Companies operating in Canada must comply with various laws. Among these, the Company Law, the Civil Code, and the Commercial Code are some of the most important. However, another law that must be respected by Canadian companies in the Competition Act or the Antitrust Law which contains important provisions about the activities completed by businesses that must have the chance to do business under equitable conditions.
Below, we invite to read about some of the most important provisions of the Competition Law in Canada. Our company formation agents in Canada can help you understand these provisions and operate your business in a matter that respects them. We can also help you set up a business in Canada.
The Canadian Competition Act, the oldest law in the world
The Competition Act is the oldest antitrust law in the world, dating back to 1889. This is why it is one of the most important laws in Canada. The act has undergone various modifications and updates over the years and now it is one of the most modern laws in this sense.
The Competition Law contains provisions which must be respected by almost all companies in Canada.
The exceptions from the provisions of the Competition Act can be provided by our company registration representatives in Canada.
What are the main regulations set out in the Competition Act in Canada?
The Competition Law is quite extensive and contains a large number of provisions that are grouped in 10 comprehensive parts. The main provisions of the Canadian Competition Law cover the following:
- the promotion of competition, greater economic efficiency and the high ranking of the Canadian economy on the global market;
- the prohibition of criminal offenses among companies, such as price-fixing, price discrimination, and bid-rigging;
- respecting the best practices in merger and acquisition procedures between local and foreign companies;
- the creation of the Competition Tribunal which has the role of reviewing all competition-related matters.
All the activities of companies in relation to competition are supervised by the Competition Bureau in Canada.
Criminal offenses under the Competition Law in Canada
The most important provisions of the Competition Law refer to the criminal offenses Canadian companies can be subject to willingly or unwillingly. The Competition Bureau verifies if the following types of offenses:
- price-fixing which is one of the most common practices in the world and which usually affects small businesses which cannot compete with large companies;
- agreements concerning the quality or quantity of products or services which can affect clients and customers;
- resale price maintenance and price discrimination which is against the Competition Law;
- exclusive dealing, tied selling and market restrictions are also offenses under the Competition Act in Canada;
- abuse of dominant position which is defined as occupying a large share of the market when it comes to providing services or selling goods.
All these offenses are tried by the Competition Tribunal and in most cases, remedies are awarded as sanctions against the offender.
If you are interested in setting up a company in Canada and need advice on how to respect the provisions of the Competition Act, our local consultants can advise you.
Mergers under the Competition Law in Canada
One of the most important provisions of the Competition Act in Canada covers the aspects related to mergers between companies. The law contains provisions about the mergers between local companies, but also between local and foreign companies.
Mergers are defined as the acquisition of control over a company. The acquisition can be complete or partial. One of the most important provisions of the law is that the company taking over another company is required to file a pre-merger notification with the Competition Tribunal in Canada.
Our company formation agents in Canada can help you in completing mergers by respecting the provisions of the Competition Act in this sense.
Facts on competition regulations in Canada
Competition is one of the most important requirements which need to be respected upon starting a company in Canada. This is because the authorities here are very strict about these provisions. For example:
- a market share of less than 35% of the entire market is not considered abuse under the dominant position offense;
- a market share of 35% to 60% can determine the Competition Tribunal to start an investigation on the company dominating that share;
- criminal offenses falling under the provisions of the Competition Law can be punished with fines of up to 10 million CAD;
- in certain cases, the punishment is more severe and can imply up to 5 years of imprisonment.
For complete information on the Competition Law, please contact our consultants in Canada.