Every year, dozens of proposed class actions are filed in Canada asserting various legal claims arising from all manner of industries. Businesses should be aware of class action developments to ensure that they can proactively assess and minimize any potential liability. This publication will focus on three legal areas with important recent developments: (1) competition class actions; (2) procedural scrutiny of delayed or dormant class actions; and (3) emerging ESG class actions.
Competition Law Developments
Competition class actions are common in Canada. However, while many actions alleging anti-competitive activity having been certified or authorized to proceed as class actions, so far, there has been no contested competition class action trial in Canada.
Plaintiffs can pursue civil causes of action drawn from the criminal offences in Part VI of the Competition Act, including criminal conspiracies (Section 45), foreign directives (Section 46), bid rigging (Section 47) and deceptive marketing (Section 52). Common law causes of actions such as the torts of conspiracy and fraudulent or negligent misrepresentation are also often advanced.
In recent years, there have been significant jurisprudential and legislative developments in the competition class action space which are expected to lead to increased litigation in this area. Some of the key developments are outlined below.
Overhaul of Canada’s Competition Legislation
Over the past few years, the Federal Government has passed a series of material amendments to the Competition Act. These amendments, which represent the most significant changes to Canada’s competition regime since its inception, are likely to result in increased competition class action activity.
For example, the Competition Act now includes express prohibitions against agreements between unaffiliated employers to fix, maintain, decrease, or control salaries, wages, or terms and conditions of employment (i.e., “Wage-Fixing Agreements”) and to not solicit or hire each other’s employees (i.e., “No-Poach Agreements”). Parties to such agreements are now subject to civil claim exposure, including by way of class actions.
Another amendment to the Competition Act has explicitly prohibited “drip pricing”, which is a marketing practice where a seller offers an initial price to consumers but adds mandatory fees at later stages of the purchase process resulting in a higher final price than advertised. This conduct can constitute a false or misleading representation under the Competition Act and is actionable in class proceedings.
Drip pricing has also been the subject of enforcement proceedings by the Competition Bureau. In one instance, the Competition Tribunal awarded a penalty of nearly $39 million against Cineplex Inc. (a movie theatre company) for engaging in drip pricing by adding a mandatory $1.50 fee to its online booking process. This decision is under appeal. In May 2025, the Competition Bureau commenced a proceeding against Canada’s Wonderland Company (an amusement park) for charging mandatory fees that are not part of the advertised price for park admission. These enforcement cases illustrate increasing litigiousness concerning drip pricing which is expected to sweep over to class actions.
Another set of amendments to the Competition Act, which will come into effect on June 20, 2025, will introduce a new form of group action to litigate civilly reviewable conduct, including refusal to deal, price maintenance, exclusive dealing, tied selling and market restriction, abuse of dominance, and civil agreements. Under the new regime, private applicants can bring their case in front of the Competition Tribunal and, subject to satisfying a leave requirement, seek a disgorgement remedy of up to the value of the benefit derived from the conduct. This disgorgement remedy, which marks the first time that the Competition Tribunal will be able to order a financial remedy for civilly reviewable conduct, can be distributed among the applicant and other persons affected by the conduct in any manner that the Competition Tribunal considers appropriate. The Competition Tribunal will be granted broad powers, including the ability to establish how payment is to be administered and to facilitate a notice and claims process, however, many of the traditional safeguards available in the current class action regime, such as class certification, court-approved settlements and class-wide releases, will presumably be unavailable to private litigants choosing this path to recovery. The class action bar, as well as academic commentators in this area, are eager to see how this new collective recovery regime will interact with Canada’s well-established class action system.
Increased Scrutiny at the Certification Stage
Historically, Canadian competition class actions were regularly certified or authorized despite strenuous opposition from defendants. However, in several recent instances lower and appellate courts have declined to certify competition class actions, perhaps marking a trend towards increased scrutiny of proposed competition class actions at the certification stage.
For one example, in Lilleyman v. Bumble Bee Foods LLC, 2024 ONCA 606, the Ontario Court of Appeal upheld the motion judge’s order refusing to certify a class action alleging a conspiracy to fix the price of canned tuna sold in Canada. US antitrust proceedings had previously revealed that three market-dominating US entities had conspired to unlawfully fix the price of tuna sold in the US between 2011 and 2013.
