Chapter 8 : Competition Policy

Objective

APEC economies will enhance the competitive environment to increase consumer welfare in the Asia-Pacific region, taking into account the benefits and challenges of globalization, developments in the New Economy and the need to bridge the digital divide through better access by ICT, by:

a. introducing or maintaining effective, adequate and transparent competition policy and/or laws and associated enforcement policies;

b. promoting cooperation among APEC economies, thereby maximizing, inter-alia, the efficient operation of markets, competition among producers and traders, and consumer benefits; and

c. improving the ability of competition authorities, through enhanced capacity building and technical assistance, to better understand the impact of globalization and the New Economy.

Guidelines

Each APEC economy will:

a. review its respective competition policy and/or laws and the enforcement thereof taking into account the “APEC Principles to Enhance Competition and Regulatory Reform”;

b. enforce competition policies and/or laws (including those prohibiting anticompetitive practices that prevent access to ICT and other new technologies), to ensure protection of the competitive process and promotion of consumer welfare, innovation, economic efficiency and open markets;

c. disclose any pro-competitive efforts undertaken (e.g. enactment of competition laws, whether comprehensive or sectoral);

d. implement as appropriate technical assistance in regard to policy development, legislative drafting, and the constitution, powers and functions of appropriate enforcement agencies;

e. establish appropriate cooperation arrangements with other APEC economies, including those intended to address the digital divide; and

f. undertake additional step as appropriate to support the development of the New Economy and to ensure the efficient functioning of markets.

Collective Actions

APEC economies will:

a. gather information and promote dialogue on and study;

(i) the objectives, necessity, role and operation of each APEC economy's competition policy and/or laws and administrative procedures, thereby establishing a database on competition policy;

(ii) competition policy issues that impact on trade and investment flows in the Asia-Pacific region;

(iii) exemptions and exceptions from the coverage of each APEC economy’s competition policy and/or laws in an effort to ensure that each is no broader than necessary to achieve a legitimate and explicitly identified objective;

(iv) areas for technical assistance and the modalities thereof, including exchange and training programs for officials in charge of competition policy, taking into account the availability of resources; and

(v) the inter-relationship between competition policy and/or laws and other policies related to trade and investment;

b. deepen competition policy dialogue between APEC economies and relevant international organizations;

c. continue to develop understanding in the APEC business community of competition policy and/or laws and administrative procedures;

d. continue to develop an understanding of competition policies and/or laws within their respective governments and within relevant domestic constituencies, thereby fostering a culture of competition;

e. encourage cooperation among the competition authorities of APEC economies with regard to information exchange, notification and consultation;

f. contribute to the use of trade and competition laws, policies and measures that promote free and open trade, investment and competition;

g. encourage all APEC economies to implement the “APEC Principles to Enhance Competition and Regulatory Reform; and

h. undertake capacity building programs to assist economies in implementing the “APEC Principles to Enhance Competition and Regulatory Reform”.

The current CAP relating to competition policy can be found in the Competition Policy Collective Action Plan

Canada’ Approach to Competition Policy in 2003

Canada’s Approach to Competition Policy in 2002

Fair competition is maintained and encouraged in Canada by the administration and application of provisions of four statutes:

- Competition Act R.S.C., 1985, c. C-34, as amended, is a Federal law which came into force on June 19, 1986 and the Notifiable Transactions Regulations, SOR/87 348 and Restrictive Trade Practices Commission Rules, C.R.C., c. 416;

- Consumer Packaging and Labelling Act R.S., 1985, c. C-38, as amended, which came into force on March 1, 1974 and the Consumer Packaging and Labelling Regulations C.R.C., c. 417;

- Textile Labelling Act R.S., c. 46 (1st Supp.) c. T-10, as amended, which came into force on December 13, 1971 and the Textile Labelling and Advertising Regulations, C.R.C., c. 1551; and

- Precious Metals Marking Act R.S., c. P-19, as amended, which came into force on July 1, 1973 and the Precious Metals Marking Regulations C.R.C., c. 1303.

The purpose of the Competition Act is to maintain and encourage competition in Canada: in order to promote the efficiency and adaptability of the Canadian economy; to expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada; to ensure that small and medium-sized enterprise have an equitable opportunity to participate in the Canadian economy; and to provide consumers with competitive prices and product choices. For more information on the legislation, please visit: http://strategis.ic.gc.ca/SSG/
ct01252e.html

For more information, please contact:

Josée Filion, Competition Law Officer, International Affairs Division, Competition Policy Branch

