The strategic shift in private enforcement of Canada’s competition laws

August 2025  |  SPECIAL REPORT: COMPETITION & ANTITRUST

Financier Worldwide Magazine

August 2025 Issue

On 20 June 2025, a year after Bill C-59 received Royal Assent, the extensive amendments to Canada’s private enforcement regime under the Competition Act came into force.

These amendments, extending the private access regime to two additional forms of reviewable conduct, introducing disgorgement remedies for private parties and expanding eligibility for private parties that may successfully seek leave to the Competition Tribunal, among others, arguably represent the most significant changes to private enforcement in a generation.

Many predict that these amendments will result in a flood of cases before the Competition Tribunal – not to fight it out on the merits before the tribunal, but instead to use the threat of Competition Act litigation as commercial leverage in private negotiations.

While there will undoubtedly be some friction as some private parties use their newfound access in a vexatious manner with little substantive support, these amendments should not necessarily be considered only as an additional regulatory hurdle for companies to overcome. Rather, another, relatively efficient, method for resolving commercial disputes may emerge, enabling private parties to more efficiently manage disputes, even if relatively few of them are heard before Canada’s specialist competition court.

A slow history: civil private enforcement before 2022

Prior to these amendments to the private access regime, for decades parliament deliberately pursued a limited and measured approach to private enforcement of Canada’s competitions laws, resulting in the Commissioner of Competition holding a near-monopoly on enforcement of the Competition Act in Canada. This cautious pessimism toward private enforcement was particularly centred around concerns regarding tactical and opportunistic private litigation chilling pro-competitive conduct.

Nonetheless, over the last half-century, parliament has slowly begun to open the doors to private enforcement of the Competition Act. Beginning in 1976, parliament enacted a limited private action regime, allowing for damages to be sought under section 36 of the Competition Act. A private party, however, could only successfully invoke this provision for criminal conduct, specifically (at the time) price-fixing offences and deceptive marketing. Although the plaintiff bar in Canada has been able to successfully invoke section 36 to pursue collective monetary relief in the form of class actions, this provision has been generally unavailable for civil conduct under the Competition Act.

It was not until 2002 that parliament enacted a provision providing limited private access to the Competition Tribunal for certain types of civil conduct. Although originally introduced for refusal to deal and exclusive dealing, tied selling and market restrictions, in 2009 the provision was further expanded to price maintenance when this conduct was converted from a criminal to a civil standard. As originally conceived, section 103.1 of the Competition Act provided private parties with the ability to seek leave of the Competition Tribunal to bring applications for injunctive relief in respect of these civil provisions. In June 2022, the list of conduct that could be subject to a private application was extended to include abuse of dominance.

Despite expanding private access to the Competition Tribunal through the enactment of section 103.1, in practice, private litigants have had very little success in being granted leave to the tribunal. This low success rate often stemmed from the test for leave presenting a high bar to private parties, coupled with a lack of incentive for cases to be brought, in particular due to the regime not providing the opportunity to seek damages from the tribunal. Indeed, in the over 20 years since this provision has been in force, only a few dozen applications have been made to the tribunal, only a handful of which have been granted leave.

A legislative leap: what Bill C-59 unleashed

The amendments to Canada’s private application regime in Bill C-59, that came into force on 20 June 2025, represent a significant change in policy regarding the enforcement of the Competition Act’s civil provisions at the legislative level. No longer does parliament appear as concerned to balance the perils of opportunistic litigation against the potential upsides of outsourcing enforcement beyond the Competition Bureau’s limited resources.

First, private parties are now permitted to seek leave of the Competition Tribunal to pursue proceedings in respect of two additional types of civil conduct – deceptive marketing under section 74.01 and anti-competitive agreements under section 90.1.

Second, private parties now have the right to pursue monetary relief, known as disgorgement, before the tribunal, with the exception of private applications for deceptive marketing practices. As a result, if a private party is granted leave to the Competition Tribunal and is successful on the merits of its application, it can now seek an order from the tribunal for the payment of “an amount, not exceeding the value of the benefit derived from the conduct […] to be distributed among the applicant and any other person affected by the conduct”.

Third, private parties now face a lower bar for obtaining leave to bring their case before the Competition Tribunal. Historically, private parties had to demonstrate that they were directly and substantially affected in their business by the alleged conduct. Although it is not known what specific percentage of the applicant’s total business is of sufficient magnitude for the tribunal to grant leave, based on previous case law, it appears that the line that the tribunal draws between substantial effect and insubstantial effect lies somewhere in the range from 22 to 48 percent of the applicant’s business being affected by the impugned conduct.