The plaintiffs in the Canadian lawsuit alleged that there was a related or similar conspiracy to fix prices of tuna sold in Canada beginning in 2004. The lower court and the Court of Appeal found that no material facts had been pleaded to support the allegation that a related or similar conspiracy had been carried out in Canada. The Court of Appeal noted that the “fundamental problem was that the evidence relied upon by the plaintiff had nothing to do with Canada and concerned conduct that occurred only with respect to the U.S., which had an entirely separate market for tuna.” Additionally, “there was no connection between the defendants’ action as pleaded and the sale of tuna in Canada” and there was no “chain of distribution” through which the US tuna had reached Canadian class members. Certification was dismissed because the plaintiff had failed to plead sufficient material facts to disclose a reasonable cause of action.
For similar reasons, the plaintiff also failed to satisfy the low evidentiary standard to show some basis in fact that the pleaded common issues existed. The Court of Appeal agreed with the court of first instance that, even though the evidence included “a huge volume of evidence concerning conduct in the U.S. regarding the U.S. retail tuna market, there was no evidence to support the claim that this conduct affected the Canadian market.” The Court of Appeal firmly clarified that the representative plaintiff must show that (i) the proposed common issues actually exist; and that (ii) they can be answered in common across the entire class.
The Ontario Court of Appeal’s decision is the final word in this case because, in March 2025, the plaintiff was denied leave to appeal to the Supreme Court of Canada.
Procedural Scrutiny of Dormant and Delayed Class Actions
Speeding up the determination of class actions has been a focal point of recent appellate decisions. Litigants, including businesses, may feel mildly encouraged that courts have taken steps to address dormant and significantly delayed class proceedings.
Tataryn v Diamond & Diamond Lawyers LLP, 2025 ONCA 5
Ontario, Canada’s most populous province, recently amended its class proceedings legislation to introduce mandatory dismissal for delay of proposed class actions if the plaintiff has not completed one of four milestones within one year of commencing the proceeding (section 29.1 of the Class Proceedings Act, 1992 (“CPA“)).
Earlier this year and for the first time, the Ontario Court of Appeal considered the interpretation of this provision and upheld mandatory dismissal in this case.
The appeal concerned the subsection of the CPA that requires a plaintiff to have had the court establish a timetable for the certification motion or “for completion of one or more other steps required to advance the proceeding” (s. 29.1(1)(c)) The question in this appeal was whether the court had established a timetable for completing such a “step”.
The plaintiffs had previously retained the defendant law firm to represent them in personal injury lawsuits. In the proposed class action, the plaintiffs alleged that the firm’s client referral practices and contingency fee agreements breached the lawyers’ fiduciary duties as well as certain obligations arising from the Solicitors Act and the Consumer Protection Act, 2002.
The plaintiffs started their lawsuit in 2018. Over the next five years, there were eleven originating pleadings, a transition from an application to an action, and two orders striking pleadings. In November 2023, the motion judge dismissed the plaintiffs’ action for delay, finding none of the forgoing constituted a “step” contemplated in subsection 29.1(1)(c). The representative plaintiffs appealed.
The Court of Appeal upheld the motion judge’s decision and dismissed the appeal. The Court of Appeal found that the mandatory dismissal provision was intended to dismiss dormant and meritless actions, as well as actions that could not be resolved within a reasonable time. This legislative purpose supported a strict interpretation of section 29.1 with no judicial discretion to extend the one-year deadline.
The Court of Appeal held that the interpretation of the impugned subsection requires a contextual analysis with a “case-by-case” consideration of the “totality of the proceeding”. Courts should consider potential litigation circumstances such as “obstructionist conduct” by defendants, scheduling delays in motions court, or whether the plaintiff’s conduct delayed a required step.
In this case, the case management judge had directed the plaintiffs to deliver a Statement of Claim by a set date and to arrange a case conference after delivery. The Court of Appeal found that neither constituted a required “step” and held that “[t]reating these inconsequential acts as meeting the parameters of s. 29.1(1) would in essence neuter the provision.”