Competition Bureau

Mail to: Filion.Josee@cb-bc.gc.ca

Andrea Bruce, Senior Trade Policy Analyst, Investment Trade Policy Division

Department of Foreign Affairs and International Trade

Mail to: Andrea.Bruce@dfait-maeci.gc.ca

Canada’s Approach to Competition Policy in 2003
General Policy Framework		Canada’s competition legislation applies to all sectors of the economy and to all marketplace participants irrespective of nationality or origin of the product or service, including provincial and federal government corporations in respect of commercial activities engaged in by such corporations in competition with other persons. All business is subject to the Competition Act, with the exception of selected activities specifically exempted, such as collective bargaining, amateur sport or regulated industries and activities subject to other legislation and which may be covered by the regulated conduct defence. The Competition Act contains provisions addressing both criminal offences, including conspiracy, bid-rigging, discriminatory and predatory pricing, price maintenance, misleading advertising and deceptive marketing practices, as well as matters subject to civil review, such as mergers, abuse of dominant position, refusal to deal, exclusive dealing and tied Selling. Transparency of the competition policy regime in Canada has been achieved through a number of means including the advisory opinion program, the availability of advance ruling certificates as well as through the public distribution of a variety of written materials, including pamphlets, bulletins and enforcement guidelines. For additional information about the Bureau, please visit: http://competition.ic.gc.ca/
*Reviews of Competition Policies and/or Laws*	In June 21, 2002, Bill C-23 and its changes to the Competition Act and the Competition Tribunal Act came into force. One of these amendments, Section 124.1 of the Competition Act, came into force on April 1, 2003. Section 124.1 allows an individual to seek a written opinion (formerly known as an advisory opinion) from the Commissioner of Competition on the application of any provision or regulations of the Competition Act. On December 17, 2002, the Bureau published an information bulletin on the regulated conduct defence, which is an interpretive tool the courts developed to resolve apparent conflicts between two laws. The defence is relevant to the Bureau’s enforcement of the Competition Act because it protects conduct that would otherwise be subject to the Competition Act when that conduct is allowed under other provincial or federal legislation. Following consultations with key stakeholders, the Bureau published it s revised Fee and Services Standards Handbook on March 24, 2003. The changes include an increase of: · the current size-of-transaction threshold for merger notification from $35 million to $50 million; · the merger notification and Advance Ruling Certificates fees from $25,000 to $50,000 to better reflect the cost of merger review; · the fees for written opinions under Section 124.1 of the Competition Act since they are now binding.	The Legislative Affairs Division of the Competition Policy Branch of the Competition Bureau is responsible for ensuring that the provisions of the Competition Act and labelling legislation remain relevant. In the longer term, it is committed to continuing to adapt the competition regime as necessary to accommodate the changing environment domestically and internationally.	On August 26, 2002, the Government of Canada announced that it would be holding consultations with Canadians concerning lawful access to information and communications. The consultations will provide stakeholders with an opportunity to consider options for policy and legislative changes, including changes to the Competition Act. A Private Member’s Bill (Bill C-249) was considered by the House of Commons Standing Committee on Industry Science and Technology in the spring of 2003 and is now being considered by the Senate. The Bill seeks to amend the Competition Act in order to clarify the treatment of efficiencies in merger review. It makes efficiencies one of the many factors the Tribunal may consider to assess a merger’s overall impact on competition and it clarifies that efficiencies only matter to the extent that they bring benefits to consumers. In its response to the April 2002 Report of the House of Commons Standing Committee on Industry, Science and Technology, A Plan to Modernize Canada’s Competition Regime, the federal government indicated that it would undertake consultations on the proposed amendments to the Competition Act. The Government of Canada launched on June 23, 2003 a consultation process on the following proposed changes: strengthening the civil provisions with administrative monetary penalties, restitution and civil cause of action; reforming the conspiracy provisions; reforming the pricing provisions; and allowing for inquiries into the functioning of markets in Canada.
*Competition Institutions (Including Enforcement Agencies)*		The Commissioner of Competition is an independent law enforcement official responsible for the administration and enforcement of four statutes: the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act, and the Precious Metals Marking Act. The Commissioner is appointed by, and serves at the pleasure of, Cabinet with a mandate to promote competition in Canada. The Commissioner is the head of the Competition Bureau, an independent unit of the federal Department of Industry. The Competition Bureau is the administrative and law enforcement body charged with the preservation of a competitive marketplace in Canada. The Competition Bureau’s activities are guided by five governing principles. The first, transparency, means that the Bureau will be as open as the law and confidentiality requirements permit. The second, fairness, refers to striking the balance between voluntary compliance and enforcement, while responding to many competing interests. The third, timeliness, demands that decisions be made efficiently to avoid cost delays. The fourth, predictability, involves providing appropriate background material on Competition Bureau positions and important issues to assist the business community in conducting its affairs in a manner that complies with the law. The fifth principle, confidentiality, requires that the Competition Bureau use all available means appropriate to the circumstances to protect confidential or commercially sensitive information provided by the business and legal communities or any other source. The Commissioner of Competition employs a variety of instruments which form part of a Conformity Continuum to administer and enforce the four Acts cited above and achieve the ultimate goal of securing compliance with the legislation. These instruments fall into three broad categories: conformity through education, facilitating conformity, and responses to non-conformity. The Conformity Continuum emphasises education and voluntary compliance to limit the need for adversarial proceedings. For the Bureau’s Conformity Continuum Bulletin, please visit: http://strategis.ic.gc.ca/SSG/ ct01768e.html Transparency and efficiency of competition laws in Canada have been well served through the use of voluntary consultation services provided by the Competition Bureau. Pursuant to the Program of Advisory Opinions, the Bureau, when requested, provides its views on proposed actions by businesses to determine if the action would cause the Commissioner to initiate an inquiry or if a particular transaction is notifiable under the Act. With respect to criminal offences, the Commissioner may refer a case to the Attorney General of Canada for consideration as to what action the Attorney General may wish to take. In the case of civil reviewable matters, the Commissioner may apply to the Competition Tribunal, a quasi-judicial body, for remedial orders. The Competition Tribunal was created in 1986 when Parliament enacted major reforms of Canada's competition law and replaced the Combines Investigation Act with the Competition Act. The Tribunal is a specialized court combining expertise in economics and business with legal expertise, which hears and decides all applications made under Parts VII.1 and VIII of the Competition Act as informally. The Tribunal is a strictly adjudicative body that operates independently of any government department. It does not have investigative powers nor does it provide advice to government. It has no function other than that associated with the hearing of applications and issuance of orders. The Tribunal is composed of not more than four judicial members and not more than eight lay members appointed by the Governor in Council. Under the Competition Act, the Commissioner is authorised to make representations to, and call evidence before, federal boards, commissions, or other tribunals. In the case of provincial boards, commissions or other tribunals, the Commissioner may only make representations at the request of, or with the consent of, the agency concerned. The Competition Bureau participates in the Government of Canada's deregulation and privatisation initiatives, to ensure that the provision of goods and services in Canada is more efficient. Recent initiatives have been in such sectors as telecommunications, electricity, energy, and financial services. The Commissioner prepares an annual report of all of the activities of the Competition Bureau, which is presented to Parliament by the Minister of Industry. For the Bureau’s publications, including the Annual Report, please visit: http://strategis.ic.gc.ca/SSG/ ct01258e.html	Changes to the Competition Tribunal Rules are being considered by the Competition Tribunal to reflect the June 2002 entry into force of Bill C-23 amendments to the Competition Act and Competition Tribunal Act.
*Measures to Deal with Horizontal Restraints*		Canada’s competition law prohibits anti-competitive agreements, such as collusive price fixing. The major prohibition concerns conspiracy and is contained in section 45 of the Competition Act. Section 45 declares that it is an indictable offence for any person to conspire, combine, agree or arrange with another person to prevent, limit or lessen competition unduly. Exemptions under section 45 include agreements that relate only to specified subject matter set out in subsection 45(3), such as defining of product standards or the exchange of credit information; agreements that relate solely to the export of products from Canada (subsections 45(5) and (6)); and agreements that relate to professional services (subsection 45(7)). Section 47 prohibits agreements to refrain from submitting a bid in response to a call or request for tenders, and also prohibits the submission of bids arrived at by agreement in response to a call or bid for tenders. The section does not, however, apply to situations where the agreement is made known to the tendering authority before bids are made, or where the agreement involves affiliated companies (subsection 45(3)). Other horizontal agreements, such as market sharing, output limitation, collective boycotts and activities of trade associations are covered by the general conspiracy prohibition of section 45. Other provisions in the Competition Act relate to the implementation of foreign directives (section 46), agreements relating to participation in professional sport (section 48) and agreements among banks (section 49). For the Bureau’s pamphlet series on horizontal agreements, such as conspiracy and bid rigging, please visit: http://strategis.ic.gc.ca/SSG/ ct01265e.html
*Measures to Deal with Vertical Restraints*		The Competition Act prohibits vertical restraints, such as resale price maintenance (section 61(3)), exclusive dealing and tied selling (section 77(1)). Exclusive dealing and tied selling are not prohibited where: - it is engaged in only for a reasonable time to facilitate entry of a new supplier or product into the market; or - it is reasonable having regard to the technological relationship among the products involved. Franchise agreements between affiliates are not subject to the exclusive dealing, tied selling, and market restriction provision. Other vertical restraints covered in the Competition Act are: - third line forcing (subparagraph 77(1)(a)(i)); - territorial restriction (section 77); - customer restriction (section79); - delivered pricing (sections 80 and 81); and - consignment selling (section 76).
*Measures to Deal with Abuse of Dominant* *Position*	On December 2, 2002, the Bureau published its bulletin, The Abuse of Dominance Provisions (Sections 78 and 79 of the Competition Act) as Applied to the Canadian Grocery Sector, to give the grocery industry a better understanding of how the Bureau applies the abuse of dominance provisions, and to help deter anti‑competitive conduct in the grocery sector by encouraging compliance with the law.	The Competition Act provides a general inclusive list, under section 79, of situations and remedies where dominant firms engage in anti-competitive behaviour. Section 79 of the Competition Act involves a situation where one or more persons substantially or completely control a class or species of business, and have engaged in or are engaging in a practice of anti-competitive acts which have the effect of preventing or lessening competition substantially. Section 78 provides a non-exhaustive list of types of conduct deemed to constitute anti-competitive acts. To address abuse of dominance in the airline industry, section 78 (j) and (k) deal with anti-competitive conduct by an air carrier. Section 104.1 allows the Commissioner to issue a temporary order prohibiting a person from operating a domestic airline service. The following features also fall within this area, but are not confined to situations of dominance: predatory pricing (paragraph 50(1)(c)); refusal to deal (section 75); and discriminatory behaviour (paragraph 50(1)(a)). For non-criminal reviewable matters, only the Commissioner may bring an application to the Tribunal. Private parties cannot sue to restrain such behaviour or to seek damages except for damages as a result of the violation of an order of the Competition Tribunal. In the Abuse of Dominance provision of the Competition Act, subsection 79(4) provides that superior competitive performance is a consideration in determining whether a practice has an anti-competitive effect in a market. In addition, subsection 79(5) provides that an act engaged in pursuant only to the exercise of any intellectual property rights or enjoyment of any interests derived from that property is not an anti-competitive act. Section 32 of the Competition Act, which is in the special remedies part of the Competition Act, gives the Federal Court the power, when asked by the Attorney General, to make remedial orders if it finds that a company has used the exclusive rights and privileges conferred by a patent, trade-mark, copyright or registered integrated circuit topography to unduly restrain trade or lessen competition. Please visit the Bureau’s pamphlet series on abuse of market power and refusal to supply for more information: http://strategis.ic.gc.ca/SSG/ ct01265e.htm
*Measures to Deal with Mergers and Acquisitions*	Under the Competition Act, acquisitions of assets, acquisitions of voting shares, and combinations must be reported when the total value of the assets, or the acquired party’s gross revenues from sales, exceeds a certain threshold. Between July and December 2002, the Bureau held consultations with key stakeholders to solicit input about the appropriate fees and thresholds for merger notification. The size-of-transaction threshold was raised from $35 million to $50 million on April 1, 2003. The increase reduces the burden for parties involved in smaller transactions, while allowing the Bureau to better focus its resources on mergers that are more likely to raise competition issues. On December 20, 2002, following extensive consultations with experts and stakeholders, the Bureau published the final version of Interpretation Guideline No. 3, Paragraph 111(a): Exemptions for Acquisitions in the Ordinary Course of Business. Paragraph 111(a) of the Competition Act exempts from notification to the Bureau transactions involving acquisitions of real property or goods in the ordinary course of business when acquirer would not hold all or substantially all of the assets of a business or of an operating segment of a business as a result of the acquisition.	Sections 91 through 107 of the Competition Act address mergers and acquisitions. The Commissioner may consider all mergers, proposed or otherwise, in all sectors of the economy, which come to his attention. Where a transaction prevents or lessens, or is likely to prevent or lessen, competition substantially, the Commissioner may ask the Tribunal to issue a remedial order in accordance with the provisions of the Competition Act (section 92). The Competition Act provides a list of factors under section 93, such as barriers to entry and effective remaining competition, which the Tribunal may consider in making its determination. Other merger provisions include: - Subsection 92 (2): stipulating that the Tribunal's finding cannot be based solely on evidence of concentration or market share; - Section 96: containing an exception, with some restrictions, for situations where the merger brings about, or is likely to bring about, gains in efficiency. Such gains must be greater than and offset, the effects of any prevention or lessening of competition, and these gains would not likely be attained if the order were made; and - Section 97: stipulating that no application can be made by the Commissioner in respect of a merger more than three years after that merger has been substantially completed. The Commissioner's approach toward mergers has been described in considerable detail in the 1991 Merger Enforcement Guidelines. In light of the decision of the Federal Court of Appeal in the Commissioner v. Superior Propane Inc., the Efficiency Exception Part 5 of the 1991 Merger Enforcement Guidelines no longer applies. In cases where efficiencies are claimed, the Competition Bureau will apply the principles set out in the Commissioner of Competition v. Superior Propane Inc. and ICG Propane Inc. 2001 FCA 104. Part IX (sections 108 to 123) of the Competition Act deals with notifiable transactions, and outlines the general thresholds and waiting period requirements for transactions. The Notifiable Transactions Regulations specify how to calculate the aggregate value of assets and gross revenue from sales for the purpose of determining whether the thresholds are exceeded. Under paragraph 94(b), an amalgamation or acquisition involving banks is exempt from the prohibitions relating to mergers if certified by the Minister of Finance as being desirable in the interest of the financial system. Joint ventures undertaken for a specific project or program of research and development are excepted from the merger provisions of the Competition Act (Section 95(1)). For additional information about mergers, please visit: http://strategis.ic.gc.ca/SSG/ ct01255e.html	In early 2003 the Bureau began a project to update the 1991 Merger Enforcement Guidelines to reflect changes in case law and other developments that have occurred over the last 10 years. The project will focus on updating all sections of the Guidelines except Part V, which is no longer in effect. Throughout the project the Bureau will be consulting with the legal community, academics, foreign competition authorities and other interested parties.
*Other Issues Addressed by Competition Policy*	On June 11, 2002, the Bureau endorsed the Scanner Price Accuracy Voluntary Code, which provides participating retailers of four major associations with a mechanism to provide redress to consumers when there is a scanner error. Following the Bureau’s consultations with the jewellery industry, provincial stakeholders and consumers, the Bureau and the Canadian Diamond Code Committee published the Voluntary Code of Conduct for Authenticating Canadian Diamond Claims on November 6, 2002. In February 2003, the Bureau published its Guidelines on Internet Representations.	The administration and enforcement of the four statutes, which maintain and encourage fair competition in Canada (the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act, and the Precious Metals Marking Act) also aims to prevent consumer deception in the marketplace. The Competition Act contains provisions relating to the use of misleading representations and deceptive marketing practices in promoting the supply or use of a product or service, or any business interest. The Competition Act provides criminal and civil regimes to address misleading representations and deceptive marketing practices. Deceptive telemarketing, pyramid selling, multi-level marketing plans which do not meet statutory requirements, double ticketing, and false or misleading representations that are made knowingly or recklessly, are criminal offences. Certain other deceptive marketing practices may be addressed through civil sanctions. False or misleading representations, performance claims that are not based on adequate and proper tests, misleading ordinary selling price representations, bait and switch selling, sale above advertised price and promotional contests are civil matters. The Consumer Packaging and Labelling Act, the Textile Labelling Act, and the Precious Metals Marking Act, are standards-based criminal statutes, which prohibit the making of false and misleading representations in labelling and marking and set out specifications for mandatory labelling and marking information. For more information on misleading advertising and labelling guidelines, please visit: http://strategis.ic.gc.ca/SSG/ cp00003e.html	In the summer of 2002, the Bureau launched a preliminary consultation with manufacturers of precious metals, jewellery, hollowware and flatware, and their associations, to identify possible improvements to the Precious Metals Marking Regulations. Recommendations were received concerning amendments to clarify existing regulations and reduce the regulatory burden. A more extensive consultation will be carried out in 2003-2004. On August 26, 2003 the Bureau released and seeks comments on its draft Guidelines on the Deceptive Notice of Winning a Prize Provision, Section 53, which is one of the misleading representations and deceptive marketing practices provisions of the Competition Act. For additional information about the draft Guidelines, please visit: http://strategis.ic.gc.ca/epic /internet/incb-bc.nsf/vwGenera tedInterE/ct02713e.html The Bureau continues to analyze the responses it received during the consultations on the Proposed Adoption of New Environmental Labelling and Advertising Guidelines.
*Co-operation Arrangements with other Member Economies*	On March 20, 2003, Canada’s cooperation agreement with Mexico regarding competition law enforcement came into force.	Canada has been active in seeking effective international co-operation. The 1995 Agreement between Canada and United States Regarding the Application of their Competition and Deceptive Marketing Practices Laws sets a framework for bilateral co-operation for the enforcement of competition law. This agreement has proven successful in a number of international prosecutions. The Cooperation Arrangement between the Commissioner of Competition (Canada), The Australian Competition and Consumer Commission and the New Zealand Commerce Commission regarding the Application of the Competition and Consumer Laws that entered into force in 2000 provides enhanced agency-to-agency co-operation between the Parties. The Memorandum of Understanding between the Commissioner of Competition (Canada) and the Fiscal Economico (Chile) regarding the Application of their Competition Laws (2001) formalises a co-operation arrangement built on commitments under the Canada-Chile Free Trade Agreement. Canada also observes the 1995 OECD Recommendation Concerning Co-operation Between Member Countries on Anticompetitive Practices Affecting International Trade. A more general class of co-operation agreements are Mutual Legal Assistance Treaties (MLATs). The purpose of MLATs is to assist prosecutors in obtaining evidence in other jurisdictions and to facilitate international bilateral co-operation between police authorities. They provide a legal basis for measures such as search and seizures at the request of the other signatory. Crimes defined under the Competition Act are covered by Canadian MLATs. The development of a network of MLATs is proving very useful for Canadian law-enforcement agencies investigating transboundary crime. Canada is currently party to 30 bilateral MLATs in criminal matters, eight of which are with APEC economies, namely, Australia, the People's Republic of China, the Republic of Korea, Mexico, Thailand, the United States, Peru, Russia. Canada is currently negotiating MLATs with several other parties and remains open to new MLATs. For more information about Canada’s international agreements, please visit: http://strategis.ic.gc.ca/SSG/ct02142e.html	Canada is working to broaden its network of co-operation and is currently in discussions with the United Kingdom. The Bureau announced on June 26, 2002, that negotiations were under way between Canada and Japan on a cooperation agreement regarding competition law. The Competition Act now provides for Mutual Legal Assistance Agreements in non-criminal competition matters. Canada is currently involved in free trade negotiations with the Central American Four (El Salvador, Guatemala, Honduras and Nicaragua) and Singapore, and is seeking to include competition policy provisions in these agreements.
*Activities with other APEC Economies and in other International Fora*		Competition Policy provisions are included in the North American Free Trade Agreement (NAFTA) (1994), the Canada-Chile Free Trade Agreement (1997) and the Canada-Israel Free Trade Agreement (1997). Canada participates in the NAFTA Ad-hoc Committee of Experts on Trade and Competition Policy as well as the Subcommittee on the Labelling of Textiles and Apparel Goods and working groups. In addition to the APEC forum, Canada participates in the competition policy discussions in the following venues: WTO Working Group on Trade and Competition Policy The International Competition Network OECD - Joint Group on Trade and Competition - Competition Law and Policy Committee - Working Party 2 on Competition and Regulation - Working Party 3 on International Cooperation - Committee on Consumer Policy Free Trade Area of the Americas Negotiating Group on Competition Policy UNCTAD - Experts Group on Competition Policy The Bureau is an active contributor to the International Consumer Protection and Enforcement Network (ICPEN), which is focussed on finding ways for agencies to cooperation and deal more effectively with the growing problem of cross-border telemarketing, mail and Internet scams.
*Collective Actions*		Canada believes that APEC can play a useful role in providing a framework for capacity building that could, at the same time, assist WTO efforts in advancing its work. Canada also believes that the APEC process could be used to advance the understanding within member economies of the benefits of sound and effective competition laws and policies and to promote co-operation and communication among APEC economies on competition issues.

