On December 5, 2011, a federal omnibus crime bill (Bill C-10) was passed that will, among other things, have the effect of eliminating conditional sentences of two years or less from being ordered by courts for violation of two of the core criminal offences under the Competition Act: criminal conspiracy agreements (section 45) and bid-rigging (section 47).
To quote the Legislative Summary issued with Bill C-10, “conditional sentencing … allows for sentences of imprisonment to be served in the community, rather than in a correctional facility. It is a midway point between incarceration and sanctions such as probation or fines.”
Currently, a number of criteria must be met for a sentencing judge to impose a conditional sentence under the Criminal Code as follows: (i) the offence is not a “serious personal injury offence” (as defined in the Code), (ii) the offence is not a terrorism offence, (iii) the offence is not a criminal organization offence prosecuted by way of indictment for which the maximum term of imprisonment is 10 years or more, (iv) the offence is not punishable by a minimum term of imprisonment and (v) the sentencing judge has determined that the offence should be subject to a term of imprisonment of less than two years, is satisfied that serving the sentence in the community would not endanger the safety of the community and the conditional sentence would be consistent with the fundamental purpose and principles set out in the sentencing guidelines of the Code.
Bill C-10 amends section 742.1 of the Criminal Code to remove the current reference to serious personal injury offences and to provide that a conditional sentence of two years or less may be ordered unless, among other things, the offence is an indictable offence with a maximum term of imprisonment of 14 years or life.
According to the Legislative Summary accompanying Bill C-10, the Bill “amends the Criminal Code to restrict the availability of conditional sentences for certain offences … [restricting] the availability of conditional sentences for all offences for which the maximum term of imprisonment is 14 years or life and for [other] specified offences …” and to “place greater emphasis upon the maximum term of imprisonment” for offences.
Both sections 45 (criminal conspiracy agreements, including price-fixing and market division/allocation agreements between competitors) and 47 (bid-rigging) of the Competition Act are indictable offences, subject to maximum terms of imprisonment of 14 years (recently increased as a result of amendments to the Competition Act made in 2009).
Given that the Competition Act was amended in 2009 and 2010 to significantly increase the penalties for criminal conspiracy offences (and lower the enforcement bar by removing the former competitive effects test – see: Competition Act amendments), this recent omnibus crime bill will further increase the potential risk for individuals participating in price-fixing, market allocation/division or output restriction agreements with competitors (the three categories of “hard core” or “per se” cartel offences prohibited under the new section 45) and bid-rigging activities.
For example, in the recent Quebec gasoline price-fixing cartel, thirteen individuals and six companies pleaded guilty, with fines totaling over Cdn. $2.8 million. Of the thirteen individuals that plead guilty, six were sentenced to conditional sentences served in the community totaling 54 months (see: Two Individuals Plead Guilty in Quebec Gasoline Price-Fixing Cartel and List of Charges and Sentences in the Quebec Gasoline Price-fixing Cartel). Following the coming into force of Bill C-10, such conditional sentences will no longer be possible.
Bringing more criminal cartel cases under the amended conspiracy provisions of the Competition Act (section 45) is also currently an enforcement priority for the Bureau (see: Commissioner of Competition Addresses Current Enforcement Priorities in Two Wide-ranging Talks in Vancouver and Remarks by Melanie L. Aitken, Commissioner of Competition to the Canadian Bar Association 2011 Fall Conference).
What will this mean to parties involved in criminal conspiracy or bid-rigging conduct? Likely, like the U.S., jail time will mean actual jail time.
As such, this new law will further enhance the importance of adopting or revising effective corporate compliance programs and, where companies or individuals may have been involved in criminal conduct under the Competition Act, exploring the potential benefits in some cases of the Bureau’s formal Immunity and Leniency Programs.
Bill C-10 is currently making its way through the Senate and has not yet been proclaimed into force.
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