The changes to Canada's competition law over the last few years have been described as "generational." Perhaps the most notable changes are the new incentives for the private enforcement of the Competition Act that come into force on June 20, 2025.1 Starting next summer, private litigants:
- Will have rights of access for more reviewable conduct under the Act, resulting in nearly all civil provisions of the Act being enforceable by private litigants.
- Will have easier access to the Competition Tribunal, with a lower threshold for the Tribunal to grant leave for a private party to bring certain types of enforcement applications; and, most notably,
- Will be able to seek monetary relief from the Tribunal for anti-competitive conduct, providing a financial incentive to private enforcement of competition laws.
This expansion of private enforcement of the Act is a significant change to the existing enforcement regime.
New private access rights
For decades, private litigants have been able to sue for damages arising from violations of the criminal provisions of the Act, most notably the price-fixing2 and deceptive marketing3 offences. While this cause of action has been around for decades, it has no applicability to the civil provisions of the Act dealing with broader competition and anti-trust laws. The limited litigation relating to damages arising from violations of the criminal provisions of the Act does not occur before the Tribunal, but rather takes place before provincial and federal courts.
In 2002, the government introduced private access rights for the enforcement of certain civil provisions of the Act, namely the refusal to deal4 and the exclusive dealing, tied selling and market restriction5 provisions. Private access rights allow private litigants to seek leave to enforce provisions of the Act before the Tribunal. In 2009, when the price maintenance provision was converted from a criminal provision to a civil provision, it was added to the private access rights.6
There has been limited use of these private access rights since their introduction with only approximately two dozen leave applications being filed (predominantly relating to alleged refusals to deal) and only a handful of leave applications being granted by the Tribunal. The limited use of the private access rights likely resulted primarily from the limited available remedies which, until recently, did not allow for any monetary awards to private litigants.
In 2022, as part of a preliminary phase in modernizing Canada's competition regime,7 the government made a significant change to the private access regime by extending private access to abuse of dominance8 cases. Since these 2022 amendments, only two applications have been filed with respect to the abuse of dominance provision9, both involving disputes between generic and innovator pharmaceutical companies. The first case was discontinued shortly after filing. The second was brought very recently and is in its very early stages.
The amendments that come into force on June 20, 2025 add two new private access rights to cases involving deceptive marketing practices10 and a civil provision dealing with anti-competitive agreements.11 As a result, nearly all the civil provisions of the Act will be enforceable before the Tribunal by private litigants.
Easier access to the Tribunal
The Tribunal is a specialized board composed of up to six judicial members appointed from among the judges of the Federal Court and not more than eight lay members. The Tribunal has jurisdiction to hear all applications made under the civil provisions of the Act.
To enforce one of the Act's civil provisions before the Tribunal, private litigants must first seek leave to bring an application. Currently, the legal test for being granted leave to bring an application (other than for price maintenance cases12) is that an applicant show that its business has been "directly and substantially affected" by the alleged anti-competitive conduct.13 The courts have interpreted this threshold to require that the leave application be "supported by sufficient credible evidence to give rise to a bona fide belief that the applicant may have been directly and substantially affected in the applicant's business by a reviewable practice."14
However, the "sufficient credible evidence" must address each element of the reviewable practice. For example, in an application related to a refusal to deal under section 75, leave will not be granted by submitting evidence that a supplier refused to sell a product or service to a willing customer. The evidence must address each element of refusal to deal under section 75(1). The amendments that come into force next June ease the test used to determine whether cases can proceed. The amendment to the leave test is two-fold.
First, the anti-competitive conduct need only directly and substantially affect a part of the applicant's business. This amendment will impact the scope of evidence needed to show an applicant is affected by the alleged anti-competitive conduct and lower the requirement of what it means for a business to be affected.
Second, the amendment introduces a new "public interest" test as an alternative to being "directly and substantially affected." The Tribunal will now be permitted to grant a private party leave to file an application if the Tribunal is "satisfied that it is in the public interest to do so." There is not yet any clear guidance or commentary on how this new "public interest" test may be applied.
Notably, the new private access rights to cases involving civil deceptive marketing practices can only proceed based on the new "public interest" test. That is, a private litigant cannot seek leave to enforce the civil deceptive marketing practices provisions on the basis that they were affected by the conduct, but rather will need to frame their application for leave as being in the public interest.
