Canada’s Competition Act Modernization Receives Royal Accent

In a move to bolster Canada’s commitment to fair practices and curb anti-competitive behaviour, crucial amendments to the Competition Act gained Royal Assent on December 15, 2023. Spearheaded by the Competition Bureau, these changes provide enhanced tools to promote fair market dynamics, discourage harmful mergers and conduct, and modernize the nation’s regulatory framework.

Key Amendments

Market Studies Framework:
This amendment empowers the Competition Bureau to delve into market dynamics, gather essential information, and identify potential anti-competitive practices. The Bureau can better understand and address emerging challenges by proactively studying markets fostering a more dynamic and competitive business environment.

Efficiencies Defence Repeal:
The amendments also rescind the efficiency defence for mergers and business collaborations with potential anti-competitive effects. This underscores a strict approach against activities that could hinder fair competition, requiring businesses to demonstrate that their practices do not adversely affect the competitive landscape. Anticipated as a means to establish a more equitable environment, this modification aims to discourage anti-competitive behaviour.

Simplified Legal Test for Abuse of Dominance:
Simplicity and clarity are the cornerstones of the amended legal test for abuse of dominance. By streamlining the assessment process, the Bureau aims to expedite identifying and addressing instances where a dominant player engages in conduct that hampers fair competition. Moreover, the amendments increase the maximum penalties available, conveying that anti-competitive behaviour will be met with more severe consequences.

Expansion of Anti-Competitive Business Collaborations Restrictions:
The scope of the law has been expanded to encompass a broader range of anti-competitive business collaborations. This ensures that the Competition Act remains robust and responsive to evolving market dynamics. By restricting a broader array of anti-competitive collaborations, the amendments seek to foster an environment where businesses compete on merit, innovation, and consumer benefit.

“These amendments are a key step in modernizing Canada’s competition law and give the Bureau more effective tools to protect and promote competition in Canada. A modern Competition Act is fundamental to driving lower prices and innovation while fueling economic growth. A more competitive economy will benefit all Canadians – by offering more choice and greater affordability for consumers and businesses.” Said, Matthew Boswell, Commissioner of Competition 

The amendments come into immediate effect, however, specific changes related to anti-competitive business collaborations (section 90.1) will be implemented on December 15, 2024. This deliberate delay provides businesses with the necessary time to align their practices with the revised legal landscape.

The Competition Bureau emphasized working closely with stakeholders to implement these amendments transparently and effectively. This collaborative approach includes a thorough review and update of the Bureau’s enforcement guidance, ensuring clarity and predictability for the business and legal communities. As Canada embraces a more competitive economy, characterized by increased choice, affordability, and innovation, the amendments underscore the nation’s commitment to fostering economic growth and prosperity for all Canadians.