Cartels 2022 Comparisons

Criminal cartel-related conduct is prohibited under Part VI of the Competition Act, R.S.C., 1985, c. C-34 (the Act) (the Criminal Provisions). Agreements or arrangements between competitors that prevent or lessen competition substantially are prohibited under Section 90.1 of the Act (the Civil Provision). 

Relevant Competition Authorities

The Canadian competition authorities consist of the Competition Bureau (the Bureau) and the Competition Tribunal (the Tribunal). 

The Bureau is an independent federal law enforcement agency, primarily responsible for the administration and enforcement of the Act across Canada. The head of the Bureau is the Commissioner of Competition (the Commissioner). The Bureau receives complaints relating to alleged prohibited practices from the public and conducts corresponding reviews and investigations. While pursuing investigations, the Bureau has access to investigative powers, including search and seizure powers, orders for the production of data and wiretaps. The Bureau is able to refer criminal matters to the Public Prosecution Service of Canada (the PPSC) for prosecution in Canadian courts. 

The Tribunal is a specialized tribunal dedicated to adjudicating matters brought under Parts VII.1 and VIII of the Act, including issues brought under the Civil Provision and any related matters. The Bureau decides whether to file an application with the Tribunal to adjudicate such matters. A Tribunal hearing is typically presided over by a panel of three members, at least one of whom is a Federal Court judge. The remaining two members are usually lay members appointed to the Tribunal due to their expertise in economics, business and the law. An appeal of any decision of the Tribunal may be filed with the Federal Court of Appeal. 

Fines and Penalties Under the Criminal Provisions

In Canada, cartel conduct can attract both criminal and civil liability under the Act. 

Conviction under the Criminal Provisions can attract both imprisonment and fines. 

Violation of the Criminal Provisions can attract a possible term of imprisonment of up to 14 years. There are no formal sentencing guidelines under the Act, and the general sentencing principles found in the Criminal Code apply alongside the competition-specific criteria developed in the case law. 

Fines range from CAD25 million per count (and persons may be convicted on multiple counts) for conspiracy and are limitless for bid-rigging convictions. Fines are generally based on the overcharge paid by victims of the cartel in addition to an amount intended to deter such conduct. Quantifying the overcharge is difficult, however, the Bureau typically uses 20% of the volume of commerce affected by the cartel in Canada as a starting point. The resulting fines for a conspiracy involving multiple counts (eg, where a conspiracy involves multiple products) may exceed the statutory minimum for one count. 

Plea agreements relating to cartel conduct under the Criminal Provisions may contemplate other sanctions, including disqualifying individuals from holding certain offices within a company or asset forfeiture. Likewise, on a finding of guilt, the Bureau can request a prohibition order that can last for up to ten years and include prescriptive terms to ensure compliance with the law. Prohibition orders are also available prior to a finding of guilt in certain circumstances. 

Separately, plaintiffs can recover damages in private third-party civil actions brought under Section 36 of the Act (a Private Action), typically brought as a class action. Such actions provide civil remedies for violation of the Criminal Provisions or a failure to comply with an order of the Tribunal or court. Class actions asserting a Section 36 cause of action alleging, eg, price fixing or other cartel conduct are usually filed in provincial superior courts.

Provincial asset forfeiture statutes also allow for the confiscation of the proceeds of crime and offence-related property tied to cartel conduct. 

In addition, provincial consumer protection legislation provides statutory rights of action in respect of unfair trade or business practices. 

Orders Under the Civil Provision

Under the Civil Provision, the Tribunal may impose both  prohibition and prescriptive orders. The Tribunal is not able to impose other penalties (eg, fines), and there is no private right of action for damages with respect to civil conduct. 

Recent Developments

On April 28, 2022, proposed amendments to Act were introduced as part of the Budget Implementation Act, 2022. The proposed amendments include the criminalisation of no-poach and wage-fixing agreements as well as compelling production for entities or persons outside of Canada. Fines for contravention of the criminal conspiracy provisions found in Section 45 of the Act are currently capped at CAD25 million per count. The proposed amendments contemplate uncapping such fines, consistent with the penalties under the bid-rigging provisions found in Section 47 of the Act.

Only the Bureau may pursue a claim under the Civil Provision. There is no private access with respect to conduct under the Civil Provision.

Section 36 of the Act creates a right of Private Action for the recovery of damages if there has been a violation of the Criminal Provisions of the Act, or a failure to comply with an order of the Tribunal or other court. Damages recoverable under this provision can be equal to the loss or damage suffered by the plaintiff and are pursued in any court of competent jurisdiction. Costs of investigation in connection with the matter and of the proceedings under this section may also be claimed. 

In addition, private litigants may assert common law causes of action in respect of alleged anticompetitive conduct, including civil conspiracy and unjust enrichment. Violation of a criminal provision of the Act may also provide a basis for certain common law torts, as well as equitable or restitutionary claims.

