Penalties and remedies for non-compliance

Summary of civil and criminal consequences

The consequences associated with being found to have engaged in deceptive marketing practices depend on whether the conduct falls under the civil or criminal provisions of the Competition Act:

  • Under the civil provisions, practices are brought before the Competition Tribunal, the Federal Court, or the superior court of a province or territory. For the practices to be found in violation requires that each element of the conduct be proven “on a balance of probabilities.”
  • Under the criminal provisions, violators can be tried in criminal court. This requires proof of each element of the offence “beyond a reasonable doubt.”

The following table provides an overview of the penalties and remedies that apply if an individual or corporation has been found to have breached different sections of the Competition Act.

Overview of the penalties that apply under different sections of the Act
Type of deceptive practice (and relevant section of the Competition Act) Penalties
Civil provisions
  • Making false or misleading representation [paragraph 74.01(1)(a)]
  • False or misleading representations in sender information, subject matter information, electronic messages, and in locators (section 74.011)
  • Ordinary selling price [subsections 74.01(2) and (3)]
  • Bait and switch selling (section 74.04)
  • Sale above advertised price (section 74.05)
  • Performance not based on adequate and proper tests [paragraph 74.01(1)(b)]
  • Drip pricing [subsection 74.01(1.1)]
  • Promotional contests (section 74.06)
  • Warranties and guarantees [paragraph 74.01(1)(c)]
  • Use of tests and testimonials (section 74.02)

The court may order the person: to stop engaging in such conduct, to publish a corrective notice, and/or to pay an administrative monetary penalty.

For individuals, the penalty for first-time violations is up to the greater of:

  • $750,000 ($1 million for each subsequent violation); and
  • three times the value of the benefit derived from the deceptive conduct, if that amount can be reasonably determined.

For corporations, the penalty for a first-time violation is up to the greater of:

  • $10 million ($15 million for each subsequent violation); and
  • three times the value of the benefit derived from the deceptive conduct, or, if that amount cannot be reasonably determined, 3% of the corporation’s annual worldwide gross revenue.

In situations where a person has made materially false or misleading representations about a product, and therefore violated paragraph 74.01(1)(a) of the Competition Act (which includes drip pricing), the court may also make an order for restitution that requires the person to pay an amount, not exceeding the total of the amounts paid to the person for the products in respect of which the conduct was engaged in, to be distributed among the persons to whom the products were sold and, in certain cases, may issue an interim injunction to freeze assets.

Criminal provisions
  • Knowingly or recklessly making a false or misleading representation (section 52)
  • Knowingly or recklessly making a false or misleading representation in sender information, subject matter information, electronic messages, and in locators (section 52.01)
  • Deceptive telemarketing (section 52.1)
  • Notice of winning a prize (section 53)

Summary conviction: Fine of up to $200,000 and/or imprisonment for up to one year.

Conviction on indictment: Fines are at the discretion of the court and imprisonment can be for up to 14 years.

Double ticketing (section 54) Fine of up to $10,000 and/or imprisonment for up to one year on summary conviction.
Multi-level marketing and pyramid selling (sections 55 and 55.1) Fine of up to $200,000 and/or imprisonment up to one year on summary conviction. Upon indictment, fines are at the discretion of the court and imprisonment can be for up to five years.

Potential for immunity

If you have engaged in a deceptive marketing practice prohibited under the criminal provisions of the Competition Act, you are encouraged to come forward, share what you know, and fully cooperate with our investigation and any subsequent prosecution. If you meet the requirements of the immunity program, we will recommend that the Director of Public Prosecutions of Canada provide you with immunity from prosecution

Compliance programs

Having a credible and effective compliance program can provide benefits in dealing with the Competition Bureau to resolve a violation of one of the legislation it enforces. A compliance program can also help:

  • reduce the risk of potentially illegal conduct
  • protect your brand and reputation
  • detect instances of potentially illegal conduct at an early stage
  • identify when others might put you at risk

Commissioner’s opinions

To find out more information on written opinions under section 124.1 of the Competition Act, contact the Bureau’s Information Centre toll-free at 1-800-348-5358 or online. If a written opinion is provided by the Commissioner, a fee will apply based upon the section of the Act the proposed conduct or practice applies to. A written opinion is binding on the Commissioner as long as the facts submitted are accurate, and it remains binding if the facts on which the opinion is based remain substantially unchanged and your conduct or practice is carried out, as proposed. All fees and service standards for written opinions are set out in the Competition Bureau Fee and Service Standards Policy.

Further reading