Canada’s Competition Act, RSC 1985 c C-43, a federal statute, creates a dual-track approach to agreements between competitors.

Criminal: Hard-Core Cartels

Hard-core cartels are dealt with through criminal provisions: agreements between competitors to fix prices, allocate markets, or restrict output are per se criminal offences (Section 45), as is bid rigging (Section 47).

As of 23 June 2023, it is also a per se criminal offence for unaffiliated employers to agree to fix or control employees’ wages or to not solicit or hire one another’s employees (Section 45(1.1)).

Civil: Agreements Between Competitors That Harm Competition

Other agreements between competitors are dealt with through a civil provision. Agreements and arrangements between competitors that lessen or prevent competition substantially can be annulled by Canada’s Competition Tribunal (Section 90.1).

Enforcement Agencies

Unlike many jurisdictions (such as the EU), Canada does not have an integrated competition authority that can both investigate and adjudicate. Rather, authority to investigate, prosecute and adjudicate cases is divided.

• The Competition Bureau (Bureau), led by the Commissioner of Competition (Commissioner), is responsible for investigating suspected cartel activity and other matters under the Competition Act. The Commissioner can commence applications in under the Act’s civil provisions, but cannot prosecute criminal offences.
• The Director of Public Prosecutions (DPP) is responsible for prosecuting criminal offences, through lawyers of the Public Prosecution Service of Canada (PPSC). Provincial Crown Attorneys can also lay charges under the Act, and occasionally do so in connection with prosecutions for fraud offences under the Criminal Code. Private prosecutions are technically possible, but almost never occur.
• Superior courts in each province, as well as the Federal Court of Canada, have jurisdiction to try criminal cases under the Act, including criminal cartel cases. 
• The Competition Tribunal (Tribunal) has exclusive jurisdiction over most of the civil provisions of the Act, including the anti-competitive agreements provision (Section 90.1). The Tribunal is a special court composed of Federal Court judges and lay members.
• Only the Commissioner can bring applications in the Tribunal under the anti-competitive agreements provision (Section 90.1).
• Private litigants can commence applications in the Tribunal for some of the civil provisions in Part VIII of the Act (but not Section 90.1).
• Private litigants can commence actions, including class actions, for breaches of the cartel provisions (and other criminal provisions) of the Act.

Scope of Labilities, Penalties and Awards

The Act provides for a range of liabilities, penalties and awards. In general terms:

• criminal provisions of the Act are punishable by imprisonment and fines;
• civil provisions of the Act provide for remedies (typically an order prohibiting the conduct), and in certain instances (but not Section 90.1), administrative monetary penalties; and
• actions for damages are possible for breaches of the Act’s criminal provisions, but not for matters under the Act’s civil provisions.

Section 36 of the Competition Act creates a civil cause of action to recover damages caused by a breach of the criminal provisions in the Act, including cartel and bid-rigging offences.

The Competition Act contains several provisions dealing with different types of cartel conduct.

Conspiracy (Section 45)

The Act’s criminal conspiracy provision (Section 45) makes it an offence for competitors or potential competitors to agree to:

• fix, maintain or control prices for the supply of a product;
• allocate customers, territories or markets; and
• fix, maintain, control, prevent or lessen the production or supply of a product.

Restraints that are ancillary to a broader agreement and are directly related to and reasonably necessary to, giving effect to that broader agreement are exempted from the provision.

It is also an offence for a corporation to implement a foreign conspiracy in Canada where that conspiracy would have contravened Section 45 if it had occurred in Canada (Section 46).

Bid-Rigging (Section 47)

Bid-rigging is also a criminal offence (Section 47). Bid-rigging can take three forms:

• the submission of a bid or tenders that are arrived at by agreement between two or more bidders;
• an agreement not to submit a bid; and
• an agreement to withdraw a bid.

In each case, bid-rigging is only an offence where the person calling for bids is not informed of the agreement.

Wage Fixing and No-Poach Agreements (Section 45(1.1))

As of 23 June 2023, it is also a criminal offence for unaffiliated employers to agree to fix wages or terms and conditions of employment or to agree not to solicit or hire each other’s employees.

Sector-Specific Offences

The Act creates two sector-specific offences.

• Conspiracies relating to professional sport – it is an offence to conspire to limit unreasonably the opportunities for a person to participate as a player or to negotiate with and play for a team or club (Section 48).
• Conspiracies between federal financial institutions – it is an offence for federal financial institutions to conspire to fix interest rates on deposits or loans, charges to customers, amount or kinds of loans to customers, kinds of services provided to customers, or to whom a loan or services will be provided or withheld (Section 49).

Sector-Specific Exemptions

The Act contains the following sector-specific exemptions:

• collective bargaining agreements between trade unions and employers;
• agreements relating to the underwriting of securities; and
• agreements between teams, clubs or leagues pertaining to participation in amateur sport.

The Shipping Conferences Exemption Act, 1987, RSC, 1985, c 17 (3rd Supp), exempts certain agreements among ocean shippers from the Competition Act.

There are no limitation periods for prosecutions under the Competition Act’s criminal cartel provisions, because these offences are indictable offences.

Private litigation brought under Section 36 of the Act must be brought within two years of the date on which the criminal conduct was discovered by the plaintiff or the date of completion of any criminal proceedings relating to the conduct (whichever is later).

