Recently, Minister of Finance Chrystia Freeland presented the federal government’s 2022 Budget Implementation Act which included reforms aimed at “making Canada’s economy more competitive.”
Making Canada’s Economy More Competitive
The Competition Act (the “Act”) is a federal law governing competition in Canada aimed at maintaining competition by regulating anti-competitive practices. It is enforced and administered by the Competition Bureau, and cases are adjudicated by the Competition Tribunal. The Act contains both criminal and civil enforcement provisions, including imprisonment and/or fines for failing to comply with the Act.
The purpose of the Act is:
…to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy, in order to expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada, in order to ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy and in order to provide consumers with competitive prices and product choices.
Budget 2022 specifically announces the government’s intention to introduce legislative amendments to the Act as a preliminary phase in modernizing the competition regime. This will include fixing loopholes; tackling practices harmful to workers and consumers; modernizing access to justice and penalties, and adapting the law to today’s digital reality.
As Budget 2022 states:
“A competitive economy is a fair, growing, and innovative economy. In this regard, the government will consult broadly on the role and functioning of the Competition Act and its enforcement regime. However, there are also shortcomings in the Act that can easily be addressed and move Canada in line with international best practices.”
These proposed changes come on the heels of a call from the Commissioner of Competition for “a comprehensive review of the Competition Act.” The Commissioner further noted that “[w]e need to have a debate in Canada about what our competition law should look like in the 21st century.” In September 2021, Edward M. Iacobucci, Toronto Stock Exchange Chair in Capital Markets Regulation, released a consultation paper which examined the application of the Act in the new digital age. In response, the Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry, issued a statement on affordability and competition in Canada’s telecommunications sector, stating that the government would be reviewing the Act and considering amendments in order to modernize it:
“In recognition of the critical role of the Competition Act in promoting dynamic and fair markets, the Minister will also carefully evaluate potential ways to improve its operation.”
The Act has not been frequently amended with the last comprehensive revisions having been done in 1986 and the most significant amendments dating back to 2009. While new amendments are expected, it is still not certain which competition laws will be changed and how. The competition law community continues to speculate on just how the Act will be reformed.
Driving Investment and Growth for Small Businesses
Budget 2022 also intends to address the barriers that are preventing small businesses from growing. This includes reducing payment card fees for merchants. It will also help Canadian businesses make the most of global trade opportunities, while better protecting Canadian businesses against unfair competition.
Creating a Canadian Innovation and Investment Agency
Budget 2022 announces the government’s intention to create an operationally independent federal innovation and investment agency, and proposes $1 billion over five years, starting in 2022-23, to support its initial operations. Final details on the agency’s operating budget are to be determined following further consultation later this year.
The new innovation and investment agency will proactively work with new and established Canadian industries and businesses to help them make the investments they need to innovate, grow, create jobs, and be competitive in the changing global economy. The government will consult further with both Canadian and global experts in finalizing the design and mandate of the new agency, with details to be announced in the 2022 fall economic and fiscal update.
Launching the Canada Growth Fund
Budget 2022 proposes to establish the Canada Growth Fund to attract substantial private sector investment to help meet important national economic policy goals:
- To reduce emissions and contribute to achieving Canada’s climate goals
- To diversify our economy and bolster our exports by investing in the growth of low-carbon industries and new technologies across new and traditional sectors of Canada’s industrial base; and
- To support the restructuring of critical supply chains in areas important to Canada’s future prosperity—including our natural resources sector.
The Canada Growth Fund will be a new public investment vehicle that will operate at arms-length from the federal government. It will invest using a broad suite of financial instruments including all forms of debt, equity, guarantees, and specialized contracts. The fund will be initially capitalized at $15 billion over the next five years. It will invest on a concessionary basis, with the goal that for every dollar invested by the fund, it will aim to attract at least three dollars of private capital.
In creating the Canada Growth Fund, the government intends to seek expert advice from within Canada and abroad. Following these consultations, details about the launch of the fund will be included in the 2022 fall economic and fiscal update. Funding for the Canada Growth Fund will be sourced from the existing fiscal framework.
Contact the Corpoate Lawyers at Baker & Company in Toronto for Assistance with Corporate Law Issues
The knowledgeable team of corporate lawyers at Baker & Company will continue to monitor for changes to the Act and how competition law reform may impact your corporation and business practices. We can assist your company in proactively responding to today’s business environment, whether you are a small or large size organization and tailor responsive and strategic legal solutions to meet your company’s individual needs. To speak with a lawyer about employment policies or any other employment law issue, contact us online or by phone at 416-777-0100.