From the appointment of “big tech” critic Lina Khan as US Federal Trade Commission chair to China’s increasingly assertive use of its anti-monopoly law against domestic firms, 2021 continued to show signs of an acceleration of competition enforcement globally. In Canada, however, this trend proved to be more muted—notwithstanding the Competition Bureau (Bureau) having declared a goal of being “at the forefront of the digital economy” in recent years.¹   Rather, following significant mid-year defeats in a Competition Tribunal (Tribunal) merger challenge, Commissioner of Competition (Commissioner) Matthew Boswell appeared to put more emphasis on the need to address shortcomings in the enforcement status quo.

Going forward in 2022, capacity-building and reform stand to be dominant themes in Canadian competition enforcement. As the Commissioner signals a more aggressive and proactive approach to merger litigation, the Bureau will deploy a long-awaited influx of federal funding, while reform of the Competition Act (Act)appears to have returned to the federal agenda.

(i) More aggressive Bureau stance on mergers likely following Tribunal and Federal Court of Appeal injunction decisions

In mid-2021, the Commissioner twice failed to obtain interim remedies from the Tribunal at the outset of a challenge to a merger between Secure Energy and Tervita Corporation, which had competed to provide waste management services to the oil and gas sector. The Tribunal first dismissed the Commissioner’s eve-of-closing request for an initial injunction to halt the merger until the Tribunal heard a second, separate injunction request that would further delay closing pending the hearing of the broader merger challenge.  In its first decision, the Tribunal dismissed what the Commissioner framed as “interim, interim” relief as “an unprecedented remedy that finds no support in the statutory scheme.”² After a subsequent, post-closing hearing, the Tribunal rejected the second injunction request as well,³ finding that the Commissioner had failed to produce an initial estimate of the merger’s harm that could be weighed against evidence of the transaction’s efficiency gains.⁴

In the wake of these rulings, the Commissioner issued sharp criticisms of the Tribunal’s reasoning, stating that the Bureau may need to pursue “a litigation-focused approach that is costly and less predictable for merging parties” to ensure readiness for future Tribunal proceedings⁵ while also appealing the first decision to the Federal Court of Appeal (FCA). In its recent February 9, 2022 decision on that appeal, the FCA delivered a partial vindication for the Commissioner, finding that the Tribunal did, in fact, have the jurisdiction to temporarily block a merger in the manner the Commissioner initially requested.⁶   That issue, however, had been rendered a moot issue in the parties’ dispute post-closing—as the FCA itself recognized before exercising its discretion to hear the matter.⁷   Moreover, the FCA’s reversal did not affect the Tribunal’s second decision denying the Commissioner’s subsequent injunction request on the merits. The FCA also left open the question of what legal standard would apply to future “interim, interim” applications other than that on which the Commissioner’s evidence had fallen short.⁸     

As a result of these developments, for transactions raising substantive competition concerns, merging parties that are unwilling to delay closing to accommodate a continuing Bureau review under “timing agreements” with the Bureau may be met with less engagement, and a more adversarial posture, as the Bureau shifts toward preparing evidence to meet the burden set out in Secure/Tervita. As discussed further below, the Bureau is also concurrently advocating for legislative reforms to lower the legal standards applicable to future injunction cases.

In cases where the Commissioner opts not to challenge a merger before the Tribunal pre-closing but has unresolved competition concerns, it should be noted that the Act gives the Commissioner the power to challenge a transaction up to one year after closing. The Commissioner continues to initiate such challenges, most recently in a November 2021 Tribunal application filed three months post-closing.⁹  

(ii) Expansion of Bureau activities and resources with new federal funding

Notwithstanding growth in other areas of federal spending, the Bureau’s budget has fallen well short of inflation for many years:  the Bureau’s CA$52.1 million budget for its 2020-21 fiscal year, for example, was only marginally above its CA$50.6 million budget for 2010-11 (and then only on account of higher Bureau user fees). In the 2021 federal budget, however, the Bureau received a significant injection of new funding – an additional CA$96 million over a five-year period and an additional CA$27.5 million per year thereafter. This amounts to a nearly one-third increase over recent years’ funding levels. 2022 will begin to see the impact of these funds in the following areas earmarked by the Commissioner:

• A new Digital Enforcement and Intelligence Branch, described as “a centre of expertise in technology and data and act as an early-warning system for potential competition issues in the digital and traditional economies”;
• Additional hiring by the Bureau, including of litigators and external experts; and
• Advocacy for “pro-competitive regulatory and policy changes at all levels of government in Canada.”¹⁰

The Bureau’s funding boost should assist its ongoing efforts to develop its capacity to enforce competition laws in the digital economy—a multi-year shift aligned with the Trudeau government’s broader “Digital Charter” initiative. It remains to be seen, however, whether a greater Bureau enforcement presence will become apparent in the tech sector in 2022. While a new Bureau investigation into Google’s online advertising practices became public in 2021 after the Bureau obtained a document production order,¹¹ the Bureau’s work in more traditional sectors such as energy, agriculture, transportation (airlines) and telecommunications assumed a greater profile.¹²  

(iii) Targeted amendments and federally directed review of the Act on the horizon

The last round of major amendments to the Competition Act occurred in 2009. In recent years, many commentators—both in Canada and abroad—have questioned whether competition law frameworks remain “fit for purpose” in light of transformative changes in the economy, particularly the fast-moving digital economy. More recently, a December 2021 mandate letter from Prime Minister Trudeau to the Minister of Innovation, Science and Industry provided an early signal that competition may be moving up on the federal government’s legislative agenda. That letter called for the Minister to, among other things, “undertake a broad review of the current legislative and structural elements that may restrict or hinder competition,” including a review of the Commissioner’s mandate to ensure “that Canadians are protected from anti-consumer practices in critical sectors”, such as oil and gas, telecommunications and financial services.¹³   Prior to the letter’s release, Commissioner Boswell had been actively promoting the concept of such a review in his public comments.¹⁴

More recently, in a February 2022 interview with the Toronto Star, the Minister indicated that the government intends to first pursue a number of specific amendments to the Act in the short term followed by a broader review of the Act.¹⁵   While not providing timelines, the Minister flagged the following as among the amendments under more immediate consideration:

• Criminalization of wage-fixing and “no-poach” agreements. In 2020 and 2021, the Bureau confirmed its position that agreements between competing employers to fix employees’ wages and limit poaching, like other so-called “buy-side” agreements, are not subject to the Act’s criminal cartel provision. By contrast, under US antitrust law, such agreements have been actively prosecuted in recent years.¹⁶   In 2021, the House of Commons Standing Committee on Science, Industry and Technology recommended amendments to criminalize “cartel-like practices related to the purchase of goods and services, including wage-fixing agreements between competitors.”¹⁷   The Bureau has expressed its support for a wage-fixing ban while proposing that further work be done to identify whether other problematic buy-side agreements exist would warrant similar treatment.¹⁸
• More clearly addressing “drip pricing” in the Act. “Drip pricing” occurs where consumers pay more than an initially advertised price through subsequently disclosed fees or other charges. The Bureau has successfully settled several deceptive marketing cases in recent years based on drip pricing allegations.¹⁹   While it is unclear what specific reforms the government is contemplating, the Bureau has proposed that drip pricing be explicitly prohibited in the Act to avoid the need to prove, in every case, why the practice is deceptive.²⁰  
• Increased penalties. The Minister has committed to reviewing the Act’s penalties to ensure that they serve as a “genuine deterrent against harmful business conduct.”²¹   The Bureau is advocating across-the-board increases, noting, for example, that “for the world’s largest firms, who earn billions of dollars in revenues, these penalties could often amount to a pittance.”²²   Existing penalties and fines (such as CA$10 million for abuse of dominance and CA$25 million for cartel conduct) have not increased since 2009. 

In a subsequent news release, the Minister also indicated his intent to consider reforms “fixing loopholes that allow for harmful conduct,” “increasing access to justice for those injured by harmful conduct” and “better tackling emerging forms of harmful behaviour in the digital economy.”²³  

For its part, the Bureau recently published 35 proposals in a February 2022 submission in response to a reform consultation initiated by Senator Howard Wetston in late 2021.²⁴   Apart from the items described above, some of the Bureau’s more significant proposals include the following:

• Repeal of Canada’s unique efficiencies “defence.”  The Act permits an anti-competitive merger to proceed if it produces gains in efficiency that are greater than its anticompetitive effects. The Bureau proposes eliminating the defence, arguing that it harms consumers and businesses “in every case” in which it is applied, is “an international outlier” not adopted in other jurisdictions, requires complicated and expensive analysis and fails to promote Canadian firms’ global competitiveness as originally intended.  The Bureau instead suggests that efficiencies be reduced to a factor to consider when assessing a merger’s effects.²⁵   
• "Structural presumptions" to shift the burden of proof on contested mergers.  Under the current Act, the Commissioner carries the burden of proving a challenged merger’s anti-competitive effects. The Bureau proposes that merging parties instead be compelled to prove that a merger will not be anti-competitive in circumstances where a transaction would significantly enhance concentration in a market, similar to U.S. antitrust practice.²⁶
• Exploring a separate legal standard for assessing acquisitions or conduct involving emerging competitors in the digital economy. In recent years, commentators have raised concerns around so-called “killer acquisitions” whereby upstart tech firms, in particular, are acquired by larger ones before they can become competitive threats. The Bureau argues that the burden the current Act places on the Commissioner to prove competitive harm is “not suitable” for such cases, and that “[a] more workable standard” with “additional flexibility to protect the competitive process” is needed.²⁷   It proposes extending this standard to cases involving alleged anti-competitive conduct or competitor collaborations targeting these emerging firms.²⁸
• A more lenient approach to Tribunal merger injunctions. Citing, among other things, the Tribunal’s denial of injunctive relief in the Secure/Tervita case noted above, the Bureau calls for a review of what it calls “impractical” legal standards for an injunction in the Act to “ensure that there is a workable avenue to protect competition on an interim basis.”²⁹ As the Commissioner’s evidentiary burden under these standards was not squarely in issue in the FCA’s recent jurisdiction-related decision in Secure/Tervita, these concerns are likely to remain ongoing for the Bureau.
• Expanding private enforcement of the Act. Only the Commissioner can initiate proceedings before the Tribunal under the Act’s abuse of dominance and civil competitor collaboration provisions. The Bureau proposes granting private parties access to these provisions³⁰ while also reducing the requirements for private parties to be granted leave to bring cases before the Tribunal.³¹   Few private parties have sought or obtained such leave, or successfully litigated cases, under narrower civil provisions in the Act that were opened up to private parties in the early 2000s (particularly under the refusal to deal provisions).  
• Penalties and other remedies for the civil regime governing competitor collaborations.  Section 90.1 was introduced in the Act’s 2009 reforms as a civil “track” allowing the Commissioner to apply to the Tribunal to prohibit anti-competitive collaborations among competitors—but not to pursue other remedies, except on a consensual basis. The Bureau proposes expanding section 90.1’s remedies to include, among other things, monetary penalties.³² The Bureau also suggests allowing the Commissioner to pursue past collaborations in addition to “existing or proposed” ones.³³
• Bureau notification of pharmaceutical patent litigation settlements. The Bureau proposes introducing a mechanism into the Act to require that the Bureau be notified of patent litigation settlement agreements between branded and generic drug manufacturers, noting its concerns that these agreements could delay the entry of cheaper generic drugs onto the market.³⁴   In the United States, parties have been required to provide similar notifications to the Federal Trade Commission since the mid-2000s.³⁵
• We anticipate that these and other reform proposals will garner significant interest from a range of stakeholders in the months to come.

Overall, each of the above trends suggests that 2022 could be a significant transition year toward a new and uncertain competition law landscape—one in which the Bureau, like many of its global counterparts, is seeking out new tools to adapt its mandate to the increasingly complex and fast-moving markets around it.

The authors would like to thank Camila Maldi for her assistance with this article.

To read other articles in the Dentons’ pick of Canadian Regulatory Trends to Watch in 2022 series, click here.

Stay up-to-date with all insights and guidance from our Regulatory team by visiting our Canada Regulatory Review blog here and signing up for future alerts here.