The Competition Bureau has long taken the position that price fixing that occurs entirely in foreign jurisdictions can be prosecuted in Canada if it has effects in Canada. This position has never been tested in a prosecution, however, and Canadian criminal law generally does not recognise effects-based jurisdiction.

Comity is a recognised principle of Canadian law, including Canadian criminal law. It is relevant to the question of whether a Canadian court will take jurisdiction over an offence that is committed partly in, and partly outside, Canada.

Canada and the United States have entered in an agreement on the application of positive comity principles to the enforcement of their competition laws. The agreement provides for Canadian and US competition authorities to request that the other party investigate and remedy anti-competitive conduct that has cross-border impact. It also provides for requests to defer or suspect investigations in reliance on enforcement activity by the other party.

In 2016, the Competition Bureau agreed with the United States Department of Justice that a foreign auto parts manufacturer that had participated in a bid-rigging conspiracy would be charged in the United States only. The conspiracy primarily affected US consumers; while the conspiracy affected cars manufactured in Canada, the cars were sold in the United States.

The Competition Bureau initially took the position, in March 2020, that it would be “vigilant against potentially harmful anti-competitive conduct by those who may seek to take advantage of consumers and businesses during these extraordinary circumstances”.

The next month, the Bureau announced that it recognised that the COVID-19 pandemic “may call for the rapid establishment of business collaborations of limited duration and scope to ensure the supply of products and services that are critical to Canadians”. It added that it would “generally refrain from exercising scrutiny” where three conditions were met:

• “there is a clear imperative for companies to be collaborating in the short-term to respond to the crisis”;
• “those collaborations are undertaken and executed in good faith”; and
• the collaborations do not go further than what is needed.

At no time, however, did the Bureau suggest that competitors could enter into arrangements that would breach the Act’s criminal cartel provisions in response to the pandemic.

The Bureau also changed some of its administrative practices, for example moving toward relying on emails instead of hard copy letters.

On 23 June 2023, two amendments to the Competition Act’s conspiracy provision (Section 45) came into force.

• Wage-fixing and no-poach agreements between unaffiliated employers are a criminal offence.
• The current CAD25 million cap on fines under Section 45 has been removed; courts may impose a fine “in the discretion of the court”.

The government is currently conducting a review of the Act with a view to modernising it. The Bureau has recommending extending Section 45 to cover buy-side cartels. (Currently, Section 45 only applies to agreements that relate to the supply of products.)

The Commissioner can commence a formal inquiry when there is reason to believe that an offence has been committed (Section 10(1)(b)). The Commissioner can also be compelled to commence a formal inquiry if six Canadian residents apply to the Commissioner for an inquiry (Section 9 and Section 10(1)(a)). The Minister of Industry can also require the Commissioner to commence an inquiry (Section 10(1)(c)).

Unless it has been compelled to commence the inquiry, the Bureau typically conducts a preliminary investigation before commencing a formal inquiry. As a practical matter, most cartel investigations are the product of an application under the Bureau’s immunity programme.

The commencement of a formal inquiry is the pre-condition to the exercise of formal investigative powers such as search warrants and orders for production of documents.

The Commissioner can obtain search warrants under the Competition Act (Section 15) and orders permitting wiretaps under the Criminal Code (Section 185-186). While wiretaps are rare, search warrants are not.

Search warrants can permit Bureau officers to search business and residential premises, and to seize documents and other evidence. They can also permit Bureau officers to operate computer systems and make copies of any data on or available to those computer systems (Section 16). The inclusion of data “available” to a computer system in Section 16 means that Bureau officers can search and copy data from cloud-based systems and Bureau officers will typically image computer systems. However, Bureau officers cannot compel a target to provide passwords to any computer system. There is no provision in the Competition Act or the Criminal Code permitting the inclusion of such a term in a search warrant, and while the issue has yet to be addressed by the Supreme Court of Canada, the weight of authority suggests that forcing a target to provide passwords violates constitutional protections against self-incrimination. The Bureau can, however, use Section 11 orders to obtain cloud-based data (see 2.5 Enforcement Agency’s Procedure for Obtaining Evidence/Testimony).

The execution of search warrants is circumscribed by the terms of the warrant itself. For example, the warrant will typically permit officers to search any buildings at a particular municipal address, but it will not permit officers to search premises located elsewhere. For this reason, the target of a search warrant must carefully review the warrant to determine what can, and cannot, be searched.

The search warrant also identifies the records and other evidence that can be seized. In principle, the search team is not entitled to seize records not included within the scope of the warrant. That said, the plain view doctrine entitles the search team to seize evidence of other crimes if the evidence is “immediately obvious” and “discovered inadvertently” (R v McGregor, 2023 SCC 4). The plain view doctrine does apply to data on electronic devices, such that files that an officer comes across unexpectedly can be seized. Files that are only discovered through an exploratory search cannot, however. (R v McGregor; R v Jones, 2011 ONCA 632).

Search warrants can be executed anytime between 6am and 9pm.

Firms and individuals must permit the Bureau officers to execute the warrant; it is an offence to refuse to allow a Bureau search team executing a search warrant to enter the premises and carry out the search (Section 65(1)). Targets cannot be compelled to assist in the execution of the warrant, however. As a practical matter, it is usually advisable to respond to queries about the layout of the premises or the location of certain types of records, as doing so will reduce the disruption caused by the search. It is also advisable to provide the search team with a boardroom to use.