The case management judge later set dates for exchanging motion materials and hearing the defendants’ motion to strike. The Court of Appeal found this also fell short of the requirement of section 29.1(1)(c) in the context of this case. The plaintiff had prolonged the proceeding by delivering three different notices of application and four different statements of claim within the first year. Moreover, while a motion to strike may constitute a “step” under section 29.1(1)(c) in other cases, the plaintiffs own conduct in this case ensured the motion to strike did not advance the proceeding. Two years after that motion was decided, the plaintiffs were still contesting a motion seeking their compliance with the court’s first decision.
Ultimately, the Court of Appeal decided that “[a]pplying a contextual approach, it could not be said that the appellants had shown that a timetable for completion of one or more other steps required to advance the proceeding had been established.”
At the time of writing, the plaintiffs are seeking leave to appeal the Court of Appeal’s decision to the Supreme Court of Canada.
Barbiero v Pollack, 2024 ONCA 904
In Barbiero, the Ontario Court of Appeal found that a delay of 21 years in setting a class action down for trial was inordinate and inexcusable, and upheld the dismissal of the action.
The appellant commenced a proposed class action in 2003 against a physician for unlawfully injecting a silicone product into patients’ lips and facial contours. The action was certified as a class action in December 2003. Some discoveries and motions occurred in 2004-2005 and a mediation was held in 2012. However, the action was not set down for trial.
In 2022, the defendant successfully moved to dismiss the action for delay. In 2024, the Court of Appeal upheld the dismissal. As an aside, the mandatory dismissal provisions discussed in Tartaryn above did not apply to this case because the action had already been certified as a class action and in any event, the case started before the above-noted legislative amendments that introduced the mandatory dismissal for delay came into force.
Under Ontario’s Rules of Civil Procedure, a case will be dismissed for delay when there has been inordinate, inexcusable delay resulting in prejudice. The Court of Appeal re-visited earlier jurisprudence on this subject and departed from earlier cases by finding that passage of time alone (21 years in this case) can constitute sufficient prejudice to dismiss an action for delay. The Court of Appeal reasoned that this stricter approach would be more aligned with the principle of securing the most expeditions determinations of civil cases as mandated by the Rules of Civil Procedure and called for by Canada’s Supreme Court in Hryniak v Mauldin, 2014 SCC 7.
The Court of Appeal confirmed that the delay was “inordinate” and “inexcusable” resulting in prejudice. With regards to the “inordinate” nature of the delay, the Court of Appeal wrote that the lower court’s finding on this point was “irreproachable” and that any contention otherwise was “incomprehensible”. The Court of Appeal noted that an “inordinate” delay must be “unusually large or excessive”. While the appellant pointed to some steps taken during between commencement and dismissal, including discoveries, motions, a mediation and some correspondence, the Court of Appeal confirmed that the appellant “simply ignored the lawsuit for the better part of seven years.”
The Court of Appeal’s decision in both cases and the recent legislative changes to Ontario’s class proceedings legislation signal a clear shift away from tolerance for excessive delays in adjudicating class actions in Ontario.
Emerging Trend: ESG Class Actions
Class actions related to environmental, social, and governance (“ESG”) issues have proliferated in Canada in recent years. For example, several lawsuits related to fuel emissions, representations about the recyclability of products, and environment fees charged to consumers have arisen recently.
Moreover, new legislative and regulatory developments underline that ESG litigation risk will continue to be front-of-mind for businesses operating in Canada. As noted above, Canada has recently overhauled its competition regime including amending the Competition Act to explicitly prohibit “greenwashing” claims as a form of deceptive marketing. The new provisions require that claims about environmental benefits of a business or business activity must be based on proper and adequate substantiation. Going forward, businesses in Canada and abroad will continue to face heightened scrutiny for potentially false or misleading statements about their environmental statements under the Competition Act as well as under provincial consumer protection legislation.
It is expected that Canadian ESG litigation, including class actions, will continue to increase in line with the US and other jurisdictions. In anticipation of this expected trend, businesses should implement appropriate compliance practices to mitigate the risk of ESG-related class actions.