On Feb. 7, Minister of Innovation, Science and Industry François-Philippe Champagne announced that his government is evaluating potential measures to update the Competition Act, such as “modernizing the penalty regime to ensure it serves as a genuine deterrent” against “harmful business conduct”; increasing “access to justice” for those injured by such misconduct; and “adapting the law to today’s digital reality to better tackle emerging forms of harmful behaviour in the digital economy.”
Minister of Innovation, Science and Industry François-Philippe Champagne
In a Feb. 7 statement, Champagne said Canadians are rightly concerned about the rising cost of living, corporate concentration and ensuring that participation in the economy is fair. “That’s why we are taking action to help the Competition Bureau continue to protect consumers and the integrity of the marketplace,” he said. “We will also ensure that our competition law remains the most effective tool it can be in making life more affordable for Canadians.”
The government’s stated intention to update the Act was hailed by consumer advocates.
“From Big Telecom to Big Tech, dealing with the power of large companies in the digital age starts with reforming the Competition Act,” OpenMedia’s Campaigns Director Matt Hatfield said in a statement Feb. 8. “Year after year, people in Canada pay some of the highest prices in the world for telecom services. The Competition Bureau has told us in print that Big Telecom profits are excessive; it is time they’re empowered to act on that conclusion. That means giving the bureau strong proactive powers to monitor and investigate markets that appear to lack adequate competition and the power to apply meaningful financial penalties relative to the profits of the companies involved.”
Hatfield added that the government’s plan to re-evaluate the efficiencies part of the Act is particularly welcome. “Section 96 of the current Act, the so-called efficiencies defence, forces the Competition Bureau to consider company claims that mergers will save money and lead to greater overall market efficiency, even if a deal is demonstrably harmful to consumers,” he said. “Similar clauses do not exist in other comparable countries, which contributes to Canada having some of the weakest competition enforcement amongst its peers.”
Last year’s federal budget provided $96 million over five years to that end, starting in 2021-2022, as well as $27.5 million in ongoing funds, to improve the Competition Bureau’s enforcement capacity, and to give the bureau the necessary digital tools.
The government said the competition law plays a “critical role in promoting dynamic and fair markets.” Under the merger provisions of the Competition Act, the minister reviews the merger pre-notification threshold annually.
That threshold may stay the same or be adjusted using the indexing mechanism set out in the Competition Act, which is based on change in Canada’s nominal GDP. The government may also prescribe a different amount by regulation.
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