The Act does not expressly define or refer to cartels or cartel conduct. Cartel conduct is generally understood as an agreement or arrangement collaboration between competitors contrary to the Act that harms competition. 

For the purposes of the Criminal Provisions, an agreement/arrangement need not be formal and can be proved on the basis of circumstantial evidence. 

Cartels and anticompetitive agreements are reviewable under multiple provisions of the Act; however, there is a prohibition against duplicate proceedings under both the Civil Provision and the Criminal Provisions. Accordingly, if the Commissioner has sought an order under the Civil Provision, it will not refer the matter for prosecution under the Criminal Provisions. 

Criminal Cartel Conduct

The criminal cartel provisions are reserved for agreements between competitors or potential competitors to engage in behaviour contrary to Part VI of the Act.

Section 45 applies to agreements between or among competitors or potential competitors in respect of a product to fix prices, allocate markets or restrict output for that product. This section does not require proof of anti-competitive effects; such agreements are, per se, illegal . 

There are several defenses available under Section 45, including:

• Subsection 45(4) provides a defense for ancillary restraints, where an arrangement or agreement is ancillary to the broader agreement or arrangement, is necessary for giving effect to the broader arrangement, and tit does not contravene the Act. 
• Subsection 45(5) provides a limited defense for agreements between competitors related to the export of products from Canada.

There are several exemptions to the application of Section 45, including:

• Paragraph 45(6)(a) provides an exception for agreements entered into solely between companies that are affiliated (under common control). 
• Subsection 45(6)(b) prevents the application of Section 45 to agreements between federal financial institutions (dealt with under specific provisions of the Act).
• Paragraph 45(6)(c) provides an exception for arrangements authorised by the Minister of Transport. 
• Subsection 45(7) provides that the regulated conduct doctrine may apply with respect to conduct regulated by another federal, provincial or municipal law. 

Under Section 90, Section 45 does not apply to registered specialisation agreements as defined in Section 85 of the Act. 

Section 46 prohibits corporations from implementing a “directive, instruction, intimation of policy or other communication” from a person outside of Canada that would give effect to a conspiracy, agreement or arrangement that would offend Section 45 of the Act had it occurred within Canada. The application of this section is prohibited where a proceeding has been commenced under Section 83 for an order against the corporation or any other person based on substantially the same facts. 

Section 47 criminalises bid rigging. Bid rigging is defined in the Act as:

• an agreement or arrangement between or among two or more persons whereby at least one person agrees not to submit a bid or tender or agrees to withdraw a bid or tender;
• the bids or tenders submitted are arrived at by agreement or arrangement between or among two or more bidders or tenderers; or
• where the agreement or arrangement is not made known to the person calling for the bids or tenders. 

Section 47 does not apply to agreements or arrangements between affiliates and any agreement or arrangement authorised by the Minister of Transport. 

Section 49 prohibits federal financial institutions from entering into certain agreements related to interest rates, loans and other services. 

Civil Anti-competitive Agreements 

Other competitor collaborations, including joint ventures and strategic alliances, may be subject to review to the extent that they prevent or lessen, or are likely to prevent or lessen, competition substantially. 

Under the Civil Provision, existing or proposed agreements or arrangements between competitors that prevent or lessen, or are likely to prevent or lessen, competition substantially in any relevant market violates the Act. Agreements that may be captured under the Civil Provision include commercialisation agreements, joint production agreements, joint purchasing agreements, and non-compete agreements. The analysis under the Civil Provision closely aligns with the Bureau’s merger review protocols. 

There are several exceptions to the application of the Civil Provision (Section 90.1), including:

• where an agreement brings about gains in efficiency that will be greater than and offset the effect of any prevention or lessening of competition that will result or is likely to result from the agreement or arrangement, and such gains will not be realised if an order is made;
• Section 90.1 does not apply to agreements or arrangements amongst affiliates, federal financial institutions, or those certified by the Minister of Transport;
• Section 90.1 does not apply to agreements or arrangements under the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act or the Trust and Loan Companies Act that have been approved by the Minister of Finance.

There is no limitation period for the prosecution of cartels and anti-competitive agreements in Canada. However, the Bureau has the discretion to discontinue investigations and not refer past conduct to the PPSC. 

A Private Action for damages must be brought within two years of the later of the day on which the conduct was engaged in (the discoverability principle applies) or the day on which the corresponding criminal proceeding was disposed of. If a Private Action is brought for the failure to comply with an order of the Tribunal or another court, the limitation period is two years from the later of the day on which the order was contravened or the day on which the criminal proceedings relating thereto was disposed of.