Bureau officers can interview officers or employees of the target firm during the execution of a search warrant. They cannot, however, require them to respond to any questions. If the person questioned is considered a target of the inquiry, they will be given a formal caution. That said, Bureau officers typically focus on executing the warrant and do not attempt to interview employees.

The Act does not provide the target firm with a right to receive copies of seized records, but it does have the right to inspect seized records (Section 18(2)). As a practical matter, a target can typically negotiate an arrangement to obtain copies of seized records, particularly those that are necessary to the operation of the business.

Counsel are entitled to attend on the execution of a search warrant. Once the Bureau search team has secured the premises, it may accommodate a request to delay the search for a reasonable period of time until the arrival of counsel or senior management.

The Bureau is not entitled to seize records that are subject to solicitor-client privilege (Section 19). Where privilege is claimed over a paper record, the record is sealed until the privilege claim can be determined by the court. Privilege issues are typically resolved without the need for a judicial determination, however.

The procedure for dealing with privileged electronic records is different. Because the Bureau images computer systems, it inevitably collects privileged records. As a result, officers who are not part of the investigation typically perform an initial review of the seized data to determine what to pass on to the investigation team. Before providing this data to the investigation team, the electronic search team will provide counsel for the target with an opportunity to review the data and make privilege claims.

The Act permits warrantless searches where “exigent circumstances” make it impractical to obtain a warrant (Section 15(7)). This would include circumstances where the delay in obtaining a warrant “would result in the loss or destruction of evidence” (Section 15(8)).

The Bureau can also obtain orders for production of documents, written returns (answers in writing to written questions), and oral examinations under oath. These are discussed in 2.5 Enforcement Agency’s Procedure for Obtaining Evidence/Testimony.

The Competition Act creates three offences for obstruction or spoliation of evidence:

• obstruction – it is an offence to impede or prevent any inquiry or examination under the Act, or to attempt to do so (Section 64);
• failure to allow access – it is an offence to refuse to allow a Competition Bureau search team executing a search warrant to enter the premises and carry out the search (Section 65(1)); and
• destruction of records – it is an offence to destroy or alter any record or thing that is required to be produced by a Section 11 order or in respect of which a warrant is issued (Section 65(3)).

Each of these offences is a hybrid criminal offence that can be prosecuted on indictment or summary conviction. When prosecuted on indictment, the maximum penalty is ten years’ imprisonment or a fine in the discretion of the court, or both.

The Right to Counsel and its Limits

The right to counsel is constitutionally protected in Canada. Any target firm and its directors, officers and employees have a right to counsel during an investigation. There are, however, limits to this right.

In a criminal investigation, the right to counsel is generally satisfied by a single consultation with a lawyer. The police can question a suspect without counsel present because a suspect does not have the right to continuous assistance of counsel (R v Sinclair, 2010 SCC 35; R v Dussault, 2022 SCC 16; R v Lafrance, 2022 SCC 42). That said, the Competition Bureau typically permits witnesses to have their counsel present at the interview.

There are also limits to the role of counsel for the target firm. Counsel for the firm do not have the right to be present at interviews of the firm’s directors, officers or employees (although the Bureau may permit them to attend). Although counsel for the target firm has the right to attend any examination under oath under Section 11, the presiding officer can exclude the target’s counsel (Section 12(4)).

When Should Officers and Employees Retain Independent Counsel?

Counsel for a target firm cannot also act for officers and employees, as to do so would create a conflict of interest. Indeed, counsel should expressly advise officers and employees that they represent the firm, not its officers and employees, and that the officer or employee is entitled to separate legal representation. (This is known as an Upjohn warning.)

This does not mean that officers and employees always need independent counsel. Independent counsel are typically only needed for officers and employees that are suspected of wrongdoing, and who do not benefit from immunity from prosecution.

Although the firm is not required to pay for independent counsel for its directors, officers and employees, it will frequently do so, particularly if it is important to ensure their continued co-operation.

Defence Counsel’s Initial Steps

Defence counsel should take the following steps as soon as possible after they are retained.

• Commence an internal investigation to determine the scope of liability (the Canadian Bar Association has published a helpful guide on Best Practices on How to Conduct an Internal Investigation).
• Consider and advise the client on applying for immunity or leniency (see 2.11 Leniency and/or Immunity Regime).
• Implement a litigation hold to preserve evidence (and avoid obstruction charges).
• Obtain the Information to Obtain in respect of any search warrants (these are unsealed after execution) and any affidavits filed to obtain Section 11 orders; these documents provide insight into the Bureau’s theory of the case.
• Determine whether the search warrants (or their execution) or Section 11 orders can be challenged.

The Bureau has several tools at its disposal to obtain evidence and testimony, including:

• search warrants (see 2.1 Initial Investigatory Steps);
• wiretaps (see 2.1 Initial Investigatory Steps);
• Section 11 orders;
• informal information requests; and
• interviews.

Section 11 Orders

Section 11 allows the Commissioner to obtain three kinds of orders from the court:

• oral examination of witnesses under oath;
• production of documents; and
• written returns, that is, written answers to questions.

These orders can be made against anyone with relevant evidence, including corporate and individual targets of the inquiry.

