Unanimity on Parliament Hill is a rarity. Yet in late May, for the second time in six months, the House of Commons came together to support a final swath of landmark changes to the Competition Act, with Justin Trudeau, Pierre Poilievre and Jagmeet Singh all voting yes.
Revisions to the Competition Act received royal assent in mid-June, as part of the omnibus Bill C-59, on which members of parliament voted in sections. In other areas, such as budget matters, there were the typical partisan divisions. But on competition, the need for an overdue overhaul was clear to legislators across the political spectrum.
The modernized Competition Act will reverberate for years ahead but the work has not received widespread attention (with one recent and unfortunate caveat). The law dates back to the mid-1980s, when the corporate ethos of bigger is better dominated the political thinking of the day. The initial changes came in mid-2022. Elements such as abuse of dominance rules were bolstered. Last December, when the Commons unanimously backed the second set of changes, the antiquated efficiencies defence was scrapped, one of a series of valuable moves.
In this third and final set of changes, there was a range of updates, from providing the Competition Bureau more powers to take on anti-competitive deals to the introduction of what are called structural presumptions, which this space supported. The Competition Act now contains a clause that if a proposed merger would lead to a combined market share of more than 30 per cent, the presumption is that the deal is bad for competition. It doesn’t mean the merger can’t happen but the companies would have to rebut that presumption for a deal to proceed.
This shift illustrates how much has changed. The old Competition Act had no such clause and in fact it contained the opposite, a prohibition against the Competition Tribunal judging a deal solely on market share.
The cumulative result, from mid-2022 through the latest changes, is a Competition Act that balances the value of companies seeking to merge and arming the bureau with the powers to challenge deals that further threaten Canada’s overly uncompetitive economy. As the Canadian Anti-Monopoly Project, an advocacy group, said, the law has moved from pro-consolidation to “a much stronger stance against abuses of concentrated economic power.”
One last-minute change, however, needs to be reconsidered – the aforementioned caveat, on greenwashing. The original bill expanded the deceptive marketing section to include environmental claims about products. That was straightforward and worthwhile.
But legislators then included a second provision, which has received more attention than the actual overhaul of the Competition Act. The problematic part focuses on climate claims a company makes about its business in general. Fossil fuel companies were angry and an oil sands consortium deployed a temper-tantrum publicity stunt as it wiped cleaned its website. The group had previously advertised that it was on “a path to reach net-zero emissions.” That’s a debatable claim but it shouldn’t be potentially illegal.
It was political overreach to include this clause, even if the upset is overwrought. For now, the Competition Bureau will draw up a guide, as it has in the past, to provide “transparency and predictability” about enforcement. And any allegations that private entities try to bring to the Competition Tribunal would have to clear a high bar to even be heard. But, more broadly, including a provision that could inhibit valid political speech from companies strays from the goal of bolstering competition.
It is unfortunate that historic changes to Canada’s competition law have been overshadowed in the past couple weeks by the greenwashing question. The hasty amendment was a mistake.
But to step back: After a debate that spanned more than two years, the House of Commons has achieved something important and lasting. It is what we want from our legislators, working together to deliver changes to out-of-date legislation that are broadly positive for the country as a whole.
The Competition Bureau put out a study last year that detailed the lack of competition in so many industries – the things everyone can already plainly see every day with their own eyes. The overhaul of the Competition Act is a momentous achievement that occurred in fractious political times.