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The author discusses Canada's Competition Act 1986 and the changes proposed to it in the form of Bill C-23. He discusses the strengths and weaknesses of these and suggests changes that need to be made to preserve competition.

The author discusses the economic theory of how mergers can lead to less competition and higher prices detrimental to consumers, then applies it to Canadian policy as seen in laws and cases.

Proposals for health care reform in the form of contracting out are gaining support in Canada. Contracting out would involve contracts between provincial governments, public hospitals, and groups of family doctors for the provision of medical services on a per patient basis. The Canada Health Act and Competition Act may affect or impede contracting out. General contract law will apply to contracting out just as it does in the private sector.

Canadian law on horizontal agreements needs to become more up-to-date. It lacks the flexibility necessary to deal with the increasingly varied kinds of horizontal arrangements between competing firms. This lackof flexibility includes a legal regime for the phenomenon of strategic alliance, one which has become popular. Canadian business competitiveness could suffer if firms hesitate to merge because of uncertainty surrounding the application of merger laws. Proposals to make Canadian law more up-to-date are considered.

The efficiency defense of Canada's Competition Act has yielded little if any benefit. Merger enforcement in Canada seems to have been changed little by the act's statement that anticompetitive mergers are permissible if their efficiency gain outweighs their anticompetitiveness. The Competition Tribunal does not find an economic efficiency standard to be workable. It seems unavoidable that Canadian antitrust law will become more like the US.

Litigation should be actionable under the Canadian Competition Act when the firm who is the possible defendant is dominant in a market with barriers to entry and a cost-benefit analysis of the litigation this firm has brought shows the goal to have been increasing a rival firm's costs by tying it up in litigation. Anti-competitive litigation is a kind of exclusionary conduct which harms consumer welfare and should be actionable.

The merger review process for examining Canada's merger law has produced several proposed reforms that would greatly improve that law. This review process was carried out from Jun 1986 to Jun 1991 under the Competition Act and the Competition Tribunal Act. Several factors influenced the process such as the merger boom, the concerns of business interests, other legislation and constitutional disputes. The resulting proposed reforms emphasize the need for the open review of mergers that would produce definitive settlements and would prevent the abuse of power by the Competition Tribunal's director.