The Act applies to all conduct that has occurred in or has effects in Canada. Enforcement under both the Criminal Provisions and the Civil Provision can arise in relation to agreements concluded outside Canada that have effects in Canada. Jurisdiction depends on finding a “real and substantial connection” between the challenged conduct and Canada. An anti-competitive effect in Canada will meet the real and substantial connection test and be sufficient to establish jurisdiction. 

No section of the Act specifically codifies the principles of comity. Rather, the principles of comity are incorporated into agreements between Canada and foreign jurisdictions in the form of state-to-state agreements or agency-to-agency agreements, often referred to as mutual legal assistance agreements. For example, there is an existing agreement between the government of Canada and the government of the USA in the application of positive comity principles to enforce their respective competition laws. Canada also has state-to-state agreements with the EU, Mexico and Japan. The Bureau has agency-to-agency agreements with competition authorities in Australia, New Zealand, Chile and the UK. 

On September 2, 2020, competition authorities in Canada, Australia, New Zealand, the UK and the US signed the Multilateral Mutual Assistance and Cooperation Framework for Competition Authorities (the Framework). This builds on existing co-operation efforts and agreements. The Framework provides a model agreement and outlines anticipated corporation amongst the parties. It expects the parties to provide assistance and co-operation with respect to investigations, including sharing public, agency confidential and investigative information, coordinating investigative activities, facilitating voluntary witness interviews, and providing copies of publicly available records. 

Several sections of the Act address situations involving foreign laws or participants. Section 46 explicitly allows recourse for foreign corporate directives. Sections 82 and 83 of the Act address the implementation of foreign judgments, laws, and directives in Canada and allow the Tribunal to bar that which would harm Canadian competition. Section 84 provides a course of action where a foreign supplier refuses to supply a product to a person in Canada.

In March 2020, the Bureau confirmed that it would remain fully functional with staff working remotely, though it may have difficulty meeting its service standards for completing notifiable merger reviews. The Bureau suggested that urgent marketplace issues requiring immediate action would take priority over less pressing matters. 

In April 2020, the Bureau signalled that in circumstances where there was a clear imperative for companies to be collaborating in response to the COVID-19 crisis, and such collaborations were undertaken and executed in good faith, it would generally refrain from exercising scrutiny. The Bureau additionally established a team to assess proposed collaborations at the request of the parties with a view to providing informal guidance. This guidance is non-binding and does not insulate companies from Private Actions. 

The Bureau further signalled increased scrutiny of potentially false or misleading claims leading to increasing compliance warnings being issued. 

In March 2020, the Tribunal moved to a virtual format and stopped accepting paper filings. As of 17 April 2020, in-person hearings were temporarily suspended, and urgent matters could be heard by telephone conference. At this time, attendance at an in-person hearing is restricted to those whose physical appearance is essential.

Initial investigatory steps by the Bureau include researching the relevant market, issuing requests for information or summonses to industry participants, obtaining information from an immunity applicant (if applicable) and executing search warrants obtained from the court (ie, conducting dawn raids).

The Act provides for the Commissioner to conduct unannounced visits and searches at a firm’s premises, referred to as dawn raids. The Act provides mechanisms by which the Commissioner may enter and search premises with a warrant or, in limited circumstances, without a warrant (ie, if there is a risk that relevant records could be lost or destroyed). A judge may issue a warrant for the Commissioner (or any other person named on the warrant) to enter and search any premises if, from information provided on oath or solemn affirmation, there are reasonable grounds to believe that an offence under the Criminal Provisions has been or is about to be committed or there is any evidence of same on the premises. The application for the warrant is ex parte.

A dawn raid may only be executed between 6:00am and 9:00pm unless the warrant states otherwise and must be conducted in accordance with the rights afforded through the Constitution of Canada. Bureau investigators may also be accompanied by agents from other law enforcement agencies.

Procedure of Dawn Raids

During a dawn raid, Bureau investigators typically enter the premises and examine and copy documents (both in hard and electronic format). Bureau investigators may attach and remove any documentation or article and may use or require the assistance of any person on the premises to use any computer system to:

• search the computer system, data storage device or media and produce an image to examine and extract relevant data off-site;
• search the computer system, data storage device or media and reproduce an electronic copy of relevant data on-site;
• search the computer system, data storage device or media and print a copy of relevant data on-site; or
• seize the computer system, data storage device or media and remove it/them from the premises to examine and extract relevant data off-site.

In most cases, Bureau investigators copy the hard drives of the computers of key personnel, and in some cases, cell phone data will be reviewed and copied.

Privilege Claims During Dawn Raids

Section 19 of the Act sets out detailed procedures for dealing with claims of solicitor-client privilege. More specifically, Subsection 19(2) of the Act provides that where there is a claim of solicitor-client privilege regarding records that may be subject to examination in a dawn raid, the records in question must be placed in a package, sealed, identified, and placed in the custody of an officer of the court, a sheriff or a person agreed to by the Commissioner and the party claiming privilege. It is up to a judge, upon application, to decide whether the information is subject to solicitor-client privilege. However, issues of privilege have often been resolved without the need to resort to a formal court process and privilege can often be screened on a case-by-case basis.