1. See e.g. Competition Bureau, “Competition in The digital Age: the Competition Bureau’s Strategic Vision for 2020–2024” (11 February 2020), online: https://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/04513.html. ↩
2. Specifically, the Tribunal found that while section 104 of the Act gave it the power to issue an interim injunction prior to the hearing of a merger challenge under section 92 of the Act, the Act did not empower the Tribunal to issue injunctive relief pending the hearing of the Commissioner’s section 104 application itself.  See Canada (Commissioner of Competition) v Secure Energy Services Inc. and Tervita Corporation, 2021 Comp Trib 4, online: https://decisions.ct-tc.gc.ca/ct-tc/cdo/en/item/499680/index.do. ↩
3. Post-closing, the Commissioner reframed his request to seek that certain Secure Energy assets  be held separate until the larger challenge was resolved.  See Secure #2, footnote 4 at para 3.↩
4. In particular, the Tribunal found that the Commissioner had raised a “serious issue to be tried” and demonstrated the potential for “irreparable harm” in relation to the merger under the applicable three-part legal test for an interim injunction (the Supreme Court of Canada’s established RJR-MacDonald test).  However, at the third “balance of convenience” stage of that test, the Tribunal found that while Secure had “provided clear and non-speculative evidence regarding the general extent of the harm that it will suffer if the relief requested by the Commissioner is granted,” the Commissioner had not produced evidence of the harm from not granting the injunction at issue.  See Canada (Commissioner of Competition) v Secure Energy Services Inc., 2021 Comp Trib 7 [“Secure #2”], online: https://decisions.ct-tc.gc.ca/ct-tc/cdo/en/item/511952/index.do. ↩
5. See Matthew Boswell, “Canada needs more competition” (20 October 2021) (remarks at the Canadian Bar Association Competition Law Fall Conference), online: https://www.canada.ca/en/competition-bureau/news/2021/10/canada-needs-more-competition.html.  ↩
6. Canada (Commissioner of Competition) v. Secure Energy Services Inc., 2022 FCA 25 [“Secure FCA”].  Among other things, the FCA found that section 104 of the Act provided a basis for the Tribunal to hear the Commissioner’s application by referring to the Tribunal’s authority to issue “any interim order that it considers appropriate” without limitation.  See e.g. paras. 56–58 of the decision (where the FCA also noted the courts’ practice of issuing similar short-term “interim” relief followed by subsequent “interlocutory” relief pending a decision on the merits of a dispute). ↩
7. Secure FCA at para 21. ↩
8. See Secure FCA at para 56 (referencing the RJR-MacDonald test applied by the Tribunal in denying the Commissioner’s second injunction request).↩
9. See Commissioner of Competition, Notice of Application – GFL Environmental Inc. (30 November 2021), Comp Trib File No CT-2021-006, online: https://decisions.ct-tc.gc.ca/ct-tc/cdo/en/item/516939/index.do.  Likewise, in 2019, the Commissioner filed a challenge one month post-closing that was later resolved by way of a consent agreement:  see Competition Tribunal, Case Details – Thoma Bravo, LLC, Comp Trib File No CT-2019-002, online: https://decisions.ct-tc.gc.ca/ct-tc/cd/en/item/462493/index.do.↩
10. See footnote 5.↩
11. Competition Bureau, News Release, “Competition Bureau obtains court order to advance an investigation of Google” (22 October 2021), online: https://www.canada.ca/en/competition-bureau/news/2021/10/competition-bureau-obtains-court-order-to-advance-an-investigation-of-google.html.↩
12. For example, 2021 saw the Secure/Tervita litigation discussed above; the completion of the federal review of Air Canada’s since-abandoned merger with Air Transat; consent agreements resolving Bureau concerns with a joint venture for the retailing of crop inputs (https://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/04588.html), with a transaction between firms that competed to provide commodity price assessments in the energy, coal and petrochemical sectors (https://www.canada.ca/en/competition-bureau/news/2021/12/competition-bureau-reaches-agreement-with-sp-global-related-to-its-acquisition-of-ihs-markit.html) and with a pulp and paper industry merger (https://www.canada.ca/en/competition-bureau/news/2021/11/competition-bureau-reaches-agreement-with-paper-excellence-to-preserve-competition-in-british-columbias-pulp-and-paper-industry.html); and the Bureau’s ongoing review of the Rogers/Shaw merger (https://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/04603.html).↩
