The new era of competition enforcement in Canada

Notes for an address by Matthew Boswell, Commissioner of Competition

Canadian Bar Association Competition Fall Law Conference

September 26, 2024

(As prepared for delivery)

Good afternoon.

I’m pleased to be back here with you again this year for the Fall Competition Law Conference.

I would like to begin by acknowledging that we are gathered today on the traditional unceded territory of the Algonquin Anishinaabeg People.

We do so as Fall’s spectacular colours take hold here. And a centerpiece of that seasonal transformation—here and across much of Canada—is the maple tree.

The growth of the maple tree gives us a good analogy for change: including the dramatic ones in competition law in Canada that I’m going to talk to you about today.

You see, early on, maples grow upward…really fast. And then they expand outward to create their large canopy.

The evolution of competition law in Canada has charted a similar course.

That’s why today, I’m here to talk about the recent series of amendments made to the Competition Act. About what these changes mean for lawyers and the clients that many of you represent. And what it means for all Canadians. I’ll also talk about what doesn’t change with these recent reforms. So let’s get started.

The new era

Before the recent amendments to the Competition Act, in 2021, the Government made significant investments in the Bureau’s budget to enhance our ability to enforce the law and advocate for more competition.

This has allowed us to tool up to meet the needs of Canada’s modern economy. This includes creating our Digital Enforcement and Intelligence Branch, which is leveraging data and technology to support our work in enforcement and competition promotion

However, despite these new resources, we lacked the legislative tools to take the kind of enforcement action that Canadians, and parliamentarians, expect.

As you know, since 2022, there have been three waves of amendments to Canada’s competition law. To name but a few of the highlights:

• It started in 2022 with the criminalization of wage-fixing and no-poaching agreements and increasing maximum fines and penalties.
• Then in 2023, the outdated efficiencies defense was scrapped, the rules around abuse of dominance were strengthened, and the Bureau was granted formal market study powers.
• And, earlier this year, the Bureau was given more effective merger controls, including the introduction of structural presumptions, and stronger deceptive marketing provisions, that target bogus discount claims, drip pricing and unsupported environmental claims.

That’s a lot of change over two short years.

Not surprisingly, Canada’s legal community took notice and has been actively assessing the impacts of these wide-ranging changes. From that, came a growing consensus that we are now in “a new era” of competition law, of compliance and of enforcement.

Words used by many of you, in your bulletins, to describe these changes have included - "landmark", "transformative", a "sea-change", and my favourite - "breathtaking".

The Globe and Mail, in a July 2024 editorial called it: “The new era of consumer-friendly competition law.”

The broad consensus on the need for reform isn’t new. The sense that Canada must do more to foster competition has been on everyone’s mind for quite a while.

It was three years ago when I joined you, more than two years into my mandate and still virtual due to the COVID-19 pandemic, to call for a comprehensive review of the Competition Act. At the time that felt like a forlorn hope.

It is hard to quantify just how much progress has been made since then.

This has been driven by a groundswell of Canadians calling for change in response to an economy where competition simply was not working. Canadians have been clear – they want to see more competition.

The desire for significant reform gathered steam in the House of Commons and in the Senate, where unanimous support across parties provided the momentum needed to turn these amendments into law.

The fine details of these recent changes might not have universal agreement—laws rarely do. But there is unanimity that these efforts to modernize our laws are a legitimate, necessary response to the need to “do more”.

This new era of competition enforcement is best thought of as generational change, rather than radical.

Just as no one faults the maple tree for growing up and then outward as it adapts to its environment, our laws must respond to the needs and challenges of our economy as it is today. With these changes, the Government and Parliament are seeking to equip the Bureau with the right tools to achieve the outcomes we all want: a dynamic and competitive Canadian economy.

To come back to the analogy of the maple, I see this new era much like the capable limbs on that hardy tree. The brilliant canopy has grown from the sapling of an idea: that greater competition will drive growth and provide a public good. This is something we all want to achieve.

These changes are also consistent with the kind of broader, whole-of-government, competition agenda I have been calling for to help solve Canada’s productivity challenges.

We can get there by doing the right thing: opening up markets, defining their rules, enforcing those rules, and giving everyone a fair shot at growth, opportunity and investment.

