Competition in the infrastructure sector

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Are you bidding for infrastructure projects?

If you work in the infrastructure sector

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…this site is for you.

Many may be more familiar with the misdeeds of cartels, such as bid-rigging and price-fixing than the term itself. But, cartels are out there and businesses need to be on the lookout so they can stay on the right side of the law.

Getting started

Fair competition benefits everyone through competitive prices, increased product choice and greater innovation. Check out the five most important things you need to know about the criminal cartel provisions in the Competition Act and the tools available to you by using the tabs above. Of course there's more to know, but this is a great place to start.

Take a look around this section to learn more about what you need to do to comply with the law and what you can do to help detect, prevent and deter anti‑competitive behaviour in the marketplace. If you have questions, please contact us.

Please note

That the information provided is for guidance only and should not be considered as legal advice. If you are unsure about what complying with the Competition Act means for your business, the Bureau recommends that you seek advice from a lawyer.

Five important facts

Criminal cartel provisions of the Competition Act: Five most important things you need to know

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1. Definition of a cartel under the Competition Act

A cartel is a formal or informal group of otherwise independent businesses whose goal is to lessen or prevent competition among its participants. Typically, cartel members enter into agreements or arrangements to fix prices, allocate customers or markets, limit production or supply, or rig bids.

2. How cartels affect the marketplace

Cartels deprive consumers of the benefits of competition, such as competitive prices, increased product choice and greater innovation.

When businesses conspire to fix prices, allocate customers or markets, or limit production or supply, purchasers throughout the supply chain, both businesses and consumers, can be harmed; higher prices will inevitably be paid by someone. The ability of small and medium-sized businesses to compete may also be affected by artificial cost increases resulting from a cartel.

Bid-rigging targeting private or government procurement increases the cost of goods and services. Where government procurement is affected, the cost increase caused by the cartel means less public money is available for other important needs.

3. Penalties for participating in a cartel

It is a criminal offence when competitors or potential competitors conspire, agree or arrange to fix prices, allocate customers or markets, or limit production or supply. This offence is known as a conspiracy, and is punishable by a fine of up to $25 million and/or a jail term of up to 14 years. (Section 45 of the Act)

It is a criminal offence for two or more bidders, in response to a call or request for bids or tenders, to agree on the bids submitted, to agree that one party will refrain from bidding or to agree that one party will withdraw a submitted bid, in each case without informing the person calling for the bids of the agreement. Penalties for bid-rigging include a fine in the discretion of the court and/or a jail term of up to 14 years. (Section 47 of the Act)

4. Immunity or leniency for providing information to the Competition Bureau

If you have been involved in a cartel, you could be eligible for immunity from prosecution if you are first to report the offence to the Bureau. Others who self-report early in the Bureau's investigation may qualify for lenient treatment.

If you are aware of a cartel but are not involved, you can provide information to the Bureau and request that your identity be kept confidential.

Read more on the Immunity Program, the Leniency Program, the Whistleblowing Initiative and the Confidentiality Bulletin.

5. Confidentiality of information provided to the Bureau

The Bureau conducts its investigations in private and, subject to certain exceptions, keeps the identity of the source and the information provided confidential.

Read more on the Confidentiality Bulletin

FAQs

Frequently asked questions

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Why are we providing advice specifically for the infrastructure sector?

These pages focus on the infrastructure sector because of the increased tendering activities that come with the Government of Canada’s $186 billion long-term infrastructure plan.

The goal is to encourage companies to do things the right way, the legal way. It's also important to make sure you know how the Competition Act applies to you and your business.

Check the Corporate Compliance section on the Bureau's website to find out how to comply with the law and how to develop your own credible and effective compliance program.

What is a cartel?

A cartel is a formal or informal group of otherwise independent businesses whose goal is to lessen or prevent competition among its participants. Cartel members enter into an agreement or arrangement to engage in one or more anti‑competitive activities, such as to fix prices, allocate customers or markets, limit production or supply, or rig bids.

Cartels are illegal under the Act because they harm the economy by removing the benefits of competition. Cartels can lead to higher prices, less product choice and reduced innovation for consumers.

What are the penalties for conspiracy under the Act?

