(1965) 4 ALBERTA LAW REVIEW 67 CRIMINALITYAND THE CANADIAN ANTI-COMBINESLAWS BRUCE C. McDONALD* INTRODUCTION Considerable attention has been devoted, over the course of the last seventy-five years, to the selection of legal controls designed to secure such economic structure and behaviour as is deemed politically desirable in Canada. Increasing concentration of private wealth and industrial­ ization continuously make the matter more complex and yet more urgent. The Canadian Parliament long ago decided that corporations and businessmen can and sometimes do act in socially undesirable ways in regard to the structural and behavioural aspects of a competitive economy. 1 A difficult legal problem is the finding of the most appropriate remedy, or combination of remedies, in view of the various desired ob­ jectives. Laws are required, not only as an agreed statement of social objectives, but also as a means for ensuring those goals. The law furnishes a wide variety of forms of control, each designed to accomplish certain types of results and each having consequent limitations upon its capabilities. The control of combines and unfair trade practices in Canada has fallen to the criminal law exclusively. Combines law originated as criminal law for natural "social" reasons in 1889, but remains criminal for what may well be misconceived constitutional grounds. The object of this article is to examine the value of the criminal law as a regulatory tool for combines problems. The subject will be treated with a view to general criminal law concepts, followed by an analysis of the operation of leading criminal law principles in combines cases. A brief description of the substantive portions of the Combines Investigation Act 2 will assist those not familiar with its proscriptions. The Act embodies an attempt to define and ensure a basically competitive environment in which certain types of enterprise are to function. As a criminal statute, it endeavours to accomplish its object by prohibiting certain classes of restraints upon competition. Part V of the Act contains the substantive offences, which are, essentially, conspiracies (to fix prices, limit production, and so on) , mergers, monopolies, price dis­ crimination, predatory pricing, rebate differentials, misleading advertis­ ing, and resale price maintenance. Although some formal remedies under the Act may be applied without regular criminal procedure 3 and • Assistant Professor, Faculty of Law, Queen's University. This article is part of a thesis on combines remedies written in partial fulfillment of the requirements for the degree Clf S.J.D. at The University of Michigan. 1 The original combines legislation ls (Can.) 1889, c. 41. Parliament had shown some concern for a decade prior to this, but had discussed the issue in terms of tariff change, until 1888. :? R.S.C. 1952, c. 314, as amended by (Can.) 1953-54, c. 51; (Can.) 1960, c. 45; (Can.) 1960-61, c. 42; and (Can.) 1962-63, c. 4. a S. 31 ( 4) requires that proceedings by information of an Attorney-General under s. 31 "shall be tried by the court without a jury, and the procedure applicable in injunction proceedings in the superior courts of the province shall, in so far as possible, apply." The Minister of Justice has suggested that the ordinary laws of evidence applicable in criminal proceedings would obtain for section 31 (2), and that section 31 (2) was designed for the more dubious cases. See House of Commons Debates, 1960, pp. 6939-40. How the courts will treat the section has not yet become clear, since there have been no contested actions under section 31 (2). 68 ALBERTA LAW REVIEW others without any court proceedings whatever,"' the substantive offences are indictable. The sole exception is the summary offence of misleading advertising in relation to the price of an article. 5 Mergers and agreements between companies are natural activities and are frequently socially beneficial. Since the basic values of the combines legislation appear to be economic in nature, flexible, extra-legal criteria have had to be written into the statute to accommodate desirable business phenomena in terms of optimal allocation of resources, use of capacity, and so on. This legislative problem and its solution are evident from the current proscriptions respecting mergers, monopolies, and con­ spiracies: S.2(e) 'merger' means the acquisition by one or more persons, whether by purchase or lease of shares or assets or otherwise, of any control over or interest in the whole or part of the business of a competitor, supplier, customer or any other person, whereby competition (i) in a trade or industry, (ii) among the sources of supply of a trade or industry, (iii) among the outlets for sales of a trade or industry, or (iv) otherwise than in subparagraphs (i), (ii) and (iii), is or is likely to be lessened to the detriment or against the interest of the public, whether consumers, producers or others; S.2 (f) 