What you can expect next

Many of you will want to know how this modernized Competition Act will affect your clients. The changes are significant and wide reaching, and I understand the importance for you to hear from the Bureau on how we view the new lay of the land and how we intend to enforce the law going forward.

As I see things, there are four big changes that will define how the Bureau works, thinks and responds.

First, expect to see more enforcement action.

I anticipate this will come both from the Bureau and through the expanded private access regime.

These legislative changes have equipped the Bureau with the tools we need to take meaningful enforcement action. That means anti-competitive conduct won’t be slipping through the cracks the way it used to, owing to gaps in the law. It will also mean greater recourse to the Competition Tribunal and the courts to address non-compliance with the law.

And, to the delight of many in the room I am sure, this will mean more case law.

Second, expect to see faster enforcement that’s far less technocratic.

The Competition Act now has streamlined legal tests, reverse onus requirements, and rebuttable presumptions for mergers. And as I mentioned a moment ago, the efficiencies defence has been repealed.

These changes will allow the Bureau to triage and investigate cases faster. They should also result in outcomes of cases based on reasons that average people can understand.

As an example of how these changes will streamline our work, we’re now unburdened by what was once hundreds of paragraphs of complex math formulae to determine whether a merger would run afoul of the Competition Act.

It was high time that some common sense was brought back into our competition laws.

The third thing you can expect is stronger remedies.

We see that in terms of the new remedial standard for mergers, the broader range of remedies available under section 90.1, and our new civil mechanism for enforcing compliance with consent agreements. We also see it in the changes to maximum fines and penalties throughout the Act. We now have a greater ability to seek real, meaningful, penalties when the law is broken. This means the days of pennies-on-the-dollar financial penalties are over.

And now, private applicants will have access to redress through private access to the Competition Tribunal.

This all adds up to enforcement that means business: those who break the law will face meaningful consequences for their actions.

The fourth and final thing you can expect from this new era is more people-focused enforcement.

Implicit in the changes is that the provisions of the Act are much more focused on what Canadians need from their competition laws today, for example:

• What’s in the public interest? Opening the door to public interest litigants will help determine the answer.
• Recognizing the importance of competition to workers through the new wage-fixing and no-poaching offences, and by expressly incorporating a “labour” call-out in the merger provisions.
• Ensuring that Canadian consumers have better protections against deceptive marketing practices, including guarding against the spread of drip pricing and bogus claims that deceive consumers and harm competitors.
• Enhanced protections for whistleblowers, complainants and others that come forward and provide assistance under the Act under the new anti-reprisal provision.

Overall, the amendments to the Act mean a more robust legal framework for competition law enforcement in Canada. It means a system that is more responsive to the needs of citizens. A system that is far less tolerant of anti-competitive conduct that misleads Canadian consumers, artificially raises prices and keeps wages low, and limits productivity and innovation.

Just as I talked about how this new era will affect the way the Bureau works, let’s now talk about how this new era will affect the choices that businesses make.

There are four areas that I want to highlight today, as I believe these will be of particular interest to all of you in this room.

Mergers

Let’s start with effective merger control. Having strong rules here is vital because it’s the first line of defense for us at the Bureau in our efforts to protect the competitiveness of our economy.

For the vast majority of mergers, things won’t change in this new era. But in specific instances, there are big changes that certainly warrant attention.

First, more mergers are now subject to pre-merger notification requirements. And, regardless of notification, in all cases where we apply for an injunction, a merger will not be able to close until the injunction is heard and decided. These changes clearly re-affirmed the preventative goal of merger review.

Second, deals that are not notified will be subject to a longer limitation period within which we can bring a post-closing challenge if necessary. Concretely, that means there is now less risk of anti-competitive deals slipping past us.

Third, you can expect much more healthy skepticism about proposed mergers in concentrated sectors. That’s as a result of the repeal of the efficiencies defense coupled with the creation of rebuttable structural presumptions. This puts an end to what was—in my view—an overly permissive approach to mergers or, as one of my predecessors described it, “the weakest merger law among all of our peer countries”.

And fourth, among the other noteworthy changes affecting mergers, the remedy standard is now much stronger. That’s going to steer us toward remedies that—in both intent and effect—fully preserve and protect competition from anti-competitive mergers. This is a big improvement over where we were just a year ago.

It does bear repeating: the vast majority of mergers reviewed under the Competition Act are non-complex and cleared quickly. That won’t change.

