Steinecke Maciura LeBlanc Barristers & Solicitors


	Newsletters
	Grey Areas


	Competition Bureau Flexes Muscles Over Provincial Professional Regulators
	by Richard Steinecke
	August 2006 - No. 102

	For many years professional regulators felt that they were immune from review of their actions by the federal Competition Bureau. In two leading cases the courts had indicated that professional regulators had protection for their actions under the Regulated Conduct Doctrine (RCD). For example, in Jabour v. Law Society of B.C., [1982] 2 S.C.R. 307, the Supreme Court of Canada supported the right of the Law Society to regulate lawyer advertising despite the anti-competitive implications of such conduct. That such regulation was an important means of protecting the public would override the value of free competition. More recently, the Ontario Divisional Court dealt with the ability of the provincial Law Society to compel lawyers to obtain professional liability insurance from a single, in-house insurer: Law Society of Upper Canada v. Canada (1996), 67 C.P.R. (3d) 48 (Ont. Ct. Gen. Div.). In that case the Court said: Where a violation of the Competition Act is alleged, the regulated conduct defence will apply to individuals and companies which are subject to regulation, and to regulatory agencies themselves, provided the impugned conduct is mandated, required or authorized by validly enacted legislation. In a June 2006 update of its technical bulletin on the issue, the Bureau took a more aggressive stance to the Regulated Conduct Doctrine. In essence the Competition Bureau signalled that it would review the actions of a professional regulator to ascertain whether they really should be exempt from scrutiny by the Bureau. While the technical bulletin is just that, quite technical, the theme emerges loud and clear. The Bureau notes that most of the cases on the point really relate to the authority of the Bureau to enforce competition law through its criminal powers. The Bureau in fact has other powers related to “reviewable matters” such as provisions related to exclusive dealing, tied selling and abuse of dominant position. The Bureau points out that the broad statement in the Law Society of Upper Canada case was based on the consent of the Bureau at that time, and not on an analysis of the law. Further, the Bureau points to a recent Supreme Court of Canada case in another context: Garland v. Consumers Gas Co., [2004] 1 S.C.R. 629. Garland dealt with an allegation of criminal interest rates being charged by Consumer Gas through its late payment fees. The Court held that the fact that such rates were regulated provincially did not immunize it from an unequivocal federal prohibition. While the Bureau suggests it will not push Garland to initiate criminal prosecutions against those acting under provincial regulatory authority, it will apply the principle to reviewable matters. The Bulletin goes on at length to describe the types of situations where the Bureau is likely to review the actions of a professional regulator. Suffice it to say that the type of conduct that is most likely to be reviewed by the Bureau would involve the following: · Action by an independent self-regulating body, as opposed to a direct government agency. · Action that involved discretionary actions by the regulator (e.g., making a regulation or by-law, publishing a policy or standard, a decision to investigate or prosecute a particular type of conduct, etc.). · Action that was not based on clearly articulated analysis of why the public interest requires such regulatory action, even if there are anti-competitive implications. Undoubtedly if the Bureau does flex its muscle, it will be prepared for a court challenge to clarify its powers. Regulators wishing to avoid becoming a test case may wish to review its actions for any anti-competitive implications. A copy of the Technical Bulletin can be found at: www.competitionbureau.gc.ca/internet/index.cfm?itemID=1993&lg=e or search the phrase: Technical Bulletin on “Regulated” Conduct. Some excerpts from the Bulletin read as follows: Generally, in determining whether conduct regulated by another law will be pursued under the Act, the Bureau will carefully consider the purpose of the Act and any other law said to be applicable to the conduct, the interests sought to be protected by both laws, the impugned conduct, the potentially applicable provision(s) of the Act and of the other law, the parties involved, and the principles of statutory interpretation applicable to the case. As outlined below, the Bureau will not necessarily approach conduct regulated by provincial laws in the same manner as conduct regulated by federal laws. Similarly, the Bureau will not necessarily approach the application of the reviewable practice provisions of the Act to conduct regulated by another law in the same manner as it will approach the application of the criminal provisions of the Act to such conduct…. Under any interpretation of the existing caselaw, it is clear that the RCD constitutes an exception to the standard rules calling both for the application of a general law in accordance with its plain meaning and for the paramountcy of validly enacted federal law, such as the Act. In compliance with the decision of the Supreme Court in Jabour, the Bureau will always consider whether the RCD applies to conduct that may be regulated by provincial law, focusing on the question of whether a validly enacted provincial law authorizes (expressly or impliedly) or requires the impugned conduct. Where this occurs, the Bureau will apply the RCD and refrain from pursuing a case under section 45 of the Act. With respect to the other provisions of Part VI, in compliance with Garland, the Bureau will strive to determine whether Parliament intended that the particular provision(s) of the Act apply to the impugned conduct and may not pursue the case by application of the RCD. Even if the Bureau concludes that the RCD, itself, does not immunize the impugned conduct, other doctrines or defences, or the Bureau’s discretion to pursue an inquiry, may lead the Bureau not to pursue a case under Part VI of the Act in respect of conduct that is authorized or required by valid provincial law.



	Subscribe to this newsletter

	FOR MORE INFORMATION This newsletter is published by Steinecke Maciura LeBlanc, a law firm practising in the field of professional regulation. If you are not receiving a copy and would like one, please contact: Richard Steinecke, Steinecke Maciura LeBlanc, 401 Bay Street, Suite 2308, P.O. Box 23, Toronto, ON M5H 2Y4, Telephone: 416-626-6897 Facsimile: 416-593-7867, E-Mail: rsteinecke@sml-law.com WANT TO REPRINT AN ARTICLE A number of readers have asked to reprint articles in their own newsletters. Our policy is that readers may reprint an article as long as credit is given to both the newsletter and the firm. Please send us a copy of the issue of the newsletter which contains a reprint from Grey Areas.