Individuals that are subject to Section 11 orders benefit from constitutional rights and statutory protection against self-incrimination. A witness cannot refuse to answer a question on an oral examination under oath or to provide a written return on the ground that the answer may tend to criminate him or her, but the answer is inadmissible against the witness (except in a prosecution for perjury) (Competition Act Section 11(3); Canada Evidence Act Section 5). Unlike the Criminal Code, the Competition Act does not afford the same protection where an individual is the subject of a production order (Criminal Code Section 487.014(4) provides no production order may be made against a person who is under investigation for an offence, while Section 487.0196 makes documents produced by a person pursuant to a production order inadmissible in a proceeding against that person). It is likely, but not decided, that a court would find that documents produced by an individual pursuant to a Section 11 order are inadmissible against that person.

Corporations do not benefit from the privilege against self-incrimination.

Informal Information Requests

The Bureau occasionally requests information from firms on an informal basis. While the firm is not obliged to respond to the request, the Bureau uses the threat of a Section 11 order to obtain compliance.

Interviews

The Bureau often interviews witnesses as part of its inquiries. Informal interviews do not trigger the same constitutional protections against self-incrimination, because the testimony is not compelled.

If the witness benefits from immunity from prosecution under the immunity or leniency programme, then this raises no concerns.

If the witness does not have immunity, and there are concerns that the witness could become a target of the inquiry, counsel should insist on “King-for-a-day letter”, that is, a “use immunity” letter that prevents the prosecution from using any evidence obtained from the witness against that witness.

If the Bureau will not agree to an interview under a King-for-a-day letter, and the witness is a target of the inquiry, consideration should be given to forcing the Bureau to use a Section 11 order to obtain an oral examination.

Where a Section 11 order (see 2.5 Enforcement Agency’s Procedure for Obtaining Evidence/Testimony) is sought against a corporation, any affiliates of that corporation, whether in or outside Canada, can be ordered to produce records or provide written returns (Section 11(2)).

In 2022, the Competition Act was amended to provide that Section 11 orders may be made against a person outside Canada who carries on business in Canada or sell products into Canada.

The enforceability of orders against corporations and persons located outside of Canada is doubtful, however, because it is unlikely that a foreign court would enforce such an order.

The Competition Bureau can instead use Canada’s mutual legal assistance treaties to obtain evidence from corporations and persons located outside Canada. However, this is a lengthy and cumbersome process.

Solicitor-Client Privilege

Solicitor-client privilege has constitutional protection in Canada and is all but inviolable. Communications with lawyers for the purposes of obtaining legal advice are privileged. There is no distinction between external and in-house counsel for purposes of determining whether a communication is privileged.

While solicitor-client privilege covers all communications between lawyer and client that are for the purpose of legal advice, the fact that a client may send a pre-existing document to a lawyer does not cloak that document with privilege.

Other Privileges

Canadian law recognises a number of other privileges that may be relevant in a cartel investigation:

• litigation privilege protects communications made for the purposes of litigation;
• settlement privilege protects communications made for the purposes of settling a dispute;
• marital communications privilege protects communications made between spouses;
• the privilege against self-incrimination protects witnesses from self-incrimination. Unlike in the US, a witness cannot refuse to answer a question on the ground that the answer may incriminate the witness, but the answer cannot be used against the witness; and
• police informer privilege and public interest privilege may in certain instances prevent an accused from obtaining information from the Crown.

There is no obligation to co-operate with the Bureau. Targets of inquiries may nevertheless choose to co-operate in order to gain credit for co-operating; but in those cases, the target will typically participate in the immunity or leniency programme. The Bureau prefers to rely on formal investigative powers (search warrants, wiretaps and Section 11 orders) to obtain evidence from targets that are not co-operating through the immunity or leniency programmes.

Confidentiality

The Competition Act provides that information provided to the Competition Bureau must be kept confidential. It can only be disclosed to a Canadian law enforcement agency or “for the purposes of the administration and enforcement” of the Act (Section 29). This applies to practically all information obtained by the Bureau, including information supplied by targets of inquiries and third parties.

The Bureau interprets its ability to disclose information for the purposes of the administration and enforcement of the Act broadly, however. For example, it considers that it can communicate confidential information to foreign competition authorities under this exception.

Crown Disclosure

Information supplied to the Bureau will be disclosed to the defence as part of the Crown’s disclosure obligations after charges are laid. This includes notes taken by Bureau officers during oral proffers by immunity and leniency applicants.

Private Litigants

Parties to civil actions for damages under the Act are able to obtain certain documents from the Bureau. The Bureau will not voluntarily provide documents to private litigants, however; the litigants must bring a court application to obtain them.

Arguments against enforcement, or in favour of alternative resolutions, can be raised with the Bureau at any time during its investigation. Similarly, a target can raise arguments with the matter to the Public Prosecution Service of Canada once the Bureau has referred the matter for prosecution.

Canada offers immunity and leniency programmes.

In general terms, the first firm to self-report will obtain complete immunity from prosecution for itself and its employees. All other firms will be eligible for leniency.

Immunity Programme

Eligibility for the immunity programme is very broad. The first applicant to come forward before the matter is referred for prosecution is eligible to obtain immunity. The only disqualification is that the applicant must not have coerced others to be a party to illegal activity. The applicant is generally expected to terminate its participation in the cartel.

