Canada: Merger Control

Merger notification

Is a filing mandatory?

The pre-merger notification provisions in Part IX of the Competition Act (the Act), a federal statute that applies across Canada, provide that parties to a merger transaction of a specified type and exceeding specified thresholds must, subject to certain exceptions discussed below, provide the Commissioner of Competition (the Commissioner) with advance notice and specified information with respect to such a transaction.

The obligation to file a pre-merger notification is on the ‘parties to the proposed transaction’. The Act specifies that in the case of a proposed acquisition of shares the parties are the buyer and the corporation (the shares of which are to be acquired). It should also be noted that the ‘acquiring party’ in the case of a share purchase, an asset purchase or an acquisition of an interest in a combination consists of one person, or two or more persons acting pursuant to an agreement or arrangement.

Are there waiting periods that must elapse before the parties can close?

A transaction that is subject to mandatory pre-merger notification may not be completed until the 30-day waiting period has expired (and then only if the Commissioner has not issued a supplementary information request (SIR) that triggers a new 30-day waiting period commencing upon satisfaction of such a supplementary information request). These waiting periods, however, may be waived by the Commissioner.

The Commissioner may issue an SIR within 30 days of receiving a notification. According to the Merger Review Process Guidelines issued by the Competition Bureau (the Bureau), it is likely that an SIR will be issued only when a proposed transaction raises significant competition issues and additional information is required.

Notwithstanding the statutory waiting periods provided in the Act, the Bureau follows an administrative schedule in its review of mergers that can be longer than the statutory waiting period. In its Fee and Service Standards Handbook for Mergers and Merger-Related Matters, the Bureau has provided maximum ‘service standard’ review periods for transactions of up to 14 days for ‘non-complex’ transactions and 45 days for ‘complex’ transactions. These periods are only guidelines as to the maximum amount of time the Bureau will need to review the proposed merger. Actual review periods may involve less or more time.

The complexity level of a transaction is based on various factors. Factors that tend to indicate a complex merger include:

  • difficulties in defining the relevant markets;
  • when the merger is between participants in a concentrated industry;
  • when the post-merger increase in market share is not de minimis;
  • the existence of entry barriers;
  • when there are few effective remaining competitors;
  • when the evaluation of the effectiveness of remaining competition or the assessment of potential sources of new competition is difficult;
  • where there exist credible complaints or competitive concerns;
  • when the efficiencies exemption or failing firm claim requires analysis; and
  • cooperation and coordination with one or more foreign competition authorities is required.

Are mergers not subject to notification nonetheless reviewable?

A transaction that is not subject to pre-merger notification may, nevertheless, be subject to review and challenge under the substantive merger provisions found in part VIII of the Act (discussed below). Subject to specified exceptions, all transactions that fall within the definition of ‘merger’ (discussed below) may be reviewed pursuant to part VIII.

What types of transactions may be subject to pre-merger notification?

Part IX of the Act requires parties to provide a pre-merger notification to the Commissioner in respect of the following categories of transaction where specified thresholds are exceeded:

  • acquisition of assets or shares;
  • amalgamation of corporations;
  • formation of a combination to carry on business other than through a corporation (for example, a partnership or an unincorporated joint venture); and
  • acquisition of an interest in a combination.

Notification is required only where an operating business is the subject of the transaction, whether directly or indirectly.

What are the thresholds for pre-merger notification?

The pre-merger notification provisions contain two thresholds: the size of the parties threshold, and the size of the transaction threshold. Both of these thresholds must be exceeded for the transaction under consideration to be notifiable.

The party size threshold is set at C$400 million. That is, there is no requirement to provide pre-merger notification unless the parties to the transaction, including their affiliates:

  • have assets in Canada that exceed C$400 million in aggregate book value; or
  • have annual gross revenues from sales in, from or into Canada that exceed C$400 million in aggregate value.

Even where the size of parties threshold is exceeded, the pre-merger notification provisions will not apply to a proposed transaction unless the size of transaction threshold is exceeded. This threshold includes a requirement that assets in Canada or annual gross revenues from sales in or from Canada exceed C$80 million, the 2013 threshold. (The size of transaction threshold is indexed to the Canadian gross domestic product and revisions to such threshold are published annually.)

However, there are aspects of this threshold that vary, depending on the type of transaction, as follows:

Asset acquisition

Pre-merger notification is required in respect of a proposed acquisition of any of the assets in Canada of an operating business where the aggregate book value of the assets proposed to be acquired, or the annual gross revenues from sales in or from Canada generated from those assets, exceeds C$80 million.

