Finance Minister Jim Flaherty’s recent stimulus budget contained sweeping reforms to Canada’s Competition Act, many of which received widespread approval from a group of more than 100 business leaders polled by COMPAS Inc.
Each of the six changes the CEOs were asked to rate got majority approval, but COMPAS notes the provisions that “appeared to have teeth” resonated more than others. Most popular among the respondents, with 83% support, were changes to the definition of bid rigging (when two or more competitors collude on the outcome of contracts or tenders) to include conspiracy to have bids withdrawn.
“Bid rigging damages companies with good business practices and needs to be dealt with harshly in order to maintain a healthy business environment,” according to one respondent. “I commend the Conservatives for going after this problem, and if we can get the police and courts to also view this as a serious crime, we will have made some real progress.”
The new rules shouldn’t be any more lenient on the public sector either, reminded another respondent: “Make sure that judges enforce the penalties, and include government employees and government corporations that assist in violating any bidding process.”
Other popular changes included criminalizing cartel behaviour in the spirit of the 19th-century U.S. Sherman Act (the first measure to prohibit trusts), and allowing those who have suffered loss as a result of violations of the Competition Act to sue for damages.
The federal government is now also entitled to review foreign takeovers of Canadian companies on the basis of national security, a measure that more than three-quarters of the respondents support.
But one CEO pointed out that changing the law is one thing; enforcing it is a different matter altogether. “We have hadcompetition laws that have been poorly enforced. Now the government wants to toughen the laws and presumably toughen enforcement,” wrote the respondent. “I would prefer they properly apply today’s laws.”