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

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Chapter 1: Introduction

The Competition Bureau works to support a dynamic, healthy, innovative and competitive marketplace in which Canadians can enjoy the benefits of competitive prices, product choice and quality services. The Bureau accomplishes this by promoting and maintaining competition.

A competitive marketplace promotes the efficiency of the economy, expands opportunities for Canadian enterprises in world markets, ensures that small and medium-sized businesses have equal opportunities, and provides consumers with competitive prices, competitive product choice and accurate product information. Competition is the foundation of a strong, modern and knowledge-based economy, spurring innovation, competitiveness and productivity growth. The Bureau administers four laws that help encourage and maintain competition in Canada: the Competition Act, the Consumer Packaging and Labelling Act (for non-food products), the Precious Metals Marking Act and the Textile Labelling Act. This report summarizes the Bureau’s activities under these statutes for the fiscal year that ended on March 31, 2005.

The Bureau operates on the assumption that most businesses are law-abiding and, therefore, comply with the law and support marketplace framework legislation. The Bureau sees vigorous communication and advocacy as the best ways to achieve compliance and, consequently, works to inform businesses and other stakeholders about the laws. Through its advocacy program, the Bureau actively promotes a competitive marketplace and develops competition policy and legislation in Canada and internationally.

The Bureau’s commitment to educating the players in the marketplace is complemented by several forms of voluntary compliance. These range from written opinions, which help businesses that want to avoid breaking the law, to alternative case resolution, which corrects anti-competitive behaviour in a timely and cost-effective fashion.

Businesses and individuals who disregard the law or fail to take advantage of opportunities for voluntary compliance may be prosecuted by the Attorney General of Canada in criminal court or be subject to civil litigation by the Bureau before the Competition Tribunal or in civil court.

This report deals with the Bureau’s activities in the following areas:

• Policing Criminal Activities (chapter 2);
• Promoting Compliance With the Civil Provisions (chapter 3);
• Reviewing Mergers (chapter 4);
• Advocating for Competition and for International Coordination (chapter 5);
• Modernizing Canada’s Approach to Competition Law (chapter 6); and
• How We Do It All (chapter 7).

This report seeks to show how the Bureau’s activities over the past year have benefited Canadians. For statistical data and legal references, please visit the Bureau’s Web site.

Organizational Structure

In 2004-2005, the Bureau employed 355 people in the National Capital Region and 85 in seven regional offices. The regional offices are located in Halifax, Montréal, Toronto, Hamilton, Winnipeg, Calgary and Vancouver. As the organizational chart below shows, the Bureau comprises seven branches.

• Commissioner of Competition:
  • Mergers
  • Civil Matters
  • Criminal Matters
  • Fair Business Practices
  • Competition Policy
  • Compliance and Operations
  • Communications

The Commissioner of Competition is head of the Competition Bureau and is responsible for administering and enforcing the Competition Act, the Consumer Packaging and Labelling Act, the Precious Metals Marking Act and the Textile Labelling Act.

Mergers Branch reviews merger transactions to assess whether a proposed merger is likely to prevent or substantially lessen competition.

Civil Matters Branch reviews anti-competitive behaviour, such as abuse of dominant position, and restraints imposed by suppliers on customers, such as refusal to supply, exclusive dealing and tied selling.

Criminal Matters Branch administers and enforces the criminal provisions of the Competition Act, including those covering conspiracies that unduly lessen competition, such as price fixing, bid rigging, price discrimination, predatory pricing and price maintenance. The Branch carries out its enforcement activities through its National Capital Region office and the regional offices.

Fair Business Practices Branch administers and enforces the provisions of the Competition Act that cover false or misleading representations, and deceptive marketing practices. Among these provisions are those that deal with deceptive telemarketing, multi-level marketing and pyramid selling schemes, as well as misrepresentations, such as general false or misleading statements, misleading ordinary price claims and promotional contests in which organizers inadequately disclose contest rules. The Branch also administers and enforces the Consumer Packaging and Labelling Act, the Precious Metals Marking Act and the Textile Labelling Act, collectively known as the standards-based statutes. The Branch carries out its investigations through its National Capital Region office and the regional offices.

Competition Policy Branch comprises the International Affairs, Economic Policy and Enforcement, and Legislative Affairs divisions. The Branch advances the Bureau’s interests in international co-operation, negotiations and policy development. It provides economic advice and expertise as well as enforcement support to the Bureau, and ensures that the provisions of the Competition Act and standards-based statutes remain relevant through regular review and amendment.

Compliance and Operations Branch oversees the Bureau’s compliance program, enforcement policy, training program and client services. It also manages the Bureau’s Information Centre, and its planning, resource management, administration and informatics activities.

Communications Branch ensures that Canadian consumers, businesses and government agencies, and the international community are aware of the Bureau’s crucial contribution to Canadian competitiveness and to the growth of the economy. The Branch manages the Bureau’s Web site, stakeholder and media relations, and internal communications.