Build a credible and effective compliance program for your business

Table of Contents

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Table of Contents

• Core principles to develop a credible
  and effective compliance program
  • Build a credible and effective
    compliance program for your business
  • Build a culture of compliance
    with management support
  • Assess your risks
  • Implement compliance policies, procedures
    and controls to mitigate your risks
  • Train and communicate
  • Use effective reporting mechanisms
  • Monitor and audit compliance measures
  • Offer incentives and impose
    disciplinary measures
  • Evaluate your program and revise
    your compliance measures
• Specific activities
  • Conspiracies, bid-rigging and other
    agreements that may harm competition
  • Wage-fixing and no-poaching agreements
  • Deceptive marketing practices
  • Mergers
  • Abuse of dominance and restrictive
    trade practices
  • Labelling and precious metals marking

On this page:

• Compliance with competition, marketing and labelling laws
• Our compliance guidance
• Reasons why compliance with the law is good for your business
• Core principles to develop a credible and effective compliance program

Compliance with competition, marketing and labelling laws

At the Competition Bureau, we operate as an independent law enforcement agency to ensure that Canadian businesses and consumers prosper in a competitive and innovative marketplace. We investigate anti-competitive practices, business arrangements or agreements, and deceptive marketing. We also promote compliance with the laws that we enforce, namely:

• the Competition Act
• the Consumer Packaging and Labelling Act (except as it relates to food)
• the Textile Labelling Act
• the Precious Metals Marking Act

These federal laws, which together we call the Acts, apply to most businesses in Canada. This includes small and medium-sized enterprises, as well as sole proprietorships. Having a credible and effective compliance program helps your organization operate within the law. Businesses of all sizes can have a credible and effective compliance program.

If we investigate your organization, in some cases we might review your compliance program to understand whether it is credible and effective. Generally, we do not provide the service of reviewing compliance programs.

Our compliance guidance

Use our compliance guidance to learn about:

• core principles to develop a credible and effective compliance program
• specific activities that are covered under the competition and labelling laws we enforce:
  • competitor collaborations and bid-rigging
  • wage-fixing and no-poaching agreements
  • deceptive marketing
  • mergers
  • abuse of dominance and restrictive trade practices
  • labelling and precious metals marking

Reasons why compliance with the law is good for your business

Most businesses in Canada want to do the right thing and operate within the law. Companies with strong compliance programs are in the best position to do so.

A credible and effective compliance program minimizes the chances of risky behaviour or potentially illegal activity and its consequences.

It can help your organization:

• operate within the law
• keep marketing activities compliant
• understand the risks from industry events and interactions with third parties, such as partners, competitors, or trade associations
• reduce the risk of costly investigations and lawsuits that interfere with your operations
• avoid penalties for your business and jail time for your people
• avoid the consequences of being associated with criminal conduct and protect your reputation
• minimize your business’ exposure to class action lawsuits
• remain eligible to participate in federal public procurement

A credible and effective compliance program strengthens your business and your reputation.

It might help:

• your organization recruit and retain good talent
• your business compete fairly and with confidence
• your people spot when others in the market are not playing by the rules
• your organization meet its environmental, social and governance goals

If you’re a small business...

Compliance is important for all businesses, no matter their size, risk profile, industry or location of operation.

Credible and effective compliance programs don’t have to be costly or complicated. They’re not only for large organizations. If your business is small or medium-sized, you need to make sure that management is committed to doing the right thing. Even simple steps can ensure that your compliance program runs effectively.

There are many benefits to having a credible and effective compliance program. Here are just a few examples:

• You stand a better chance of doing business with larger companies. They generally have compliance programs in place. They’ll probably be more comfortable working with you if you do too. Some might even require their suppliers or partners to have a compliance program.
• If you want to sell your business, you’ll find it easier to attract potential buyers. Acquirers will look into your organization’s compliance history. A compliance program demonstrates that you take compliance seriously.

Core principles to develop a credible and effective compliance program

A compliance program is a set of business practices scaled to your organization’s size, resources and risks. Organizations of all sizes can benefit from having a compliance program, but that doesn’t mean all businesses must have the same compliance program. As well, you don’t have to create a separate compliance program for competition law. But you should factor competition and marketing risks under Canadian laws into your compliance program.

To be credible, your program must at a minimum show your business’ genuine commitment to obeying the law and competing fairly.

To be effective, your program must inform all your people, and those acting for your organization, that compliance is important. It must inform them of their legal duties and your internal compliance measures. It should also give you the tools to prevent and detect misconduct.

If we investigate your organization, we might review your compliance program. We will consider information and evidence that we see throughout our investigation that speaks to the credibility and effectiveness of your compliance measures.

We will consider a compliance program to be credible and effective when you can demonstrate to us that it was reasonably designed, implemented and enforced in the circumstances. This means that it addresses your organization’s risks within your resources and in light of your business activities. We will look at factors such as the size of your business, the industry in which you operate, and the efforts you’ve made to comply with the law.

Even the most effective compliance program might not stop all illegal activities. Your organization could still face problems that, if left unchecked, could lead to fines and other penalties. The good news is that you can reduce these risks by having a credible and effective compliance program in place.

A credible and effective compliance program should cover the following actions:

1. Build a culture of compliance with management support
2. Assess your risks
3. Implement compliance policies, procedures and controls to mitigate your risks
4. Train and communicate
5. Use effective reporting mechanisms
6. Monitor and audit compliance measures
7. Offer incentives and impose disciplinary measures
8. Evaluate your program and revise your compliance measures

Principles of a credible and effective compliance program

• Principles of a credible and effective compliance program

  The image is a diagrammatic representation of how your organization can build a credible and effective compliance program.

  At the core of program is having a culture of compliance and of management support and having a strong and independent compliance officer.

  To build a credible and effective compliance program, adopt the principles given below:

  • assess your risks,
  • implement compliance policies, procedures and controls,
  • train and communicate with your people,
  • use effective reporting systems to empower your people to report concerns without fear of retaliation
  • monitor and audit compliance measures
  • offer incentives to compliance leaderships and penalize violations by imposing disciplinary
  • measures

  Compliance program is dynamic, so you have to regularly evaluate your program and revise compliance measures in light of changes in any of the principles mentioned above.