Exam 24: Government Regulation of Business

Which of the following statements is TRUE?

Broadly speaking, under the Competition Act, some matters are criminal offences, others are reviewable practices that may be the subject of an application to the Competition Tribunal by the Commissioner, and misleading advertising may be dealt with as a criminal offence or a reviewable practice.

Under the Competition Act, the defence of due diligence is available if the person responsible for a misleading advertisement took all possible precautions to ensure that the advertisement was not unreasonably misleading.

With respect to the Competition Act, identify and briefly explain (a) the nature, purpose, and operation of the Act, (b) the categories of anti-competitive behaviour that are recognized by the Act, and (c) examples of each category.

For years, Mandy has owned a chain of six delicatessens in and around Calgary.She is very proud of the products her stores carry, but she has always wanted to get Pantry Pride Meats, Snacks, and Fruits as part of her line.This has been difficult because, as she learned early on, Pantry Pride products are sold only through authorized dealers who follow Pantry Pride's "pricing guidelines." These are meant to reinforce consumer perceptions of Pantry Pride's superiority over other brands.Mandy wonders whether there is anything under the Competition Act that would help her get Pantry Pride items.

Sanjiv is an accountant.Although he recognizes the need for the government to have money for the purposes of funding social programs and whatnot, he is strongly opposed, as a matter of principle, to excise taxes.That most likely means that Sanjiv

Java Joe is a coffee wholesaler.It is run by Ernesto Arabica and his brothers, Che and Hugo.Times are good.Canadians are drinking more coffee than ever before and an increasing number call on Java Joe for their daily fix of caffeine.Ernesto has therefore begun to wonder how he and his brothers can enjoy the profits, but pay as little in tax as possible.He has come to you for advice.He and his brothers specifically want to know about the tax implications of different business models.You have correctly said that

Skooma Drugs Inc has been accused of getting together with the other pharmacies in and forging an agreement to consistently charge inflate prices.The company's director, Kaye Jeet, does not seem especially worried, however."These accusations have been around for years," she said."Back in 1990s, my father constantly dealt with similar allegations and he easily got away clean.Conspiracies are almost impossible to prove." Kaye's nephew, Garfield, is not so confident.In a Business Law course, he learned of an important event in 2010.Consequently, unlike his aunt, Garfield knows that

"The power of taxation is divided between the federal government and the provincial governments.The way in which that power is divided reveals how the drafters of the Constitution wanted the country to operate." Is that statement TRUE? Explain the meaning of the quotation.

In late August, Idris moved from his parents' home in Kamloops to Winnipeg for college.Because he was living on his own for the first time, Idris was eager to find decent pieces of furniture at low prices.He consequently was excited to see an advertisement that Guile Furniture, a local store, placed in the newspaper: "Rest-E-Z Classic Recliners-Regularly $999-Sale Price $499-Tomorrow Only." Idris was waiting the next morning when Guile Furniture opened its front door.When he asked to see the specially-priced recliners, however, the young sales representative sheepishly looked at the floor and said, "Oh no … they didn't run that ad again? Well, we don't have any Rest-E-Z Classic Recliners-we actually never have those things in stock-but we do have another recliner that I could let you have for $800." If the Commissioner of Competition looks into the matter, Guile Furniture is most likely to be investigated for running a multi-level marketing plan.

Ultra-Brite is a new brand of clothing detergent introduced in the Canadian market in the past year following heavy promotion and advertising.It is specially formulated to take heavy dirt out of white and other light-coloured clothing.Sales have climbed substantially with the catchy new slogan "Ultra-Brite, Always White!" However, recently a small, but growing, number of complaints have been received by the Competition Bureau alleging that Ultra-Brite is in fact engaged in deceptive advertising: the use of Ultra-Brite on clothes does not always return them to a pristine, white condition like the advertising and slogan suggest.Instead, clothes washed with Ultra-Brite often have a used, faded look about them.Discuss what action could be taken against the company, and what defences would it have?

The Merex 200E is a new sports coupe designed to appeal to the highest bracket of consumer.Each coupe costs at least $100 000.Calvin, a young stockbroker in Toronto, saw an ad for the Merex 200E in the subway.It says, "0 to 60 in 2.8 seconds." He went straight to the Toronto Merex dealer, took the car out for a test ride, but did not have an opportunity to test the acceleration.The sales representative, however, assured Calvin that the acceleration promised in the advertisement had been verified by an independent testing agency.Relying on the test drive and the representative's sales pitch, Calvin bought a hot red 200E and tried several times to take the car up to 60 mph in 2 seconds.He had no success.Worse yet, he discovered that the engine stalls dangerously when accelerating rapidly.Which of the following is most likely to be TRUE?

Provinces are restricted to imposing direct taxes because

One of the key elements of consumer protection under provincial laws is mandatory disclosure of contractual terms.Describe the main features of provincial laws requiring disclosure to consumers.

Identify and briefly explain seven types of taxes that are relevant to businesses in Canada.

In Canada, the power of taxation

What is the federal government's primary strategy for avoiding double taxation in the context of corporations and shareholders?

Your friend, Aher, wants to be a candidate in upcoming election.He has a lot of great ideas, but he is not entirely clear on certain political and economic issues.He finds taxes, in particular, to be baffling.He therefore has asked you to teach him about a few basic concepts.His first question: "What is the difference between a direct tax and an indirect tax?"

Marissa is the CEO of Motormax Inc, a generic auto parts manufacturer that does business with several large auto manufacturers.Parts manufacturing is a highly competitive business.Several years ago, Marissa was contacted by the CEO of a competitor who asked whether Motormax would like to "go in with them." At the time, Marissa did not understand what that meant, so she replied in the negative.She now realizes, however, that the rival's CEO was proposing a conspiracy to reduce competition.Furthermore, she has begun to notice that the pricing of her competitors' products is always suspiciously the same as hers.Which of the following statements is TRUE?

Under the Competition Act, a private person has a right to receive damages for losses suffered, but only if those losses were caused by anti-competitive behaviour that was