CANADA Law and Practice Contributed by: Kevin West, Andrea Hill, Priya Ratti and Gabriel Potkidis, SkyLaw
Significant amendments to the Competition Act have been made in recent years. Among other things, these amendments expanded the non-exhaustive list of acts that may be considered an abuse of dominant position and increased the applicable penalties. The amend - ments also removed the efficiency defence for anti- competitive collaborations and in merger reviews. In 2024, the Competition Bureau took legal action against Google for engaging in anti-competitive prac - tices following an investigation that found that Google abused its dominant position by preventing rivals from being able to compete. In March 2026, the Compe - tition Tribunal dismissed Google’s allegation that a constitutional right was breached, which reinforces its clear authority to order administrative monetary penal - ties to promote compliance and deter anti-competitive behaviour. The Competition Bureau’s case continues against Google, and the final decision rests with the Competition Tribunal. 2.5 Labour Law Regulations Employment legislation varies by jurisdiction in Can - ada. Minimum statutory employment standards, such as notice requirements on termination, generally can - not be contracted out of or waived. For example, an employment agreement providing for “termination at will” would not be enforceable. Other legislation applies to the employment relation - ship, including the applicable human rights code, pay equity statute and occupational health and safety leg - islation. Canada supports the principles of collective bargain - ing. Each jurisdiction in Canada has a labour code. Ontario prohibits non-competition provisions in employment agreements and requires that certain employers have a written policy with respect to “dis - connecting from work”. Acquirors should conduct due diligence to understand the potential severance costs associated with a tar - get’s key employees and consider whether any future plans (for example, a return-to-office policy) could be construed as constructive dismissal requiring sever - ance payments.
In the context of M&A transactions, while there is no requirement to engage with employees or pension trustees, target company directors in discharging their fiduciary duties are encouraged to take the interests of these stakeholders into account. If a target business is unionised or about to become unionised, a poten - tial acquiror should also learn more about the current collective bargaining agreement and any negotiation process that is underway. 2.6 National Security Review See 2.3 Restrictions on Foreign Investments . 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments Non-Binding Letters of Intent may Inform Contractual Interpretation Project Freeway sold a group of companies to ABC Technologies (ABC) for cash plus an earn-out, with an acceleration clause triggered by a sale of a material portion of the business assets without its consent. After ABC subsequently completed sale-leaseback transactions without its consent, Project Freeway claimed that the full earn-out was payable. The Ontar - io Superior Court of Justice looked to the letter of intent for context that the financing transactions did not accelerate the earn-out and adopted a contextual interpretation of the purchase agreement. Parties should draft earn‑outs using precise, objective threshold metrics, include carve‑outs for anticipated post‑closing transactions, and ensure consistency between the letter of intent and the definitive agree - ment, even where an “entire agreement” clause is included. Negotiated MAC Triggers will be Enforced A standstill agreement between Parkland and its larg - est shareholder, Simpson Oil, prohibited Simpson Oil from soliciting a sale of Parkland unless a material adverse change (MAC) occurred, an example of which included a material change in composition of senior management. The Ontario Superior Court of Justice held that the departure of eight out of ten members of Parkland’s senior management triggered a MAC and
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