Canada’s Approach to Competition Policy in 2003

Section

Improvements Implemented Since Last IAP

Current Competition Policies / Arrangements

Further Improvements Planned

General Policy Framework

Canada’s competition legislation applies to all sectors of the economy and to all marketplace participants irrespective of nationality or origin of the product or service, including provincial and federal government corporations in respect of commercial activities engaged in by such corporations in competition with other persons. All business is subject to the Competition Act, with the exception of selected activities specifically exempted, such as collective bargaining, amateur sport or regulated industries and activities subject to other legislation and which may be covered by the regulated conduct defence.

The Competition Act contains provisions addressing both criminal offences, including conspiracy, bid-rigging, discriminatory and predatory pricing, price maintenance, misleading advertising and deceptive marketing practices, as well as matters subject to civil review, such as mergers, abuse of dominant position, refusal to deal, exclusive dealing and tied

Selling.

Transparency of the competition policy regime in Canada has been achieved through a number of means including the advisory opinion program, the availability of advance ruling certificates as well as through the public distribution of a variety of written materials, including pamphlets, bulletins and enforcement guidelines.

For additional information about the Bureau, please visit: http://competition.ic.gc.ca/

Reviews of Competition Policies and/or Laws

In June 21, 2002, Bill C-23 and its changes to the Competition Act and the Competition Tribunal Act came into force. One of these amendments, Section 124.1 of the Competition Act, came into force on April 1, 2003. Section 124.1 allows an individual to seek a written opinion (formerly known as an advisory opinion) from the Commissioner of Competition on the application of any provision or regulations of the Competition Act.

On December 17, 2002, the Bureau published an information bulletin on the regulated conduct defence, which is an interpretive tool the courts developed to resolve apparent conflicts between two laws. The defence is relevant to the Bureau’s enforcement of the Competition Act because it protects conduct that would otherwise be subject to the Competition Act when that conduct is allowed under other provincial or federal legislation.

Following consultations with key stakeholders, the Bureau published it s revised Fee and Services Standards Handbook on March 24, 2003. The changes include an increase of:

· the current size-of-transaction threshold for merger notification from $35 million to $50 million;

· the merger notification and Advance Ruling Certificates fees from $25,000 to $50,000 to better reflect the cost of merger review;

· the fees for written opinions under Section 124.1 of the Competition Act since they are now binding.

The Legislative Affairs Division of the Competition Policy Branch of the Competition Bureau is responsible for ensuring that the provisions of the Competition Act and labelling legislation remain relevant. In the longer term, it is committed to continuing to adapt the competition regime as necessary to accommodate the changing environment domestically and internationally.

On August 26, 2002, the Government of Canada announced that it would be holding consultations with Canadians concerning lawful access to information and communications. The consultations will provide stakeholders with an opportunity to consider options for policy and legislative changes, including changes to the Competition Act.

A Private Member’s Bill (Bill C-249) was considered by the House of Commons Standing Committee on Industry Science and Technology in the spring of 2003 and is now being considered by the Senate. The Bill seeks to amend the Competition Act in order to clarify the treatment of efficiencies in merger review. It makes efficiencies one of the many factors the Tribunal may consider to assess a merger’s overall impact on competition and it clarifies that efficiencies only matter to the extent that they bring benefits to consumers.

In its response to the April 2002 Report of the House of Commons Standing Committee on Industry, Science and Technology, A Plan to Modernize Canada’s Competition Regime, the federal government indicated that it would undertake consultations on the proposed amendments to the Competition Act.

The Government of Canada launched on June 23, 2003 a consultation process on the following proposed changes:

strengthening the civil provisions with administrative monetary penalties, restitution and civil cause of action;
reforming the conspiracy provisions;
reforming the pricing provisions; and
allowing for inquiries into the functioning of markets in Canada.

Competition Institutions (Including Enforcement Agencies)

The Commissioner of Competition is an independent law enforcement official responsible for the administration and enforcement of four statutes: the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act, and the Precious Metals Marking Act. The Commissioner is appointed by, and serves at the pleasure of, Cabinet with a mandate to promote competition in Canada.

The Commissioner is the head of the Competition Bureau, an independent unit of the federal Department of Industry. The Competition Bureau is the administrative and law enforcement body charged with the preservation of a competitive marketplace in Canada.

The Competition Bureau’s activities are guided by five governing principles. The first, transparency, means that the Bureau will be as open as the law and confidentiality requirements permit. The second, fairness, refers to striking the balance between voluntary compliance and enforcement, while responding to many competing interests. The third, timeliness, demands that decisions be made efficiently to avoid cost delays. The fourth, predictability, involves providing appropriate background material on Competition Bureau positions and important issues to assist the business community in conducting its affairs in a manner that complies with the law. The fifth principle, confidentiality, requires that the Competition Bureau use all available means appropriate to the circumstances to protect confidential or commercially sensitive information provided by the business and legal communities or any other source.

The Commissioner of Competition employs a variety of instruments which form part of a Conformity Continuum to administer and enforce the four Acts cited above and achieve the ultimate goal of securing compliance with the legislation. These instruments fall into three broad categories: conformity through education, facilitating conformity, and responses to non-conformity. The Conformity Continuum emphasises education and voluntary compliance to limit the need for adversarial proceedings.

For the Bureau’s Conformity Continuum Bulletin, please visit:

http://strategis.ic.gc.ca/SSG/
ct01768e.html

Transparency and efficiency of competition laws in Canada have been well served through the use of voluntary consultation services provided by the Competition Bureau. Pursuant to the Program of Advisory Opinions, the Bureau, when requested, provides its views on proposed actions by businesses to determine if the action would cause the Commissioner to initiate an inquiry or if a particular transaction is notifiable under the Act.

With respect to criminal offences, the Commissioner may refer a case to the Attorney General of Canada for consideration as to what action the Attorney General may wish to take. In the case of civil reviewable matters, the Commissioner may apply to the Competition Tribunal, a quasi-judicial body, for remedial orders.

The Competition Tribunal was created in 1986 when Parliament enacted major reforms of Canada's competition law and replaced the Combines Investigation Act with the Competition Act.

The Tribunal is a specialized court combining expertise in economics and business with legal expertise, which hears and decides all applications made under Parts VII.1 and VIII of the Competition Act as informally. The Tribunal is a strictly adjudicative body that operates independently of any government department. It does not have investigative powers nor does it provide advice to government. It has no function other than that associated with the hearing of applications and issuance of orders.

The Tribunal is composed of not more than four judicial members and not more than eight lay members appointed by the Governor in Council.

Under the Competition Act, the Commissioner is authorised to make representations to, and call evidence before, federal boards, commissions, or other tribunals. In the case of provincial boards, commissions or other tribunals, the Commissioner may only make representations at the request of, or with the consent of, the agency concerned.

The Competition Bureau participates in the Government of Canada's deregulation and privatisation initiatives, to ensure that the provision of goods and services in Canada is more efficient. Recent initiatives have been in such sectors as telecommunications, electricity, energy, and financial services.

