The Competition Act and the Competition Tribunal Act set out the legal and institutional framework for competition law in Canada.
The commissioner of competition is responsible for investigating alleged anti-competitive conduct and mergers as well as misleading advertising and other deceptive marketing practices.
The commissioner also heads the Competition Bureau, which carries out investigative and advocacy work.
At the end of an investigation by the bureau, the commissioner decides whether to refer the matter to the Competition Tribunal, in the case of a non-criminal matter, or to the attorney general of Canada in the case of a criminal matter. If the evidence is insufficient, the matter is discontinued.
Once a criminal matter has been referred to the attorney general, the director of public prosecutions has the independent discretion to determine whether it is in the public interest to prosecute before the courts.
In practice, contested proceedings before the courts and competition tribunal are rare.
Most cases are resolved on a consensual basis and there is a wide range of remedies available under the Competition Act depending on the nature and seriousness of the matter.
There is also scope for filing lawsuits for the recovery of damages by private parties under the Competition Act involving criminal matters as well as limited private enforcement before the competition tribunal in civil matters.
The granting of formal investigatory powers to the bureau or another independent government agency to conduct market studies is another subject of debate.
Currently, as part of its advocacy function, the bureau undertakes market research to assess the state of competition in various sectors of the Canadian economy.
Proponents argue that such measures would assist in obtaining complete and accurate information, and thus be more useful in increasing the understanding of how certain markets operate.
Such formal market studies are conducted in several other jurisdictions.
Opponents argue that the bureau already has sufficient means to conduct market studies using public information and voluntary requests to obtain information from stakeholders in the marketplace. In addition, opponents have raised concerns that the line between the bureau’s market study and enforcement activities would become blurred.
The key provision of the law dealing with bid rigging is subsection 47(1) of the Competition Act. Prior to the enactment of Bill C-10, the term “bid-rigging” was defined to mean:
An agreement or arrangement between or among two or more persons whereby one or more of those persons agrees or undertakes not to submit a bid in response to a call or request for bids or tenders, or
The submission, in response to a call or request for bids or tenders, of bids or tenders that are arrived at by agreement or arrangement between or among two or more bidders or tenderers.
Where the agreement or arrangement is not made known to the person calling for or requesting the bids or tenders at or before the time when any bid or tender is made by any person who is a party to the agreement or arrangement.
The new definition defines the term bid-rigging to mean (see change in brackets):
An agreement or arrangement between or among two or more persons whereby one or more of those persons agrees or undertakes not to submit a bid or tender in response to a call or request for bids or tenders, (or agrees or undertakes to withdraw a bid or tender submitted) in response to such a call or request.
As a practical matter, the implementation of an arrangement not to bid, or to submit a bid on qualified terms, would in many cases be indistinguishable from the usual process by which tenders are submitted and in which tenders decide between jobs based on their genuine assessment of what they are capable of doing and what they are likely to be recognized as capable of doing.
Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com.
Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.
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