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The Canadian Competition Bureau (the “Bureau”) released some informative statistics summarizing the number and characteristics of merger reviews started and concluded by the Bureau’s Mergers Directorate in its 2019-2020 fiscal year (ending March 31, 2020). In past years, similar information was presented by the Bureau at the Mergers Roundtable hosted by the Canadian Bar Association’s Mergers Committee and the Mergers Directorate, which did not happen this year due to COVID-19.

Non-Notifiable Mergers

About a year ago, the Bureau expanded the role of its Merger Notification Unit, now referred to as the Merger Intelligence and Notification Unit, to include a broader focus on active intelligence gathering on non-notifiable merger transactions that may raise competition concerns. These efforts have borne fruit, with the Bureau identifying and reviewing a number of non-notifiable transactions where the parties would not have otherwise engaged with the Bureau prior to closing. In one instance, the Bureau became aware of a non-notifiable transaction, Evonik Industries AG’s acquisition of PeroxyChem Holding Company LLC, and entered into a consent agreement with the merging parties which required the divestiture of assets in British Columbia to remedy competition concerns.

Number of Annual filings and reviews

There has been a slight increase in merger filings and reviews over the past year, although not outside the normal range for the past 10 years. Set out below is a chart outlining the total number of merger filings by year for the past 10 years.

image: Competition Bureau Canada


Continue Reading Merger Review by the Canadian Competition Bureau in 2019-2020: Breaking down the Numbers

The Canadian Competition Bureau (the “Bureau”) has released a toolkit – Strengthening Canada’s economy through pro-competitive policies (the “Toolkit”) – to assist regulators and policymakers, at all levels of government, in maximizing competition in Canadian industries. The Toolkit offers a five-step process for policymakers to assess the impact of new and existing policies on competition, and tailor those policies to maximize the benefits of competition across the Canadian economy.

The Bureau suggests engaging in a competition assessment each time a new policy is proposed or an existing policy is reviewed. The Bureau’s five-step competition assessment process is summarized below:

Step 1: Identify the policy. The first step is to specify the underlying goals that the policy is designed to achieve and the proposed measures to achieve those goals.

Step 2: Assess whether the policy impacts competition. The second step involves an assessment of the impact of the proposed measures on competition, with reference to the following four indicators of a competitive marketplace:

  • the ability of businesses to enter or expand in a market or operate across borders;
  • the ability of businesses to set the price, quality and quantity of the products or services sold;
  • the incentives for businesses to compete vigorously; and
  • the potential for consumers to switch between competing businesses.


Continue Reading Competition Bureau Seeks to Promote Consideration of Competition by Policymakers with New Toolkit

On July 6, 2020, the Competition Bureau (the “Bureau”) published its Annual Plan for 2020-21 titled “Protecting competition in uncertain times” (the “Annual Plan”). The Annual Plan provides specific action items for implementing the Bureau’s 2020-24 Strategic Vision (the “Strategic Vision”) published this February.

As discussed in

So-called “excessive price” prohibitions are premised on a theory of harm that is generally rejected in competition law. Indeed, Canada’s Competition Act does not even contain a prohibition against excessive pricing. Among the many reasons for not prohibiting excessive prices are that to do so would undermine investment incentives (both of firms already in the market and potential entrants). Further, the phenomenon of excessive prices, in the absence of exclusionary conduct, is generally viewed as a temporary phenomenon that will be corrected by the market. Also, the legal uncertainty associated with the vagueness of the ‘excessive’ element in the concept could easily result in regulatory overreach.

In the context of COVID-19, the traditional arguments against prohibiting excessive prices have given way to a more consumer-oriented approach with respect to those supplying consumers directly. In response to concerns that retailers may be incentivized to substantially increase prices for products critical to the COVID-19 response, three Canadian provinces (i.e. British Columbia, Ontario & Nova Scotia) have specifically prohibited selling essential goods at unconscionable prices, or at prices markedly higher than fair market value. Other provinces appear to be more actively seeking to enforce pre-existing price gouging prohibitions in their consumer protection legislation, particularly in regards to necessary goods.