Acquisition of voting shares of a corporation

Pre-merger notification is required in respect of a proposed acquisition of the voting shares of a corporation that carries on an operating business, or controls a corporation that carries on an operating business, where the target corporation and any corporations controlled by that corporation have assets in Canada with an aggregate book value, or have annual gross revenues from sales in or from Canada generated from such assets, exceeding C$80 million.

In addition to meeting the C$80 million threshold, acquisitions of shares must exceed thresholds relating to the percentage of the voting shares of the target that the acquirer acquires to be subject to pre-merger notification. In the case of public companies, the transaction is only notifiable if, following the transaction, the acquirer will own shares carrying more than 20 per cent of the votes attached to all outstanding voting shares of the corporation. If the acquirer already owns 20 per cent, then the transaction is only notifiable if the transaction will increase the acquirer’s interest to more than 50 per cent of the votes. In the case of private companies, the thresholds are more than 35 per cent of the votes, or if the acquirer already owns 35 per cent, 50 per cent. The interest owned by the acquirer includes any interest owned by any of the acquirer’s affiliates.

Amalgamation

Pre-merger notification is required in respect of a proposed amalgamation of two or more corporations where:

  • one or more of those corporations carries on an operating business, or controls a corporation that carries on an operating business, where the aggregate book value of the assets in Canada that would be owned by the continuing corporation that would result from the amalgamation or by corporations controlled by the continuing corporation, or the annual gross revenues from sales in or from Canada generated from such assets, exceed C$80 million; and
  • each of at least two amalgamating corporations, together with its affiliates, has assets in Canada or gross revenues from sales in, from or into Canada in excess of C$80 million.

Formation of a combination

Pre-merger notification is required in respect of a proposed combination of two or more persons to carry on business other than through a corporation where one or more of those persons propose to contribute to the combination assets that form all or part of an operating business carried on by those persons, or corporations controlled by those persons, and where the aggregate book value of the assets in Canada that are the subject matter of the combination, or the annual gross revenues from sales in or from Canada generated from such assets, exceeds C$80 million.

Acquisition of an interest in a combination

Pre-merger notification is required in respect of a proposed acquisition of an interest in a combination that carries on an operating business other than through a corporation where the aggregate book value of the assets in Canada that are the subject matter of the combination, or the annual gross revenues from sales in or from Canada generated from such assets, exceeds C$80 million, and as a result of the proposed acquisition, the person(s) acquiring the interest, together with their affiliates, would hold an aggregate interest in the combination that entitles the person(s) to receive more than 35 per cent of the profits of the combination, or more than 35 per cent of its assets on dissolution or, where the person(s) acquiring the interest are already so entitled, to receive more than 50 per cent of such profits or assets.

Are there exemptions from the obligation to provide pre-merger notification?

The Competition Act and Notifiable Transactions Regulations provide for various exemptions from pre-merger notification. Examples include:

  • a transaction involving only affiliates;
  • a transaction in respect of which the Commissioner has issued an advance ruling certificate (ARC);
  • a transaction in respect of which the Commissioner has waived the obligation to provide a pre-merger notification because substantially similar information to that required by a notification was supplied in relation to a request for an ARC;
  • an acquisition of real property or goods in the ordinary course of business in certain circumstances;
  • an acquisition of collateral or receivables, or an acquisition resulting from a foreclosure or default or forming part of a debt workout, made by a creditor in or pursuant to a credit transaction entered into in good faith in the ordinary course of business; and
  • the formation of a joint venture, provided the parties meet certain conditions, including that the formation of the joint venture does not involve a change in control over any party to the combination.

What is the procedure for pre-merger notification?

Pre-merger notifications, and requests for ARCs or waivers from the obligation to notify, are to be addressed to the Merger Notification Unit, a unit of the Mergers Branch of the Bureau. The Merger Notification Unit reviews notifications for compliance with the requirements of part IX.

The majority of filing obligations are discharged through application for and receipt of an ARC, often in combination with a request for a waiver of the obligation to file a pre-merger notification (discussed below) in the event an ARC is not granted. An ARC application is generally in letter form and delivered to the attention of the Merger Notification Unit.

As an ARC will be unavailable unless the Commissioner finds that the transaction is likely to give rise to no or minimal anti-competitive effects, the central purpose of the application is to address this issue.

It should be noted that the ARC application does not start the statutory waiting period. Hence, where there is time sensitivity, it is often the case that parties will supplement the ARC application with a prescribed notification so as to start the 30-day statutory waiting period.

Where a detailed ARC application has been submitted that contains ‘substantially similar information’ to that to be supplied with a pre-merger notification, the Commissioner may waive the obligation to file a pre-merger notification.

What are the considerations for takeover bids?

In the case of an unsolicited takeover bid for voting shares, special rules impose an obligation on the target corporation to supply its portion of a notification, notwithstanding that it may be an unwilling ‘party’ to the proposed transaction.

