The Generals - Fall/Winter 2013 - (Page 23)

FEATURE Healthy Competition: Staying Onside the Competition Act through the OGCA’s New Compliance Program By Nikiforos Iatrou and Graham Brown, WeirFoulds M ost people in the construction industry are familiar with the startling revelations coming out of the Charbonneau Inquiry in Quebec. However, there are equally important developments coming out of Ottawa. Recently, Canada’s Competition Bureau (the “Bureau”) has focused its sights on the business practices of Canadian construction companies. In the past year, the Bureau has executed search warrants at a Quebec engineering firm and conducted an investigation into Ontario’s concrete foundation-pouring industry. This is only the tip of the iceberg, as the Bureau has publicly stated its intention to increase its level of strategic and targeted regulatory interventions. Following on the Bureau’s increased scrutiny of the construction industry, the OGCA has decided to provide its members with a competition compliance program. Here is why your participation in the program will be an asset to your business. The Competition Act and Your Business Every construction business deals with tendering, bidding and pricing issues. However, not everyone is familiar with the legal headaches that can arise during such processes. Canada’s Competition Act specifically prohibits certain practices that have the effect of dampening healthy competition and harming consumers. Of particular relevance to the construction industry are the illegal practices known as “price-fixing” and “bid-rigging.” Price-Fixing Section 45 of the Competition Act prohibits conspiracies to control a market, commonly through a practice known as price-fixing. The punishment for price fixing can be up to 14 years in prison, a $25 million fine, or both. Price-fixing may be found to exist where two or more competitors agree to: • fix, maintain, increase or control the price for the supply of a product or service; • fix, maintain, control, prevent, lessen, or eliminate the supply of a product or service; or • allocate sales, territories, customers or markets. In 2010, the Competition Act was amended, and it is now easier than ever for the Competition Bureau to prove that price-fixing has occurred. The Bureau only needs to prove that an agreement The Bureau only needs to prove that an agreement was entered into with the intent of price-fixing; it does not need to show that the agreement actually had any effect on the market. was entered into with the intent of price-fixing; it does not need to show that the agreement actually had any effect on the market. Simply put, this means that companies of all sizes are at risk of violating the Competition Act, and should re-examine their pricing practices accordingly. The Bureau frequently brings price-fixing cases against companies and individuals, and as recently as June 2013 obtained a $1.5 million fine from an airline for its role in fixing the price of surcharges related to air cargo shipments. Fall/Winter 2013 23

Table of Contents for the Digital Edition of The Generals - Fall/Winter 2013

Chairman’s Message
President’s Message
Incoming Chairman’s Message
Upcoming Events - In Memoriam
Mitigating the Risk of Subcontractor and Supplier Default
Glen Murray Has Cause to Pause
Healthy Competition: Staying Onside the Competition Act through the OGCA’s New Compliance Program
Insurers and Contractors: Working Together to Support Investment in Critical Infrastructure
Thank You to Our 8th Construction Symposium Sponsors
Prompt Payment Legislation and the General Contractor
75th Annual General Meeting & Conference
Index to Advertisers

The Generals - Fall/Winter 2013

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