Understanding the Competition Act Offences

The Competition Act Canada creates serious criminal offences for anti-competitive business conduct such as price‑fixing conspiracies, market allocation agreements, and bid‑rigging. Under the national crime reporting system, these offences are captured under UCR Code 6350 and are treated as indictable offences, reflecting their severity. Although these crimes are prosecuted in the same criminal courts as Criminal Code offences, they do not appear in the Criminal Code itself. Instead, they are found in sections 45 to 49 of the federal Competition Act, a standalone statute that governs business conduct and protects market competition across Canada.

The Legal Definition

Every person who enters into an agreement or arrangement — whether orally or in writing, whether express or implied — with another person to lessen, or prevent or lessen, competition substantially in a market commits an indictable offence.

This definition, found in section 45 of the Competition Act, targets secret or coordinated agreements between competitors that meaningfully reduce competition. The law is written broadly to capture any form of agreement or arrangement: it does not have to be written down, signed, or even spoken in explicit terms. An implied understanding between competitors to fix prices, restrict output, divide territories, or otherwise blunt competitive rivalry can be enough.

To amount to an offence, the agreement must be likely to lessen competition substantially in a market. This goes beyond everyday commercial cooperation. The Crown must prove that the arrangement is capable of causing a major reduction in competition in a defined market (for example, retail gasoline sales in a particular region, or supply of a specific industrial input across Canada). The focus of the law is on protecting the competitive process—ensuring businesses compete on price, quality, and innovation—so that consumers and other businesses benefit from fair market conditions.

Penalties & Sentencing Framework

• Offence type: Indictable offence under the Competition Act (Part VI – criminal offences).
• Mandatory minimum sentence: None.
• Maximum term of imprisonment (individuals): Up to 14 years in prison.
• Maximum fine (individuals and corporations): Fine at the discretion of the court (no statutory upper limit; effectively unlimited).
• Corporate liability: Corporations can be convicted and fined, and responsible officers/agents may also face personal criminal liability.

The Competition Act treats hard‑core cartels—such as price‑fixing, market allocation, and bid‑rigging—as among the most serious economic crimes in Canada. As indictable offences, they are prosecuted in superior courts (or provincial courts with indictable jurisdiction) and carry a maximum penalty of 14 years imprisonment. There is no mandatory minimum, which means a judge has wide discretion to impose anything from a discharge (in rare, exceptional cases) to lengthy imprisonment and very substantial fines, depending on the circumstances.

Unlike many offences where Parliament sets a fixed maximum fine, the Competition Act uses a fine “at the discretion of the court.” This allows courts to impose very large penalties, especially on corporations, to strip away any economic benefit from the illegal agreement and to deter other businesses from engaging in similar conduct. For corporations, fines can run into the tens or hundreds of millions of dollars in major cases. Courts may consider the volume of commerce affected, the duration of the conspiracy, the harm to consumers and competitors, and whether the conduct was deliberate and concealed.

Because these offences are inherently economic and often complex, sentencing is heavily influenced by competition law principles and expert economic evidence. Judges often look at factors such as whether the accused cooperated with the Competition Bureau, participated in a leniency or immunity program, implemented compliance programs, or took steps to make restitution. Although these are criminal offences, the sentencing objectives of deterrence and denunciation are especially prominent: courts seek to send a clear message that cartel behaviour and bid‑rigging are not acceptable in Canadian markets.

Common Defenses

• Lawful excuse (ancillary restraints to legitimate collaboration)

  Not every agreement among businesses that influences competition is unlawful. A key defence under Competition Act Canada jurisprudence is that the restraint on competition is ancillary to a broader, legitimate collaboration—such as a joint venture, franchise agreement, distribution arrangement, or technology‑sharing alliance—and is reasonably necessary to make that collaboration work. For example, two companies may need to share certain pricing information or allocate certain production responsibilities to efficiently deliver a new product or service that neither could provide alone. If the accused can show that the agreement forms part of a genuine, efficiency‑enhancing arrangement and that the restraint is no broader than reasonably necessary, courts may find a lawful excuse and conclude that the criminal prohibition in section 45 does not apply.

• Due diligence (reasonable belief no substantial lessening of competition)

  Another important line of defence involves due diligence. In practice, businesses and their officers may argue that they took reasonable steps to ensure their conduct complied with the Competition Act and reasonably believed that any agreement would not substantially lessen competition. This can include obtaining competition law advice, using compliance policies, and structuring arrangements to avoid hard‑core cartel behaviour. While the core offence in section 45 is one of intention to enter into the agreement (and not simply negligence), evidence of thorough due diligence can undermine the Crown’s claim that the parties knowingly engaged in a prohibited conspiracy. It can also reduce moral blameworthiness and influence sentencing where liability is established.

• Charter rights (e.g., section 7 – life, liberty, and security of the person)

  Because Competition Act offences are criminal and carry the risk of imprisonment, the protections of the Canadian Charter of Rights and Freedoms apply. Section 7 guarantees the right to life, liberty, and security of the person and the right not to be deprived of these except in accordance with principles of fundamental justice. Accused persons may challenge aspects of the Competition Act or its enforcement where, for example, the scope of the offence is alleged to be overly broad or vague, or where investigative methods, disclosure failures, or procedural rules undermine trial fairness. While section 7 challenges rarely strike down the core cartel provisions themselves, they can lead to the exclusion of improperly obtained evidence or, in extreme cases, a stay of proceedings if prosecutorial conduct is abusive or the process becomes fundamentally unfair.

Real-World Example

Consider a group of competing companies that supply a common household product across Canada. Executives from these companies meet secretly at conferences and in private communications and agree to fix minimum prices for their products and to avoid discounting below a set level. They also agree not to aggressively enter each other’s regional territories, effectively dividing the country among themselves. This agreement is never disclosed publicly. Over several years, consumers pay higher prices than they would have in a competitive market.

Under the Competition Act Canada, this type of arrangement fits squarely within the conspiracy offence in section 45. There is an agreement among competitors, it is at least partly secret and coordinated, and it is designed to lessen competition substantially by eliminating price rivalry and restricting entry into each other’s markets. The Competition Bureau could investigate using search warrants, production orders, or by seeking cooperation through its immunity and leniency programs. If the evidence proves the agreement beyond a reasonable doubt, the companies and responsible individuals could be charged with an indictable offence. Upon conviction, the corporations could face very large fines, and individuals could face imprisonment, heavy personal fines, or both.

Record Suspensions (Pardons)

Because criminal offences under the Competition Act are treated as indictable offences, they are subject to the same federal record suspension (pardon) framework as Criminal Code crimes. A conviction will appear on an individual’s criminal record and can have serious long‑term impacts on employment, professional licensing, international travel, and business opportunities. Under current Parole Board of Canada policies, a person convicted of an indictable offence typically must wait 10 years after the completion of their entire sentence—including any term of imprisonment, probation, and payment of fines or surcharges—before they can apply for a record suspension. The Parole Board then assesses factors such as conduct since conviction, the nature of the offence, and evidence of rehabilitation. A record suspension does not erase the conviction but sets it aside in the national repository, limiting routine access to the record. Corporations themselves do not obtain record suspensions; this process applies to individuals.

Related Violations

• Bid-rigging (e.g., collusive tendering under section 47 of the Competition Act)
• Price-fixing conspiracies (agreements among competitors to fix, maintain, increase, or control prices)
• Abuse of dominant position (civil or administrative misconduct by a firm with market power that substantially lessens or prevents competition)