Merger Controls First Edition - J Sagar Associates

Canada
Michelle Lally & Shuli Rodal
Osler, Hoskin & Harcourt LLP
Overview of merger control activity during the last 12 months
Competition law practitioners in Canada continue to watch closely the Competition Bureau’s (“Bureau”) implementation
of Canada’s new merger review regime. In March 2009, the Canadian Competition Act (“CA”) merger review process
was amended to align it more closely with the U.S. merger review process under the Hart-Scott-Rodino Antitrust
Improvements Act.
Under the new Canadian regime, there is a two-track approach to merger review. Notifiable transactions are subject to a
30-day statutory waiting period following the filing of a pre-merger notification, which can be suspended by the
Commissioner of Competition (“Commissioner”) through the issuance of a Supplementary Information Request (“SIR”)
(the equivalent of a U.S. Second Request). Where an SIR has been issued, a second 30-day waiting period must be
observed, which only commences when a complete response to the SIR has been submitted by each party. The parties
can complete the transaction upon expiry of the second 30-day waiting period unless the Commissioner applies to challenge
the transaction and/or obtains an order from the Competition Tribunal (“Tribunal”) to prevent or delay completion of the
transaction. The new merger review regime preserves the right of the Commissioner to challenge a merger (whether or
not previously notified) after closing, although this discretionary review period has been reduced to one year following
closing, down from three years under the prior regime.
The new merger review regime did not change the jurisdictional thresholds for merger review. Accordingly, the number
of transactions subject to review continues to be primarily a reflection of the level of domestic and international merger
and acquisition activity with a material Canadian component.
Between April 1, 2010 and March 31, 2011, examinations were commenced in respect of 236 matters (some of these
reviews continued beyond March 31), of which 218 were subject to review on a mandatory basis. This represents a small
increase in the number of merger examinations as compared with the prior fiscal year, in which there were 216
examinations, of which 200 were the result of a mandatory review requirement. In the 2008-2009 fiscal year, 239 merger
examinations were undertaken, of which 207 were reviewed on a mandatory basis.
In the 2010-2011 fiscal year, the Bureau issued only five SIRs (i.e. it undertook only 5 formal second stage reviews).
However, it is uncertain how many other transactions were subject to an informal second stage review through a negotiated
process involving a voluntary production of information and an agreement to delay closing for a specific period of time
(see further discussion below).
In the 2010-2011 fiscal year, formal remedies were obtained in only four matters. All four matters were resolved on
consent, as is typically the case in Canada for transactions notified to the Bureau on a mandatory basis (see further
discussion below).
In the 2010-2011 fiscal year, one application to the Tribunal was filed and notably this was in respect of a transaction that
was not subject to mandatory notification. In January 2011, the Commissioner filed an application with the Tribunal to
challenge the acquisition by CCS Corporation of Complete Environmental Inc., the owner of a proposed secure landfill
site in north east British Columbia1 . The case is being followed closely, as there is very little merger litigation in Canada
(it has been years since there was a litigated merger case). In addition, the case is of interest because the Commissioner’s
theory of the case is focused on the prevention of competition.
New developments in jurisdictional assessment or procedure
There have been no material changes in the jurisdictional thresholds for merger review in the past year (a minor increase
in the transaction size threshold for pre-merger notification from C$70 million to C$73 million in book value of Canadian
assets of the target or gross revenues generated from Canadian assets took effect in February 2011).
The primary impact of the new merger review process has been on the procedural aspects of merger review. The Bureau
Global Legal Insights ­ Merger Control First Edition
—24—
© Published and reproduced with kind permission by Global Legal Group Ltd, London
www.globallegalinsights.com