The Commissioner prepares an annual report of all of the activities of the Competition Bureau, which is presented to Parliament by the Minister of Industry.

For the Bureau’s publications, including the Annual Report, please visit: http://strategis.ic.gc.ca/SSG/
ct01258e.html

Changes to the Competition Tribunal Rules are being considered by the Competition Tribunal to reflect the June 2002 entry into force of Bill C-23 amendments to the Competition Act and Competition Tribunal Act.

Measures to Deal with Horizontal Restraints

Canada’s competition law prohibits anti-competitive agreements, such as collusive price fixing. The major prohibition concerns conspiracy and is contained in section 45 of the Competition Act. Section 45 declares that it is an indictable offence for any person to conspire, combine, agree or arrange with another person to prevent, limit or lessen competition unduly.

Exemptions under section 45 include agreements that relate only to specified subject matter set out in subsection 45(3), such as defining of product standards or the exchange of credit information; agreements that relate solely to the export of products from Canada (subsections 45(5) and (6)); and agreements that relate to professional services (subsection 45(7)).

Section 47 prohibits agreements to refrain from submitting a bid in response to a call or request for tenders, and also prohibits the submission of bids arrived at by agreement in response to a call or bid for tenders. The section does not, however, apply to situations where the agreement is made known to the tendering authority before bids are made, or where the agreement involves affiliated companies (subsection 45(3)).

Other horizontal agreements, such as market sharing, output limitation, collective boycotts and activities of trade associations are covered by the general conspiracy prohibition of section 45.

Other provisions in the Competition Act relate to the implementation of foreign directives (section 46), agreements relating to participation in professional sport (section 48) and agreements among banks (section 49).

For the Bureau’s pamphlet series on horizontal agreements, such as conspiracy and bid rigging, please visit: http://strategis.ic.gc.ca/SSG/
ct01265e.html

Measures to Deal with Vertical Restraints

The Competition Act prohibits vertical restraints, such as resale price maintenance (section 61(3)), exclusive dealing and tied selling (section 77(1)).

Exclusive dealing and tied selling are not prohibited where:

- it is engaged in only for a reasonable time to facilitate entry of a new supplier or product into the market; or

- it is reasonable having regard to the technological relationship among the products involved.

Franchise agreements between affiliates are not subject to the exclusive dealing, tied selling, and market restriction provision.

Other vertical restraints covered in the Competition Act are:

- third line forcing (subparagraph 77(1)(a)(i));

- territorial restriction (section 77);

- customer restriction (section79);

- delivered pricing (sections 80 and 81); and

- consignment selling (section 76).

Measures to Deal with Abuse of Dominant

Position

On December 2, 2002, the Bureau published its bulletin, The Abuse of Dominance Provisions (Sections 78 and 79 of the Competition Act) as Applied to the Canadian Grocery Sector, to give the grocery industry a better understanding of how the Bureau applies the abuse of dominance provisions, and to help deter anti‑competitive conduct in the grocery sector by encouraging compliance with the law.

The Competition Act provides a general inclusive list, under section 79, of situations and remedies where dominant firms engage in anti-competitive behaviour.

Section 79 of the Competition Act involves a situation where one or more persons substantially or completely control a class or species of business, and have engaged in or are engaging in a practice of anti-competitive acts which have the effect of preventing or lessening competition substantially. Section 78 provides a non-exhaustive list of types of conduct deemed to constitute anti-competitive acts. To address abuse of dominance in the airline industry, section 78 (j) and (k) deal with anti-competitive conduct by an air carrier. Section 104.1 allows the Commissioner to issue a temporary order prohibiting a person from operating a domestic airline service.

The following features also fall within this area, but are not confined to situations of dominance: predatory pricing

(paragraph 50(1)(c)); refusal to deal (section 75); and discriminatory behaviour (paragraph 50(1)(a)).

For non-criminal reviewable matters, only the Commissioner may bring an application to the Tribunal. Private parties cannot sue to restrain such behaviour or to seek damages except for damages as a result of the violation of an order of the Competition Tribunal.

In the Abuse of Dominance provision of the Competition Act, subsection 79(4) provides that superior competitive performance is a consideration in determining whether a practice has an anti-competitive effect in a market. In addition, subsection 79(5) provides that an act engaged in pursuant only to the exercise of any intellectual property rights or enjoyment of any interests derived from that property is not an anti-competitive act.

Section 32 of the Competition Act, which is in the special remedies part of the Competition Act, gives the Federal Court the power, when asked by the Attorney General, to make remedial orders if it finds that a company has used the exclusive rights and privileges conferred by a patent, trade-mark, copyright or registered integrated circuit topography to unduly restrain trade or lessen competition.

Please visit the Bureau’s pamphlet series on abuse of market power and refusal to supply for more information: http://strategis.ic.gc.ca/SSG/
ct01265e.htm

Measures to Deal with Mergers and Acquisitions

Under the Competition Act, acquisitions of assets, acquisitions of voting shares, and combinations must be reported when the total value of the assets, or the acquired party’s gross revenues from sales, exceeds a certain threshold.

Between July and December 2002, the Bureau held consultations with key stakeholders to solicit input about the appropriate fees and thresholds for merger notification. The size-of-transaction threshold was raised from $35 million to $50 million on April 1, 2003. The increase reduces the burden for parties involved in smaller transactions, while allowing the Bureau to better focus its resources on mergers that are more likely to raise competition issues.

On December 20, 2002, following extensive consultations with experts and stakeholders, the Bureau published the final version of Interpretation Guideline No. 3, Paragraph 111(a): Exemptions for Acquisitions in the Ordinary Course of Business. Paragraph 111(a) of the Competition Act exempts from notification to the Bureau transactions involving acquisitions of real property or goods in the ordinary course of business when acquirer would not hold all or substantially all of the assets of a business or of an operating segment of a business as a result of the acquisition.

Sections 91 through 107 of the Competition Act address mergers and acquisitions. The Commissioner may consider all mergers, proposed or otherwise, in all sectors of the economy, which come to his attention. Where a transaction prevents or lessens, or is likely to prevent or lessen, competition substantially, the Commissioner may ask the Tribunal to issue a remedial order in accordance with the provisions of the Competition Act (section 92).

The Competition Act provides a list of factors under section 93, such as barriers to entry and effective remaining competition, which the Tribunal may consider in making its determination.

Other merger provisions include:

- Subsection 92 (2): stipulating that the Tribunal's finding cannot be based solely on evidence of concentration or market share;

- Section 96: containing an exception, with some restrictions, for situations where the merger brings about, or is likely to bring about, gains in efficiency. Such gains must be greater than and offset, the effects of any prevention or lessening of competition, and these gains would not likely be attained if the order were made; and

- Section 97: stipulating that no application can be made by the Commissioner in respect of a merger more than three years after that merger has been substantially completed.

The Commissioner's approach toward mergers has been described in considerable detail in the 1991 Merger Enforcement Guidelines.

In light of the decision of the Federal Court of Appeal in the Commissioner v. Superior Propane Inc., the Efficiency Exception Part 5 of the 1991 Merger Enforcement Guidelines no longer applies. In cases where efficiencies are claimed, the Competition Bureau will apply the principles set out in the Commissioner of Competition v. Superior Propane Inc. and ICG Propane Inc. 2001 FCA 104.

Part IX (sections 108 to 123) of the Competition Act deals with notifiable transactions, and outlines the general thresholds and waiting period requirements for transactions.

The Notifiable Transactions Regulations specify how to calculate the aggregate value of assets and gross revenue from sales for the purpose of determining whether the thresholds are exceeded.

Under paragraph 94(b), an amalgamation or acquisition involving banks is exempt from the prohibitions relating to mergers if certified by the Minister of Finance as being desirable in the interest of the financial system.

Joint ventures undertaken for a specific project or program of research and development are excepted from the merger provisions of the Competition Act (Section 95(1)).

For additional information about mergers, please visit: http://strategis.ic.gc.ca/SSG/
ct01255e.html

In early 2003 the Bureau began a project to update the 1991 Merger Enforcement Guidelines to reflect changes in case law and other developments that have occurred over the last 10 years. The project will focus on updating all sections of the Guidelines except Part V, which is no longer in effect. Throughout the project the Bureau will be consulting with the legal community, academics, foreign competition authorities and other interested parties.

Other Issues Addressed by Competition Policy

On June 11, 2002, the Bureau endorsed the Scanner Price Accuracy Voluntary Code, which provides participating retailers of four major associations with a mechanism to provide redress to consumers when there is a scanner error.

Following the Bureau’s consultations with the jewellery industry, provincial stakeholders and consumers, the Bureau and the Canadian Diamond Code Committee published the Voluntary Code of Conduct for Authenticating Canadian Diamond Claims on November 6, 2002.

In February 2003, the Bureau published its Guidelines on Internet Representations.

The administration and enforcement of the four statutes, which maintain and encourage fair competition in Canada (the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act, and the Precious Metals Marking Act) also aims to prevent consumer deception in the marketplace.

The Competition Act contains provisions relating to the use of misleading representations and deceptive marketing practices in promoting the supply or use of a product or service, or any business interest. The Competition Act provides criminal and civil regimes to address misleading representations and deceptive marketing practices. Deceptive telemarketing, pyramid selling, multi-level marketing plans which do not meet statutory requirements, double ticketing, and false or misleading representations that are made knowingly or recklessly, are criminal offences.

Certain other deceptive marketing practices may be addressed through civil sanctions. False or misleading representations, performance claims that are not based on adequate and proper tests, misleading ordinary selling price representations, bait and switch selling, sale above advertised price and promotional contests are civil matters.

The Consumer Packaging and Labelling Act, the Textile Labelling Act, and the Precious Metals Marking Act, are standards-based criminal statutes, which prohibit the making of false and misleading representations in labelling and marking and set out specifications for mandatory labelling and marking information.

For more information on misleading advertising and labelling guidelines, please visit: http://strategis.ic.gc.ca/SSG/
cp00003e.html

In the summer of 2002, the Bureau launched a preliminary consultation with manufacturers of precious metals, jewellery, hollowware and flatware, and their associations, to identify possible improvements to the Precious Metals Marking Regulations. Recommendations were received concerning amendments to clarify existing regulations and reduce the regulatory burden. A more extensive consultation will be carried out in 2003-2004.

On August 26, 2003 the Bureau released and seeks comments on its draft Guidelines on the Deceptive Notice of Winning a Prize Provision, Section 53, which is one of the misleading representations and deceptive marketing practices provisions of the Competition Act.

For additional information about the draft Guidelines, please visit: http://strategis.ic.gc.ca/epic
/internet/incb-bc.nsf/vwGenera
tedInterE/ct02713e.html

The Bureau continues to analyze the responses it received during the consultations on the Proposed Adoption of New Environmental Labelling and Advertising Guidelines.

Co-operation Arrangements with other Member Economies

On March 20, 2003, Canada’s cooperation agreement with Mexico regarding competition law enforcement came into force.

