Competition Law in Canada

Introduction

Competition law in Canada is primarily governed by the Competition Act, RSC 1985, c C-34, a federal statute that regulates anti-competitive conduct, mergers, and deceptive marketing practices. The Act is administered by the Commissioner of Competition and enforced through the Competition Bureau (an independent law enforcement agency) and the Competition Tribunal (a specialised quasi-judicial body). Canadian competition law has undergone significant structural changes in recent years, particularly through the Budget Implementation Act, 2022 (SC 2022, c 10) and the Budget Implementation Act, 2024 (SC 2024, c 17), which introduced major amendments to the Competition Act. The Canadian regime blends criminal and civil enforcement mechanisms and distinguishes itself from other jurisdictions through the historical presence of the efficiencies defence and, more recently, the strengthening of private enforcement.

The Institutional Framework

The Competition Bureau is the investigative and enforcement arm of the regime. Led by the Commissioner of Competition, the Bureau is a division of Innovation, Science and Economic Development Canada but operates independently. The Bureau may conduct inquiries, compel the production of records, and refer matters to the Public Prosecution Service of Canada (for criminal matters) or the Competition Tribunal (for civil reviewable matters).

The Competition Tribunal is a specialised adjudicative body composed of judicial members (drawn from the Federal Court) and lay members (experts in economics, business, or other relevant disciplines). The Tribunal hears applications brought by the Commissioner concerning civil reviewable matters, including mergers, abuse of dominance, and certain restrictive trade practices. Appeals from the Tribunal lie to the Federal Court of Appeal and, with leave, to the Supreme Court of Canada.

Private parties may also bring applications to the Tribunal for certain reviewable practices (such as refusal to deal, price maintenance, and exclusive dealing) and may seek leave to bring actions for damages under s. 36 of the Competition Act for conduct that violates the criminal provisions. The 2022 and 2024 amendments significantly expanded private access to the Tribunal, including a new private right to challenge abuse of dominance.

Criminal Offences

Part VI of the Competition Act establishes criminal offences that require proof beyond a reasonable doubt. The principal offences include:

• Conspiracy (s. 45): Agreements between competitors to fix prices, allocate markets, or restrict output. Section 45 creates a per se (no proof of anti-competitive effects required) offence for “naked” restraints — agreements that are not ancillary to a broader legitimate agreement. The Competition Act formerly contained an exception for conspiracies that enhanced efficiency, but this was repealed by the 2022 amendments.
• Bid-rigging (s. 47): Agreements to ensure that one party wins a tender or bid, including agreements to withdraw bids or submit pre-arranged bids.
• False or misleading representations (s. 52): Knowingly or recklessly making materially false or misleading representations to the public.

Criminal prosecutions are conducted by the Public Prosecution Service of Canada and carry penalties including fines (at the discretion of the court) and imprisonment for up to 14 years for conspiracy.

Civil Reviewable Practices

Part VIII of the Competition Act addresses civil reviewable matters, adjudicated before the Competition Tribunal on a balance of probabilities. Key provisions include:

• Abuse of dominance (s. 79): Prohibits a dominant firm from engaging in anti-competitive acts with the purpose, effect, or likely effect of substantially lessening or preventing competition. The 2022 amendments removed the requirement to prove “intent” to substantially lessen competition (reducing it to a “purpose, effect or likely effect” test) and expanded the types of conduct that can be challenged. The 2024 amendments further broadened s. 79 to encompass conduct that “hinders” competition or the entry or expansion of a competitor.
• Mergers (ss. 91–103): The Commissioner may apply to the Tribunal for an order to prohibit a merger (or dissolve a completed merger) if it substantially lessens or prevents competition. The Tribunal assesses mergers by defining the relevant product and geographic market, evaluating market concentration, and considering entry barriers, countervailing power, and the remaining competitiveness of the market. Parties to a merger must notify the Bureau if the transaction exceeds specified financial thresholds (approximately C$93 million in 2024, adjusted annually).
• Price maintenance (s. 76): Prohibits a supplier from attempting to influence upward or discourage the reduction of a resale price.
• Refusal to deal (s. 75): A person substantially affected by a refusal to supply may apply to the Tribunal for an order requiring supply, provided certain conditions are met.
• Exclusive dealing, tied selling, and market restriction (s. 77): Practices that are likely to substantially lessen competition.

The Efficiencies Defence: Rise and Fall

A distinctive feature of Canadian merger and conspiracy law was the efficiencies defence, codified in former s. 96 of the Competition Act. The defence, as interpreted by the Supreme Court in Tervita Corp v. Canada (Commissioner of Competition), 2015 SCC 3, permitted an otherwise anti-competitive merger to proceed if the efficiency gains (cost savings, economies of scale, productive efficiencies) outweighed the likely anti-competitive effects and if the efficiencies would not otherwise be attained.

