As the global financial storm subsides, our colleagues Richard Clark and Curtis Cusinato take a look at the issues facing Canadian M&A in 2011 in an article recently posted on CanadianSecuritiesLaw.com. Specifically, Richard and Curtis have identified 11 trends for the upcoming year, including the gaining strength of poison pills, the growth of a domestic high-yield debt market and recent income tax developments that have a generally positive effect for M&A.
With the passage this week of anti-spam legislation in Canada, a number of related amendments to the Competition Act aimed at combating misleading and deceptive practices online should be in force by next summer.
Bill C-28, the Fighting Internet and Wireless Spam Act (FISA), received Royal Assent this week, and is expected to come into force within 6 to 8 months. FISA contains a number of important amendments to the Competition Act which give the Commissioner and the Bureau a role in investigating and enforcing the new legislation. Industry Canada officials have indicated that the Bureau will be receiving additional budget resources and personnel to meet these new responsibilities.
The amendments clarify that offences under the Competition Act relating to false or misleading electronic messages or telemarketing are committed by those who permit messages to be sent, in addition to those who actually send them. The definition of “telemarketing’ is also expanded to cover not only “interactive telephone communications”, but to extend to “any means of telecommunication,” so would include not just voice communications, but text messages, instant messages, and social networking messages through applications such as Facebook and Twitter. Similar amendments are made to other key definitions in the Act to better capture online practices and technologies.
Continue Reading...The Competition Bureau of Canada announced on December 15, 2010 that it had filed an application with the Competition Tribunal to strike down certain rules that Visa and MasterCard impose on merchants who accept their credit cards. The Bureau is challenging Visa and MasterCard's rules under the price maintenance provisions of the Competition Act. The Bureau launched its investigation in response to complaints by merchants and their associations and initiated a formal inquiry in April 2009. It marks the second civil case launched by the Commissioner in the past year challenging unilateral conduct - a significant increase in the pace of enforcement of the reviewable practice provisions of the Competition Act, if it persists, although the case has taken almost two years to come to fruition.
Bill C-452 proposes to give the Commissioner of Competition and the Competition Bureau broad powers to review the state of competition in entire industry sectors, absent grounds to believe that the Competition Act has been violated. The Bill was referred to the Standing Committee on Industry, Science and Technology (Parliament, House of Commons) in June, 2010. The Committee has now asked for an extension of its review, beyond February 1, 2010, in order to enable it to hear from a wide range of witnesses prior to clause-by-clause review.
Currently, the Commissioner's extensive investigative powers can only be used in relation to an "inquiry" which requires that grounds exist for believing either than an offence has been committed under the criminal provisions of the Competition Act, or that grounds exist for the Tribunal to make an order under one of the civil provisions of the Act. There is no explicit power for the Commissioner to inquire into the state of competition in an industry, absent allegations of wrong-doing under the Act. A predecessor to the Competition Bureau, the Restrictive Trade Practices Commission, made extensive use of sector inquiry powers under the Combines Investigation Act, most notably inquiring into competition in the oil and gas sector for over ten years, between 1973 and 1985, while ultimately failing to find any evidence of wrongdoing. In 2000, Industry Canada and Natural Resources Canada jointly sponsored an independent review of the sector by the Conference Board of Canada, which again found the industry to be reasonably competitive. In response to the introduction by a Private Member of Bill C-452, the grounds for which again focus on competition in relation to gasoline prices, the Competition Bureau has said that it does not need the extra powers.
On November 3, 2010, Canada's Minister of Industry announced his conclusion that the proposed acquisition by BHP Billiton plc of Potash Corporation of Saskatchewan Inc. was not likely to be of "net benefit to Canada". Although provided a further 30 days to try to convince him to change his mind, BHP Billiton announced on November 14, 2010 that it would withdraw its bid. The Minister's announcement marked only the second time Canada has rejected a foreign takeover under the Investment Canada Act, the first being its rejection of the proposed acquisition by Alliant Techsystems Inc. of the information systems division of MacDonald, Dettwiler and Associates Ltd. in 2008.
The Minister said that he felt the takeover would not have a beneficial effect on three of the six criteria listed in the Act: Canada's ability to compete in world markets; productivity, efficiency and innovation in Canada; and the country's overall level of economic activity. The proposed takeover had also been vocally opposed by Saskatchewan Premier Brad Wall and generated an unprecedented degree of public commentary and controversy. Following his decision, the Minister said that he would support a review of the 25-year old statute to see how it could be improved in terms of transparency and enforceability. He also indicated that, in the meantime, he would clarify how he interprets the factors he is required to consider in coming to his conclusions on the "net benefit" test. Stikeman Elliott's Lawson Hunter, Susan Hutton and Michael Kilby represented PotashCorp with respect to the Competition Act and Investment Canada Act aspects of the transaction.
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