Coherent competition law reform

Competition law reform in Canada should not proceed in a piecemeal manner, says the Competition Law and Foreign Investment Review Section of the Canadian Bar Association in a letter to the Standing Committee on Industry and Technology. It is crucial to examine Bill C-352, Lowering Prices for Canadians Act, in light of significant amendments to the Competition Act recently implemented by Bill C-56, the Affordable Housing and Groceries Act and proposed amendments contained in Bill C-59, the Fall Economic Statement Implementation Act.

Several elements of Bill C-352 were incorporated in Bill C-56 at committee and are no longer required. These include market study powers for the Commissioner of Competition, repeal of efficiencies exceptions for anti-competitive mergers and collaborations, revisions to the legal test for abuse of dominance and amendment to the legal test addressing business collaborations with an anti-competitive purpose and increased financial penalties.

The most significant amendment in Bill C-352 that is not part of C-56 is the introduction of bright line rules and presumptions for merger reviews. Those are addressed in Bill C-59 and therefore no longer required.

Section 92(2) of the Competition Act, says the Competition Tribunal can’t find a merger will likely to result in a substantial prevention or lessening of competition uniquely on evidence of concentration or market share. Bill C-59 will repeal that when it receives Royal Assent.

Bill C-352, on the other hand, would establish arbitrary rules for combined market shares above 60% and a “substantial pro-competitive outcomes” reverse onus for market shares between 30-60%. This is contrary to global competition and antitrust laws that recognize that assessments of market powers and anticompetitive effects are highly contextual.

“In our view, the amendments proposed in section 8 of Bill C-352 go too far and are inconsistent with an effects-based competition regime,” the Section concludes.