Innovation Superclusters Initiative and the Competition Act

Clusters are dense areas of business activity where innovation happens and where many of the middle‑class jobs of today and tomorrow are created. They bring together the most talented people, the newest technologies and the fastest‑growing companies to build leading innovation ecosystems, energize the economy, and act as engines of growth.

Through the Innovation Superclusters Initiative (ISI), the Government of Canada will invest nearly $1 billion, over five years (2017‑2022), to strengthen up to five of Canada’s most promising clusters and build business‑led innovation superclusters at scale.

These innovation hotbeds will foster stronger connections—from large anchor firms to start‑ups, from post‑secondary institutions to research and government partners—and open the door to new forms of industry partnership.

Collaboration and competition

Specifically, the ISI will incent large‑scale collaboration of Canadian‑based private‑sector enterprises, supported by other innovation ecosystem players, to work together more strategically to address key challenges, deliver innovative solutions, and build a shared competitive advantage.

Multi‑sector collaboration, open innovation, and partnerships with other innovators can accelerate the pace of innovation, as well as bring new products and processes to market faster and cheaper. It can also enable organizations to combine technologies and resources, leading to the development of new and better products for the benefit of Canadians and the economy.

At the same time, industry collaboration involving actual or potential competitors can sometimes raise concerns under the law. Therefore, industry participants supporting an application to the ISI are strongly encouraged to review their proposed activities for compliance with the Competition Act (Act).

Guidance

In the vast majority of cases, collaborative projects and initiatives that will be undertaken by the awarded superclusters to fulfill the objectives of the ISI will not raise legal concerns under the Act. However, these collaborative activities must not be used to engage in cartel activity or anti‑competitive agreements.

The following types of agreements among competitors are prohibited:

  • Agreements to fix prices, allocate markets or restrict output (section 45 criminal cartel provision); and
  • Agreements that are likely to substantially lessen or prevent competition (section 90.1 civil anti‑competitive agreement provision).

The Competition Bureau (Bureau) is generally not concerned with collaborations that:

  • Involve firms that are not actual or potential competitors, or firms that do not have market power because collaboration occurs in highly competitive markets;
  • Are limited to R&D, and do not contemplate the joint sale or commercialization of products developed through the collaboration; or
  • Allow firms to develop products they would not otherwise be able to develop independently.

Compliance safeguards

There are some best practices that can help organisations stay within the rules:

  • Be cautious when collecting and sharing commercially sensitive information (for example: costs or marketing strategies), particularly with competitors;
  • Do not exclude firms from participating in the collaboration based on arbitrary membership criteria (for example: limiting participation to businesses of a certain size or with a minimum number of years of experience);
  • Ensure that the collaboration does not result in the setting of standards that artificially provide certain firms with a competitive advantage over others (for example: where only firms that have licenses to certain essential patents can participate);
  • Create and implement a compliance program, using the Bureau's Corporate Compliance Programs bulletin; and
  • Consult the list of “Dos and Don’ts” in the Bureau’s Bulletin on Trade Associations and the Competition Act.

Additional resources

The Bureau’s analytical approach to competitor collaborations is set out in the Competitor Collaboration Guidelines. You may also consult the Competitor collaboration pamphlet.

If you need additional information about the Act or the Bureau’s program of written opinions, please contact the Bureau's Information Centre.

This guidance document was developed with input from Innovation, Science and Economic Development (ISED).

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