Casual Legal: Amendments to Federal Competition Act

By Andrew Skeith
Reynolds Mirth Richards Farmer LLP
Alberta Municipalities Casual Legal Service Provider

The Federal Competition Act, RSC 1985, c C-34 is a piece of legislation that, broadly speaking, attempts to maintain and encourage competition in the Canadian economy.

While the provisions of the Act apply to municipalities, given the fact municipalities are government entities and do not generally engage in free market “competitive” activity, the Act is rarely of concern. However, in June of 2022, the Federal Government passed certain amendments to the Act which will be of concern to employers generally, including municipalities. These amendments will officially come into force on June 23, 2023.

The amendments add a new prohibition on “wage fixing” and “no-poach” agreements between employers, and the language of the amendments is incredibly broad:
(1.1) Every person who is an employer commits an offence who, with another employer who is not affiliated with that person, conspires, agrees or arranges

• (a) to fix, maintain, decrease or control salaries, wages or terms and conditions of employment; or
• (b) to not solicit or hire each other’s employees.

The Act makes it a criminal offence to engage in any wage fixing or other activity that would breach that section.

Municipalities must be particularly cautious when entering into any form of agreement with another entity which would impose any term or condition of employment on their, or the other parties, employees. The term could relate to wages, but it could also be as broad as imposing a confidentiality requirement on the employees. This can arise in such seemingly harmless circumstance as where the municipality has accepted a tender for services, and the agreement with the service provider imposes a mutual duty of confidentiality on the employees of the service provider and the municipality.

Agreements between a municipality and a service provider also often contain “no-poach” provisions prohibiting either party from approaching or hiring each other’s employees for a certain period of time. Those provisions would be expressly prohibited by the amendments to the Act.

Going forward, municipalities should ensure that any agreements they enter into do not contain provisions which might directly impose terms or conditions of employment on their employees, or that contain any terms which might contravene the new amendments to the Act.

To access Alberta Municipalities Casual Legal Helpline, Alberta Municipalities members can call toll-free to 1-800-661-7673 or send an casuallegal [at] abmunis.ca (email) to reach the municipal legal experts at Reynolds Mirth Richards and Farmer LLP. For more information on the Casual Legal Service, call 310-MUNI (6864) or send an riskcontrol [at] abmunis.ca (email) to speak to Alberta Municipalities Risk Management staff. Any Regular or Associate member of Alberta Municipalities can access the Casual Legal Service.

DISCLAIMER: This article is meant to provide information only and is not intended to provide legal advice. You should seek the advice of legal counsel to address your specific set of circumstances. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this article to be outdated.