Bill C-56 Risks Undermining Competition in Canada Rather Than Fostering It

November 27, 2023

The Trudeau government introduced Bill C-56 at the start of the soon-to-be wrapped up fall legislative sitting. The government bill signaled (at the time) a major overhaul of Canadian competition law, proposing over a dozen amendments to the Competition Act. While the government continues to assert that these amendments are necessary to foster greater competition in the marketplace, a closer examination of the bill reveals potential pitfalls that could undermine competition, stifle innovation, and result in harm to consumers and economic growth.

The biggest issue with the legislation reflects the government’s backroom deal with the NDP to revise the legal test for abuse of dominance. Any proposal that weakens or removes the Competition Bureau’s obligation to prove that alleged business conduct has resulted in anti-competitive effects in a relevant market would not only mark a seismic shift in the burden of proof; it would also be detrimental to competition. This is because the existing “effects test” requires the government or private litigants prove that the business conduct in question substantially harms competition and consumers through increased prices, reduced quality, and/or reduced innovation.