On September 21, 2023, Bill C-56—also known as the Affordable Housing and Groceries Act—received its first reading in the House of Commons. The Bill proposes several changes to Canada’s Competition Act. One such change is a significant expansion of the government’s power to conduct inquiries into anti-competitive practices.
Inquiries under current Act
Under Section 10 of the Competition Act (the “Act”), the Commissioner of Competition may, upon a formal application by at least six individuals, direct an inquiry into allegations of anti-competitive behaviour. The application must contain a solemn or statutory declaration containing details about the alleged misconduct and a statement of evidence supporting the allegation.
The Commissioner may conduct an inquiry only if satisfied that the complaint is well-founded and that an inquiry is “necessary”. The application must contain sufficient information and evidence to satisfy the Commissioner that:
- a person has contravened an order made under certain sections of the Act;
- grounds exist for the making of an order under the Act; or
- an offence has been or is about to be committed.
Unlike Section 10, which deals with allegations of specific anti-competitive behaviour against specific commercial entities, the new amendments will enable the government to bring general inquiries into entire markets absent any allegation of anti-competitive behaviour.
The amendments would permit the Minister of Innovation, Science and Industry (the “Minister”) to direct the Commissioner to conduct an inquiry into the “state of competition in a market or industry” if “he or she is of the opinion that it is in the public interest to do so”.
There will be no analogous “necessity” requirement for market inquiries. Nor will there be a requirement that the Minister believes that anti-competitive behaviour has actually occurred. The only restrictions on the Minister’s decision to launch an inquiry will be:
- the Minister’s own opinion regarding public interest;
- the “feasibility” of the inquiry, including a consideration of its cost; and
- a mandatory public consultation.
The new amendments, therefore, propose a significant expansion of the government’s power under the Competition Act—both in respect to the scope of inquiries and the government’s discretion to direct them.
What does this mean for my business?
What will an industry inquiry look like?
An individual or corporation who is the subject of an inquiry can be judicially ordered to:
- be examined under oath on any matter that is relevant to the inquiry;
- produce any record or thing specified in the order; or
- deliver to the Commissioner a written return under oath that details all information requested in the order.
Orders are effective anywhere in Canada and can be made against entities outside of Canada who carry on business in Canada or sell products into Canada.
After the inquiry is complete, the Commissioner will file a public report containing the findings of the inquiry.
Will I have an opportunity to object to the information contained in the report?
Yes, but you will need to act quickly. Before the report is published, the Commissioner must send a draft to anyone who was required to provide information. You will then have 3 days after the draft is sent—not received—to file objections in respect to factual inaccuracies or confidential information that should not be disclosed in the report.
How likely is it to be the target of an inquiry?
Presently, inquiries are limited to specific allegations of specific misconduct and require a formal application containing evidence of anti-competitive behaviour. Therefore, there is presently very little risk that an innocent party becomes the subject of a government inquiry. If Bill-56 passes in its current state, the government will have the ability to initiate investigations into entire industries. While it remains unclear just how common industry inquiries will be—or how broad their scope—if you do business in one of these industries, you could be subject to investigation.
Will industry inquiries apply to all industries?
While grocers are the government’s stated targets,1 nothing within Bill-56 appears to restrict the Minister’s powers to one industry. Again, the specific implementation of the government’s powers remains to be seen.