April 30, 2015 – The recent Supreme Court of Canada decision in Tervita Corp. v. Canada may make merger challenges by the Commissioner of Competition less likely than before to succeed. This is the consensus view of the C.D. Howe Institute’s Competition Policy Council, which held its ninth meeting on April 22, 2015.
The Competition Policy Council comprises top-ranked academics and practitioners active in the field of competition policy. The Council, chaired by Finn Poschmann, Vice President, Policy Analysis, at the C.D. Howe Institute, provides analysis of emerging competition policy issues. Professor Edward Iacobucci, Dean of the University of Toronto Faculty of Law and Competition Policy Scholar at the Institute, advises the program, along with the Institute’s Benjamin Dachis, Senior Policy Analyst, and Aaron Jacobs, Researcher. The Council, whose members participate in their personal capacities, convenes a neutral forum to test competing visions and to share views on competition policy with practitioners, policymakers and the public.
At the April 22nd meeting, the Council assessed the recent Supreme Court decision in Tervita, because of its significant implications for merger analysis in competition law and policy. The Supreme Court rejected the Competition Bureau’s opposition to the acquisition by Tervita Corporation of Complete Environmental Inc., two hazardous waste disposal companies in Northeastern British Columbia.
The Council agreed that the Supreme Court’s decisionraises the evidentiary standard and places a strong onus on the Commissioner of Competition to present all quantitative evidence possible when challenging some proposed mergers that may lessen or prevent competition. The Court’s decision elevates the role of empirical analysis to a hierarchical position that supersedes qualitative arguments.
The immediate consequence of Tervita is that the Commissioner may request significantly more information from parties seeking to merge, to satisfy the new quantitative evidence burden. In addition, some merging parties may be more inclined than otherwise to employ the efficiencies defence, which weighs potential gains to producers against losses to consumers in cases where a merger or acquisition is likely to substantially lessen or prevent competition.
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For more information contact: Finn Poschmann, Vice President, Policy Analysis, C.D. Howe Institute, 416-865-1904 email: kmurphy@cdhowe.org.