This HillNote is the first in a series of five on competition policy and law in Canada. The second in the series examines drip pricing and junk fees in the airline industry. The third analyzes the balance between competition and financial stability in the banking sector, including issues related to mergers and open banking. The fourth addresses competition in the grocery and agricultural sectors, and the fifth focuses on the telecommunications sector.
Competition in markets matters. A competitive market is one in which many buyers and sellers participate, and no single participant has enough power to influence prices. In such markets, businesses compete on price, quality and service to attract customers, which benefits consumers and supports economic efficiency.
As noted by the Organisation for Economic Co-operation and Development,
“[w]ell-designed competition law, effective enforcement and competition-based economic policy promote consumer welfare and economic growth while making markets more […] innovative.”
Together, these measures encourage lower prices, better quality and more variety, and they make it easier for new and smaller firms to enter markets.
Competition law in Canada seeks to preserve these conditions by addressing monopoly power over buyers (where a market has a single seller) and monopsony power over sellers (where a market has a single buyer), in both consumer and business-to-business relationships. Market concentration – where a small number of firms dominate a market – is one of several indicators of competition. It has become particularly significant in the telecommunications, banking, grocery retail and air transportation sectors amid cost-of-living pressures, prompting renewed focus on the Competition Act, the foundation of Canada’s competition policy.
An Overview of the Competition Act and Its Administration
Canada’s competition law – known in the United States and elsewhere as antitrust law – originated with the Anti-Combines Act of 1889. Prompted by public concern over cartel-like “combines,” Canadian legislators drew on the U.S. model yet asserted a distinct Canadian approach. The legislation became the Combines Investigation Act and was amended several times between 1910 and 1937 before culminating in the modern Competition Act of 1986.
Today, the Competition Act (the Act) applies broadly across industries, with limited exceptions for certain regulated sectors (e.g., some aspects of broadcasting and financial services), and it complements a range of sector-specific laws that also govern business conduct. The Act has three main functions:
- to review mergers that may substantially lessen or prevent competition;
- to prohibit anti-competitive practices; and
- to protect consumers from deceptive marketing practices.
It contains both civil and criminal provisions, along with a pre-merger notification regime for large transactions. The size threshold for these transactions – used to determine whether they are notifiable transactions – is reviewed annually by the Minister of Industry; it is currently set at $93 million. Criminal offences, such as bid-rigging and certain cartel agreements, can result in fines, imprisonment or both. Other anti-competitive behaviours, such as abuse of dominance, price maintenance (where a supplier pressures resellers to keep prices high) and exclusive dealing (where a supplier restricts a buyer from purchasing from competitors), are generally treated as “reviewable matters” subject to civil challenge, although in some cases may be pursued criminally.
The Competition Bureau, led by the Commissioner of Competition, administers and enforces the Act. It investigates complaints and may bring a civil application before the Competition Tribunal, which is an independent adjudicative body, or refer a criminal matter to the Public Prosecution Service of Canada’s Director of Public Prosecutions. In some cases, private parties may also bring proceedings before the Competition Tribunal, which can prohibit anti-competitive conduct, impose administrative monetary penalties or block mergers and acquisitions.
Recent Amendments to the Competition Act
The Competition Act has been criticized for failing to keep pace with changing market realities and for trying to serve both as competition law and industrial policy.
In February 2022, the federal government launched a review of the Act, followed by consultations on long-term reform, which led to the enactment of the following bills, all of which are now in force:
- Bill C-19, An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures (Royal Assent received in June 2022);
- Bill C-56, An Act to amend the Excise Tax Act and the Competition Act (Royal Assent received in December 2023); and
- Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Royal Assent received in June 2024).
Recent amendments to the Act gave the Competition Bureau and private parties more avenues to challenge harmful business practices. Private parties can now take certain cases directly to the Competition Tribunal if they are substantially affected or if the case is in the public interest. Examples of cases include the following:
- abuse of dominant position;
- anti-competitive agreements;
- refusal to deal (where a supplier refuses to sell to another business);
- tied selling (where a vendor induces a customer to buy a second product);
- market restrictions (where a supplier requires a customer to sell only in a specified market or penalizes a customer for selling outside of it);
- price maintenance; and
- deceptive marketing.
The Tribunal may order companies to give up profits from illegal conduct, award limited damages in some deceptive marketing cases or impose large fines. Penalties for big companies can now reach $10 million to $15 million, three times the benefit gained or 3% of annual global revenues, helping to prevent major firms from treating fines as just a business expense.
Other notable changes include:
- repealing the efficiencies defence for mergers, which had allowed anti-competitive mergers to be justified on the basis of cost savings;
- strengthening provisions against greenwashing (false or misleading environmental claims);
- narrowing the exception for drip pricing – where a low advertised price is not attainable due to additional mandatory fees – such that it applies only to government-imposed charges, such as sales tax; and
- expanding the Competition Bureau’s powers to initiate market studies and compel the production of information.
The Competition Bureau’s guidelines and publications provide further information on enforcement policies and procedures regarding recent changes to the Act.
Tangible effects of these amendments are largely still to be seen since it will take time to assess whether they meaningfully advance the goals of the Act in fostering fair, innovative and dynamic markets. Expanded private access rights, new remedies and heightened scrutiny – particularly in mergers and environmental claims – could encourage more challenges from competitors and advocacy groups while potentially lengthening Competition Bureau reviews.
Intersection between Competition and Equity
Concentrated markets can limit access to affordable goods, services and economic opportunities, disproportionately affecting marginalized and low-income groups.
Researchers have noted that competition law can influence both market efficiency and equity. Some jurisdictions, such as South Africa and the European Union, explicitly integrate equity considerations into their laws – for example, by promoting inclusive ownership or addressing unfair pricing. By contrast, Canada’s Competition Act remains primarily focused on economic efficiency and lacks an explicit equity lens. The researchers argue that, while competition law is not designed to reduce inequality directly, its enforcement can be leveraged to support a fairer economy. Although this argument emerged from international scholarship, it offers a perspective that may help inform Canadian discussions on aligning competition policy with broader social goals, and exploring how competitive markets and equitable outcomes can reinforce one another.
Competition law plays an essential role in promoting fair markets and the public interest. Recent amendments to Canada’s Competition Act mark the progress made toward modernizing its provisions to better reflect current economic realities. Yet, debate continues on whether its current scope and formulation are adequate to address ongoing concerns about the fairness of economic outcomes in Canada. As recent amendments are tested in practice, the law will shape the future direction of Canada’s competition policy and its ability to address socio-economic disparities.
Further Reading
Bednar, Vass and Keldon Bester. Competing Ideas: Canada’s Competition Reform Conversation. Centre for International Governance Innovation, April 2024.
Blake, Cassels & Graydon LLP. Canadian Competition Law Outlook: What Businesses Need to Know, February 2025.
Boswell, Matthew, Commissioner of Competition, Competition Bureau Canada.
“The new era of competition enforcement in Canada.” Address to the Canadian Bar Association Competition Fall Law Conference, 26 September 2024.
By Dana Fan, Library of Parliament
Categories: Economics and finance, Law, justice and rights