It is a criminal offence when competitors or potential competitors conspire, agree or arrange to fix prices, allocate customers or markets, limit production or supply. This offence is known as a conspiracy, and is punishable by a fine of up to $25 million and/or a jail term of up to 14 years. (Section 45 of the Act)

Who are my competitors? Are we talking about the companies that currently compete for business with me?

Your competitors include both your existing competitors and any potential competitors—businesses that would be likely to compete with you in the absence of a conspiracy.

What are the penalties for bid-rigging under the Act?

Penalties for bid-rigging include a fine in the discretion of the court and/or a jail term of up to 14 years. Under section 47, it is a criminal offence for competitors, in response to a call or request for bids or tenders:

  • to agree on the bids submitted;
  • to agree that one party will refrain from bidding; or
  • to agree that one party will withdraw a submitted bid,

in each case without informing the person calling for the bids of the agreement.

I am involved in procurement processes. What are the signs of unlawful bid-rigging or other anti‑competitive activities that I should look out for?

Bid-rigging is generally carried out in secret and, therefore, it can be very difficult to detect. As a procurer, you are uniquely placed to spot unusual bidding patterns and/or practices that may indicate unlawful anti‑competitive agreements. Combining your procurement experience and market knowledge, together with knowing how to spot the warning signs of collusion, you can increase your chances of detecting this kind of behaviour.

See the Bureau's Bid-rigging: detecting, preventing and reporting — Toolbox for procurement as well as the video on corporate compliance.

What are my options if I want to admit my participation in a cartel?

You should consider contacting the Bureau as soon as possible. You should also seek legal advice.

Immunity from prosecution is available to the first person in a cartel to come forward with information about the cartel, as long as you continue to provide information and fully cooperate with us. If you are not the first-in-the-door to report a particular cartel, you may be eligible for lenient treatment. Again, you must provide information and fully cooperate with us.

Please visit the Bureau's website for further information on our Immunity and Leniency programs.

Tell me more about the Bureau’s Whistleblowing Initiative

The Bureau’s Whistleblowing Initiative is a way for members of the public to provide information to the Bureau regarding possible violations of the criminal cartel provisions of the Act, including agreements or arrangements among competitors to fix prices, allocate customers or markets, restrict output or rig bids.

Anyone who has reasonable grounds to believe that a person has committed, or intends to commit, a criminal offence under the Act may notify the Bureau of the particulars of the matter and may request that his or her identity be kept confidential. (Section 66.1 of the Act)

The Bureau will keep confidential the identity of a person who has made such disclosure and to whom an assurance of confidentiality has been provided. Depending on the circumstances, a whistleblower may be required to testify in court proceedings.

Employers shall not dismiss, suspend, demote, discipline, harass or otherwise disadvantage an employee, or deny an employee a benefit of employment, as a result of the employee providing information on reasonable belief and in good faith to the Bureau under the whistleblowing program. (Section 66.2 of the Act) Whistleblowers are also protected by other legislation, including the Criminal Code, which makes it an offence for an employer to take disciplinary measures against, demote, terminate or otherwise adversely affect the employment of an employee, or to threaten to do so, because the employee has provided or will provide information to a person whose duties include the enforcement of federal law.

Please visit the Bureau's website for further information on the Whistleblowing Initiative.

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Practical tips

Practical tips

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  • Establish a credible and effective compliance program and, where practicable, appoint a compliance officer.
  • Make independent pricing decisions.
  • Do not exchange pricing or other competitively sensitive information with your competitors.
  • If you are approached by another business to:
    • discuss pricing;
    • allocate customers or markets;
    • limit production or supply; or
    • discuss not submitting a bid, withdrawing a bid or submitting a bid arrived at by agreement,
  • raise an objection right away. Leave the discussion immediately and report the incident to counsel or another appropriate individual.
  • If you are considering entering a joint bid with a competitor, seek legal advice.
  • Familiarize yourself with the key provisions of the Competition Act.
  • Familiarize yourself with the Bureau's Immunity and Leniency programs.
  • Familiarize yourself with the Whistleblowing Initiative.
  • Review your internal documents, policies and procedures for compliance with the Act.
  • If you become aware of anti‑competitive conduct, contact the Bureau as soon as possible.

Consult the Bureau's Trade Association pamphlet for more tips

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