Competition and foreign investment laws

The Canadian Competition Act applies to agreements, arrangements, transactions, and other conduct that may prevent or lessen competition and to false or misleading representations to the public.
AI has been a key recent area of focus for the Competition Bureau, which enforces the Competition Act and completed a detailed Consultation on Artificial Intelligence and Competition in January 2025.
- The consultation concluded that the complexity of AI markets may distinguish them from other digital markets and discussed how the use of AI can have both positive and negative impacts on competition.
- On the positive side, AI may lead to improved product quality, greater pricing options, and expanded product offerings, which may be relevant factors when a transaction or other conduct is being reviewed by the Competition Bureau. AI may also lead to efficient and pro-competitive outcomes by enabling companies to maintain a consistent pricing approach aligned with their goals as markets shift.
- On the negative side, AI may facilitate anti-competitive conduct, such as collusion between competitors and deceptive marketing practices.

Under the Competition Act, it is a criminal offense for competitors, or potential competitors, to enter into agreements or arrangements to fix prices or wages; allocate markets, territories, or customers; control production or supply; or engage in bid rigging. This can be proven from circumstantial evidence alone, such as the sharing of competitively sensitive information between competitors.
A single AI system or algorithm could facilitate a “hub-and-spoke” conspiracy as the central hub used by multiple competitors to coordinate on pricing, with alleged conduct of this nature leading to investigations in both Canada and the U.S.
The Competition Act also prohibits making false or misleading representations to the public for the purpose of promoting products, services, or business interests. AI could be used to amplify deceptive marketing practices by generating fake online reviews, endorsements, impersonations, or tailored phishing campaigns.

Foreign investment

Investments by non-Canadians to establish new Canadian businesses or acquire control over an existing Canadian business are either notifiable or reviewable under the Investment Canada Act.
All investments by non-Canadians in Canada, regardless of size or structure, can be reviewed on a discretionary basis on national security grounds. National security reviews can result in orders blocking an investment, authorizing it on certain terms and conditions, or requiring divestitures.
AI technology has been identified as an area of potential sensitivity in guidance on national security reviews under the Investment Canada Act.

Ensure that the unique features of AI markets are taken into account when assessing the potential risks of a transaction being reviewed by the Competition Bureau.
Exercise caution before using an AI model or third-party algorithm to inform pricing or other competitive strategies to avoid violating criminal prohibitions against price fixing and other collusive behaviour among competitors.
Avoid sharing competitively sensitive information with an AI model or third-party algorithm, which could raise risks of potential criminal violations of competition laws. Examples of sensitive information include pricing, bidding strategies, supply/output levels, employee wages, and customer/supplier information.
Never use AI to generate fake online reviews, endorsements, impersonations, tailored phishing campaigns, or other potential deceptive marketing practices.

Foreign investment

Before buying, selling, or establishing a Canadian business that develops or utilizes AI technology, assess the potential risk of a national security review under the Investment Canada Act.
Proactively prepare to address and respond to potential national security questions or concerns when buying, selling, or establishing a Canadian business that develops or utilizes AI technology.

“Consultation on Artificial Intelligence and Competition: What We Heard,” Competition Bureau of Canada, January 2025
“Artificial Intelligence and Competition: Discussion Paper,” Competition Bureau of Canada, March 2024
“Guidelines on the National Security Review of Investments,” Government of Canada, Revised March 2025
“Sensitive Technology List,” National security and defence, February 2025
Frequently asked questions concerning the Investment Canada Act, Innovation, Science, and Economic Development Canada, September 2023

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