In what appears to be a dramatic shift in Canada’s foreign investment review policy, the federal government has recently approved the acquisition of ITF Technologies Inc. (“ITF”), a Montreal-based technology firm, by O-Net Communications Holdings Limited (“O-Net”), a Chinese developer of optical networking components, which is said to be effectively controlled
Kobo’s Quest for Status Quo in the E-books Market: A Never Ending Story
On February 17, 2017, Toronto-based e-books retailer Rakuten Kobo Inc. (“Kobo”) sought judicial review of the consent agreements reached between the Commissioner of Competition (“Commissioner”) and three e-books publishers earlier this year.
The consent agreements reached between the Commissioner and each of Hachette, Macmillan, and Simon & Schuster are aimed at resolving the Commissioner’s concerns…
Investment Canada Issues National Security Review Guidelines
On December 19, 2016, the Minister of Innovation, Science and Economic Development (Minister) issued Guidelines on the National Security Review of Investments (Guidelines) in an effort to provide foreign investors and their advisers with a better understanding as to the circumstances in which a national security review might be initiated by the Government of Canada under the Investment Canada Act (Act).
In February 2009, the Act was amended to provide the Government of Canada with the authority to review virtually any foreign investment that, in its opinion, could be injurious to Canada’s national security. The national security review process is an additional clearance under the Act which is separate and distinct from the “net benefit to Canada” economic impact review process for which the Act was originally created.
In summary, if the Canadian Government, principally Canada’s security and intelligence agencies, identifies a potential national security threat associated with an investment in Canada by a non-Canadian, the Minister is advised of that concern and, after consultation with the Minister of Public Safety and Emergency Preparedness (Public Safety Minister), the Minister is responsible for referring the investment to the Governor in Council (GIC) if he agrees that the investment could be injurious to national security. The GIC then determines whether a review should be ordered. If the GIC orders a review, the Minister, after consultation with the Public Safety Minister, then conducts a formal review and, if necessary, submits a report to the GIC with his recommendations at which point the GIC has the authority to take any measures in respect of the investment that it considers advisable to protect national security. These measures include permitting the investment to proceed with or without conditions or prohibiting the investment or, if already made, requiring the divestiture of the investment.
Unfortunately, little practical guidance was until now provided to foreign investors and their advisers as to the circumstances in which a national security review might be initiated. This situation contrasted with national security reviews conducted by the Committee on Foreign Investment in the United States which had issued guidance on the types of investments that might be of concern to it. The Guidelines which inform investors of the procedures that will be followed in the administration of the national security review process set out in Part IV.1 of the Act and in the National Security Review of Investments Regulations are intended to help remedy this lack of guidance.…
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Competition Bureau Releases Updated Consent Agreement Template for Merger Remedy Negotiations
On September 29, 2016, the Competition Bureau (the “Bureau”) released a revised consent agreement template for merger remedy negotiations. The release of the Bureau’s updated template is timely, as the number of consent agreements registered with the Competition Tribunal (the “Tribunal”) have risen significantly since the last template was published in 2007.
This year alone,…
New Trial Ordered: Application of Co-Conspirators’ Exception to the Hearsay Rule at Issue in Price-Fixing Conspiracy Case
On September 9, 2016, the Quebec Court of Appeal (“QCCA”) issued its judgment in two gasoline price-fixing conspiracy cases. The cases were the product of the Competition Bureau’s (the “Bureau”) year-long investigation into the fixing of retail gasoline prices in the province of Quebec from April 2005 to May 2006.
The three accused individuals in the cases (Yves Gosselin, Linda Proulx, and Michel Lagrandeur) were charged under the Competition Act’s (the “Act”) former price-fixing provisions for conspiring to fix retail gasoline prices in the cities of Magog and Sherbrooke. All three accused were subsequently convicted at trial. The trial judge arrived at his decision based on the preponderance of evidence adduced during the trial, which included, among other things, hundreds of intercepted telephone conversations, which included statements by co-conspirators.…
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The Competition Bureau, Criminal Conspiracies and Making History
The Competition Bureau Continues to Make History in its Enforcement of the Criminal Conspiracy Provisions of the Competition Act
For the second time in as many months, the Competition Bureau (the “Bureau”) has made an historic announcement about its efforts to enforce the criminal conspiracy provisions of the Competition Act (the “Act”).
On July 20,…
Competition Bureau Releases its 2016-2017 Annual Plan
On July 28, 2016, the Competition Bureau (the “Bureau”) released its 2016-2017 Annual Plan, entitled “Strengthening Competition To Drive Innovation”. While this year’s Annual Plan ostensibly repackages both the Bureau’s 3-year Strategic Vision and its 2015-16 Annual Plan, it does contain a few notable developments.
Indeed, the Bureau has introduced 10 new “areas of focus”…
Driving Out False and Misleading Advertising: Avis & Budget Agree to Pay $3 million Penalty for Unattainable Advertised Prices
On June 2, 2016, the Competition Bureau (the “Bureau”) announced that Avis and Budget have agreed to pay a $3 million penalty for what the Bureau has concluded were false or misleading advertisements made to the public in respect of prices and discounts on car rentals and associated products. Avis and Budget also agreed to …
A Long Road to Victory: The Competition Bureau Wins TREB Case
On April 27, 2016, the Competition Tribunal (the “Tribunal”) ended the years-long dispute between the Competition Bureau (the “Bureau”) and the Toronto Real Estate Board (“TREB”) by ruling that certain of TREB’s practices are anticompetitive.
TREB — an association of real estate brokers — had adopted rules that barred brokers from disseminating detailed listing information…
Mediation: A First in Resolving Merger Challenges under the Competition Act
In an unprecedented move in Canadian competition litigation, the Competition Bureau and Parkland Fuel Corporation (“Parkland”) reached a consent agreement through mediation on March 29, 2016. The dispute—which was founded on the Commissioner of Competition’s (“Commissioner”) concerns that competition would be significantly lessened in eight local retail gas markets as a result of Parkland’s acquisition…