Following sustained criticism that the defence resulted in unduly permissive merger enforcement — particularly in an increasingly concentrated Canadian economy — the federal government repealed the efficiencies defence through the 2022 Budget Implementation Act. The repeal was effective June 23, 2022. Efficiency gains remain a relevant factor in the Tribunal’s overall competitive effects analysis under the general merger provision (s. 92) but no longer operate as a standalone defence that immunises anti-competitive mergers.

Recent Amendments: 2022 and 2024

The 2022 and 2024 amendments represent the most significant overhaul of the Competition Act since its enactment in 1986. Key changes include:

• Repeal of the efficiencies defence (2022).
• Expansion of abuse of dominance (2022 and 2024): Lowered threshold for establishing anti-competitive conduct; removal of the “intent” element; addition of a “hindering” theory of harm; explicit recognition that agreements between firms with common ownership or control (including dual-class share structures and common shareholding) may fall within the provision.
• Private enforcement (2022 and 2024): Private parties may now seek leave to bring abuse of dominance applications before the Tribunal; the “leave” threshold was lowered in 2024.
• Market studies (2022 and 2024): The Commissioner’s market study powers were expanded; the government may now direct the Commissioner to conduct a market study.
• Labour and competition: The 2022 amendments clarified that the conspiracy provision does not apply to agreements between employers regarding employee wages or working conditions (a response to no-poach agreements — see Commissioner of Competition v. Groupe CRH Canada Inc., 2021 Comp Trib 8).
• Deceptive marketing: The 2024 amendments enhanced penalties for deceptive marketing and established a new framework for the review of “greenwashing” and environmental claims.

Digital Economy and Enforcement Trends

The Competition Bureau has increasingly focussed on the digital economy. Key enforcement initiatives include:

• Merger review: The Bureau has challenged several significant technology-sector mergers, including its 2023 challenge to Rogers Communications’ acquisition of Shaw Communications (ultimately approved with conditions by the Tribunal and the Federal Court of Appeal in Canada (Commissioner of Competition) v. Rogers Communications Inc., 2023 FCA 161).
• Algorithmic collusion: The Bureau has signalled that agreements between competitors to use pricing algorithms that facilitate coordinated pricing may constitute criminal conspiracy under s. 45.
• Dominance in digital markets: The Bureau has launched investigations into the conduct of major digital platforms, including Google (online advertising) and Amazon (marketplace practices).
• Market studies: The Bureau has conducted market studies in digital health care, online advertising, and grocery retail.

The 2024 amendments introduced specific provisions addressing the anti-competitive conduct of dominant digital platforms, though Canada has not adopted an ex ante regulatory regime for digital gatekeepers akin to the EU’s Digital Markets Act (Regulation (EU) 2022/1925). Instead, Canada has chosen to strengthen ex post enforcement tools within the existing Competition Act framework.

Deceptive Marketing and Advertising

Part VII.1 of the Competition Act governs deceptive marketing practices, administered by the Bureau (and, in certain cases, private parties). Key provisions include:

• Misleading representations (s. 74.01): Representations that are false or misleading in a material respect, including representations about price, performance, or characteristics.
• Performance claims (s. 74.01(1)(b)): Representations about the performance, efficacy, or characteristics of a product must be based on adequate and proper testing.
• Bait-and-switch selling (s. 74.04): Advertising a product at a bargain price but not supplying it in reasonable quantities.

The 2024 amendments introduced enhanced penalties — up to the greater of C$15 million (C$25 million for subsequent offences) or three times the value of the benefit derived from the deceptive conduct — and a new provision targeting environmental claims (s. 74.012), requiring that representations about a product’s environmental benefits be substantiated in accordance with internationally recognised methodologies.

Conclusion

Canadian competition law has undergone a decisive transition from a regime that tolerated efficiency-justified anti-competitive conduct to one that prioritises competitive process, consumer protection, and enforcement vigour. The 2022 and 2024 amendments signal a deliberate convergence toward international best practices, particularly the U.S. antitrust tradition and the EU competition law framework. The Competition Bureau’s growing focus on digital markets, the expansion of private enforcement, and the elimination of the efficiencies defence position Canadian competition law for a more assertive enforcement era. Practitioners and market participants must navigate a regime that is increasingly interventionist and procedurally complex, with heightened risks for non-compliance across both criminal and civil reviewable matters.