Canada has been active in seeking effective international co-operation. The 1995 Agreement between Canada and United States Regarding the Application of their Competition and Deceptive Marketing Practices Laws sets a framework for bilateral co-operation for the enforcement of competition law. This agreement has proven successful in a number of international prosecutions.

The Cooperation Arrangement between the Commissioner of Competition (Canada), The Australian Competition and Consumer Commission and the New Zealand Commerce Commission regarding the Application of the Competition and Consumer Laws that entered into force in 2000 provides enhanced agency-to-agency co-operation between the Parties.

The Memorandum of Understanding between the Commissioner of Competition (Canada) and the Fiscal Economico (Chile) regarding the Application of their Competition Laws (2001) formalises a co-operation arrangement built on commitments under the Canada-Chile Free Trade Agreement.

Canada also observes the 1995 OECD Recommendation Concerning Co-operation Between Member Countries on Anticompetitive Practices Affecting International Trade.

A more general class of co-operation agreements are Mutual Legal Assistance Treaties (MLATs). The purpose of MLATs is to assist prosecutors in obtaining evidence in other jurisdictions and to facilitate international bilateral co-operation between police authorities. They provide a legal basis for measures such as search and seizures at the request of the other signatory. Crimes defined under the Competition Act are covered by Canadian MLATs.

The development of a network of MLATs is proving very useful for Canadian law-enforcement agencies investigating transboundary crime. Canada is currently party to 30 bilateral MLATs in criminal matters, eight of which are with APEC economies, namely, Australia, the People's Republic of China, the Republic of Korea, Mexico, Thailand, the United States, Peru, Russia. Canada is currently negotiating MLATs with several other parties and remains open to new MLATs.

For more information about Canada’s international agreements, please visit: http://strategis.ic.gc.ca/SSG/ct02142e.html

Canada is working to broaden its network of co-operation and is currently in discussions with the United Kingdom.

The Bureau announced on June 26, 2002, that negotiations were under way between Canada and Japan on a cooperation agreement regarding competition law.

The Competition Act now provides for Mutual Legal Assistance Agreements in non-criminal competition matters.

Canada is currently involved in free trade negotiations with the Central American Four (El Salvador, Guatemala, Honduras and Nicaragua) and Singapore, and is seeking to include competition policy provisions in these agreements.

Activities with other APEC Economies and in other International Fora

Competition Policy provisions are included in the North American Free Trade Agreement (NAFTA) (1994), the Canada-Chile Free Trade Agreement (1997) and the Canada-Israel Free Trade Agreement (1997).

Canada participates in the NAFTA Ad-hoc Committee of Experts on Trade and Competition Policy as well as the Subcommittee on the Labelling of Textiles and Apparel Goods and working groups.

In addition to the APEC forum, Canada participates in the competition policy discussions in the following venues:

WTO Working Group on Trade and Competition Policy

The International Competition Network

OECD

- Joint Group on Trade and Competition

- Competition Law and Policy Committee

- Working Party 2 on Competition and Regulation

- Working Party 3 on International Cooperation

- Committee on Consumer Policy

Free Trade Area of the Americas Negotiating Group on Competition Policy

UNCTAD - Experts Group on Competition Policy

The Bureau is an active contributor to the International Consumer Protection and Enforcement Network (ICPEN), which is focussed on finding ways for agencies to cooperation and deal more effectively with the growing problem of cross-border telemarketing, mail and Internet scams.

Collective Actions

Canada believes that APEC can play a useful role in providing a framework for capacity building that could, at the same time, assist WTO efforts in advancing its work. Canada also believes that the APEC process could be used to advance the understanding within member economies of the benefits of sound and effective competition laws and policies and to promote co-operation and communication among APEC economies on competition issues.

