Annual Report of the Commissioner of Competition for the year ending March 31, 2005

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Message from the Commissioner

I have now completed my first full year as Commissioner of Competition, a year in which the Competition Bureau made an impressive difference in the Canadian marketplace.

Our many accomplishments during 2004–2005 are described in the pages of this annual report, so I will only mention a few key ones here.

To begin with, the Bureau had a major impact in the area of deceptive marketing practices. Not only were prison sentences given for the first time to a number of offending telemarketers, but also some key enforcement activities took place. One had to do with a landmark decision handed down by the Competition Tribunal, the first under the ordinary selling price provisions of the Competition Act. In January 2005, the Tribunal ruled that Sears Canada had breached the Competition Act by making false or misleading representations when advertising discounts on certain tires. Sears was required to pay a $100 000 administrative monetary penalty, as well as $387 000 towards the Bureau’s legal costs. The Tribunal’s order also prohibited Sears’ automotive business division from engaging in similar conduct for 10 years.

The Bureau and Air Canada also resolved their litigation before the Competition Tribunal concerning allegations that Air Canada had engaged in anti-competitive behaviour towards WestJet and CanJet. The Bureau decided not to pursue the litigation any further, in light of the major changes that have occurred in the airline industry since the case began in 2001.

As well, the Bureau reviewed an extremely complex merger between the Canadian National Railway Company and British Columbia Rail Limited. Following this review, the Bureau filed a consent agreement with the Competition Tribunal to ensure that competition would be maintained in the pricing and transportation of products.

But we did much more than enforce Canada’s competition legislation this past year. We released the Merger Enforcement Guidelines in September 2004. We introduced Bill C-19, which sets out important amendments to the Competition Act, in Parliament. We published two comprehensive reports on the gasoline industry. We made real progress internationally on cartels, consumer interface and merger review. We launched Fraud Awareness Month, a campaign to educate Canadians about how to protect themselves against fraud. Needless to say, none of these impressive achievements would have been possible without the support of the entire Bureau. As usual, everyone worked very hard and very constructively. I send my sincere thanks to one and all.

The year ahead promises to be just as busy and productive as was the last. Our priorities include stepping up our attack on international and domestic cartels and fraudulent mass marketers. By the end of my mandate, I would like to see more of Canada’s gross domestic product subject to competitive market forces. This will require us to continue investing in people in order to retain the high-quality staff we now have. We will also need to keep our focus on the key objectives we intend to pursue. And we must continue to improve our communications with Canadians through dialogue, workshops and outreach. I look forward to making progress on all these fronts in the year ahead.

Sheridan Scott
Commissioner of Competition