Competition Law Update: Further Changes Coming to the Competition Act

On November 21, 2023, the Canadian federal government released its Fall Economic Statement (FES) laying out the government’s economic plan and next legislative steps. It signaled, among other things, additional expansive amendments to the Competition Act (Act) addressing a wide range of practices including mergers, abuse of dominance, competitor collaborations, advertising and others. This is part of an ongoing effort to expand the scope of Canadian competition law and increase penalties for non-compliance. Prior reforms include amendments in 2022 that increased private right of access and introduced prohibitions on certain agreements between employers, and proposed amendments introduced earlier this year, which include explicit powers to conduct market studies and removal of the efficiencies defence, are currently being debated in Parliament.

The below amendments are expected to be included in forthcoming implementation legislation based on the Fall Economic Statement.

• Expanded abuse of dominance provisions. Greater tools and powers would be available to the Competition Bureau (Bureau) to address abuse of dominance, including a specific focus on predatory pricing. Complementary amendments, including a revision to the test for abuse of dominance, are also being considered.

• Addressing “killer acquisitions” and impacts on workers. The Bureau would have expanded powers to detect and address “killer acquisitions,” where a nascent competitor is acquired for the purpose of being eliminated as a future competitor, in merger reviews. The FES also indicates changes are forthcoming to improve “the focus on worker impacts in competition analysis.”

• Targeting “greenwashing.” Both the civil and criminal deceptive marketing provisions of the Act would be amended to explicitly include “greenwashing” — the making of misleading environmental and sustainability claims about a company’s products.

• Focus on anti-competitive collaborations. The Bureau would be empowered to review a wider selection of anti-competitive collaborations. The FES indicates that penalties and remedies available under these provisions would be increased and expanded.

• Right to repair. The Act would be amended to prevent manufacturers from refusing to provide the means for repair of devices and products.

• Expanded private litigation. Broadening the reach of the law by enabling more private parties to bring cases before the Competition Tribunal and receive payment if they are successful. At the same time, costs could no longer be awarded against the Bureau.

Key Takeaways

• The FES proposes measures across multiple facets of the Canadian economy to address affordability issues for Canadians. In doing so, it will likely result in substantial changes to Canada’s competition laws, expanding the scope of conduct subject to the Act and increasing enforcement.

• Businesses need to stay informed on these important changes to the Act and ensure compliance programs and guidelines are in place and current.

• The expanded competition law provisions are likely to significantly impact strategic business decisions related to mergers and other commercial practices. Early planning and discussion with counsel are instrumental to understanding the potential for competition law to play a key role in business decision-making.

For more information on the amendments currently being debated in Parliament, please see our September 2023 Blakes Bulletin: Canadian Government Introduces Important Amendments to the Competition Act. For more information on the government’s consultation on the future of the Act, see our November 2022 Blakes Bulletin: Canadian Government Announces Review of the Competition Act and our April 2023 Blakes Business Class Seminar: Sweeping Changes to Canada’s Competition and Foreign Investment Rules.

For further information, please contact any member of our Competition, Antitrust & Foreign Investment group.