*Improvements* *in {Economy’s} Approach to Competition Policy since 1996*
*General Policy Position*	The purpose of the Competition Act is to maintain and encourage competition in Canada: in order to promote the efficiency and adaptability of the Canadian economy; to expand opportunities for Canadian participation in world markets while at the same time recognising the role of foreign competition in Canada; to ensure that small and medium-sized enterprise have an equitable opportunity to participate in the Canadian economy; and to provide consumers with competitive prices and product choices. Canada’s competition legislation applies to all sectors of the economy and to all marketplace participants irrespective of nationality or origin of the product or service, including provincial and federal government corporations in respect of commercial activities engaged in by such corporations in competition with other persons. All business is subject to the Competition Act, with the exception of selected activities specifically exempted, such as collective bargaining, amateur sport or regulated industries and activities subject to other legislation and which may be covered by the regulated conduct defence. The Competition Act contains provisions addressing both criminal offences, including conspiracy, bid-rigging, discriminatory and predatory pricing, price maintenance, misleading advertising and deceptive marketing practices, as well as matters subject to civil review, such as mergers, abuse of dominant position, refusal to deal, exclusive dealing and tied selling. Transparency of the competition policy regime in Canada has been achieved through a number of means including the advisory opinion program, the availability of advance ruling certificates as well as through the public distribution of a variety of written materials, including pamphlets, bulletins, and enforcement guidelines. For additional information about the Bureau, please visit: http://competition.ic.gc.ca
*Reviews of Competition Policies and/or Laws*	Canada has had legislation restricting anti-competitive behaviour since 1889. In 1986, the former Combines Investigation Act was replaced by the Competition Act and the Competition Tribunal Act which, among other things, transferred certain offences, notably mergers and monopolies, from criminal to civil law; established a new body, the Competition Tribunal, to deal with the expanded civil law area of the Act; and clarified and strengthened the law with respect to the remaining criminal offences. No further amendments were made between 1986 and 1996.	Since the last major reform of the Competition Act, in1986, the Competition Bureau has taken an incremental approach to amending its legislation. Bill C-20 was enacted which was intended to modernise Canada's competition law framework and to update its investigative and enforcement tools to keep pace with emerging business trends and enforcement requirements, improve enforcement efficiency and clarify the law. The amendments included provisions making deceptive telemarketing a criminal offence, creating a civil process as a faster and more effective means of putting a stop to misleading advertising and other deceptive marketing practices and permitting law enforcement officials to use judicially authorised interception of private communications without consent (wiretap) to gather tangible evidence in cases of deceptive telemarketing as well as bid-rigging and conspiracy to fix prices or allocate or share markets. In addition, the amendments included provisions streamlining the merger review process through changes to merger prenotification requirements, expanding the responsibility of corporations and their officers and directors for ensuring compliance with the law and making it easier for the courts to issue interim injunctions to stop operations of suspected fraudulent telemarketers. Finally, the amendments changed the name of the Director of Investigation and Research to Commissioner of Competition (1999). The following new Information Bulletins were issued following the amendments (1999): - Interception of Private Communications - Misleading Advertising and Deceptive Marketing Practices - Choice of Criminal or Civil Track - New Telemarketing Provisions - Ordinary Price Claims In June 2002, changes to the Competition Act and the Competition Tribunal Act, contained in Bill C-23, came into force. The new provisions are intended to strengthen and modernise Canada’s competition laws and to provide the necessary tools to enhance compliance with the Competition Act, to the benefit of businesses and consumers. The amendments include provisions that: - create a new criminal offence that prohibits the sending of a deceptive notice of winning a prize; - provide additional measures to protect competition in the Canadian airline industry; - streamline the Competition Tribunal process by providing for cost awards, summary disposition and references; broaden the scope under which the Competition Tribunal may issue temporary orders; - allow limited private access to the Competition Tribunal; - afford full protection against disclosure of any information voluntarily provided; - allow a judge to order a person to provide certified copies of record instead of having to produce the original record; - allow parties to conclude a consent agreement; - enable the Competition Bureau to request formal assistance from foreign states in obtaining and transmitting evidence located abroad in non-criminal competition matters. One of these amendments, Section 124.1 of the Competition Act, came into force on April 1, 2003. Section 124.1 allows an individual to seek a written opinion (formerly known as an advisory opinion) from the Commissioner of Competition on the application of any provision or regulations of the Competition Act. On December 17, 2002, the Bureau published an information bulletin on the regulated conduct defence, which is an interpretive tool the courts developed to resolve apparent conflicts between two laws. The defence is relevant to the Bureau’s enforcement of the Competition Act because it protects conduct that would otherwise be subject to the Competition Act when that conduct is allowed under other provincial or federal legislation. Following consultations with key stakeholders, the Bureau published it s revised Fee and Services Standards Handbook on March 24, 2003. The changes include an increase of: · the current size-of-transaction threshold for merger notification from $35 million to $50 million; · the merger notification and Advance Ruling Certificates fees from $25,000 to $50,000 to better reflect the cost of merger review; · the fees for written opinions under Section 124.1 of the Competition Act since they are now binding.
*Competition Institutions (Including Enforcement Agencies)*	The Commissioner of Competition (prior to 1999, the Commissioner was referred to as the Director of Investigation and Research) is an independent law enforcement official responsible for the administration and enforcement of four statutes: the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act, and the Precious Metals Marking Act. The Commissioner is appointed by, and serves at the pleasure of, Cabinet with a mandate to promote competition in Canada. The Commissioner is the head of the Competition Bureau, an independent unit of the federal Department of Industry. The Competition Bureau is the administrative and law enforcement body charged with the preservation of a competitive marketplace in Canada. The Commissioner of Competition employs a variety of instruments which form part of a Conformity Continuum to administer and enforce the four Acts cited above and achieve the ultimate goal of securing compliance with the legislation. These instruments fall into three broad categories: conformity through education, facilitating conformity and responses to non-conformity. Transparency and efficiency of competition laws in Canada have been well served through the use of voluntary consultation services provided by the Competition Bureau. Pursuant to the Program of Advisory Opinions, the Bureau, when requested, provides its views on proposed actions by businesses to determine if the action would cause the Commissioner to initiate an inquiry or if a particular transaction is notifiable under the Act. With respect to criminal offenses, the Commissioner may refer a case to the Attorney General of Canada for consideration as to what action the Attorney General may wish to take. In the case of civil reviewable matters, the Commissioner may apply to the Competition Tribunal, a quasi-judicial body, for remedial orders. The Competition Tribunal was created in 1986 when Parliament enacted major reforms of Canada's competition law and replaced the Combines Investigation Act with the Competition Act. The Tribunal is a specialized court combining expertise in economics and business with legal expertise, which hears and decides all applications made under Parts VII.1 and VIII of the Competition Act as informally. The Tribunal is a strictly adjudicative body that operates independently of any government department. It does not have investigative powers nor does it provide advice to government. It has no function other than that associated with the hearing of applications and issuance of orders. The Tribunal is composed of not more than four judicial members and not more than eight lay members appointed by the Governor in Council. Under the Competition Act, the Commissioner is authorised to make representations to, and call evidence before, federal and provincial boards, commissions or other tribunals. In the case of provincial regulatory board, the Commissioner may only make representations at the request or with the consent of the agency concerned. The Competition Bureau participates in the Government of Canada's deregulation and privatisation initiatives, to ensure that the provision of goods and services in Canada is more efficient. Recent initiatives have been in such sectors as telecommunication, electricity, energy and financial services. The Commissioner prepares an annual report of all of the activities of the Competition Bureau which is presented to Parliament by the Minister of Industry. For the Bureau’s publications, including the Annual Report, please visit: http://strategis.ic.gc.ca/SSG/ ct01258e.html	The Consumer Products Directorate of Industry Canada was integrated into the Competition Bureau, together with responsibility for the Textile Labelling Act, the Precious Metals Marking Act and the Consumer Packaging and Labelling Act (1997-98) The Permanent Amendments Unit was established (1999). The Corporate Compliance Programs Information Bulletin was published in 1997. The Conformity Continuum Information Bulletin was published in 2000 Bill C-23, which contained amendments to the Competition Tribunal Act came into force in June 2002. The amendments include: - provisions introducing private access to the Competition Tribunal for matters regarding refusal to deal, tied selling, exclusive dealing and market restrictions; - provisions that authorise the Competition Tribunal to issue interim orders prior to the commencement of litigation, to hear “references,” or questions involving a specific aspect of a case or interpretation of the law, to award costs and to make “summary dispositions” if it finds no merit to the case or no genuine defence.
*Measures to Deal with Horizontal Restraints*	Canada’s competition law prohibits anti-competitive agreements, such as collusive price fixing. The major prohibition concerns conspiracy and is contained in section 45 of the Competition Act. Section 45 declares that it is an indictable offense for any person to conspire, combine, agree or arrange with another person to prevent, limit or lessen competition unduly. Exemptions under section 45 include agreements that relate only to specified subject matter set out in subsection 45(3), such as defining of product standards or the exchange of credit information; agreements that relate solely to the export of products from Canada (subsections 45(5) and (6)); and agreements that relate to professional services (subsection 45(7)). Section 47 prohibits agreements to refrain from submitting a bid in response to a call or request for tenders, and also prohibits the submission of bids arrived at by agreement in response to a call or bid for tenders. The section does not, however, apply to situations where the agreement is made known to the tendering authority before bids are made, or where the agreement involves affiliated companies (subsection 45(3)). Other horizontal agreements, such as market sharing, output limitation, collective boycotts and activities of trade associations are covered by the general conspiracy prohibition of section 45. Other provisions in the Competition Act relate to the implementation of foreign directives (section 46), agreements relating to participation in professional sport (section 48) and agreements among banks (section 49). For the Bureau’s pamphlet series on horizontal agreements, such as conspiracy and bid rigging, please visit: http://strategis.ic.gc.ca/SSG/ ct01265e.html	The Information Bulletin - Immunity Program under the Competition Act was published in 2000. New provisions relating to the use of wiretapping, to the use of the Information Bulletin on the Interception of Private Communications and the Competition Act, and to whistleblowing applying to the criminal law provisions of the Competition Act as referred to under Reviews of Competition Policies and/or Laws, entered into force in 1999.
*Measures to Deal with Vertical Restraints*	The Competition Act prohibits vertical restraints such as resale price maintenance (section 61(3)), exclusive dealing and tied selling (section 77(1)). Exclusive dealing and tied selling are not prohibited where: - it is engaged in only for a reasonable time to facilitate entry of a new supplier or product into the market; or - it is reasonable having regard to the technological relationship among the products involved. Franchise agreements between affiliates are not subject to the exclusive dealing, tied selling, and market restriction provision. Other vertical restraints covered in the Competition Act are: - third line forcing (subparagraph 77(1)(a)(i)); - territorial restriction (section 77); - customer restriction (section79); - delivered pricing (sections 80 and 81); and - consignment selling (section 76).
*Measures to Deal with Abuse of Dominant Position*	The Competition Act provides a general inclusive list, under section 79, of situations and remedies where dominant firms engage in anti-competitive behaviour. Section 79 of the Competition Act involves a situation where one or more persons substantially or completely control a class or species of business, and have engaged in or are engaging in a practice of anti-competitive acts which have the effect of preventing or lessening competition substantially. Section 78 provides a non-exhaustive list of types of conduct deemed to constitute anti-competitive acts. The following features also fall within this area, but are not confined to situations of dominance: predatory pricing (paragraph 50(1)(c)); refusal to deal (section 75); and discriminatory behaviour (paragraph 50(1)(a)). For non-criminal reviewable matters, only the Commissioner may bring an application to the Tribunal. Private parties cannot sue to restrain such behaviour or to seek damages except for damages as a result of the violation of an order of the Competition Tribunal. In the Abuse of Dominance provision of the Competition Act, subsection 79(4) provides that superior competitive performance is a consideration in determining whether a practice has an anti-competitive effect in a market. In addition, subsection 79(5) provides that an act engaged in pursuant only to the exercise of any intellectual property rights or enjoyment of any interests derived from that property is not an anti-competitive act. Section 32 of the Competition Act, which is in the special remedies part of the Competition Act, gives the Federal Court the power, when asked by the Attorney General, to make remedial orders if it finds that a company has used the exclusive rights and privileges conferred by a patent, trade-mark, copyright or registered integrated circuit topography to unduly restrain trade or lessen competition. Please visit the Bureau’s pamphlet series on abuse of market power and refusal to supply for more information: http://strategis.ic.gc.ca/SSG/ ct01265e.html	New Regulations regarding anti-competitive acts in the domestic airline industry came into force (2000). The regulations specify types of behaviour by a dominant air carrier that are likely to be challenged by the Bureau (under new paragraphs 78(1)(j) and (k) of the Act). These regulations are part of the federal government's initiative to ensure that the dominant air carrier does not abuse its dominant position. In addition, section 104.1 allows the Commissioner to issue a temporary order prohibiting a person from operating a domestic airline service. For more information, please visit: http://strategis.ic.gc.ca/SSG/ ct01816e.html Proposed amendments to abuse of dominance provisions and powers of the Commissioner to deal with abuse of dominance referred to in Reviews of Competition Policies and/or Laws. (2000 IAP) Intellectual Property Guidelines were published in 2000. Enforcement Guidelines on the Abuse of Dominant Position were released for in 2001. Draft Enforcement Guidelines on the Abuse of Dominance in the Airline Industry were released for consultations in February 2001. In June 2002, the changes to the Competition Act and the Competition Tribunal Act, contained in Bill C-23, came into force. The amendments include provisions that authorise the Competition Tribunal to grant a further extension of a temporary order, issued by the Commissioner under section 104.1, beyond the current maximum period until the Commissioner has had sufficient time to receive and review information required to determine whether to make an application before the Tribunal. In addition, the amendments allow the Competition Tribunal to impose an Administrative Monetary Penalty against a dominant airline carrier found to have abused its dominant market position. On December 2, 2002, the Bureau published its bulletin, The Abuse of Dominance Provisions (Sections 78 and 79 of the Competition Act) as Applied to the Canadian Grocery Sector, to give the grocery industry a better understanding of how the Bureau applies the abuse of dominance provisions, and to help deter anti‑competitive conduct in the grocery sector by encouraging compliance with the law.
*Measures to Deal with Mergers and Acquisitions*	Sections 91 through 107 of the Competition Act address mergers and acquisitions. The Commissioner may consider all mergers, proposed or otherwise, in all sectors of the economy, which come to his attention. Where a transaction prevents or lessens, or is likely to prevent or lessen, competition substantially, the Commissioner may ask the Tribunal to issue a remedial order in accordance with the provisions of the Competition Act (section 92). The Competition Act provides a list of factors under section 93, such as barriers to entry and effective remaining competition, which the Tribunal may consider in making its determination. Other merger provisions include: - Subsection 92 (2): stipulating that the Tribunal's finding cannot be based solely on evidence of concentration or market share; - Section 96: containing an exception, with some restrictions, for situations where the merger brings about, or is likely to bring about, gains in efficiency. Such gains must be greater than and offset, the effects of any prevention or lessening of competition, and these gains would not likely be attained if the order were made; and - Section 97: stipulating that no application can be made by the Commissioner in respect of a merger more than three years after that merger has been substantially completed. The Commissioner's approach toward mergers has been described in considerable detail in the 1991 Merger Enforcement Guidelines. In light of the decision of the Federal Court of Appeal in the Commissioner v. Superior Propane Inc., the Efficiency Exception Part 5 of the 1991 Merger Enforcement Guidelines no longer applies. In cases where efficiencies are claimed, the Competition Bureau will apply the principles set out in the Commissioner of Competition v. Superior Propane Inc. and ICG Propane Inc. 2001 FCA 104. Part IX (sections 108 to 123) of the Competition Act deals with notifiable transactions, and outlines the general thresholds and waiting period requirements for transactions. Under paragraph 94(b), an amalgamation or acquisition involving banks is exempt from the prohibitions relating to mergers if certified by the Minister of Finance as being desirable in the interest of the financial system. Joint ventures undertaken for a specific project or program of research and development are excepted from the merger provisions of the Competition Act (Section 95(1)). For additional information about mergers see http://strategis.ic.gc.ca/SSG/ ct01255e.html	Merger Enforcement Guidelines were published in 1997 Merger Enforcement Guidelines as applied to a Bank Merger were published in 1999. New provisions in Competition Act to streamline merger notification process as referred to under Reviews of Competition Policies and/or Laws came into force in 1999. Amendments to the notifiable transactions provisions of the Competition Act and related amendments to the Notifiable Transactions Regulations were made. New provisions relating to requirements for and exemptions from notification, information required for filings, and waiting periods, entered into force in 2000. Interpretation Guidelines: Notifiable Transaction under Part IX of the Competition Act were published in 2000. Notifiable Transactions and Advance Ruling Certificates under the Competition Act: Procedures Guide was published in 2000. Bill C-8, which proposes new legislative measures for the financial services sector, including a transparent review process for merger proposals between large banks, was passed in June 2001. Revised Draft Interpretation Guideline #3 on subsection 111(a): Exemptions of acquisitions in the ordinary course of business from notifiable transactions under Part IX of the Competition Act was released for consultations in February 2001. Bill C-8, which established new measures for the financial services sector, came into force in October 2001. As part of the amendments, the Competition Act was also amended to allow the Commissioner of Competition, on request by the Minister of Finance, to communicate confidential information in the context of a merger between financial institutions. Under the Competition Act, acquisitions of assets, acquisitions of voting shares, and combinations must be reported when the total value of the assets, or the acquired party’s gross revenues from sales, exceeds a certain threshold. The Bureau published it s revised Fee and Services Standards Handbook on March 24, 2003. The size-of-transaction threshold was raised from $35 million to $50 million on April 1, 2003. The increase reduces the burden for parties involved in smaller transactions, while allowing the Bureau to better focus its resources on mergers that are more likely to raise competition issues. On December 20, 2002, following extensive consultations with experts and stakeholders, the Bureau published the final version of Interpretation Guideline No. 3, Paragraph 111(a): Exemptions for Acquisitions in the Ordinary Course of Business. Paragraph 111(a) of the Competition Act exempts from notification to the Bureau transactions involving acquisitions of real property or goods in the ordinary course of business when acquirer would not hold all or substantially all of the assets of a business or of an operating segment of a business as a result of the acquisition.
*Other Issues Addressed by Competition Policy*	The Competition Act contains provisions relating to the use of misleading representations and deceptive marketing practices in promoting the supply or use of a product or service, or any business interest. The Competition Act provides criminal and civil regimes to address misleading representations and deceptive marketing practices. Deceptive telemarketing, pyramid selling, multi-level marketing plans which do not meet statutory requirements, double ticketing, and false or misleading representations that are made knowingly or recklessly, are criminal offences. Certain other deceptive marketing practices may be addressed through civil sanctions. False or misleading representations, performance claims that are not based on adequate and proper tests, misleading ordinary selling price representations, bait and switch selling, sale above advertised price and promotional contests are civil matters.	New provisions in the Competition Act making deceptive telemarketing a criminal offence; creating a civil process as a faster and more effective means of putting a stop to misleading advertising and other deceptive marketing practices; and permitting law enforcement officials to use judicially authorised interception of private communications without consent (wiretap) to gather tangible evidence in cases of deceptive telemarketing as referred to in the section on Reviews of Competition Policies and/or Laws, came into force in 1999. “Be a Smart Shopper - Know your Software” Pamphlet was published in1998. Draft Guidelines on Pet Food Labelling and Advertising was released for consultation in 2000. Proposal for the Adoption of New Environmental Labelling and Advertising Guidelines was released for consultations in 2001. Guidelines on the Enforcement Policy on the Marketing of Canadian Diamonds were published in 2001. On June 11, 2002, the Bureau endorsed the Scanner Price Accuracy Voluntary Code, which provides participating retailers of four major associations with a mechanism to provide redress to consumers when there is a scanner error. Following the Bureau’s consultations with the jewellery industry, provincial stakeholders and consumers, the Bureau and the Canadian Diamond Code Committee published the Voluntary Code of Conduct for Authenticating Canadian Diamond Claims on November 6, 2002. In February 2003, the Bureau published its Guidelines on Internet Representations.
*Co-operation Arrangements with other Member Economies*	Canada has been active in seeking effective international co-operation. The 1995 Agreement between Canada and United States Regarding the Application of their Competition and Deceptive Marketing Practices Laws sets a framework for bilateral co-operation for the enforcement of competition law. This agreement has proven successful in a number of international prosecutions. Canada also observes the 1995 OECD Recommendation Concerning Co-operation Between Member Countries on Anticompetitive Practices Affecting International Trade. A more general class of co-operation agreements are Mutual Legal Assistance Treaties (MLATs). The purpose of MLATs is to assist prosecutors in obtaining evidence in other jurisdictions and to facilitate international bilateral co-operation between police authorities. They provide a legal basis for measures such as search and seizures at the request of the other signatory. Crimes defined under the Competition Act are covered by Canadian MLATs. The development of a network of MLATs is proving very useful for Canadian law-enforcement agencies investigating transboundary crime. Canada is currently party to 27 bilateral MLATs, eight of which are with APEC economies, namely, Australia, the People's Republic of China, the Republic of Korea, Mexico, Thailand, the United States, Peru and Russia. Canada is currently negotiating MLATs with several other parties and remains open to new MLATs.	The Cooperation Arrangement between the Commissioner of Competition (Canada), The Australian Competition and Consumer Commission and the New Zealand Commerce Commission regarding the Application of their Competition and Consumer Laws was signed in 2000. Canada signed MLATs in criminal matters with Peru (2000) and Russia (2000). In December 2001, the Competition Bureau and Chile’s competition authority signed a Memorandum of Understanding regarding the application of their laws. The MOU formalises a co-operation arrangement built on commitments under the Canada-Chile Free Trade Agreement. A co-operation agreement on competition law enforcement between the governments of Canada and Mexico entered into force March 20, 2003. In June 2002, the Competition Bureau and United States Federal Trade Commission announced the adoption a protocol for sharing complaint and investigation data in order to make the pursuit of cross-border fraudulent telemarketing operators faster, more efficient and more effective. Canada signed MLATs in criminal matters with Argentina (2001), Sweden (2001) and Uruguay (2002). June 21, 2002 amendments to the Competition Act create a new framework to facilitate co-operation with foreign competition authorities regarding evidence for civil competition matters.
*Activities with other APEC Economies and in other International Fora*	Competition Policy provisions are included in the North American Free Trade Agreement (NAFTA) (1994). Canada participates in the NAFTA Ad-hoc Committee of Experts on Trade and Competition Policy as well as the Subcommittee on the Labelling of Textiles and Apparel Goods and working groups. In addition to the APEC forum, Canada participates in the competition policy discussions in the following venues: WTO Working Group on Trade and Competition Policy OECD - Joint Group on Trade and Competition - Competition Law and Policy Committee - Working Party 2 on Competition and Regulation - Working Party 3 on International Cooperation - Committee on Consumer Policy Free Trade Area of the Americas Negotiating Group on Competition Policy UNCTAD - Experts Group on Competition Policy	Competition Provisions are included in the Canada-Chile Free Trade Agreement (1997) and the Canada-Israel Free Trade Agreement (1997). Free Trade Area of the Americas Working Group on Competition Policy was replaced by Negotiating Group on Competition Policy (1998). Competition Provisions are included in the Canada-Costa Rica Free Trade Agreement (2001). International Competition Network (ICN) – The ICN will provide antitrust agencies from developed and developing countries a stronger and broader network for addressing practical competition enforcement and policy issues. The ICN Steering Committee, which consists of representatives of antitrust agencies from developed and developing countries, is responsible for identifying projects and devising work plans for each project, recommending appropriate staffing for, and leadership of, working groups to carry out the work plans, and drafting agendas for conferences and meetings.