The process begins with the applicant obtaining a marker from the Competition Bureau. Usually this is done by a telephone call from counsel. The applicant’s identity does not need to be disclosed, but the nature of the conduct and the product must be disclosed.

After obtaining a marker, the applicant has 30 days to complete its internal investigation and provide the Bureau with a detailed statement describing the unlawful conduct. This is known as a “proffer”. The proffer is almost invariably provided orally, by counsel, and on a without prejudice basis. Frequently, multiple proffers are required before the Bureau is satisfied that it has enough information.

If the Bureau is satisfied that the applicant is able to provide full co-operation and fully satisfy the requirements for obtaining immunity, it will make a recommendation to the Director of Public Prosecutions (DPP). The DPP then decides whether to grant a Grant of Interim Immunity (GII) to the applicant.

Once the applicant receives a GII, it must provide “complete, timely and ongoing co-operation as well as full, complete and truthful disclosure” to the Bureau. The applicant must disclose all relevant information (except for privileged information). It must make directors, officers and employees available for interviews.

The GII will include all current directors, officers and employees identified by the applicant. Those directors, officers and employees must also admit their knowledge of, or participation in, the unlawful conduct and co-operate fully with the Bureau. If they do not, they can be removed from the GII.

Once the applicant has satisfied its co-operation obligations, the Bureau will make a recommendation to the DPP. If the DPP accepts the recommendation, it will finalise the grant of immunity.

Leniency Programme

The leniency process begins with counsel obtaining a marker from the Bureau and then making a proffer within 30 days thereafter. The Bureau will then interview key witnesses. The applicant is expected to disclose records relevant to the witness interviews. Both the interviews and records are provided on a settlement privilege and “use immunity” basis; that is, they cannot be used against the witness or leniency applicant.

Once the Bureau is satisfied that it has sufficient information, it will make a leniency recommendation to the DPP. The DPP has the discretion to accept or reject the leniency recommendation.

If the DPP accepts the recommendation, the applicant and the DPP will negotiate a plea agreement. The applicant will be required to plead guilty to a criminal offence under the Act. The agreement will set out the fine that will be recommended to the court.

The Bureau’s recommended fine consists of a base fine, plus or minus the net effect of aggravating or mitigating factors, minus the leniency co-operation credit.

The base fine is calculated as a percentage of the affected volume of commerce in Canada that is twice the estimated overcharge. Indirect sales are included in this calculation. The Bureau frequently uses 10% as a proxy for the overcharge, resulting in a base fine of 20% of the affected volume of commerce.

The base fine can be increased or decreased based on the presence of aggravating and mitigating factors. One mitigating factor is whether the applicant had a compliance programme at the time of the offence. However, the Bureau will only give credit if it considers that the programme was “credible and effective”.

Finally, the leniency co-operation credit can be worth up to 50% of the fine. The Bureau decides how much credit to give based on the value of the leniency applicant’s co-operation.

If the leniency applicant also discloses evidence of another offence that is unknown to the Bureau, it can obtain immunity for that offence under the immunity programme, as well as a further 5–10% leniency credit.

The first-in leniency applicant (that is, the second firm to obtain a marker after the immunity applicant) typically will not be charged with any offence – effectively granting them immunity – provided that they co-operate fully with the Bureau’s investigation. There are no exclusions (other than for failure to co-operate).

Subsequent leniency applicants are unable to shelter their directors, officers or employees; they may be charged if they are involved.

Once the plea agreement is agreed, the leniency applicant must make full disclosure to the Bureau of its involvement in the offence. It must produce all relevant and non-privileged information, and make individuals available for interviews.

Next, the leniency applicant will plead guilty to an offence, and the DPP and the leniency applicant will make a joint sentencing submission to the court. The court must accept the joint sentencing submission unless the proposed sentence would bring the administration of justice into disrepute or would otherwise be contrary to public interest (R v Antic, 2017 SCC 27).

Even after sentencing, the leniency applicant has ongoing co-operation obligations.

See 2.11 Leniency and/or Immunity Regime.

The Competition Bureau can obtain information directly from employees using Section 11 orders or voluntary interviews (frequently under King-for-a-day letters). See 2.5 Enforcement Agency’s Procedure for Obtaining Evidence/Testimony.

The Bureau can obtain documentary information from the target company through search warrants (see 2.2 Dawn Raids), Section 11 orders (see 2.5 Enforcement Agency’s Procedure for Obtaining Evidence/Testimony), and information requests (see 2.5 Enforcement Agency’s Procedure for Obtaining Evidence/Testimony).

Although the Bureau can, in theory, obtain documents from outside Canada using Section 11 orders, its ability to enforce the order outside Canada is doubtful at best. See 2.5 Enforcement Agency’s Procedure for Obtaining Evidence/Testimony.

The Bureau can also make use of Mutual Legal Assistance Treaties to obtain information outside Canada.

The Bureau has agreements with a number of other federal and provincial government agencies. These include agreements with police forces (Royal Canadian Mounted Police and Ontario Provincial Police), regulators (Canadian Radio-television and Telecommunications Commission, Ontario Energy Board, Market Surveillance Administrator of Alberta), and securities commissions (Ontario Securities Commission).