13. Office of the Prime Minister, “Minister of Innovation, Science and Industry Mandate Letter” (16 December 2021), online: https://pm.gc.ca/en/mandate-letters/2021/12/16/minister-innovation-science-and-industry-mandate-letter.↩
14. See e.g. Matthew Boswell, “Canada needs more competition” (20 October 2021) (remarks at the Canadian Bar Association Competition Law Fall Conference), online: https://www.canada.ca/en/competition-bureau/news/2021/10/canada-needs-more-competition.html; Jaren Kerr, “Competition commissioner says Canadian laws need U.S.-style makeover,” Globe and Mail (8 November 2021), online: https://www.theglobeandmail.com/business/article-competition-commissioner-says-canadian-laws-need-us-style-makeover/. ↩
15. Christine Dobby, “Ottawa announces review of Canada’s competition law, with focus on wage fixing, deceptive pricing and ‘anti-consumer practices,” Toronto Star (7 February 2022), online: https://www.thestar.com/business/2022/02/07/in-an-exclusive-interview-innovation-minister-says-ottawa-to-consider-changes-to-competition-law-launch-comprehensive-review.html. ↩
16. See generally Department of Justice, Antitrust Division and Federal Trade Commission, “Antitrust Guidance for Human Resources Professionals” (October 2016), online: https://www.justice.gov/atr/file/903511/download.  See also U.S. v Jindal, E.D. Tex. No. 20-cr-00538 (2020); In re Railway Ind. Employee No-Poach Litigation, W.D. Pa. No. 18-798 (2019).  ↩
17. The Committee’s recommendations were included in a June 2021 report focused on the grocery sector that can be found here: https://www.ourcommons.ca/DocumentViewer/en/43-2/INDU/report-6/page-5.   ↩
18. See the submission of the Bureau in response to an invitation for comment on Canada’s competition policy framework by Hon. Senator Howard Wetston, Q.C.: Competition Bureau, “Examining the Canadian Competition Act in the Digital Era” (8 February 2022) [“Bureau Consultation Submission”], s 5.1, online: https://www.canada.ca/en/competition-bureau/news/2022/02/the-competition-bureau-of-canada-participates-in-consultation-to-modernize-canadian-competition-policy.html. ↩
19. See e.g. Competition Bureau, “Ticketmaster to pay $4.5 million penalty to settle misleading pricing case” (27 June 2019), online: https://www.canada.ca/en/competition-bureau/news/2019/06/ticketmaster-to-pay-45-million-to-settle-misleading-pricing-case.html; Competition Bureau, “Enterprise Rent-A-Car Canada to pay a $1 million penalty for advertising unattainable prices” (22 February 2018), online: https://www.canada.ca/en/competition-bureau/news/2018/02/enterprise_rent-a-carcanadatopaya1millionpenaltyforadvertisingun.html; Competition Bureau, “Competition Bureau reaches settlement with Leon’s and The Brick in advertising case” (20 February 2018), online: https://www.canada.ca/en/competition-bureau/news/2018/02/competition_bureaureachessettlement withleonsandthebrickinadverti.html.↩
20. See Bureau Consultation Submission, footnote 18, s 6.1.↩
21. Competition Bureau, “Minister Champagne maintains the Competition Act’s merger notification threshold to support a dynamic, fair and resilient economy" (7 February 2022), online: https://www.canada.ca/en/innovation-science-economic-development/news/2022/02/minister-champagne-maintains- the-competition-acts-merger-notification-threshold-to-support-a-dynamic-fair-and-resilient-economy.html.↩
22. Bureau Consultation Submission, note 14, s 6.4 (addressing penalties for deceptive practices).  See also ss 3.3 and 5.3 (where the Bureau makes similar points with respect to abuse of dominance and cartel conduct, respectively).↩
23. See footnote 21, above.↩
24. See Bureau Consultation Submission, footnote 18.↩
25. Bureau Consultation Submission, s 2.1.↩
26. Bureau Consultation Submission, s 2.2↩
27. Bureau Consultation Submission, s 2.3.↩
28. Specifically under ss 79 (abuse of dominance) and 90.1 of the Act.  See Bureau Consultation Submission, s 3.2, 4.4.↩
29. Bureau Consultation Submission, s 2.1.↩
30. Bureau Consultation Submission, ss 3.4, 4.6.↩
31. Bureau Consultation Submission, s 8.7↩
32. Bureau Consultation Submission, ss 4.1.↩
33. Bureau Consultation Submission, ss 4.2.↩
34. Bureau Consultation Submission, ss 4.5.↩
35. See e.g. Federal Trade Commission, “MMA Reports: No tricks or treats—just facts” (27 October 2020), online:  https://www.ftc.gov/news-events/blogs/competition-matters/2020/10/mma-reports-no-tricks-or-treats-just-facts.↩