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______________________________________________________________________________Stewart McKelveyDoing Business in Atlantic Canadaissue injunctions and remedial orders preventing practices that are likely to substantially reducecompetition.The Competition Act also establishes a number of trade practices and activities which can be reviewed bythe Competition Tribunal. These activities include the refusal by a supplier to sell its product to anotherparty, consignment selling, exclusive dealing, market restrictions, tied selling, abuse of dominant positionand delivered pricing. Administrative monetary penalties of up to $10-million for the first offence and upto $15-million for subsequent offences have been recently introduced for abuse of dominant positionoffences.The other major reviewable activity under the Competition Act is mergers, which are defined very broadlyas involving the acquisition of control over or significant interest in the whole or part of a business of acompetitor, supplier, customer or other person, whether directly or indirectly and whether by share orasset purchase or by amalgamation or otherwise. If the Tribunal determines that a merger or proposedmerger prevents or lessens competition substantially, or is likely to do so, it may order that the merger bedissolved or not proceeded with, or allow it to proceed under certain conditions.Large proposed mergers are subject to notification requirements which must be satisfied before themergers can be completed. Mergers requiring notification to the Commissioner of Competition are thosewhere the parties have assets in Canada that exceed $400-million in aggregate value, or annual grossrevenues from sales in, from or into Canada that exceed $400-million. Additionally, the size of thetransaction must exceed $70-million, either in terms of the value of the assets being acquired or theannual gross revenues that would be generated by the transaction. As well, in the case of sharepurchase transactions, the proposed transaction must result in the acquiror holding at least 20% of theshares of a public corporation or 35% of the shares of a private corporation. There are additional rulesthat apply for amalgamations and joint ventures.The notification procedure involves completing either a short-form or long-form filing and paying a filingfee of $50,000. It is also possible to apply for an Advanced Ruling Certificate as an alternative to filingthe short-form or long-form filings.In considering if a merger or proposed merger will substantially lessen competition, the CompetitionTribunal is required to consider a number of factors including the extent to which foreign products orforeign competitors provide or are likely to provide effective competition to the businesses of the parties tothe merger or proposed merger; whether the business, or a part of the business, of a party to the mergeror proposed merger has failed or is likely to fail; the extent to which acceptable substitutes for productssupplied by the parties to the merger or proposed merger are or are likely to be available; any barriers toentry into a market, including tariff and non-tariff barriers to international trade and any effect of themerger or proposed merger on such barriers; the extent to which effective competition remains or wouldremain in a market that is or would be affected by the merger or proposed merger; any likelihood that themerger or proposed merger will or would result in the removal of a vigorous and effective competitor; thenature and extent of change and innovation in a relevant market; and any other factor that is relevant tocompetition in a market that is or would be affected by the merger or proposed merger.Pursuant to recent amendments to the Competition Act, the initial review period is now 30 days for allmatters. If the Competition Bureau requires further information in order to make its determination, thereview period will be extended for an additional 30 days commencing only after the parties fully complywith the Bureau’s request for additional information.Further, the time period during which post-merger challenges by the Competition Bureau can be madehas been recently reduced from three years to one year.Product Standards and CodesProducts and services in Canada are subject to numerous technical standards which set minimumrequirements for safety or performance. Many of these standards have been developed by industryassociations on a voluntary basis. Federal and provincial governments have also established manyPage 27
______________________________________________________________________________Stewart McKelveyDoing Business in Atlantic Canadamandatory standards, often by incorporating into law standards developed by industry organizations.One of the key federal statutes to be aware of is the Hazardous Products Act, which applies to theadvertising, sale and importation into Canada of hazardous products and substances, and which sets outnational safety standards for numerous consumer products, including toys, furniture, household andgarden products.The Standards Council of Canada is a federal Crown corporation with the mandate to promote efficientand effective standardization. It coordinates and oversees the efforts of the National Standards System,which includes organizations and individuals involved in voluntary standards development, promotion andimplementation in Canada. Some of the more prominent standards developing organizations in Canadainclude the Canadian Standards Association (which deals with electrical products, fire and safetyequipment, plumbing fixtures, toys and other consumer goods), the Canadian General Standards Board(textiles) and the Underwriters Laboratories of Canada (fire hazards and detection).Given the large number of standards in force, developers and importers of products should seek expertadvice to ensure their products comply with applicable standards. Companies should also determine iftheir products are eligible to receive certification marks from accredited certification organizations.Packaging and Labelling RequirementsThe federal Consumer Packaging and Labelling Act applies to most products which are the subject oftrade or commerce in Canada, including both food and non-food products. The Act provides that noprepackaged goods can be sold, imported to Canada or advertised without a label prominently displayingthe net quantity of the product. Labels are required to identify the product’s identity in both English andFrench, and quantities must normally be described using the metric system of measurement. The Actalso regulates standard container shapes and sizes.In addition to the Consumer Packaging and Labelling Act, there are a number of federal statutes thatmandate additional packaging and labelling requirements, including the Food and Drugs Act (which dealswith food products, drugs, cosmetics and medical devices), the Canada Agricultural Products Act (whichregulates specific food and beverage products), the Textile Labelling Act, the Hazardous Products Act,the Pest Control Products Act, the Precious Metals Marking Act, the Trade-marks Act, the Customs Tariff(which mandates that the country of origin be indicated on certain imports) and the Weights andMeasures Act.AdvertisingAs seen above, the Competition Act has many provisions which regulate advertising, including a generalprohibition against making false or misleading representations to the public and restrictions ontelemarketing and promotional contest activities. There are also many provincial statutes and regulationswhich impact on advertising, and these include locational restrictions (e.g. under highways legislation),product related restrictions (e.g. for liquor and tobacco), and professional restrictions (e.g. for lawyers anddentists).Warranties and Consumer ProtectionAll of the Atlantic Provinces have a Sale of Goods Act (“SGA)”, and there exists a high degree ofuniformity between the jurisdictions.The SGA sets out a complete and uniform set of rules which govern all situations where goods arebought and sold. The purpose of the legislation is to fill the gaps in the terms of a contract, where theparties may have forgotten to address an issue. It states what promises are to be implied on the part ofthe buyer and the seller in respect of matters on which the contract is silent, and the consequences ofperformance or non-performance of such promises where the contract does not state what thoseconsequences are to be. Its provisions do not supplant those of the contract, they merely supplementthem. The terms of the contract always prevail over the terms of the SGA, and the legislation specificallyallows parties to contract out of some or all of its provisions, should they wish to do so. As well, the SGAPage 28
Page 1 and 2: DOING BUSINESS IN ATLANTIC CANADA
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CHAPTER 15ABORIGINAL LAW
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CHAPTER 16MUNICIPAL LAW
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OUR OFFICE ADDRESSESNEW BRUNSWICKFR
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