Under the Act, it is an offence to:

• impede or prevent or attempt to impede or prevent any inquiry or examination under the Act; or 
• destroy or alter, or cause to be destroyed or altered, any record or other thing required to be produced.

The Act must be interpreted in a manner consistent with the Constitution of Canada. Respondents under investigation by the Commissioner and the Bureau are afforded all the constitutional rights available to any participant in judicial proceedings, including the right to be represented and assisted by counsel. 

Requirement to Obtain Separate Counsel

Typically, the company will prefer that its officers and employees retain independent counsel when they are suspected of wrongdoing. Although company counsel may interview these individuals during the internal investigation, a clear notice should be provided to inform them that company counsel does not represent their individual interests (and rather represents the company’s interests) and confirm that the discussion is subject to applicable privileges.

Initial Steps Taken by Defence Counsel

Initial steps undertaken by defence counsel during the initial phase of a Bureau investigation include:

• identifying key custodians for the purpose of the internal investigation;
• ensuring that relevant documentation is preserved;
• determining whether independent counsel should be retained for employees whose conduct is being investigated; and
• assessing whether the search warrants (if any were executed) should be challenged.

Also, if any concerns are identified during the initial phase, consideration should be given to applying for immunity or leniency under the Bureau’s programs or engaging in “without prejudice‟ settlement negotiations with the Commissioner and the PPSC.

The Commissioner can issue requests for information, which recipients can elect to respond to on a voluntary basis. The Commissioner can also use its statutory investigative powers, such as conducting dawn raids and issuing summonses to firms, entities and individuals, requiring them to provide documents and/or give evidence. See 2.2 Dawn Raids. 

The Bureau also obtains information, documents and evidence from immunity and leniency applicants, informants and respondents who have settled or are engaged in settlement negotiations.

Section 11(2) of the Act allows the Commissioner to apply to the court for an order requiring a corporation to produce documents from its foreign affiliates. However, such orders can only compel the production of documents and not oral testimony or written returns of information. Further, the Commissioner is required to show that the foreign affiliate has the documents in question (not that the affiliate is likely to have the documents). Moreover, Section 11(2) only applies when the Commissioner has sought information from the Canadian affiliated corporation. It should be noted that the scope of Section 11(2) has yet to be judicially tested, and many uncertainties remain with respect to its enforceability. 

Pursuant to Subsection 16(2) of the Act, persons named in the warrant may use or cause to be used any computer system or part thereof on the premises to search any data contained in or available to the computer system, no matter where those data are located, including data in the “cloud”. 

The Bureau’s powers to compel information are subject to claims of solicitor-client privilege. 

Solicitor-client privilege protects communications between a lawyer and a client for the purpose of seeking or giving legal advice intended to be confidential by the parties. Solicitor-client privilege also protects materials related to seeking/giving legal advice and is not restricted to communications with counsel admitted to Canadian jurisdictions. Communications to or from in-house counsel are recognized as privileged in Canada as long as the other preconditions are met. 

See 2.2 Dawn Raids for the procedure related to claims for solicitor-client privilege in the dawn raid context. 

Other Relevant Privileges

A person who is compelled to provide testimony, records or written returns under Section 11 of the Act that may incriminate them is required to provide the information or documents. However, they are protected from the information or documents being used to incriminate them in a subsequent criminal proceeding, subject to certain exceptions. This protection is only available to individuals, not corporate entities. 

Litigation privilege protects communications between a lawyer and their client, and between the lawyer and third parties where the dominant purpose of the communication is for existing or reasonably anticipated litigation. Unlike attorney-client privilege that lasts indefinitely unless it has been waived, litigation privilege ends when the litigation terminates or when litigation is no longer reasonably anticipated.

The Bureau may also assert public interest privilege to prevent the disclosure of documents obtained from informants in its investigations, with limitations regarding the scope of same.

Confidential informers are protected by informer privilege to protect them from possible retribution and encourage future potential informers to come forward. Once a judge is satisfied that informer privilege exists, the informer’s identity may not be disclosed. 

Firms to which the Bureau reaches out on a voluntary basis may wish to engage in preliminary discussions with the latter. In doing so, firms will be able to conduct their own internal investigation to quickly assess their legal exposure and determine whether further cooperation is appropriate. They may also be able to give the Bureau reason to reconsider its investigation should it be predicated on an erroneous understanding of the facts. If firms elect not to cooperate or respond to voluntary requests for information, the Commissioner can use its investigative powers, such as issuing summonses or conducting dawn raids. A firm’s degree of cooperation with the competition authorities is one of the factors taken into consideration by the court and the Tribunal in determining the quantum of an appropriate penalty.

