Administrative Note on Communication between the Competition Bureau and the Investment Review Division of Innovation, Science and Economic Development Canada
April 6, 2018
The Competition Bureau (the “Bureau”) and the Investment Review Division (“IRD”) of Innovation, Science and Economic Development Canada (“ISED”) recognize that continued communication contributes to improved delivery of each of the Bureau’s and IRD’s independent mandates, and benefits stakeholders by improving the efficiency of reviews where both organizations are reviewing the same transaction. The purpose of this Administrative Note on Communication is to set out the nature and scope of communication between the two organizations.
The Bureau is an independent law enforcement agency that ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace. Headed by the Commissioner of Competition (the “Commissioner”), the Bureau is responsible for the administration and enforcement of the Competition Act (the “CA”), the Consumer Packaging and Labelling Act (except for enforcement as it relates to food), the Textile Labelling Act, and the Precious Metals Marking Act.
IRD supports and advises the Minister of ISED (the “Minister”) in the administration of the Investment Canada Act (the “ICA”), which provides for the review of significant foreign investments in Canada to determine if they are likely to be of net benefit to Canada (with the exception of investments in cultural businesses, which are reviewed by Canadian Heritage) and for the review of investments that could be injurious to Canada’s national security. Foreign investments subject to review and/or approval under the ICA may also be reviewed independently by the Bureau under the CA to determine whether they are likely to result in a substantial lessening or prevention of competition.
Benefits of Information Sharing
Decisions made by the Commissioner under the CA and by the Minister under the ICA are taken independently and in accordance with each organization’s respective statute. However, the analysis conducted for the purpose of each independent review and in some cases the outcomes, can benefit and inform the decisions of both organizations. In this context, the Bureau and IRD have a mutual interest in exchanging certain information for purposes of the administration and/or enforcement of their respective legislation. Information sharing, subject to the organizations’ respective confidentiality and privilege obligations, leads to more informed decisions and reduces duplication of efforts, improving the efficiency of both processes.
In carrying out its net benefit analysis, IRD, as a matter of course, seeks the Bureau’s views on potential competition issues arising from the transaction. It does so by providing written notice to the Bureau that it is reviewing a foreign investment proposal, and by providing basic information about the transaction and the parties involved, as well as any plans submitted to IRD by the investor. In some cases, the Bureau will have already commenced, or completed, a review of the transaction under the CA prior to receiving this written notice. In other cases, such a review is initiated following receipt of the written notice. In all cases, the Bureau conducts its own independent review of the transaction, and shares its conclusions with IRD regarding the effects of the transaction on competition. The Bureau’s analysis and ultimate conclusions are considered in the context of IRD’s assessment of net benefit, particularly with regard to paragraphs 20(d), (e), and (f) of the ICA, which consider the effect of the investment on competition within any industry or industries in Canada, the contribution of the investment to Canada’s ability to compete in world markets, and the compatibility of the investment with federal or provincial industrial and economic policies.
In cases where the Bureau finds that the transaction does not raise significant issues under the CA, the Bureau notifies IRD accordingly. In cases where the Bureau finds that the transaction is likely to result in a substantial lessening or prevention of competition, it can negotiate remedies with the parties in order to resolve the competition concerns by consent, or apply to the Competition Tribunal to challenge the transaction. Similarly, undertakings may be offered by the parties under the ICA to support a net benefit determination. In rare cases, there could be incompatible requirements for the parties between remedies agreed to with the Bureau and undertakings offered to IRD. The organizations, as well as the parties, have a mutual interest in sharing relevant information to ensure effective and cohesive outcomes.
Because the Bureau’s input is considered as part of the net benefit analysis, the Bureau also shares timing and other procedural information with IRD relating to its review, as necessary. IRD would generally not finalize its review, and accordingly the Minister would generally not make a decision regarding the likely net benefit of an investment, until after the Bureau’s analysis is complete.
Scope of Information Sharing
Where possible, and subject to their respective legal obligations, the organizations will:
- Participate in knowledge transfer sessions to increase expertise in areas of mutual interest;
- Cooperate throughout the review of the same transaction, by:
- designating liaison officers;
- exchanging timing and other procedural information;
- sharing information or submissions provided by the parties relating to the rationale for the transaction and post-transaction plans;
- sharing analytical findings, and preliminary and final conclusions related to the effects of the transaction on competition, along with the analysis underlying these conclusions that could be relevant to the other organization’s review; and
- communicating proposed remedies or possible undertakings as appropriate.
Confidentiality and Privilege
The organizations do not exchange information if doing so would contravene any relevant legislation, international instruments, policies or guidance documents. Each organization maintains the privilege or confidentiality of any information obtained from the other and the information is protected under the organizations’ respective policies, procedures, and all applicable legislation. Each organization notifies the other should it receive a request from a third party for disclosure of such information. Neither organization will disclose any privileged or confidential information obtained from the other organization to any third party without the written consent of the other organization, except as required by law.
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