But for those complex cases—especially those that raise significant competition issues—expect us to come knocking. In those cases, some parties will simply need to be well prepared to explain their proposed merger. But for those ill-conceived deals

that are particularly anti-competitive, in this new era, those ideas should never leave the boardroom.

I recognize that good guidance here will be vital. That’s why we will soon be launching a comprehensive review of the Merger Enforcement Guidelines. We’ll also be taking this opportunity to ensure we have modern guidelines that reflect the digital economy and the latest jurisprudence.

As a part of this process, we will be publishing a discussion paper in the coming weeks that will include questions for your consideration. We hope that you will participate in this process in order to help us make these guidelines as useful and as rigorous as possible.

A draft of the revised guidelines will follow. We value and appreciate the input of you and your clients. Your contributions to our guidance help create greater clarity for everyone.

Monopolistic practices

Let’s turn to item two on the list of noteworthy changes: monopolistic practices.

It’s not bad to be big. Companies that grow large by innovating and competing on the merits should not be punished – this is a fundamental underpinning of the competitive process.

The recent amendments do not change our thinking on this point. What does change is our ability to clearly define rule breakers, and the very real potential of meaningful penalties for violations. These changes finally align us with our peers.

In this new era, we now have a streamlined test to determine whether there has been an abuse of dominance that would require a prohibition order. This will help us stop dominant-firm conduct that has either harmed competition in the marketplace or was intended to do so.

Also, we have a significantly improved civil-agreement provision. It will allow us to address a broader range of anti-competitive agreements. This is coupled with more effective remedies to address harm and promote compliance.

In this area, we have published new property controls guidance for public consultation. We see our position here as strong but responsible. However, we also remain open to other viewpoints. We welcome your feedback here before finalizing this guidance.

Lastly on this point, we are preparing additional guidance on restrictive trade practices, and we will be consulting on that draft guidance as well.

Deceptive marketing practices

Next, let’s talk about how this new era will affect our enforcement in the area of deceptive marketing practices.

This is an area where the Bureau needed an enforcement framework that was up to speed with the times. We needed the tools to do the best job possible in countering these age-old practices that harm consumers and undermine competition.

First up is drip pricing. As you know, we have a long track record in successfully pursuing those who engage in this anti-competitive practice.

Most recently, earlier this week, the Competition Tribunal handed down its decision in the Cineplex drip pricing case. This was a resounding win for Canadians, and a concrete example of our new era of competition enforcement.

I recognize that Cineplex has announced its intention to appeal. However, I want to highlight that this is the first decision by the Tribunal to deal with the recent changes to the Competition Act, including the availability of higher administrative monetary penalties.

The decision sends a strong message that businesses should not engage in drip pricing and need to display their full prices upfront whenever additional fees are mandatory for consumers. Businesses that fail to comply with the law risk significant financial penalties.

Of course, we also recently secured two consent agreements in this area—against TicketNetwork and SiriusXM Canada. We also have several other active investigations. The overall lesson here is clear: expect pushback and consequences if you engage in false or misleading practices by advertising prices that are unattainable due to fees that aren’t included in the offer.

Next up is an area that has seen a lot of ink spilled: the provisions about environmental claims and greenwashing. I can reassure you that, at the Bureau, we heard loud and clear that there’s a deep desire for guidance on these new provisions in the Act. We have and will move quickly here.

While these changes are significant, it is important not to overlook the reality that prohibitions against greenwashing and unsupported performance claims already existed in our laws.

The Competition Act has long had provisions prohibiting false or misleading claims to promote a product or a business interest. Case in point, look at the action we took against Keurig Canada in 2022. There, our investigation concluded the company’s claims about the recyclability of its single-use coffee pods were false or misleading. Keurig agreed to pay a $3 million penalty.

Similarly, performance claims not based on adequate or proper testing have been prohibited in Canada since the 1930s. By extension, the Bureau has long advised businesses that these provisions apply to environmental claims. Not only have we published guidance and warnings for many years, we’ve also taken enforcement action in high-profile cases.

With our past track record for context, you can see that these new provisions are an evolution—not a revolution—in addressing deceptive marketing practices. It means that advertisers are expected to have a foundation for their environmental claims, so that they’re not deemed false or misleading for consumers.