Improvements in {Economy’s} Approach to Competition Policy since 1996

Section

Position at Base Year (1996)

Cumulative Improvements Implemented to Date

General Policy Position

The purpose of the Competition Act is to maintain and encourage competition in Canada: in order to promote the efficiency and adaptability of the Canadian economy; to expand opportunities for Canadian participation in world markets while at the same time recognising the role of foreign competition in Canada; to ensure that small and medium-sized enterprise have an equitable opportunity to participate in the Canadian economy; and to provide consumers with competitive prices and product choices.

For additional information about the Bureau, please visit: http://competition.ic.gc.ca

Reviews of Competition Policies and/or Laws

Canada has had legislation restricting anti-competitive behaviour since 1889. In 1986, the former Combines Investigation Act was replaced by the Competition Act and the Competition Tribunal Act which, among other things, transferred certain offences, notably mergers and monopolies, from criminal to civil law; established a new body, the Competition Tribunal, to deal with the expanded civil law area of the Act; and clarified and strengthened the law with respect to the remaining criminal offences.

No further amendments were made between 1986 and 1996.

Since the last major reform of the Competition Act, in1986, the Competition Bureau has taken an incremental approach to amending its legislation.

Bill C-20 was enacted which was intended to modernise Canada's competition law framework and to update its investigative and enforcement tools to keep pace with emerging business trends and enforcement requirements, improve enforcement efficiency and clarify the law. The amendments included provisions making deceptive telemarketing a criminal offence, creating a civil process as a faster and more effective means of putting a stop to misleading advertising and other deceptive marketing practices and permitting law enforcement officials to use judicially authorised interception of private communications without consent (wiretap) to gather tangible evidence in cases of deceptive telemarketing as well as bid-rigging and conspiracy to fix prices or allocate or share markets. In addition, the amendments included provisions streamlining the merger review process through changes to merger prenotification requirements, expanding the responsibility of corporations and their officers and directors for ensuring compliance with the law and making it easier for the courts to issue interim injunctions to stop operations of suspected fraudulent telemarketers. Finally, the amendments changed the name of the Director of Investigation and Research to Commissioner of Competition (1999).

The following new Information Bulletins were issued following the amendments (1999):

- Interception of Private Communications

- Misleading Advertising and Deceptive Marketing Practices - Choice of Criminal or Civil Track

- New Telemarketing Provisions

- Ordinary Price Claims

In June 2002, changes to the Competition Act and the Competition Tribunal Act, contained in Bill C-23, came into force. The new provisions are intended to strengthen and modernise Canada’s competition laws and to provide the necessary tools to enhance compliance with the Competition Act, to the benefit of businesses and consumers.

The amendments include provisions that:

- create a new criminal offence that prohibits the sending of a deceptive notice of winning a prize;

- provide additional measures to protect competition in the Canadian airline industry;

- streamline the Competition Tribunal process by providing for cost awards, summary disposition and references;

broaden the scope under which the Competition Tribunal may issue temporary orders;

- allow limited private access to the Competition Tribunal;

- afford full protection against disclosure of any information voluntarily provided;

- allow a judge to order a person to provide certified copies of record instead of having to produce the original record;

- allow parties to conclude a consent agreement;

- enable the Competition Bureau to request formal assistance from foreign states in obtaining and transmitting evidence located abroad in non-criminal competition matters.

One of these amendments, Section 124.1 of the Competition Act, came into force on April 1, 2003. Section 124.1 allows an individual to seek a written opinion (formerly known as an advisory opinion) from the Commissioner of Competition on the application of any provision or regulations of the Competition Act.

Following consultations with key stakeholders, the Bureau published it s revised Fee and Services Standards Handbook on March 24, 2003. The changes include an increase of:

· the current size-of-transaction threshold for merger notification from $35 million to $50 million;

· the merger notification and Advance Ruling Certificates fees from $25,000 to $50,000 to better reflect the cost of merger review;

· the fees for written opinions under Section 124.1 of the Competition Act since they are now binding.

Competition Institutions (Including Enforcement Agencies)

The Commissioner of Competition (prior to 1999, the Commissioner was referred to as the Director of Investigation and Research) is an independent law enforcement official responsible for the administration and enforcement of four statutes: the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act, and the Precious Metals Marking Act. The Commissioner is appointed by, and serves at the pleasure of, Cabinet with a mandate to promote competition in Canada.

With respect to criminal offenses, the Commissioner may refer a case to the Attorney General of Canada for consideration as to what action the Attorney General may wish to take. In the case of civil reviewable matters, the Commissioner may apply to the Competition Tribunal, a quasi-judicial body, for remedial orders.

The Competition Tribunal was created in 1986 when Parliament enacted major reforms of Canada's competition law and replaced the Combines Investigation Act with the Competition Act.

The Tribunal is composed of not more than four judicial members and not more than eight lay members appointed by the Governor in Council.

Under the Competition Act, the Commissioner is authorised to make representations to, and call evidence before, federal and provincial boards, commissions or other tribunals. In the case of provincial regulatory board, the Commissioner may only make representations at the request or with the consent of the agency concerned.

The Commissioner prepares an annual report of all of the activities of the Competition Bureau which is presented to Parliament by the Minister of Industry.