Yet, as already noted, it is unclear what constitutes an ‘excessive’ or ‘unconscionable’ price. Despite the fact that some provinces have had prohibitions on price gouging in their consumer protection legislation for decades, those provisions have been rarely used and scarcely considered by Canadian courts. At the same time, failing to comply with these provisions can have serious consequences, including financial penalties, restitution and reputational harm – and in some cases criminal fines and jail time. There is also the possibility a class action lawsuit could be instituted by a consumer on behalf of a class of consumers. What follows is a description of the price gouging laws of each Canadian province, as well as a description of their enforcement approach, where available, in order to help businesses understand how to avoid liability in respect of this particularly vague area of law.
Continue Reading Price Gouging Prohibitions across Canada

Competition Bureau’s Position on Advertising During COVID-19 Pandemic

In the context of COVID-19, the Competition Bureau (“Bureau”), in coordination with Health Canada, has indicated its intention to take action against companies that fail to comply with the Competition Act (the “Act”) and, in particular, its provisions relating to misleading advertising and performance claims. The Act includes a wide range of civil and criminal deceptive marketing practices provisions that apply to anyone who is promoting a product, service or business interest. Failing to comply with these provisions can have serious consequences, including financial penalties, restitution and reputational harm – and in some cases criminal fines and jail time.

On March 20, 2020 the Bureau issued a statement confirming its commitment to enforcing the Act against deceptive marking practices relating to COVID-19 and, in particular, false, misleading or unsubstantiated performance claims about a product’s ability to prevent, treat or cure the virus. Subsequently, the Bureau has actively solicited complaints from the public on its website and on social media. Even before the pandemic, the Bureau indicated in its 2019-20 Annual Plan that it intends to “[p]rioritize high-impact and consumer-focused enforcement cases” that “[f]ocus on key areas important to all Canadians including…health and bio-sciences” and that it intends to support Canadian health care by, among other things, “[pushing] for … [t]ruth in the advertising of health … products and services”.
Continue Reading Regulators Crack Down on Misleading Advertising and Performance Claims Related to COVID-19

As previously discussed in our Refresher on the Failing Firm Defence, many companies will be facing insolvency or bankruptcy in the aftermath of COVID-19. This could lead to a situation in which financially stronger companies want to purchase struggling competitors. In this context, it is likely that the Competition Bureau will be asked to approve otherwise “problematic” mergers on the basis of what is commonly known at the “failing firm” defence.

On April 29, 2020, the Bureau issued a Position Statement providing additional guidance on the failing firm defence and, in particular, the types of information that are most relevant for a timely and efficient analysis of a failing firm. The key aspects of this guidance are summarized in this blog post.


Continue Reading Competition Bureau Provides Guidance on Failing Firm Analysis

The COVID-19 crisis has caused havoc to daily life and to economies around the world. Among other things, it has put immense pressure on businesses to coordinate and collaborate with each other in order to address unprecedented disruptions to major parts of the economy (e.g., shortages of essential goods and services, collapse of supply chains,

On March 18, 2020, the Commissioner of Competition (the “Commissioner”) issued an open letter to the executive members of the Canadian Bar Association’s Competition Law Section regarding the impacts of the COVID-19 pandemic on the Competition Bureau’s (the “Bureau”) enforcement processes. In this letter, the Commissioner stated that “the Bureau may … need to prioritize urgent marketplace issues that require immediate action to protect Canadians”. While the Commissioner did not provide specific examples of “urgent market issues”, a subsequent statement issued by the Bureau suggests that these issues include, among other things, deceptive marketing practices relating to COVID-19 and, in particular, false, misleading or unsubstantiated performance claims about a product’s ability to prevent, treat or cure the virus.


Continue Reading A Refresher on Performance Claims

Many have expressed concern that retailers are now incentivized to unilaterally increase the prices for products critical to the COVID-19 response. Canada’s competition enforcer, the Competition Bureau, does not have clear jurisdiction to regulate prices or otherwise directly prevent price gouging. However, the Ontario government is now expressly prohibiting price gouging for “necessary goods” (as defined). In particular, through an emergency prohibition order made under the Emergency Management and Civil Protection Act on March 27, 2020, certain persons are prohibited from selling “necessary goods” at “unconscionable prices”.


Continue Reading Ontario Implements Price Gouging Measures: What You Need to Know

In response to the COVID-19 virus, Canada’s federal government has restricted non-essential travel and closed the US border. Canada’s provincial governments have enacted highly restrictive measures including mandating the closure of facilities providing recreational programs (i.e. gyms), libraries, public and private schools, licensed childcare centres, bars and restaurants, theaters, cinemas and concert venues, and the list goes on. Some provinces have also banned gatherings of more than 5 people and prohibited all non-essential businesses. The status quo is likely to continue for weeks, if not months. While both federal and provincial governments have implemented measures to support businesses during this time, including tax deferrals, increased credit availability, and wage subsidies to help prevent layoffs, these programs, regrettably, may not be enough to keep some businesses afloat.


Continue Reading Refresher on the Failing Firm Defence