Firms (targets and third parties) may claim all or part of the information collected by the Bureau in the course of the enforcement of the Act as confidential. The Act does not define confidential information. Section 29 of the Act restricts the Bureau from disclosing confidential information obtained pursuant to the exercise of powers under the Act. Confidential information is protected through various measures, including sealing orders, confidentiality orders, confidential schedules to public documents and in-camera proceedings with respect to matters filed with the Tribunal or the court. 

The validity and scope of a summons and search warrant can be challenged via an application to the court, or during or at the conclusion of that raid. Arguments against the merits can be raised in settlement discussions during the Bureau’s investigation after the Bureau has concluded its investigation and when the case has reached the court. 

The Bureau has issued a guideline titled “Immunity and Leniency Programs under the Competition Act” (the Program) that serves as a framework for granting immunity and leniency from prosecution to cartel participants in exchange for information and cooperation with the Bureau and the PPSC. The decision to grant immunity (or enter into a settlement agreement, where applicable) is at the discretion of the PPSC, provided that certain requirements and conditions are met by the cartel member. The Program is applicable in respect of agreements among competing firms to engage in unlawful conduct subject to the Criminal Provisions, including conspiracy and bid rigging. These cartel activities need not have been entered into in Canada but must have had an effect within Canada.

There is a reasonable degree of certainty regarding the outcomes following a leniency application. Where a leniency applicant dutifully provides the Bureau and the Department of Public Prosecutions (DPP) with all available information and documents and complies with the requirements set out in the Program, leniency is granted. 

Qualifying for Immunity

Only a firm that is first to apply may qualify for immunity by:

• requesting an “immunity marker” and providing information for the Bureau to assess whether the applicant is first-in under the Program, and there is often a race to be first-in;
• providing the Bureau with a “proffer”, a detailed statement describing the unlawful conduct, including evidence available to the firm to support each element of the offence, on a “without prejudice” basis;
• complying with the terms of the Grant of Interim Immunity (GII), which is a conditional immunity agreement that sets out the applicant’s obligations, including to: 
1. provide the Bureau with full disclosure of all non-privileged information, evidence or records in the applicant’s possession, under its control or available to it, wherever located, that, in any manner, relate to the anticompetitive conduct; 
2. make itself available for interviews upon the request of the Commissioner or the DPP; 
3. cooperate with Bureau investigators as part of furthering the Bureau's investigation of the anticompetitive conduct, including providing truthful and accurate information; 
4. not disclose the existence of this GII, nor the substance of the matter under investigation, without the consent of the DPP unless this information is made public by the DPP or the Commissioner, or as may be ordered by a Canadian court of competent jurisdiction; and 
5. when requested by the DPP, testify completely and truthfully under oath, or solemn affirmation in proceedings commenced by the DPP in connection with the anticompetitive conduct being reported and, if applicable, attorn to the jurisdiction of Canada for purposes of service of any court process related to proceedings commenced by the DPP relating to the anticompetitive conduct being reported.

Qualifying for Leniency

The Commissioner will recommend to the DPP that leniency in sentencing be granted to a party in only the following circumstances:

• it has terminated its participation in the cartel;
• it agrees to cooperate fully and in a timely manner, at its own expense, with the Bureau′s investigation and any subsequent prosecution of the other cartel participants by the DPP; 
• it demonstrates that it was a party to the offence; and 
• it agrees to plead guilty.

A recommendation for leniency will only be made when the disclosed conduct constitutes an offence under the Act and is supported by credible and reliable evidence that demonstrates all elements of the offence. A leniency applicant must provide complete, timely and ongoing cooperation with the Bureau’s investigation and the subsequent prosecution. 

See 2.11 Leniency and/or Immunity Regime.

The Commissioner may seek an order for oral examination, production or written return and/or seek a search warrant to obtain information directly from company employees. In both cases, the Commissioner makes an ex parte application to a judge of the court with affidavit evidence to establish reasonable grounds. In most circumstances, employees are entitled to have counsel attend with them at an examination by the Commissioner and claims for solicitor-client privilege may be made. Information provided by company employees compelled to cooperate under the Act cannot be used against them in any criminal proceeding, with some exceptions. 

The Commissioner may seek an order for oral examination, production or written return under Section 11 of the Act and/or seek a search warrant under Section 15 of the Act to obtain information directly from the target company or others. In both cases, the Commissioner makes an ex parte application to a judge of the court with affidavit evidence.   

Section 11(2) of the Act allows the Bureau to seek a production order in respect of a foreign affiliate of a Canadian corporation if the Bureau has sought a similar order against the domestic subsidiary and established the foreign affiliate has records relevant to the inquiry.

