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

Greg Kane and David Elder -

In a significant decision released yesterday, the Federal Court of Appeal has restored a Federal Cabinet Order that found that Globalive Wireless Management Corp. (Globalive) meets Canadian ownership requirements to operate as a telecommunications common carrier.

As we noted previously, the Federal Court Trial Division had quashed the decision of the Federal Cabinet that found that Globalive, which provides wireless services in Canada under the Wind Mobile brand, met Canadian ownership requirements under the Telecommunications Act. 

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Susan M. Hutton and Edwin Mok -

On May 25, 2011, the Federal Court of Appeal released its decision in Canada (Attorney General) v United States Steel Corp. In this decision, the FCA dismissed the appeal of US Steel, affirming the decision of the lower court to the effect that s. 39 and 40 of the Investment Canada Act (ICA) do not violate s. 11(d) of the Charter and s. 2(e) of the Bill of Rights. Accordingly, the constitutional validity of monetary penalties issued by a court under s. 40 of the ICA, in response to a breach of undertaking, has once again been upheld.

By way of background, on July 17, 2009, the Minister of Industry asked the Federal Court to impose retroactive penalties against US Steel under s. 40 of the ICA for allegedly breaching two undertakings made by US Steel as conditions for the Minister’s approval of the 2007 acquisition of Stelco, one of the last Canadian-owned steel companies in Canada. The Act allows for fines of $10,000 per day per breach, until such a time that US Steel complied with the undertakings. US Steel opposed the penalties, arguing that ss. 39 and 40 of the Act violated s. 11(d) of the Charter (the presumption of innocence for persons charged with an offence) and s. 2(e) of the Bill of Rights (the right to a fair hearing in accordance with the principles of fundamental justice). In its June 14, 2010 decision, the Federal Court rejected US Steel’s arguments. It ruled that the s. 40 penalties fell outside the ambit of s. 11(d) because, following the Supreme Court of Canada in R. v Wigglesworth, the penalties were not criminal in nature, nor did they impose true penal consequences. Further, the Federal Court rejected the Bill of Rights argument because US Steel had not been denied natural justice or procedural fairness in this case. US Steel appealed to the FCA, leading to the decision just issued.

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Shawn C.D. Neylan and Michael Kilby -

In March 2009, significant amendments to Canada’s Competition Act and Investment Canada Act were passed, with important implications for the regulatory review of mergers and acquisitions. 

Merger Control – Competition Act

Following the amendments of March 2009, Canada now has a “two-stage” merger review process. The merits and demerits of this new regime were never thoroughly debated among competition law practitioners or in Parliament, because the amendments were included in a budget implementation bill drafted in response to the global economic crisis of 2008. The bill moved through the legislative process in a matter of weeks, with the clear focus of parliamentary debate being on economic stimulus measures, rather than amendments to the Competition Act and other statutes. In any event, the new merger review process shares many similarities with the US process under the Hart-Scott-Rodino Act1. More particularly, the submission of the required notification filings by the purchaser and the target company triggers a 30 calendar day waiting period during which the transaction may not proceed, unless the Commissioner of Competition (the Commissioner) issues a positive clearance for the transaction and/or terminates the waiting period. If the 30 calendar day waiting period expires without the issuance by the Commissioner of a supplementary information request (a SIR), then there is no legal impediment to the parties closing the transaction. However, if the Commissioner issues a SIR within the 30 calendar day waiting period, the transaction may not close until 30 days after the parties have complied with the SIR, unless the Commissioner issues a positive clearance for the transaction and/or terminates the waiting period.

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Susan Hutton -

Canada's Competition Bureau announced on May 27, 2011 that the Commissioner of Competition had filed an application with the Competition Tribunal alleging an abuse of dominance by the Toronto Real Estate Board in the market for residential real estate brokerage services. According to the Commissioner's application, TREB member brokers have access to detailed information about properties listed on the TREB multiple listing service (which lists almost all properties for sale in the Greater Toronto Area or GTA), such as historical prices, comparables, etc. Members of the TREB, however, are not permitted to provide their customers with direct access to the complete TREB MLS, nor to disseminate the more detailed information to their customers via searchable websites. The Commissioner alleges that such rules effectively prevent on-line brokerages from competing in the GTA as they do in the United States and Nova Scotia, for example. The allegations in the Commissioner's application are unproven, and no response has been filed.

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