This was a high bar to meet, especially for complainants whose business was larger-scale and perhaps affected by the impugned conduct in a single product area or geography. With the amendments, this test has been diluted so as to allow for parties to be granted leave where they have been directly and substantially affected in whole or in part of their business; this makes an applicant’s evidentiary burden at the leave stage more manageable.

Furthermore, parliament has also created a second avenue for parties to be granted leave to the Competition Tribunal, where it is satisfied that it is “in the public interest to do so”, a phrase that remains undefined in the Competition Act and therefore subject to the future contours of tribunal jurisprudence.

Taken together, these changes expand access, lower the applicable procedural hurdles and provide some commercial incentive for private parties to come forward for alleged civil conduct infringements.

Opportunity in uncertainty: leveraging the new regime

In predicting the impact of these changes, some have argued that they will open the floodgates for private litigants to enforce the civil provisions directly, bypassing the Competition Bureau, which has a poor track record of enforcing these provisions.

As a result, concerns have been raised that this newly expanded private enforcement regime may only be used by parties to gain unjustified commercial leverage, resulting in settlements emerging as the most likely resolution for many applications. We have already seen this strategy taking shape for private applications alleging abuse of dominance (which has featured private access rights since 2022).

In the first private application brought under section 79, Apotex Inc discontinued its application against Paladin Labs Inc. just two weeks after filing as Apotex received the sample of the ponatinib drug it alleged had been withheld by Paladin. We expect a similar trend for private applications under the deceptive marketing and civil anti-competitive agreements provisions of the Competition Act.

Should this pattern continue, and settlements become the most common resolution once a private application for leave has commenced, it is possible that the leave stage could become a greater focal point in private litigation, with leave hearings playing a role akin to the class certification process in class actions. As a corollary to the frequent settlement of class actions following successful certification, we may see private applications regularly settle in those cases where leave is granted (and conversely, peter out in circumstances where the applicant cannot meet the leave criteria). Moreover, the threat of a potential administrative monetary penalty under sections 74.01, 79 and 90.1, in addition to the new right to seek a disgorgement by private parties, may provide them with material leverage for the purposes of reaching a negotiated settlement.

Although litigating these cases would provide the Competition Tribunal with a welcome avenue to offer important jurisprudence on the new leave test and changes to the civil provisions’ legal standards and thereby provide more certainty to clients, greater incentives for achieving settlement are not inherently harmful. Litigating cases before the tribunal, or any civil court in Canada, remains a costly and time-consuming process, with no guarantee of an outcome that satisfies both parties. Accordingly, the enablement of an effective mechanism through which parties to commercial disagreements can both reach beneficial terms, without a need to litigate, could be one of the more positive consequences of the amendments in Canada.

Finally, for many private parties, the newly-expanded private application regime provides them with standing before an adjudicative body on matters where before they were dependent on the Competition Bureau’s enforcement priorities and budgetary constraints. Both complainants – provided they have the resources – and parties subject to a Competition Bureau investigation have little control over the investigative process once the Competition Bureau’s inquiry has commenced (assuming the bureau elects to take the case forward).

While the Competition Bureau is a law enforcement agency and the ability to exercise its discretion is a paramount feature of Canada’s adversarial competition law model, it does result in frustrations for parties, either for complainants when cases are deprioritised other than for evidentiary reasons, and for defendants owing to the time it can take for the Competition Bureau to review and ultimately close down an inquiry.

Accordingly, with appropriate guardrails to protect against vexatious litigation via the leave test, there is reason to be cautiously optimistic that expanding private access to a wider range of civil matters can generate efficiencies for both complainants and defendants, especially by giving them a stronger hand on the tiller directing the ebb and flow of any given case.

Nonetheless, it remains to be seen how impactful these amendments will be in practice. Although it is difficult to deny that these amendments have and will continue to change the enforcement landscape for Canadian competition law, for the reasons outlined above, this does not necessarily translate into more complexity or more litigation for companies conducting business in Canada.

Indeed, these provisions may provide, with appropriate tribunal supervision, a better calibrated balance of risk and reward for private parties, both by levelling the playing field and by removing the inherent uncertainty that comes with using the Competition Bureau as intermediator.

 

Michael Caldecott is a partner and Samantha Steeves is an associate at McCarthy Tétrault LLP. Mr Caldecott can be contacted on +1 (416) 601 7738 or by email: mcaldecott@mccarthy.ca. Ms Steeves can be contacted on +1 (416) 601 8324 or by email: samsteeves@mccarthy.ca.

© Financier Worldwide

BY

Michael Caldecott and Samantha Steeves

McCarthy Tétrault LLP

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