There is significant inter-agency interaction between the Commissioner and other regulators, including federal regulators of telecommunications, privacy and industry and provincial consumer services agencies as set out in memoranda of understanding (MOUs). The MOUs typically allow for information sharing among the agencies related to enforcement activities. 

Canada has entered into agreements with foreign jurisdictions in the form of state-to-state agreements or agency-to-agency agreements, often referred to as mutual legal assistance agreements. For example, Canada has agreements with the USA, the EU, Mexico and Japan. The Bureau has agency-to-agency agreements with competition authorities in Australia, New Zealand, Chile and the UK. 

Most international cartels that the Bureau has investigated, such as the auto parts cartel, entail broad-ranging cooperation with numerous foreign agencies. In practice, the coordination between the agencies should cause a firm targeted by an international investigation to ensure that its defense strategy and/or immunity application be coordinated across multiple jurisdictions. Retaining legal counsel who can work seamlessly across jurisdictions and implement a global defence strategy is key. 

The Bureau is also an active participant in the International Competition Network (ICN).

Criminal prosecution is not conducted by the competition authorities but through the PPSC/DPP and the criminal justice system, using information obtained by Bureau investigations. Criminal cases are brought before the provincial courts or the Federal Court of Canada. Evidence is presented to the court. The accused parties may avail themselves of their right to a preliminary inquiry to have the court determine if there is enough evidence to have a trial. The PPSC is obliged to disclose evidence collected by the Bureau prior to trial. The accused parties can seek relevant information from third parties through an application to the court for third-party records and/or summons to attend for examination. 

Under the Civil Provision, the Commissioner can apply to the Tribunal for an order prohibiting any person from doing anything under an agreement or arrangement that prevents or lessens or is likely to prevent or lessen competition substantially in a market, or on consent, requiring any person to take any other action. 

The Commissioner files a Notice of Application with the Tribunal that sets out the grounds for the application, the material facts relied upon, and the particulars of the order sought, among other things. A respondent who wishes to oppose the application then files a response setting out the material facts relied upon in opposition, among other things. The Commissioner may then file a Reply. 

The Commissioner and the respondent then serve an affidavit of documents on each other, disclosing all relevant and non-privileged documents. Examinations for the discovery of the representative of each party are then held. Before the hearing, the parties deliver a list of documents that are intended to be relied upon and witness statements. Evidence is presented to the Tribunal at a hearing. 

A party may bring a motion to the Tribunal to request production of any relevant documentation from a person who is not a party to the action.

Enforcement actions involving cartels are typically brought against multiple parties in a single proceeding.

The standard of proof for cartel conduct prosecuted criminally in court is guilty beyond a reasonable doubt. The standard of proof for non-criminal conduct adjudicated by the Tribunal is whether, on a balance of probabilities, the acts were committed. 

The Tribunal and the court (and jury, if applicable) act as the principal finders of facts. 

Section 36(2) of the Act allows evidence given in a Bureau investigation to be used in the Private Action in respect of the same conduct. For example, the search warrants associated with a Bureau investigation have been filed with the court in support of a Private Action. 

The “deemed undertaking” rule, which prohibits parties from using information obtained in one proceeding for any other purpose, including commercial advantage or unrelated proceeding, applies to Tribunal proceedings and civil proceedings in certain Canadian provincial courts, with some exceptions. 

The evidence proffered by an immunity and/or leniency applicant is often used. Evidence from another jurisdiction can also be used if relevant and otherwise admissible. 

In criminal and civil matters, strict rules of evidence are applied, including requirements that evidence be given under oath or by sworn affidavit. Hearsay statements are not admissible unless an established exception to the rule against the introduction of hearsay applies or the evidence is shown to meet the criteria of necessity and reliability. In Tribunal and court proceedings, expert and lay witnesses provide evidence under oath and oral evidence under examination in chief and cross-examination. 

Experts are frequently used by the Commissioner, respondent firms and interveners to provide economic analysis in Tribunal and court hearings.

Solicitor-client privilege, settlement privilege, litigation privilege, informer privilege, public interest privilege and protection against self-incrimination may apply during the course of cartel enforcement activity.   

It is common for the Bureau to investigate conduct and, in the process of the investigation, decide whether to pursue the Civil Provision or to recommend the matter to the PPSC for prosecution under the Criminal Provisions. However, there is a prohibition against duplicate proceedings under the Civil Provision and the Criminal Provisions. If the Commissioner has sought an order under the Civil Provision, it will not refer the matter for prosecution under the Criminal Provisions. Simultaneously, while a Bureau investigation is ongoing, it is also common for a Private Action to be commenced under Section 36 of the Act in respect of the same conduct. 

