The Competitor : Canada Competition / Antitrust Blog by Stikeman Elliott Lawyers & Attorneys

• Stikeman Elliott's Competition/Antitrust Group is once again listed in the GCR 100 (2006),a publication of the 100 leading global competition law practices by theGlobal Competition Review. Stikeman Elliott's group was identified as being "more popular with corporate counsel than most [of their] rivals this year as well as "being popular for referrals from other GCR 100 firms."

• Chambers and Partners' Chambers Global 2006, which provides an independent, objective and research-based ranking of law firms and lawyers internationally, and has ranked our Competition/Antitrust Group as among the best in Canada. According to the Chambers guide, our Group is acknowledged for its "polished customer service and razor-sharp business acumen."

• Paul Collins is included in Lexpert's recently published Guide to the Leading 100 Canada/U.S. Cross-Borders Litigators in Canada in the area of competition law.

• Paul Collins, Jeffrey Brown and Kevin Rushtonco-authored "The Aspen Skiing Case from a Canadian Competition Law Perspective," which appeared in the American Bar Association's Antitrust Law Journal, Volume 73, Issue 1 (2005).

 

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While foreign investment review thresholds have been increased, the scope and application of Canada's foreign investment legislation remains unchanged.

The Canadian government has increased the foreign investment review threshold in respect of all transactions closing in 2006 that involve acquisitions of control of Canadian businesses. Specifically, the monetary threshold for review of investments by WTO investors based in WTO-member countries has been increased from $250 million1 to $265 million, unless one of the exceptional circumstances discussed below applies.

The increased threshold is thanks to the inflationary indexing formula prescribed under the Investment Canada Act (the ICA), rather than a liberalization of Canada's foreign investment policy per se. In fact, the "rules" of foreign investment review have not changed. All acquisitions of control of a Canadian business (i.e., a business carried on in Canada that has a place of business in Canada, an individual or individuals in Canada who are employed or self-employed in connection with the business and assets in Canada used in carrying on the business) by a "non-Canadian" are subject to the provisions of the ICA - even where the Canadian business is already foreign-controlled (e.g., a Canadian subsidiary of a U.S. corporation). One common misconception is that the use of a Canadian-incorporated acquisition vehicle takes the transaction outside the scope of the ICA. This is not the case; the nationality of the persons ultimately controlling the acquisition vehicle is determinative for ICA purposes.

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Danielle K. Royal

Following a Competition Bureau investigation, three Canadian carbonless paper sheet manufacturers (Cascades Fine Papers Group Inc., Domtar Inc. and Unisource Canada Inc.) recently pleaded guilty to conspiring to lessen competition in the supply of carbonless paper sheets in Ontario and Quebec contrary to section 45 of the Competition Act.Carbonless paper sheets are used in multiple copy forms. The demand for carbonless paper sheets has been declining for several years as a result of the development of computerized receipts.

Each of the accused was sentenced to pay a fine in the amount of $12,500,000, comprised of a $10,000,000 fine for activity in Ontario and $2,500,000 for activity in Quebec. In addition to the fines, each accused must educate its directors, officers, employees and agents about complying with the Competition Act.

This is the first time the Court has imposed the maximum $10,000,000 fine available under the Competition Act against a domestic company.

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Danielle K. Royal

In Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc., the United States Supreme Court recently decided that a truck manufacturer (Volvo) that had offered its dealers different wholesale prices was not liable for price discrimination because there was no evidence that Volvo discriminated between dealers contemporaneously competing to resell to the same retail customer.

The Plaintiff, Reeder-Simco GMC, Inc. (Reeder), was an authorized dealer of Volvo trucks. Reeder generally sold Volvo trucks through a competitive bidding process in which the retail customers would determine their specific heavy-truck product requirements and invite bids from several selected dealers. Once Reeder received the customer's specifications, it would request a discount or concession off the wholesale price from Volvo. Volvo would decide on a case-by-case basis whether to offer a discount and what the discount rate would be, taking into account factors such as industry-wide demand, and whether that particular retail customer historically purchased a different brand of trucks. Reeder would then use the discount offered by Volvo in preparing its bid to the retail customer.

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