New monetary incentives for private enforcement
The most notable change to the private enforcement regime is the new provisions that allow the Tribunal to award monetary relief for anti-competitive conduct.
The government described these changes as "providing an incentive to bring matters directly to the Competition Tribunal," claiming that these changes would result in greater accountability throughout the marketplace and more action on cases that the Competition Bureau may not be able to take.15 These amendments appear to be an attempt to shift some of the enforcement of the Act to private parties.
In the United States most of the enforcement of anti-trust laws is done by private parties. This practice is largely incentivised by a statutory cause of action that allows for the recovery of triple damages plus legal costs for any damages suffered because of breaches of antitrust laws.16 The new monetary remedy provisions in Canada do not allow a party to seek damages per se (let alone triple damages), but rather provide a broad and discretionary disgorgement remedy.
The new provisions allow the Tribunal to order a party "to pay an amount, not exceeding the value of the benefit derived from the [anti-competitive] conduct ... in any manner that the Tribunal considers appropriate." This suggests a discretionary remedy that is capped at the value of the benefit derived from the anti-competitive conduct irrespective of any alleged damages. Moreover, the amount can be paid to the applicant (the private litigant that brought the case forward) "and any other person affected by the conduct."
The wording of these provisions may allow for the creation of a type of class proceeding before the Tribunal. However, it remains to be seen how these new amendments will be interpreted, particularly in situations where certain affected parties may attempt to piggyback or free ride on the enforcement efforts of other affected parties. What is clear is that the Tribunal has a significant new power in awarding and allocating potentially very substantial monetary awards.
It is also notable that the Tribunal may award legal costs in respect of applications brought by private litigants.17 Costs awards by the Tribunal are done in accordance with the provisions governing costs in the Federal Court Rules. Costs awards in complex litigation in the Federal Court range from awards based on a fixed tariff to partial indemnity costs of up to around 50 per cent of actual legal costs incurred plus reasonable disbursements.
While it is difficult to predict the effect of the new monetary incentives for private enforcement, the new remedies will in all likelihood result in more private actions before the Tribunal than has been seen over the past 20 plus years.
Summary and conclusion
Starting next summer:
- Private parties will be able to enforce two new civil provisions of the Act: the deceptive marketing practices and civil anti-competitive agreements provisions. These are added to the recent private enforcement of the abuse of dominance provision, resulting in nearly all civil provisions of the Act being enforceable by private litigants.
- The leave test for private parties to bring enforcement actions before the Tribunal will be eased such that an applicant need only show that a part of their business is affected by the alleged anti-competitive conduct, and a new "public interest" test will be added.
- The Tribunal will have a significant new power in awarding and allocating potentially very substantial monetary awards in private party applications. These applications can be awarded to the applicant and any other person affected by the anti-competitive conduct, and the value of the award is capped at the benefit derived from the anti-competitive conduct.
These changes, together with the changes to the Act since 2020, represent a significant shift in the enforcement of Canada's competition laws. The full impact of these changes remains to be seen, but it is clear that the amendments seek to jumpstart the state of competition law enforcement in Canada by shifting some of the enforcement burden from the resource limited Competition Bureau to private players.
Footnotes
1 Bill C-59 received royal assent on June 20, 2024. Many of the new provisions of the Competition Act come into force one year after royal assent – June 20, 2025.
2 Section 45 of the Act.
3 Section 52 of the Act.
4 Section 75 of the Act.
5 Section 77 of the Act.
6 Currently section 76 of the Act (civil), formerly section 61 of the Act (criminal).
8 Section 79 of the Act.
9 A third application for leave with respect to the abuse of dominance provision was sought to be filed by a self-represented litigant but was not accepted for filing by the Tribunal on the basis that it was not properly constituted.
10 Section 74.1 of the Act.
11 Section 90.1 of the Act.
12 The legal test for granting leave to bring an application relating to price maintenance is whether the applicant is "directly affected" by the alleged anti-competitive conduct.
13 Current section 103.1 of the Act.
14 Symbol Technologies Canada ULC v Barcode Systems Inc, 2004 FCA 339 at para 16.
15 House of Commons Debates, 44th Parliament, 1st Session Edited Hansard, No. 312 Thursday, May 9, 2024.
16 15 U.S.C. § 15.
17 Competition Tribunal Act, RSC 1985, c 19 (2nd Supp), s 8.1.
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