Once the Bureau has completed an investigation into alleged cartel conduct, it can refer the matter to PPSC for prosecution under the Criminal Provisions, or the Commissioner can bring an application to the Tribunal under the Civil Provision. The court or Tribunal adjudicates the matter and can impose the remedies and sanctions provided for in the Act, including:

• fines;
• imprisonment;
• orders prohibiting certain conduct; and/or
• orders prescribing certain conduct.

Administration of plea bargains is performed by PPSC following the referral of a matter by the Bureau. The Bureau makes recommendations on the form of these agreements, but the final decision rests with the PPSC. Plea agreements are not made public in Canada.

The PPSC negotiates with the accused to determine the form of the plea agreement, including the penalty, and files relevant materials in court (eg, the Agreed Statement of Facts). The PPSC and accused make joint submissions on the plea and sentencing in court. Ultimately, Canadian courts retain discretion on the sentence imposed, however, it is rare for a court to differ from the joint recommendation made. In the 2012 case, Section 46 case of Canada v Maxzone Auto Parts (Canada) Corp, the Federal Court approved the joint sentencing submissions of the parties and imposed a fine of CAD1.5 million, though the Court chastised the Bureau for not having fought harder for the imprisonment of individuals involved. 

Section 34(2) of the Act further allows for individuals to consent to prohibition orders. Such orders frequently appear similar to plea agreements and include the monetary penalty conditions and/or prohibitions on an individual’s ability to hold certain offices.

A finding that a firm contravened the Criminal Provisions could result in a Private Action for civil damages. 

Also, under the government of Canada’s Integrity Regime and provincial legislation, a corporation may be barred from bidding on contracts where it or any of its affiliates have been convicted of certain offences under the Act, including criminal offences, as well as the equivalent foreign offences. It may be possible to reduce the length of debarment by entering into an administrative agreement with the procurement authority.

Conviction under the Criminal Provisions can result in fines and/or imprisonment. Fines are imposed on a per count basis, and individuals can face multiple counts. Some Criminal Provisions contain limitations on the penalties imposed, while others do not. 

Currently, the penalty imposed for conspiracy under Section 45 of the Act can include imprisonment for up to 14 years, fines up to CAD25 million, or both. The proposed amendments to the Act contemplate uncapping such fines, consistent with the penalties under the bid-rigging provisions found in Section 47 of the Act.

The penalty for foreign directives that would amount to a conspiracy if they had occurred in Canada under Section 46 of the Act is a fine at the discretion of the court. 

The penalty for bid-rigging under Section 47 of the Act can include imprisonment for up to 14 years, fines in the discretion of the court, or both. 

Sentencing under the Act is guided by the general sentencing principles found in the Criminal Code. The PPSC makes recommendations on sentencing; however, ultimately the length of a term of imprisonment is at the court’s discretion. With respect to fines, the amount is primarily determined by the court on recommendations from PPSC. The PPSC receives recommendations from the Bureau regarding fines.

The Tribunal can impose prescriptive or prohibition orders in civil proceedings. No other penalties (eg, fines) are available in civil cartel proceedings. 

A prohibition order can apply to any person, whether or not the person is a party to the agreement or arrangement. The Commissioner applies to the Tribunal for a specific prohibition order. It is in the Tribunal’s discretion whether to grant the order as requested. 

Prescriptive orders can require any person, whether or not the person is a party to the agreement or arrangement, to take any action. Such orders require the consent of the person and the Commissioner. 

Civil damages are also available under Section 36 of the Act to individuals who pursue Private Actions for violations of the criminal cartel provisions. 

Compliance efforts may be considered by the Tribunal in determining the appropriate sanction for contravention of the Act. Compliance programs are a competition-specific mitigating factor that may be considered as part of sentencing under the Criminal Provisions. That said, the failure to follow a proper existing compliance program may be viewed as an aggravating factor. 

The Act does not contain provisions related to mandatory consumer redress.

A decision of the Tribunal can be appealed to the Federal Court of Appeal as if it was a judgment of the Federal Court. An appeal of a question of fact requires leave of the Federal Court of Appeal. 

For all convictions under the Act, there is an automatic right of appeal to the relevant provincial Court of Appeal or the Federal Court of Appeal, depending on which court tried the indictment at first instance. Further appeals of a Court of Appeal can be made to the Supreme Court of Canada with leave. Leave is not required if there is a dissenting opinion at the Court of Appeal. Criminal cartel matters are primarily addressed using plea agreements in Canada, making appeals rare. 

A private right of action for cartel conduct is available under Section 36 of the Act. Private Actions can only be brought to recover damages for violations of the Criminal Provisions or violations of orders of the Tribunal or other courts. Such actions typically follow an enforcement proceeding by the Commissioner and are primarily brought in the form of class actions in provincial courts. Such cases are decided on a balance of probabilities – the standard of proof for a civil case. 