Section 29 of the Act allows the Bureau to provide information to other Canadian law enforcement agencies. The Bureau takes the view that “Canadian law enforcement agency” includes any federal or provincial authority that enforces laws that provide for criminal, civil or administrative sanctions.

The Bureau has bilateral and multilateral co-operation agreements with numerous competition authorities around the world, including in the United States, the European Union, Australia, New Zealand, Mexico, Japan, India, Brazil and others.

The Bureau’s closest relationship is with US authorities. The Bureau frequently co-operates with the Department of Justice on cartel investigations and is able to share information with the Department of Justice.

The Bureau also participates in a number of international organisations, including the International Competition Network, the Organization for Economic Cooperation and Development’s (OECD) Competition Committee and Committee on Consumer Policy, the International Consumer Protection and Enforcement Network (ICPEN), and the Unsolicited Communications Enforcement Network (UCENET).

Decision to Prosecute

Once the Competition Bureau has concluded its investigation, it will refer the case to the Public Prosecution Service of Canada (PPSC). Crown counsel at the PPSC will prosecute if they are satisfied that there is a reasonable prospect of conviction, and that a prosecution is in the public interest.

Crown Disclosure

The accused has the right to full disclosure from the Crown. This will include all documents collected by the Bureau (including documents from other parties), notes taken by Bureau officers during interviews (and if the interviews were recorded, copies of the recordings), as well as notes taken by Bureau officers during proffers from immunity and leniency applicants.

Preliminary Hearing

The accused has the right to a preliminary hearing. This provides the accused with an opportunity to test the strength of the Crown’s case. The threshold for committing the accused to stand trial is low, however; the judge must commit the accused to stand trial if “there is sufficient evidence upon which a properly instructed jury could convict” (R v Sazant, 2004 SCC 77). The Attorney General can prefer an indictment without a preliminary hearing (that is, deprive the accused of the right to a preliminary hearing). The Attorney General or Deputy Attorney General must personally consent in writing, however.

Trial

Competition Act offences are tried by a jury in the superior court in the province of residence of the accused. The Federal Court can also try Competition Act offences, but this is generally not done.

An accused is presumed innocent until proven guilty. The Crown must prove all of the elements of the offence beyond a reasonable doubt. An accused cannot be compelled to testify. Because corporations do not benefit from the privilege against self-incrimination, their directors, officers and employees can be compelled to testify against the corporation.

Some defences, for example the ancillary restraints defence in subsection 45(4), must be proven by the accused, but on a balance of probabilities.

Section 90.1 Applications

Applications under Section 90.1 are commenced by the Commissioner by filing a Notice of Application with the Tribunal.

Private damages actions are discussed in 5. Private Civil Litigation Involving Alleged Cartels.

Criminal cartel prosecutions are typically brought against all accused in a single proceeding, excluding those who have already pleaded guilty and been sentenced. The trial judge can order that the accused be tried separately if the interests of justice so require (Criminal Code Section 591(1)), for example, if evidence that is inadmissible against one defendant is to be introduced against another defendant. This would occur, for example, if the prosecution wishes to call an employee who has been charged with the offence to testify against a co-accused corporation.

Section 90.1 applications will also typically include all parties involved in the agreement or arrangement, apart from those that have reached settlements with the Commissioner.

Criminal Proceedings

In a criminal prosecution, the Crown must prove all elements of the offence (actus reus and mens rea) beyond a reasonable doubt.

The burden of proof for defences may vary. For example, the accused must establish the ancillary restraints defence (Section 45(4)) on a balance of probabilities.

Section 90.1 Proceedings

In a Section 90.1 application, the Commissioner must establish the elements in Section 90.1 on a balance of probabilities.

Criminal Proceedings

In a criminal trial by jury, the judge will instruct the jury on the law, but the jury deliver the verdict.

Section 90.1 Proceedings

The Tribunal hears applications under Section 90.1. The Tribunal sits in panels of three with at least one judicial member. The judicial members of the Tribunal decide any issues of law, while the panel as a whole makes findings of fact and applies the law to the facts.

The general rule is that any admissible evidence can be used in any legal proceeding unless there is a rule that excludes it.

Evidence obtained from another jurisdiction, for example through mutual legal assistance treaties or co-operation between the Bureau and foreign competition authorities, can be used in Canada unless there is a rule excluding it.

Evidence of past convictions is generally not admissible in a criminal trial.

Section 36 provides that if a defendant has been convicted of an offence under the Act, the evidence given in the criminal proceedings can be used in the Section 36 proceedings.

In criminal proceedings under the Competition Act, the rules of evidence that apply in a criminal proceeding are observed strictly.

In Tribunal proceedings, rules of evidence applicable to civil proceedings are observed, but as with other civil proceedings, not as strictly.

There is relatively little scope for expert evidence from economists in criminal cartel proceedings, because of the per se nature of the prohibition.

By contrast, proceedings under Section 90.1 rely heavily on experts to delineate relevant markets, assess market power and determine whether the impugned agreement will substantially lessen or prevent competition.

Canadian law recognises a number of privileges, including the following:

• solicitor-client privilege protects communications between lawyers and their clients;
• litigation privilege protects communications made for the purposes of litigation;
• settlement privilege protects communications made for the purposes of settling a dispute;
• marital communications privilege protects communications made between spouses;
• police informer privilege may, in certain instances, prevent an accused from obtaining information from the Crown; and
• the privilege against self-incrimination protects witnesses from self-incrimination. Unlike in the US, a witness cannot refuse to answer a question on the ground that the answer may incriminate the witness, but the answer cannot be used against the witness.

