INST Committee Report

            After receiving this report and while the Committee was conducting its hearings process, the Bureau engaged the Public Policy Forum (PPF) — a non-profit, non-partisan organization dedicated to improving the quality of government in Canada — to consult the Canadian public widely on changes to the Competition Act and the Competition Tribunal Act. The changes contemplated in its consultations were those proposed in four Private Member’s bills: Bill C-402, Bill C-438, Bill C-471 and Bill C-472. Two of these bills covered much the same policy ground as the Committee’s study. Because the Committee did not want to prejudice this consultative process, it decided not to provide an opinion on any of the specifics of these bills and to make its report an interim one. The Committee would weigh in on these matters only after these consultations were complete and a report issued.

            In December 2000, the PPF published its report, entitled Amendments to the Competition Act and the Competition Tribunal Act: A Report on Consultations, which summarized both the written submissions it had received and the discussions at the roundtables it had held. The Government of Canada then decided to wrap some of the contents of the four Private Member’s bills into a government bill. The government chose the parts where a consensus could be obtained, including selected inputs from both this Committee’s Interim Report and the PPF’s report. All these efforts culminated in Bill C-23: An Act to Amend the Competition Act and the Competition Tribunal Act, which was assigned to this Committee for study after First Reading in the House of Commons. This course of action, rather than the traditional procedure of assigning the bill to a parliamentary committee only after Second Reading, permitted a more thorough review of the bill and the Acts that it sought to modify. This procedural route also allowed the Committee to study more deeply the changes contemplated and, if necessary, to recommend additional changes.

            The bill dealt with four issues: (1) creating a new offence for "deceptive prize notices," including "scratch and win cards"; (2) facilitating cooperation with foreign competition authorities for the enforcement of civil competition and fair trade practices laws; (3) streamlining the administrative processes of the Competition Tribunal by providing for cost awards, summary dispositions and references; and (4) broadening the scope under which the Tribunal may issue temporary orders. After extensive consultation with competition law experts and selected business interests, the Committee subsequently amended the bill in two important ways. The bill, if it receives Royal Assent as amended, will permit private parties to have access to the Tribunal for resolving disputes on a limited number of business practices that are considered civilly reviewable by the Acts. The Tribunal will also now be able to impose an administrative penalty of as much as $15 million if an air carrier is found guilty of abuse of dominance (sections 78 and 79 of the Competition Act, which would include acts of predatory behaviour).

            The Committee believes that Bill C-23 amendments to the two competition Acts provide a good start, but more amendments are needed to address contemporary antitrust concerns. In some cases, the Competition Act captures too many business practices, which leads to a "chilling effect" on perfectly legitimate, pro-competitive behaviour on the part of Canada’s most productive firms. At the same time, and in other cases, both competition Acts fail to capture and properly address many business practices that at least appear to be anticompetitive and may even constitute egregious anti-social behaviour. Therefore, more change is necessary, and the Committee agrees with the government’s multi-stage approach to reform. Looking beyond the immediate horizon, the Committee undertook four roundtables that included more than 20 eminent competition law experts, as well as formal and informal meetings with the Bureau and members of the Tribunal, respectively, to suggest options and a timetable for reform.

            Although interesting and varied opinions exist among competition policy experts on a number of business practices and their current legal status, as well as the way in which they should be reviewed and pursued by the Bureau and Tribunal, these views were not so diverse as to prevent a consensus. The Committee believes this consensus is captured in this report. However, the first-time reader of this Committee’s reports is encouraged to read our Interim Report before tackling this one; a better understanding and appreciation will be gained on the necessary trade-offs in objectives presented by competition issues.