The relief sought in these cases typically includes damages in the amount of the overcharge allegedly passed-on to the class members. Unlike damages for common law causes of action, recovery under Section 36 is limited to “an amount equal to the loss or damage proved to have been suffered”. This has been interpreted as precluding an award of punitive or exemplary damages. Unlike in the US, treble damages are not available. The actual loss must be established on the balance of probabilities, and all damage awards are at the discretion of the court. Costs of investigation in connection with the matter and of the proceedings under this section may also be claimed.

Class actions are available, and Private Actions are commonly prosecuted as class actions. They are typically filed in provincial superior courts. Litigants are required to comply with the relevant provincial class proceedings legislation. The test for certification in most provinces is substantially the same. The proposed representative plaintiff must establish that the pleadings disclose a cause of action, there is an identifiable class of two or more persons that would be represented by the representative plaintiff, the claims of the class raise common issues, and a class proceeding would be the preferable means for resolving the common issues, and the representative plaintiff would fairly and adequately represent the class. 

Consumer associations of public interest groups do not have standing in class actions. 

The passing on defense has been rejected by the Supreme Court of Canada, most recently in Pro-Sys Consultants Ltd v Microsoft Corporation. Indirect purchasers have a right to assert competition claims in Canada, and Canadian courts may certify class actions where the class is entirely composed of, or includes, indirect purchasers. The remoteness and complexity of indirect purchaser claims remain burdens to establishing such claims but do not bar them. 

Section 36 does not provide private parties with a general right of access to records in the Bureau’s possession or control. To preserve the independence necessary to carry out the Bureau’s mandate effectively and protect the integrity of the Bureau’s investigative process and the confidentiality of information in its possession, the Bureau will not voluntarily provide information to persons contemplating or initiating a Section 36 action.

If served with a subpoena, the Bureau will inform the information provider and oppose subpoenas for production of information if compliance with them would potentially interfere with an ongoing examination or inquiry or otherwise adversely affect the administration or enforcement of the Act. If the Bureau′s opposition is unsuccessful, it will seek protective court orders to maintain the confidentiality of the information in question.

That said, evidence such as guilty pleas, agreed statements of facts and business records found in a public court file are admissible in the Private Action to the extent that they relate to the conduct at issue. For example, the search warrants associated with a Bureau investigation into price fixing have been filed with the court in support of a Private Action seeking damages arising for the alleged overcharge. 

The “deemed undertaking” rule, which prohibits parties from using information obtained in one proceeding for any other purpose, including commercial advantage or in an unrelated proceeding, applies to Tribunal proceedings and civil proceedings in certain Canadian provincial courts, with certain exceptions. 

Private Actions are generally prosecuted as class actions and typically settle before trial. Such actions can take several years to progress from inception to resolution, whether that is settlement or adjudication at trial.

Compensation is determined on a case-by-case basis. Class proceedings are typically structured using the contingency fee model wherein counsel is compensated with an agreed-upon percentage of the total settlement amount or damages awarded. Settlement agreements for class proceedings must be approved by the court, including class counsel compensation. We also see an increased number of Private Actions being funded by Litigation Funders in Canada.

Cost awards vary based on the province in which a proceeding is brought and the type of proceeding. Several provinces in Canada have implemented no cost regimes for class proceedings, whereas others apply the ordinary costs rules. Typically, if costs are available, they are only for a portion of the total costs of the successful party and are in the discretion of the court. 

If the Private Action is structured as a class proceeding, certification must be granted before the action can proceed to a full hearing of the merits. The rules governing appeals of certification decisions vary across the provinces. In some provinces, there is an automatic right of appeal (eg, British Columbia and Alberta), whereas other provinces require leave to be sought. For example, in Ontario, the appeal of a certification decision requires leave to appeal and proceeds to the Divisional Court. Following a trial on the merits, appeals can be made to the relevant provincial Court of Appeal. Subsequent appeals are made to the Supreme Court of Canada and require leave to appeal. 

Non-class proceeding Private Actions are appealed from provincial courts to the relevant provincial Court of Appeal and then to the Supreme Court of Canada with leave.

There is no other pertinent information.

The Commissioner issues guidelines from time to time, but these are not binding on the Commissioner. Below are the key guidelines: 

• Competitor Collaboration Guidelines (6 May 2021);
• Immunity and Leniency Programs under the Competition Act (15 March 2019);
• Information Bulletin on Sections 15 and 16 of the Competition Act (25 April 2008);
• Information Bulletin on the Communication of Confidential Information Under the Competition Act (30 September 2013);
• Communication during Inquiries (26 June 2014); 
• Requests for information from private parties in proceedings under Section 36 of the Competition Act (11 June 2018).

In addition, the PPSC has issued the following guideline: 

• Public Prosecution Service of Canada Deskbook – 5.2 Competition Act.