Once an accused has been acquitted or convicted of an offence, the accused cannot be prosecuted again for the same matter.

The Competition Act also forces the Crown to choose between criminal and civil tracks in cartel matters: Section 45.1 provides that no proceedings can be commenced under Section 45 against a person if the Commissioner has commenced a proceeding against that person under Sections 76 (price maintenance), 79 (abuse of dominance), 90.1 (anti-competitive agreements), or 92 (mergers). Analogous provisions in Sections 76, 79, 90.1, and 92 prevent proceedings under multiple provisions.

The Competition Bureau has no power to make any findings or impose any sanctions.

Only courts can impose sanctions in criminal matters. In criminal matters, the Bureau’s authority is limited to conducting an investigation and referring the matter to the PPSC for prosecution.

Only the Competition Tribunal can order a remedy under Section 90.1 and other matters in Part VIII of the Competition Act. The Bureau’s role in these matters is to conduct an investigation and bring proceedings in the Competition Tribunal.

Plea bargains are an important part of criminal practice in Canada. Plea bargains are negotiated with Crown counsel, not the Bureau, although Crown counsel will consult with the Bureau about the appropriate sentence.

Where the accused has been accepted into the leniency programme, settlement negotiations will occur early on in the process.

Where the accused is not in the leniency programme, settlement negotiations can occur any time, but are most likely to occur once the Bureau has referred the matter to the PPSC.

Once a plea agreement has been finalised, the accused will plead guilty to charges under the Act, an agreed statement of facts will be filed, and the accused and prosecutor will make a joint sentencing submission to the court. The court must accept the joint sentencing submission unless the proposed sentence would bring the administration of justice into disrepute or would otherwise be contrary to public interest (R v Antic, 2017 SCC 27).

Recently, a number of cartel cases have been resolved through a consent prohibition order, without any prior conviction, under subsection 34(2). These orders also involve a payment to the Crown. This procedure is not unlike a remediation order under the Criminal Code or a deferred prosecution agreement in other jurisdictions. It has been used seven times in recent years to resolve an investigation into a bid-rigging scheme targeting municipal infrastructure contracts in Quebec.

There are three main effects of a criminal conviction under the Competition Act’s cartel provisions:

• criminal record – a conviction under the Act results in a criminal record;
• debarment – a conviction renders the offender automatically ineligible to do business with the federal government for ten years. This period can be reduced to five years for offenders that have co-operated with law enforcement or taken positive steps to address the causes of the conduct. Quebec also maintains a debarment list; and
• use in private litigation – a conviction under the Act gives rise to a rebuttable presumption in an action for damages under Section 36 that the offender engaged in the conduct. The evidence given in the criminal proceedings can be used in the Section 36 action.

The Competition Act’s cartel provisions are all indictable offences.

Conspiracy offences (Section 45) are punishable by up to 14 years’ imprisonment or a fine of up to CAD25 million, or both. As of 23 June 2023, the CAD25 million cap will be lifted, and the fine will be in the discretion of the court.

Bid-rigging offences (Section 47) are punishable by up to 14 years’ imprisonment or a fine in the discretion of the court.

Foreign directives offences (Section 46) are punishable by a fine in the discretion of the court. Only corporations can commit this offence; as a result, no sentence of imprisonment is available.

No penalties are available in proceedings under the civil anti-competitive agreements provision (Section 90.1). Rather, the Tribunal can prohibit a party to the agreement from doing anything under the agreement.

Compliance programmes are relevant to determining the appropriate sentence.

The Competition Bureau takes the position that credit can only be given where the compliance programme was in place at the time of the offence, and where the programme is credible and effective.

However, the Criminal Code requires courts to take into consideration “any measures that the organization has taken to reduce the likelihood of it committing a subsequent offence” when imposing a sentence on a corporation (Section 718.21(j)). This suggests that even compliance programmes implemented after the offence is discovered will be taken into consideration by the court.

It is unlikely that mandatory consumer redress can be ordered in any criminal proceeding under the Competition Act, because the restitution provisions in the Criminal Code do not contemplate restitution orders for economic losses.

Criminal Proceedings

Appeals from an acquittal or conviction can be brought in the court of appeal in the province in which the case was tried, or to the Federal Court of Appeal if the trial was in the Federal Court.

The decision of the court of appeal can be appealed to the Supreme Court of Canada. Leave is required, except for an appeal from a conviction where a judge of the court of appeal dissents.

Common grounds of appeal include procedural and evidentiary issues and errors of law in the judge’s instruction to the jury. Because juries do not issue written reasons, but merely render a verdict, it is extremely difficult to successfully appeal a jury’s verdict.

Section 90.1 Proceedings

Decisions of the Competition Tribunal can be appealed to the Federal Court of Appeal. Leave is not required to appeal on issues of law or issues of mixed fact and law, but is required to appeal on issues of fact.

The decision of the Federal Court of Appeal can be appealed to the Supreme Court of Canada. Leave is required.

The standard of review of decisions of the Tribunal is the same as for any superior court: decisions on issues of law are reviewed on a correctness standard. Decisions on issues of fact are reviewed on the palpable and overriding error standard. Decisions on issues of mixed fact and law are generally also reviewed on the palpable and overriding error standard.

