The exposure is the parties' own, it exists whether or not the deal ever closes, and it covers HR terms as well as pricing.
Short answer
Not automatically, and not just because a merger is under discussion. Section 45(1) of the Competition Act makes it a criminal offence for competitors to agree on price, allocate customers or territories, or fix output — and that exposure exists between the parties themselves regardless of whether the deal ever closes — so due diligence between competitors needs a clean-team protocol, a genuine need-to-know structure, and, where the sharing is ancillary to the transaction itself, the narrow defence in s.45(4).
Section 45(1) reads: “Every person commits an offence who, with a competitor of that person with respect to a product, conspires, agrees or arranges (a) to fix, maintain, increase or control the price for the supply of the product; (b) to allocate sales, territories, customers or markets …; or (c) to fix, maintain, control, prevent, lessen or eliminate the production or supply of the product.” Section 45(2) sets the penalty at up to 14 years' imprisonment or a fine at the court's discretion, or both — this is not a civil merger-review question, it is a standalone criminal exposure that the parties carry regardless of whether the Competition Bureau ever clears, or even reviews, the transaction.
Section 45(1.1) reaches conduct that an ordinary due-diligence exercise can walk straight into: “Every person who is an employer commits an offence who, with another employer who is not affiliated with that person, conspires, agrees or arranges (a) to fix, maintain, decrease or control salaries, wages or terms and conditions of employment; or (b) to not solicit or hire each other's employees.” Comparing compensation bands or discussing retention plans directly between the two competing employers — rather than through counsel or a clean team — can fall inside this offence even though nobody discussed a single customer price.
Section 45(4) provides a defence only where the person establishes, on a balance of probabilities, “(i) it is ancillary to a broader or separate agreement or arrangement that includes the same parties, and (ii) it is directly related to, and reasonably necessary for giving effect to, the objective of that broader or separate agreement or arrangement,” and the broader agreement itself does not independently contravene s.45(1). A diligence exchange has to be structured to fit inside that defence deliberately — it is not a general licence to share competitively sensitive information because a transaction is in progress. Section 90.1(1) adds a separate civil track, reaching an agreement that substantially lessens competition even outside the criminal conspiracy provisions.
A 30-minute call is enough to tell you whether AI pays for itself here.
Canadian small-business transaction data is not published anywhere, so most valuations in this country quote an American benchmark. The Deavo–Treadstone Acquisition Index is a daily record of Canadian listings built to replace that: asking-price distributions by province and city are published now, and days on market, departure rates and asking-to-sale spreads follow as the series lengthens. Leave an email and we will tell you as each measure lands.
No pitch, no listings. One email when the first report lands.