For the Bureau’s publications, including the Annual Report, please visit: http://strategis.ic.gc.ca/SSG/
ct01258e.html

The Consumer Products Directorate of Industry Canada was integrated into the Competition Bureau, together with responsibility for the Textile Labelling Act, the Precious Metals Marking Act and the Consumer Packaging and Labelling Act (1997-98)

The Permanent Amendments Unit was established (1999).

The Corporate Compliance Programs Information Bulletin was published in 1997.

The Conformity Continuum Information Bulletin was published in 2000

Bill C-23, which contained amendments to the Competition Tribunal Act came into force in June 2002. The amendments include:

- provisions introducing private access to the Competition Tribunal for matters regarding refusal to deal, tied selling, exclusive dealing and market restrictions;

- provisions that authorise the Competition Tribunal to issue interim orders prior to the commencement of litigation, to hear “references,” or questions involving a specific aspect of a case or interpretation of the law, to award costs and to make “summary dispositions” if it finds no merit to the case or no genuine defence.

Measures to Deal with Horizontal Restraints

Canada’s competition law prohibits anti-competitive agreements, such as collusive price fixing. The major prohibition concerns conspiracy and is contained in section 45 of the Competition Act. Section 45 declares that it is an indictable offense for any person to conspire, combine, agree or arrange with another person to prevent, limit or lessen competition unduly.

Other horizontal agreements, such as market sharing, output limitation, collective boycotts and activities of trade associations are covered by the general conspiracy prohibition of section 45.

For the Bureau’s pamphlet series on horizontal agreements, such as conspiracy and bid rigging, please visit: http://strategis.ic.gc.ca/SSG/
ct01265e.html

The Information Bulletin - Immunity Program under the Competition Act was published in 2000.

New provisions relating to the use of wiretapping, to the use of the Information Bulletin on the Interception of Private Communications and the Competition Act, and to whistleblowing applying to the criminal law provisions of the Competition Act as referred to under Reviews of Competition Policies and/or Laws, entered into force in 1999.

Measures to Deal with Vertical Restraints

The Competition Act prohibits vertical restraints such as resale price maintenance (section 61(3)), exclusive dealing and tied selling (section 77(1)).

Exclusive dealing and tied selling are not prohibited where:

- it is engaged in only for a reasonable time to facilitate entry of a new supplier or product into the market; or

- it is reasonable having regard to the technological relationship among the products involved.

Franchise agreements between affiliates are not subject to the exclusive dealing, tied selling, and market restriction provision.

Other vertical restraints covered in the Competition Act are:

- third line forcing (subparagraph 77(1)(a)(i));

- territorial restriction (section 77);

- customer restriction (section79);

- delivered pricing (sections 80 and 81); and

- consignment selling (section 76).

Measures to Deal with Abuse of Dominant Position

The Competition Act provides a general inclusive list, under section 79, of situations and remedies where dominant firms engage in anti-competitive behaviour.

The following features also fall within this area, but are not confined to situations of dominance: predatory pricing

(paragraph 50(1)(c)); refusal to deal (section 75); and discriminatory behaviour (paragraph 50(1)(a)).

Please visit the Bureau’s pamphlet series on abuse of market power and refusal to supply for more information: http://strategis.ic.gc.ca/SSG/
ct01265e.html

New Regulations regarding anti-competitive acts in the domestic airline industry came into force (2000). The regulations specify types of behaviour by a dominant air carrier that are likely to be challenged by the Bureau (under new paragraphs 78(1)(j) and (k) of the Act). These regulations are part of the federal government's initiative to ensure that the dominant air carrier does not abuse its dominant position. In addition, section 104.1 allows the Commissioner to issue a temporary order prohibiting a person from operating a domestic airline service.

For more information, please visit: http://strategis.ic.gc.ca/SSG/
ct01816e.html

Proposed amendments to abuse of dominance provisions and powers of the Commissioner to deal with abuse of dominance referred to in Reviews of Competition Policies and/or Laws. (2000 IAP)

Intellectual Property Guidelines were published in 2000.

Enforcement Guidelines on the Abuse of Dominant Position were released for in 2001.

Draft Enforcement Guidelines on the Abuse of Dominance in the Airline Industry were released for consultations in February 2001.

In June 2002, the changes to the Competition Act and the Competition Tribunal Act, contained in Bill C-23, came into force.

The amendments include provisions that authorise the Competition Tribunal to grant a further extension of a temporary order, issued by the Commissioner under section 104.1, beyond the current maximum period until the Commissioner has had sufficient time to receive and review information required to determine whether to make an application before the Tribunal.

In addition, the amendments allow the Competition Tribunal to impose an Administrative Monetary Penalty against a dominant airline carrier found to have abused its dominant market position.

Measures to Deal with Mergers and Acquisitions

The Competition Act provides a list of factors under section 93, such as barriers to entry and effective remaining competition, which the Tribunal may consider in making its determination.

Other merger provisions include:

- Subsection 92 (2): stipulating that the Tribunal's finding cannot be based solely on evidence of concentration or market share;

- Section 97: stipulating that no application can be made by the Commissioner in respect of a merger more than three years after that merger has been substantially completed.

The Commissioner's approach toward mergers has been described in considerable detail in the 1991 Merger Enforcement Guidelines.

Part IX (sections 108 to 123) of the Competition Act deals with notifiable transactions, and outlines the general thresholds and waiting period requirements for transactions.

Joint ventures undertaken for a specific project or program of research and development are excepted from the merger provisions of the Competition Act (Section 95(1)).

For additional information about mergers see http://strategis.ic.gc.ca/SSG/
ct01255e.html

Merger Enforcement Guidelines were published in 1997

Merger Enforcement Guidelines as applied to a Bank Merger were published in 1999.

New provisions in Competition Act to streamline merger notification process as referred to under Reviews of Competition Policies and/or Laws came into force in 1999.

Amendments to the notifiable transactions provisions of the Competition Act and related amendments to the Notifiable Transactions Regulations were made. New provisions relating to requirements for and exemptions from notification, information required for filings, and waiting periods, entered into force in 2000.

Interpretation Guidelines: Notifiable Transaction under Part IX of the Competition Act were published in 2000.

Notifiable Transactions and Advance Ruling Certificates under the Competition Act: Procedures Guide was published in 2000.

Bill C-8, which proposes new legislative measures for the financial services sector, including a transparent review process for merger proposals between large banks, was passed in June 2001.

Revised Draft Interpretation Guideline #3 on subsection 111(a): Exemptions of acquisitions in the ordinary course of business from notifiable transactions under Part IX of the Competition Act was released for consultations in February 2001.

Bill C-8, which established new measures for the financial services sector, came into force in October 2001. As part of the amendments, the Competition Act was also amended to allow the Commissioner of Competition, on request by the Minister of Finance, to communicate confidential information in the context of a merger between financial institutions.

The Bureau published it s revised Fee and Services Standards Handbook on March 24, 2003. The size-of-transaction threshold was raised from $35 million to $50 million on April 1, 2003. The increase reduces the burden for parties involved in smaller transactions, while allowing the Bureau to better focus its resources on mergers that are more likely to raise competition issues.

Other Issues Addressed by Competition Policy

New provisions in the Competition Act making deceptive telemarketing a criminal offence; creating a civil process as a faster and more effective means of putting a stop to misleading advertising and

other deceptive marketing practices; and permitting law enforcement officials to use judicially authorised interception of private communications without consent (wiretap) to gather tangible evidence in cases of deceptive telemarketing as referred to in the section on Reviews of Competition Policies and/or Laws, came into force in 1999.

“Be a Smart Shopper - Know your Software” Pamphlet was published in1998.

Draft Guidelines on Pet Food Labelling and Advertising was released for consultation in 2000.

Proposal for the Adoption of New Environmental Labelling and Advertising Guidelines was released for consultations in 2001.

Guidelines on the Enforcement Policy on the Marketing of Canadian Diamonds were published in 2001.

In February 2003, the Bureau published its Guidelines on Internet Representations.

Co-operation Arrangements with other Member Economies

Canada also observes the 1995 OECD Recommendation Concerning Co-operation Between Member Countries on Anticompetitive Practices Affecting International Trade.

The development of a network of MLATs is proving very useful for Canadian law-enforcement agencies investigating transboundary crime. Canada is currently party to 27 bilateral MLATs, eight of which are with APEC economies, namely, Australia, the People's Republic of China, the Republic of Korea, Mexico, Thailand, the United States, Peru and Russia. Canada is currently negotiating MLATs with several other parties and remains open to new MLATs.

The Cooperation Arrangement between the Commissioner of Competition (Canada), The Australian Competition and Consumer Commission and the New Zealand Commerce Commission regarding the Application of their Competition and Consumer Laws was signed in 2000.

Canada signed MLATs in criminal matters with Peru (2000) and Russia (2000).

In December 2001, the Competition Bureau and Chile’s competition authority signed a Memorandum of Understanding regarding the application of their laws. The MOU formalises a co-operation arrangement built on commitments under the Canada-Chile Free Trade Agreement.

A co-operation agreement on competition law enforcement between the governments of Canada and Mexico entered into force March 20, 2003.

In June 2002, the Competition Bureau and United States Federal Trade Commission announced the adoption a protocol for sharing complaint and investigation data in order to make the pursuit of cross-border fraudulent telemarketing operators faster, more efficient and more effective.

Canada signed MLATs in criminal matters with Argentina (2001), Sweden (2001) and Uruguay (2002).

June 21, 2002 amendments to the Competition Act create a new framework to facilitate co-operation with foreign competition authorities regarding evidence for civil competition matters.

Activities with other APEC Economies and in other International Fora

Competition Policy provisions are included in the North American Free Trade Agreement (NAFTA) (1994).

Canada participates in the NAFTA Ad-hoc Committee of Experts on Trade and Competition Policy as well as the Subcommittee on the Labelling of Textiles and Apparel Goods and working groups.

In addition to the APEC forum, Canada participates in the competition policy discussions in the following venues:

WTO Working Group on Trade and Competition Policy

OECD

- Joint Group on Trade and Competition

- Competition Law and Policy Committee

- Working Party 2 on Competition and Regulation

- Working Party 3 on International Cooperation

- Committee on Consumer Policy

Free Trade Area of the Americas Negotiating Group on Competition Policy

UNCTAD

- Experts Group on Competition Policy

Competition Provisions are included in the Canada-Chile Free Trade Agreement (1997) and the Canada-Israel Free Trade Agreement (1997).

Free Trade Area of the Americas Working Group on Competition Policy was replaced by Negotiating Group on Competition Policy (1998).

Competition Provisions are included in the Canada-Costa Rica Free Trade Agreement (2001).

International Competition Network (ICN) – The ICN will provide antitrust agencies from developed and developing countries a stronger and broader network for addressing practical competition enforcement and policy issues. The ICN Steering Committee, which consists of representatives of antitrust agencies from developed and developing countries, is responsible for identifying projects and devising work plans for each project, recommending appropriate staffing for, and leadership of, working groups to carry out the work plans, and drafting agendas for conferences and meetings.