Section 36 of the Competition Act creates a civil cause of action to recover damages caused by a breach of the criminal provisions in the Act, including conspiracy (Section 45), bid-rigging offences (Section 47), and foreign directives offences (Section 46).

To succeed, the plaintiff must establish that the defendant committed one of the criminal cartel offences and that the plaintiff suffered damages as a result, or that the defendant violated an order. To establish the offence, the plaintiff must prove all elements of the offence, but on a balance of probabilities.

Cartel damages actions under Section 36 are typically brought as class proceedings.

Plaintiffs may also raise common law causes of action that are based on contraventions of the criminal provisions of the Act. The tort of unlawful act conspiracy is the most common.

Private damages actions are limited to breaches of criminal provisions of the Act (and breaches of certain orders made under the Act). There is no private right of action for damages for matters involving Section 90.1, nor are private applications to the Tribunal available under this provision. Only the Commissioner can challenge agreements between competitors under Section 90.1.

Private damages actions are typically configured as class actions. Consumer associations and public interest groups do not have standing to bring such an action in Canada’s common law jurisdictions. Rather, the action must be commenced by a representative plaintiff who has a cause of action (for example, who has purchased a cartelised product).

Section 36 provides that anyone who suffers loss or harm as a result of a cartel can sue. As a result, indirect purchasers have a cause of action if they can show that the overcharge was passed on to them. Umbrella purchasers (those who purchased the same product, but from a manufacturer not involved in the cartel) also have a cause of action, if they can show that the non-cartel members were able to raise their prices as a result of the cartel.

Despite this, passing-on cannot be raised as a defence to liability. However, passing-on can be used to limit the amount of damages payable to certain classes of purchasers, in order to avoid double recovery. In practice, direct, indirect, and umbrella purchasers will be included in one class, and any award will be apportioned among them.

Any admissible evidence can be used in a private damages action.

Subsection 36(2) provides that a conviction raises a rebuttable presumption that the defendant engaged in the conduct for which it was convicted, and that evidence from a criminal proceeding in which the defendant was convicted can be used in the Section 36 action.

Evidence from Bureau investigations can in principle be used, but it can be difficult to obtain. The Bureau’s position is that it will not voluntarily provide evidence from its investigations to plaintiffs. Rather, plaintiffs must bring an application to court to obtain it.

To date, all class actions alleging cartel offences have settled; none have gone to a complete trial (one settled mid-trial).

Several individual actions under Section 36 have gone to trial.

Class actions in Canada follow an “entrepreneurial model”. Plaintiff lawyers are entitled to a contingency fee set as a percentage of the award or settlement, or occasionally, as a multiplier of the normal hourly fee.

Increasingly, legal funders are providing funding to plaintiff lawyers in exchange for a share of the contingency fee.

Canada has a loser-pays costs system: the losing party must generally cover part (but not all) of the winning party’s reasonable legal costs.

In some provinces, such as Ontario, the same costs rules apply to class actions as to any other action. In others, such as British Columbia, provincial class proceedings legislation provides that no costs are available to either the plaintiff or defendant in a class proceeding. In these provinces, however, a successful plaintiff will nevertheless be able to obtain a costs award, because Section 36 expressly provides for costs. As a result, in those provinces the costs rules are effectively biased in favour of plaintiffs.

Decisions of courts in private damages actions can be appealed. The appeal route varies by province.

Generally speaking, final orders (decisions that finally determine an issue in a case) can be appealed as of right to the court of appeal. Decisions of the court of appeal can be appealed to the Supreme Court of Canada, but leave is required.

In Ontario, an intermediate appeal court known as the Divisional Court handles appeals from interlocutory matters, including certification decisions. Leave is required to appeal a certification decision. Decisions of the Divisional Court can be appealed to the Ontario Court of Appeal.

In other provinces, appeals from certification decisions are to the court of appeal for that province.

The Canadian government is in the midst of a review of the Competition Act with a view to modernising it to make it more responsive to challenges created by the emergence of the “digital economy”.

The Commissioner has issued guidelines on a number of topics relating to cartel conduct.

The Competitor Collaboration Guidelines (6 May 2021) are the most important reference for understanding the Bureau’s understanding of the Act’s conspiracy provision (Section 45) and anti-competitive agreements provision (Section 90.1).

The Bureau recently issued its Enforcement guidance on wage-fixing and no poaching agreements (30 May 2023). It is expected that these guidelines will provide important insight into the Bureau’s understanding of the new wage-fixing and no-poach agreements offence, which will come into force on 23 June 2023.

The bulletin on Immunity and Leniency Programs under the Competition Act (15 March 2019) explains how these programmes work.

Other relevant guidance includes the following.

• Information Bulletin on Sections 15 and 16 of the Competition Act (25 April 2008) (this deals with search warrants).
• Information Bulletin on the Communication of Confidential Information Under the Competition Act (30 September 2013).
• Information Bulletin on Transparency (25 October 2022) (this deals with communications with targets, among other things).
• Requests for information from private parties in proceedings under Section 36 of the Competition Act (11 June 2018).

In addition, the PPSC deskbook contains a chapter on Competition Act matters: Public Prosecution Service of Canada Deskbook – 5.2 Competition Act.