Members

An Open Letter to the Members of Dental Industry Association of CanadaFootnote 1

Sharing in the benefits of competition

This is an exciting time for the dental industry in Canada. Recent legislative changes in some provinces have made the market for dental hygiene services more competitive and it is anticipated that more change is coming. The Competition Bureau is hopeful that all members of the dental industry are able to share in the benefits of this new avenue for competition.

The role of the Competition Bureau

The Competition Bureau is an independent law enforcement agency. We contribute to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice. Headed by the Commissioner of Competition, (the Commissioner) the organization investigates anti‑competitive practices and promotes compliance with the laws under its jurisdiction. The Commissioner is responsible for the administration and enforcement of the Competition Act (the Act) which is a federal statute of general application to all sectors of the Canadian economy.

The Act defines a number of practices that are prohibited as criminal offences or that are subject to review by the Competition Tribunal under the civil provisions of the Act. The Act does not provide the Bureau with any authority to decide the law or to compel businesses to adopt any particular type of conduct. For more information on the Bureau, please visit our Web site at www.competitionbureau.gc.ca.

The Bureau promotes competition in two ways. As a law enforcement agency, we investigate allegations of anti‑competitive conduct and seek judicial and quasi‑judicial remedies to stop anti‑competitive behaviour Whenever possible, the Bureau prefers to use education as a tool to promote compliance with the Act, as opposed to setting out on an enforcement footing. We hope that with the proper information, participants in the market will choose to comply with their obligations under the Act and it will not become necessary to consider their behaviour in the context of future investigations into alleged anti‑competitive conduct.

Dental hygienists as market participants

Dental hygienists have traditionally worked within dental offices, and this will likely be the most common scenario for many years to come. There are, however, other practice models that are gaining prominence in the market, such as mobile practices and store front dental hygiene clinics. In British Columbia, Alberta and most recently, Ontario, dental hygienists have the right to operate their own practices. In Ontario alone, almost 900 hygienists have gained the ability to work independently of a dentist since their legislation changed on September 1, 2007.

Problems procuring supply

The Bureau encourages competition and hopes that all members of the market are able to realize the benefits to be gained from increased competition. For some members of DIAC, this means that there are more potential practices to supply with equipment and materials. Discouragingly, the Bureau is hearing that this opportunity is not always being realized and that some suppliers may be refusing to sell to entrepreneurial hygienists. If true, this will inevitably lead to complaints to the Bureau, and possibly to future investigations. Education about the Act may serve to address some of these instances and will hopefully make enforcement activities unnecessary.

Although businesses are generally able to deal with whomever they see fit, there are instances wherein refusals to deal are contrary to the Act. When the Bureau receives complaints regarding refusals to deal, there are provisions of the Act that must be considered. Primarily, the Bureau must consider whether or not what is happening falls under the statutory definition of a Refusal to Deal, which could be contrary to section 75. In cases such as these, either the Commissioner or a private litigant may make an application to the Competition Tribunal seeking a ruling to ensure supply. The Competition Tribunal is a quasi‑judicial tribunal that has the power to make binding orders similar to a Court. Further details on refusals to deal may be found on the Bureau Web site.

There are other provisions of the Act that may be relevant in circumstances wherein someone is unable to obtain supply. If a supplier refuses to deal as a result of a requirement or inducement of the would‑be client’s competitor, this may trigger a closer look under the Abuse of Dominance provisions. Section 78(1) delineates a number of behaviours that may be considered to be an “anti‑competitive act” for the purposes of determining whether or not there has been an abuse of dominance in a market. That section specifically identifies instances of a competitor dissuading a supplier from selling to someone with the object of preventing entry or expansion in a market.

These are the two most common provisions under which circumstances wherein someone is refused supply are evaluated. These are both civil provisions of the Act and do not carry criminal penalties,Footnote 2 however a prudent business person will undoubtedly take them into account when making rationale business decisions.

Certainly not all complaints alleging a refusal to deal will lead to full investigations, and of those that do, not all will meet the elements required by the Act to seek relief before the Tribunal. It is hoped, however, that members of the dental industry will see the entry of new participants to the market as an opportunity to share in the benefits of competition and that the role of Bureau in this instance can remain one of education.

Yours sincerely,

Richard Taylor
Deputy Commissioner of Competition
(Civil Matters)

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