Competition is a well-known driver of economic prosperity, spurring innovation and a greater variety of better product and service offerings at lower prices. Competitive markets are beneficial to consumers, businesses and workers alike, and the Competition Act helps achieve them by tackling anti-competitive forms of business conduct, including mergers, collaborations between competitors, and actions by dominant players that reduce levels of competition.
The challenges of today's economy have brought to light many questions about our framework laws. The digital transformation has reshaped our economy in ways that were unimaginable when the Competition Act was written. Affordability, including for key goods and services, and the availability of products in the wake of supply-chain disruptions, have been top of mind for Canadians as we enter a post-pandemic economic environment. This adds to ongoing concerns related to Canada's innovation performance and challenges faced by workers and small and medium-sized enterprises seeking a fair chance to participate in an economy increasingly dominated by mega-players.
At the same time, many of our key trading partners have, over the past few years, taken important steps to modernize their competition laws, recognizing the critical role they play in protecting consumers and promoting dynamic markets. In contrast, Canada's competition regime was last comprehensively reviewed in 2007-2008, and questions have increasingly been raised in Parliament, by academia, and by the media as to whether our regime is fit for purpose in our modern economy, and whether we are keeping pace alongside our allies to ensure the dynamism of our markets.
The Government is tackling this important issue in a phased approach: in Budget 2021, a significant boost in resources was provided to the Competition Bureau (the Bureau) to enhance its enforcement capacity and ensure that it is equipped with the necessary digital tools to protect competition in today's economy. In Budget 2022, targeted amendments were made to the Competition Act (the Act) to make immediate and concrete improvements, and to reinforce the Bureau's new enforcement capacity.
These actions were important first steps, but more remains to be done.
Broad and Inclusive Engagement
That's why the Government is now launching a consultation to consider comprehensive reforms to bolster our competition framework and ensure that the economy works for all Canadians.
The consultation will be wide-ranging and consider the role and functioning of the Act and its enforcement regime, whether key aspects of the regime are fit for purpose, and whether the law can stand up to new challenges brought about by the evolution of our economy, especially digital transformation.
The Government is particularly interested in hearing from Canadians on the following themes:
- The role and functioning of the Competition Act: Currently, the Act seeks to promote and preserve competition in order to foster economic dynamism and efficiency; support success of Canadian businesses in world markets; ensure a level playing field for small and medium-sized enterprises; and provide consumers with competitive prices and product choices. It does so mainly by prohibiting mergers that would reduce competition, cartels, and abuse of market power by dominant players. Do the objectives of the Act need to be revised or rebalanced? Is the Act sufficiently flexible and practical to understand and apply? What are the right tests to prevent clearly harmful conduct and mergers?
- The role and powers of the Competition Bureau: Currently, the Act empowers the Bureau to seek remedies through an outside adjudicator, the Competition Tribunal or courts. Could or should the Act broaden the role of the Bureau as enforcement agency and the decisions available to it? Does the Bureau have the authority it needs to identify threats to competition and take timely and effective action? Can review and investigation processes be more efficient? Are the right governance and accountability measures in place to ensure delivery of results and provide Canadians with confidence?
- The effectiveness of remedies and private redress mechanisms: Currently, the Act provides for criminal remedies or administrative monetary penalties to deter some – but not all – practices it covers. Private access to the Competition Tribunal is available in some cases, but complainants cannot obtain damages. Are new or stronger tools needed to promote compliance with the Act? Is the way cases are decided the best one? Are remedies for harmful conduct strong enough to restore competition and undo the harm that has been caused?
- Addressing challenges of data and digital markets: Currently, the Act generally applies equally to all sectors of the economy, with some exemptions granted to regulated sectors, transport-related matters, collective bargaining, and intellectual property. Should new, sector-specific mechanisms be added, or existing ones strengthened to better address anti‑competitive behaviour? How should the Act intersect with other digital governance areas such as privacy and data protection?
- Other pro-competitive policies: Beyond the Act, what other tools might the Government consider to drive greater competition in Canada? Are there other laws and regulations beyond the Competition Act that could do more to promote competitive markets?
The Government has published a discussion paper that elaborates on these themes and outlines potential options for stakeholder and public consideration. Roundtables will also be held with key stakeholders to solicit broader discussion and debate on these themes.
Competition affects all Canadians, whether as consumers, workers, or entrepreneurs. The Government is accordingly committed to hearing from a wide diversity of individuals and organizations from all corners of our society. Comments may be submitted through the form on the consultation website. All feedback received until March 31, 2023 will help inform the Government's policy development process.
Note that information received throughout this submission process is subject to the Access to Information Act and will be disclosed to third parties upon request and may be made public.
Quick Facts:
- Enacted in 1986, the Competition Act is a federal economic framework law designed to maintain and encourage competition in Canada. It contains a mix of civil and criminal provisions aimed at preventing anti-competitive and deceptive conduct in the marketplace.
- The Act protects competition mainly by prohibiting mergers that would lead to too much market concentration; limiting the behaviour of firms that are already dominant in a market; ensuring that collaboration and agreements between companies does not amount to collusion; and penalizing misleading advertising.
- The Act is administered and enforced by the Competition Bureau, an independent law enforcement agency headed by the Commissioner of Competition. The Commissioner has a mandate to investigate possible contraventions of the Act, seek remedies or make referrals. Contested civil matters are adjudicated by a specialized Competition Tribunal. Criminal matters are referred to the Public Prosecution Service of Canada.
- Budget 2021 provided an additional $96 million in funding to the Bureau over five years, and $27.5 million ongoing, to enhance the Bureau's enforcement capacity and ensure it is equipped with the necessary digital tools for today's economy.
- Budget 2022 introduced legislative amendments to the Act as a preliminary phase in modernizing the competition regime. The amendments included fixing loopholes in the Act, tackling practices harmful to consumers and workers, modernizing access to justice and penalties, and better adapting the law to today's digital reality.