'monopoly' means a stiuation where one or more persons either sub­ stantially or completely control throughout Canada or any area thereof the class or species of business in which they are engaged and have operated such business or are likely to operate it to the detriment or against the interest of the public, whether consumers, producers or others, but a situation shall not be deemed a monopoly within the meaning of this paragraph by reason only of the exercise of any right or enjoyment of any interest derived under the Patent Act, or any other Act of the Parliament of Canada. [Emphasis added.] S.32 (1) Everyone who conspires, combines, agrees or arranges with another person (a) to limit unduly the facilities for transporting, producing, manufacturing, supplying, storing or dealing in any article, (b) to prevent, limit or lessen, unduly, the manufacture or production of an article, or to enhance unreasonably the price thereof, (c) to prevent, or lesson, unduly, competition in the production, manufacture, purchase, barter, sale, storage, rental, transportation or supply of an article, or in the price of insurance upon persons or property, or (d) to restrain or injure trade or commerce in relation to any article, is guilty of an indictable offence and is liable to imprisonment for two years. [Emphasis added.] As an engine of social control, there are two chief reasons for selecting the criminal process. Firstly, the philosophy of the criminal law and the function and capacity of the criminal penalty may offer the most effective safeguard for the relevant public interest. Secondly, the procedural safeguards which are stationed around the criminal law may be desired as part of the sanctioning process. These two factors are necessarily related. f The Govemor in Council may, by s. 29, adjust the duty on an article if it is satisfied, as a result of an inquiry under the Act, that certain specified criteria have been met. The real effect of this section is none too clear. 5 S. 33C. CRIMINALITY AND ANTI-COMBINES LAWS 69 COMBINES AND GENERAL CONCEPTS OF CRIMINAL LAW 1. General The traditional concern of the criminal law has been for the health and safety of the bodies and minds of the people who compose society. It has also dealt with some violations of the property rights of individuals, and with morally blameworthy exploitation of individuals. The underlying criteria derive from a principle of efficacy in the orderly functioning of society as a collective unit. This is the meaning of the familiar concept of the King's Peace. The Supreme Court of Canada has described the object of the criminal laws as follows: They are concerned primarily not with rights, with their creation, the conditions of their exercise, or their extinction; but with some evil or some menace, moral or physical, which the law aims to prevent or suppress through the control of human conduct. 6 Economic crimes do not have to be directed at private persons. In­ come tax evasion and breaches of securities regulations usually involve moral considerations, and undermine the orderly supervision of society in a more direct way than do combines offences. The criminal law is also utilized to help secure integrity and responsibility in government and public administration, but in this area the offences are limited to easily definable acts which involve moral fault.· The social problem of combines offences comes near to this latter area, since it also involves socially undesirable conduct and consequences occurring at a high level of organization and influence. The economic consequences are frequently colossal, even though perhaps thoroughly diluted in time and space. To what extent may the community, by the threat and penalties of the criminal law, effectively repudiate undesirable combines activity? Since, to a large extent, the relevant public interest or interests can only be evident from the deliberations of Parliament, initial recourse must be had, in answering this question, to the original combines debates of 1888, 1889, and 1890. Those debates illustrate a general agreement that combines should be suppressed; but, at the same time, disclose a vigourous dispute over the appropriate means of suppression. The debates are characterized by moralistic overtones indicated by such phrases as "a crying and growing evil," 8 "iniquitious," "per nicious," and "illegitimate." 0 This appears to have been inspired by appre­ hension and alarm over the activities of the robber barons in the United States; and, indeed, our legislation was partially influenced by the re­ actions in the New York State legislature to that problem. 1° Con­ sequently, the members were naturally motivated by a rather personalized level of concern, and experienced little difficulty in equating the nature 6 Re Combines Investigation Act and S. 498 of the Criminal Code, (1929) 2 D.L.R. 802 {Duff, J., as he then was).
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