As you know, we are consulting on these new provisions, and will carefully consider the feedback received. For now, I invite interested parties to read the special edition of Volume 7 of the Deceptive Marketing Practices Digest. It lays out some helpful advice on how to comply with the pre-existing provisions of the law when it comes to environmental claims.

Private access

Last but not least, I will share with you a few thoughts about changes to the private access regime in this new era.

The amendments have created a much more robust private enforcement system. It now extends to most of our civil provisions. It is accessible by a broader range of applicants. This comes with an eased leave test and the possibility of monetary disgorgement payments.

We welcome and support these changes, because they will complement the Bureau’s work, lead to more jurisprudence, and provide access to private redress.

You can already start to see the impacts of these changes. It is being used as a tool in abuse-of-dominance cases, including Apotex, and JAMP Pharma. And that’s just for starters. More significant changes to the Act come into force in June 2025.

We will be keeping a close eye on cases and scrutinizing them for opportunities to intervene and provide the Bureau’s perspective, particularly if there are important questions of law at stake. And I’m sure many of you in this room will be doing the same.

We plan to update our Information Bulletin on private-access proceedings in light of these significant changes. This will include laying out the factors we will consider in deciding whether to intervene.

I also want to state that we recognize the importance of having a properly resourced Competition Tribunal. As we move into a new era where we intend to bring more cases, and we anticipate a growing number of private access cases, this will only become more important to ensure timely and effective adjudication.

What comes next?

I’ve spent much of my time today walking you through what will I believe will change in competition law enforcement in Canada as a result of the recent amendments. And how those changes will affect your work.

Yes, there’s widespread public support for a modernization of the Competition Act, and these changes bring Canada into alignment with international best practices. And yes, some changes still have some rough edges that will need sanding down to a smoother finish, be it through guidance or case law. That’s normal. Because this is framework law, after all, not a code.

But, despite these significant changes, it’s also important to take note of what doesn’t change. This is still a framework law focused on maintaining and promoting competition in Canada, it is not sector-specific regulation or a price control regime.

The Competition Act remains subject to robust due process protections, evidentiary requirements and leave standards, to ensure fairness for all parties and to weed out clearly unmeritorious cases. The Bureau will, of course, continue to apply the law in a transparent, predictable and rigorous manner. In other words, while the maple tree’s canopy may have expanded, its roots are the same.

When it comes to the desire to ensure competition that’s fair and just in Canada, we’ve been threading that needle for nearly as long as Canada has been Canada. That doesn’t get talked about enough. New laws here are a response to an age-old problem.

Way back in 1889, Canada was the first country in the world to introduce modern anti-trust legislation. Ours—along with similar laws in the US—was a response to serious problems faced by people in those young, emerging markets. That 135-plus year tradition continued on in the 20th century. In the 1920s, Prime Minister Mackenzie King himself introduced the first reading of the Combines Investigation Act, which was the foundation of today’s Competition Act.

Next in the 1980s the Competition Act saw amendments via Bill C-91, in which the Minister of the day responsible for this portfolio said plainly that legislative changes were needed to "gear them to the requirements of a modern marketplace."

And that takes us to today’s changes—the latest segment on what’s been a long road.

As I explained in the beginning of my remarks, generational change in competition law is here. Finally.

To bring us back to the analogy of the maple:

These are new limbs to fill out the figurative tree canopy of competition in Canada. It covers more with the rules and enforcement framework needed to keep pace with the economy of today. But it’s consistent with past principles. These changes are backed by a long tradition of commitment by the Bureau to transparent, evidence-based law enforcement.

Conclusion

As I conclude, I want to reiterate that this is a new era of competition enforcement in Canada. Today, we have a law that is significantly stronger, one that finally addresses many of the longstanding inadequacies of the Competition Act.

As I have stated, we are developing guidance to provide clarity on what these changes will mean for the Bureau and for your clients. And we will want to hear from you to help us refine it.

However, Canadians’ and Parliamentarians’ message has been clear -- they want to see stronger and more active enforcement. These recent amendments have equipped us with the right tools to do just that.

I want to leave you with a clear takeaway: in this new era you should expect a more aggressive and active enforcer, one that will be using all the tools at our disposal for the benefit of Canadians and the Canadian economy.

These changes were long overdue, and it is now my role as Commissioner of Competition to see them implemented in a way that meets the high expectations of Canadians and Parliamentarians’.

So buckle up.

Thank you.