SWEEPING CANADIAN COMPETITION ACT
AMENDMENTS (BILL C-59) PASSED JUNE 20, 2024
On June 20, 2024, Bill C-59 was passed (the Fall Economic Statement Implementation Act, 2023), which introduced the third of three significant rounds of amendments to Canada’s federal Competition Act in two years (together with Bill C-19 and Bill C-56). This new round of amendments to the Competition Act completes a sweeping overhaul of the Competition Act across virtually all key provisions of Canada’s competition legislation. These amendments are also the most significant changes to Canadian competition law since the modern Competition Act came into effect in 1986 replacing the former Combines Investigation Act.
The Bill C-59 amendments, among other things, strengthen the Competition Bureau’s powers to enforce key deceptive marketing provisions of the Competition Act (e.g., relating to drip pricing, performance claims and ordinary selling price (OSP) claims), strengthen private party rights to seek Competition Tribunal remedies (e.g., for civil deceptive marketing and violations of the civil agreements provisions of the Act), introduce new penalties (e.g., administrative monetary penalties for violating the civil agreements provisions of the Act and for reprisal actions penalizing individuals for complying with the Act) and introduce a new clearance regime for environmental protection related agreements. Canada’s Competition Act merger review regime was also substantially overhauled, eliminating the efficiency defence, introducing market share presumptions and a more restrictive remedial test for restoring competition.
These amendments, together with those enacted in June 2022 and December 2023 (Bill C-19 and Bill C-56), increase the potential competition law risk for companies, trade and professional associations and other entities, particularly those without credible and effective competition law compliance programs and that have not reviewed their business practices to reflect Canada’s new competition laws. For the Competition Bureau’s summary of the June 20, 2024 Bill C-59 amendments to the Competition Act, see: Guide to the June 2024 amendments to the Competition Act (June 25, 2024).
Our blogs will be updated to reflect these amendments.
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OVERVIEW OF WAGE-FIXING AND NO-POACHING
CRIMINAL CONSPIRACY OFFENCES
UNDER SECTION 45 OF THE COMPETITION ACT
“Like price-fixing agreements between competitors, wage-fixing and no-poaching agreements undermine competition. Maintaining and encouraging competition among employers results in higher wages and salaries, as well as better benefits and employment opportunities for employees.”
(Competition Bureau,
Wage-fixing and no-poaching agreements are illegal in Canada)
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On June 23, 2022, the Competition Act was amended to add wage-fixing and no-poaching agreements between employers to the existing criminal conspiracy offences under section 45 of the Act. These amendments came into force on June 23, 2023. For more information about these amendments, see: Amendments.
In this regard, a new criminal conspiracy offence provision (section 45(1.1)) was added to the Competition Act to address wage-fixing and no-poaching agreements between employers.
This amendment was based, among other things, on jurisprudence under section 45 (the criminal conspiracy provision of the Competition Act) that held that, unlike the former conspiracy offence provision, the current section 45 did not apply to upstream agreements between competitors (i.e., fixing the price or other aspects of competition for products or services supplied to downstream purchasers, such as in the case of competing employers paying employees’ wages).
Following these amendments, under section 45(1.1)(a) of the Competition Act, it is a criminal offence for non-affiliated employers to agree to agree to fix, maintain, decrease or control salaries, wages or terms and conditions of employment (i.e., wage-fixing agreements between employers).
Under section 45(1.1)(b) of the Competition Act, it is a criminal offence for non-affiliated employers to agree to not solicit or hire each other’s employees (i.e., no-poaching agreements between employers).
The potential penalties for violating the wage-fixing and no-poaching offences under section 45(1.1) of the Competition Act are a fine in the discretion of the court (i.e., with no prescribed limit), imprisonment for up to 14 years, or both.
The Competition Bureau has issued Enforcement Guidelines on wage-fixing and no-poaching agreements and other related enforcement guidance for employers. For more information, see: Wage-fixing and no-poaching agreements are illegal in Canada and Enforcement Guidelines on wage-fixing and no-poaching agreements.
In addition, the Competition Bureau has revised its Immunity and Leniency Programs to include the new criminal wage-fixing and no-poaching conspiracy offences.
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SERVICES AND CONTACT
We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, across Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
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For more information about our firm, visit our website: Competitionlawyer.ca
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