The Safe Streets and Communities Act (Bill C-10), passed in the House of Commons in December, could have harsh implications for violators of The Competition Act.
Richard Wagner, an Ottawa-based partner at Norton Rose, warns that Wall Street “perp walks” may be in the cards for a lot more Canadian executives, since under the act more convictions for conspiracy and bid-rigging will likely result in jail time. Wagner notes that Bill C-10 “removes the ability to sentence an individual to community service” for conspiracy and bid-rigging convictions. To date, almost all persons sentenced to serve less than two years for these charges have done so in the community.
Besides stiffer sentencing, Bill C-10 extends the time convicted executives have to wait to receive a pardon to 10 years from the current five years. Since a pardon is necessary to travel to the U.S., Wagner notes that Bill C-10 may “affect these individuals’ ability to resume business activities” if they have business associations in the U.S.
Not only will price-fixing convictions be stricter under this legislation, 2010 Competition Act changes cause them to be more frequent. Conviction “no longer requires proof of anti-competitive effects” resulting from price-fixing agreements; the agreements themselves are a violation.
So, what can Canadian boards and senior management do to prevent violations?
Wagner suggests that “Canadian businesses should prepare or enhance corporate com- pliance plans and training for executives and employees.” These steps will deter violations through increased awareness of competition laws and help a company defend itself if charged, proving it took steps to prevent anti-competitive behaviour.
“Companies that are first to report suspected violations and meet the criteria of the [Competition] Bureau’s immunity and leniency programs can obtain some legal protection for individual employees,” says Wagner. Thus, if an executive suspects violations are taking place within the company, he or she must act quickly to seek protection.