In 2022, the Government of Canada passed new amendments that expanded the scope of the Competition Act.

No-Poach and Wage-Fixing Agreements by Employers Criminalized

Employers agree not to recruit or employ each other’s personnel under no-poach agreements. Agreements between employers to fix, maintain, reduce, or manage earnings, pay or other contracts of employment are known as wage-fixing agreements. These agreements can result in a maximum sentence of 14 years in prison, a fine, or both. Private actions (including class actions) for damages would be permitted for violations of this new offence.

Increased Financial Penalties

The previous limit of $25 million increased to a charge “at the discretion of the court” if a criminal conspiracy was convicted (including the new no-poach and wage-fixing offences). The maximum penalty for a conviction would remain at 14 years in prison.

Under the new legislation, administrative monetary penalties (AMPs) of up to three times the financial gains received from anticompetitive activity, or 3% of annual worldwide gross revenues (with no cap), are now permitted.

 False and Misleading Advertising—Drip Pricing Explicitly Prohibited

The modifications from 2022 recognize “drip pricing” as anti-competitive behaviour that is illegal under both criminal and civil false advertising laws. Drip pricing is the strategy of attracting customers by offering or promoting unrealistic headline prices while adding or burying extra set mandatory charges or fees in the final price. The Bureau’s recent enforcement approach against drip pricing schemes under the existing advertising statutes, would be aligned by these revisions, making it potentially easier for the Bureau to challenge drip pricing.

Abuse of Dominance: Allow Private Right of Access to the Tribunal and Expand Definition of Anticompetitive Conduct.

If granted leave by the Tribunal, the 2022 revisions allow private parties whom are significantly harmed by a dominant firm’s suspected anti-competitive behaviour to seek an order from the Tribunal under the “abuse of dominance” regulations. This, together with the possibility of much greater financial penalties and a broader definition of the abuse of dominance clause, may lead to a large increase in the number of “abuse” cases filed before the Competition Tribunal.

Anti-Avoidance Rule for Merger Notification

The Act’s pre-merger notice provisions are based on financial criteria that apply to certain transaction structures. While those standards would remain unchanged, a new anti-avoidance regulation would be implemented in order to catch more mergers within the pre-merger notice system.