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

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Chapter 6: Modernizing Canada’s Approach to Competition Law

The Competition Act is a vital piece of Canadian legislation that affects virtually all industry sectors. Its goal is to ensure that Canadians enjoy the benefits of a competitive economy, including competitive prices, product choice and quality services. To ensure that the Act remains effective in a rapidly changing global environment, the Government of Canada takes an incremental approach to amendments. The Bureau actively seeks the views of stakeholders and the general public when legislative changes are proposed.

Amendments to the Competition Act

Bill C-19

In April 2002, the House of Commons Standing Committee on Industry, Science and Technology released a report entitled "A Plan to Modernize Canada’s Competition Regime". The report proposed a wide range of amendments to the Competition Act, including the following:

• strengthening the civil provisions;
• reforming the treatment of conspiracies; and
• eliminating the criminal pricing provisions dealing with price discrimination, geographic price discrimination, predatory pricing and promotional allowances.

The Committee also recommended the following:

• repealing the airline-specific provisions to return the Competition Act to being a law of general application; and
• implementing general provisions that comprise sufficient deterrence to achieve adequate compliance.

In response to these recommendations, the Competition Bureau committed to consult widely with stakeholders on a number of specific proposals. In June 2003, the Bureau launched a consultation process with Canadians on certain proposed changes to the Act.

On April 13, 2004, the Public Policy Forum published a report about the consultations.

On November 2, 2004, Bill C-19, an Act to amend the Competition Act and to make consequential amendments to other Acts, was introduced in the House of Commons. The proposed changes contained in the Bill are designed to strengthen Canada’s competition framework in a global economy, balancing the interests of consumers and large and small businesses. These proposed amendments are firmly rooted in the Industry Committee’s comprehensive 2002 report and will benefit consumers and businesses by doing the following:

• giving authority to the Commissioner of Competition to seek restitution for consumer loss resulting from false or misleading representations;
• introducing a general administrative monetary penalty for abuse of dominance in any industry;
• removing the airline-specific provisions from the Act to return it to being a law of general application;
• increasing the administrative monetary penalties for deceptive marketing practices; and
• decriminalizing the pricing provisions.

Bill C-19 received first reading in the House of Commons on November 2, 2004, and was referred to the Standing Committee on Industry, Natural Resources, Science and Technology on November 16, 2004. The Committee’s study is ongoing.

Bill C-249

As reported in the Bureau’s 2003–2004 annual report, Bill C-249, an Act to amend the Competition Act, proposed amending section 96 of the Act to make efficiencies a factor in the analysis of a proposed merger. The House of Commons passed this private member’s bill, but it was still on the order paper in the Senate when the 2004 election was called. In September 2004, the Bureau launched extensive consultations on the role of efficiencies under the Competition Act. To assist in discussions, the Bureau issued a consultation paper entitled "Treatment of Efficiencies in the Competition Act". Details of this consultation paper are reviewed in chapter 7.

In January 2005, following a period in which the Bureau accepted written submissions on the consultation paper, the Bureau held round tables in Vancouver, Toronto and Montréal to further the discussion with stakeholders. In addition, an international round table on efficiencies, including participants from the European Union, the United States, Australia, Mexico and the United Kingdom, took place in October 2004.

Finally, the Bureau commissioned an advisory panel of experts with backgrounds in business, economic policy and international trade to assess the role that efficiencies should play in the administration and enforcement of the Competition Act in the context of Canada’s evolving economy.

The Bureau will make the reports on these three consultation initiatives public when they are available.

Bill C-27

On November 26, 2004, the Minister of Agriculture and Agri-Food introduced Bill C-27 in the House of Commons. Bill C-27 comprises a number of legislative changes, including the deletion of several references to the Minister of Industry in the Consumer Packaging and Labelling Act, and sets out statutorily the transfer of duties between Industry Canada and the Agriculture and Agri-Food Canada in the Competition Act.

Private Member’s Bills

Private member’s bills related to the work of the Bureau include the following:

• Bill C-229: An Act to establish the Energy Price Commission;
• Bill C-242: An Act to amend the Criminal Code (proceeds of crime);
• Bill C-249: An Act to amend the Bank Act (bank mergers);
• Bill C-316: An Act to amend the Bank Act (branch closures); and
• An Act to amend the Competition Act (investigations by the Commissioner and class proceedings), which was also designed to make a related amendment to another Act.