Bill C-235

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First Reading

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	1st Session, 36th Parliament, 46 Elizabeth II, 1997
	The House of Commons of Canada
	BILL C-235
	An Act to amend the Competition Act (protection of those who purchase products from vertically integrated suppliers who compete with them at retail)
R.S., c. C-34; R.S., c. 27 (1st Supp.), c. 19 (2nd Supp.), c. 34 (3rd Supp.), cc. 1, 10 (4th Supp.); 1990, c. 37; 1991, cc. 45, 46, 47; 1992, cc. 1, 14; 1993, c. 34; 1995, c. 1	Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
	*1. The Competition Act* is amended by adding the following after section 50:**
Competition by supplier: definitions	50.1 (1) In this section,
``affiliate'' « personnes affiliées » ou « filiale »	``affiliate'' has the meaning given to it in subsection 77(5);
``market area'' « secteur de marché »	``market area'' means an area in which a seller customarily sells a product at retail or offers it for sale at retail.
Fair price to competing retailer	(2) Every vertically integrated supplier who manufactures and sells a product at retail, either directly or through an affiliate, and also sells the product or a similar product to a purchaser who is not an affiliate but who is in the business of selling the product at retail, and who charges the purchaser a price that exceeds
	(a) the supplier's own retail price in the same market area as that in which the purchaser customarily sells the product or offers it for sale, less
	(i) the supplier's own cost of marketing at retail, and
	(ii) the supplier's reasonable return on the retail sale,
	in the case of a direct sale, or
	(b) the price charged to the affiliate, in the case of a sale through an affiliate,
	is guilty of an indictable offence and liable to a fine not exceeding ten thousand dollars for every day on which the offence is committed, in the case of a first offence, and twenty-five thousand dollars for every day on which the offence is committed, in the case of a second or subsequent offence, or to a term of imprisonment not exceeding two years, or to both fine and imprisonment.
No lower return for supplier	(3) Notwithstanding subsection (2), a vertically integrated supplier is not required to sell a product to a retailer at a price that results in the supplier receiving a lower return on the retail sale of the product when sold by the supplier or its affiliate than the customer's return on the retail sale of the same product supplied by the supplier, in the same market area.
	2. Section 78 of the Act is amended by deleting the word ``and'' at the end of paragraph (h), by adding the word ``and'' at the end of paragraph (i) and by adding the following after paragraph (i):
	(j) by a vertically integrated supplier, coercing or attempting to coerce a customer who competes with the supplier at the retail level in the same market area, in relation to the establishment of the customer's retail price or pricing policy.