The fact that a target corporation may not cooperate with a bidder does not prevent the statutory waiting period from expiring. In such an instance, the statutory waiting period is determined without reference to the day on which the target corporation files its part of the notification.

Where a bidder or other party that is not the target corporation supplies the Commissioner with a pre-merger notification, the Commissioner must notify the target corporation of the receipt of the notification and require the target to supply its portion of the notification within 10 days following such notification by the Commissioner.

What is the prescribed information for a notification?

Section 16 of the Notifiable Transactions Regulations sets out the requirements of a notification. They include:

  • a description of the proposed transaction and its business objectives;
  • a copy of each legal document to be used to implement the transaction;
  • a list of foreign competition authorities that have been notified of the transaction in respect of each party and its affiliates with significant assets in Canada or revenues in, from or into Canada, with a description of its principal businesses, including principal categories of products;
  • the 20 most important suppliers and customers for each such principal category of products;
  • the total annual volume or dollar value of purchases from and sales to all suppliers and customers;
  • geographic regions of sales; and
  • all studies, surveys, analyses and reports that were prepared or received by an officer or director for the purpose of evaluating or analysing the proposed transaction with respect to market shares, competition, competitors, markets, potential for sales growth or expansion into new products or geographic regions.

Although not prescribed, a Competitive Impact Statement is almost universally filed in notifiable transactions. Often, it takes the form of a request for an ARC or a no-action letter, or both. The statement is an advocacy document submitted by the parties in support of their view of the competitive effects of the transaction.

Is there a fee for pre-merger notification?

The filing fee in respect of an ARC application or pre-merger notification is C$50,000. If an ARC application and a pre-merger notification are submitted in respect of the same transaction, only the fee for an ARC is payable.

What protections are there for confidential information?

Information obtained or provided pursuant to a pre-merger notification or ARC application is afforded confidential treatment. This confidentiality protection does not apply to the communication of such information by the Bureau to a Canadian law enforcement agency or for the purposes of the administration or enforcement of the Act. Information that has been made public also loses confidential treatment. Importantly, the Bureau takes the view that it does not require a waiver to supply information it receives to the competition authorities of other jurisdictions.

What are the penalties for failing to provide pre-merger notification?

Failure to file a merger pre-notification (without good and sufficient cause) when one is required is a criminal offence, punishable by a fine of up to C$50,000. In addition, failure to comply with the mandatory waiting period can result in a court:

  • ordering the person to supply the information required pursuant to the SIR (if one has been issued);
  • issuing an interim order prohibiting any conduct directed at completion or implementation of the transaction;
  • where a transaction has been completed, ordering a dissolution of the transaction or the disposition of assets or shares;
  • in the case of a completed transaction, imposing an administrative monetary penalty of up to C$10,000 for each day that the party failed to comply with the mandatory waiting period; or
  • granting any other relief the court considers appropriate.

In addition, failure to file a merger pre-notification is a basis for the tribunal to grant an interim order preventing the parties from closing the merger.

Interaction with other regulatory regimes

Investment Canada Act (ICA)

An acquisition of control of a ‘Canadian business’ or other investment to establish a new Canadian business that is subject to review and approval under the ICA must be determined to be of ‘net benefit to Canada’, based on an assessment of various factors including the competitive effect of such acquisition. The administrators of the ICA rely on the Bureau to assess competitive effects. Accordingly, such administrators share with the Bureau information in respect of transactions that come to their attention. Where a transaction is reviewable under the ICA, clearance will usually not be possible until the Bureau has cleared the transaction where the transaction is also notifiable under part IX of the Act.

Canada Transportation Act

Transactions involving ‘transportation undertakings’ that are subject to pre-merger notification under the Act must also be notified to the minister of transportation (as well as the Canadian Transportation Agency if the proposed transaction involves an air transportation undertaking). The minister of transport has 42 days from such notification to determine whether or not the proposed transaction ‘raises issues with respect to the public interest as it relates to national transportation’. Where the transaction is considered to raise such issues, a potentially lengthy review period is triggered.

Merger review

What is a ‘merger’ under the applicable legislation?

The definition of ‘merger’ contained in section 91 of the Act is broad and includes not only acquisitions of substantially all of the assets of a business, acquisitions of a majority of the voting shares of an entity that carries on a business, amalgamation transactions, and similar transactions, but also the acquisition of a ‘significant interest in the whole or a part of a business of a competitor, supplier, customer or other person’.

The Bureau’s Merger Enforcement Guidelines (MEGs) assert that, since the Act is concerned with the market behaviour of firms, a ‘significant interest’ in the whole or part of a business is held when one or more persons have the ability to materially influence the economic behaviour (for example, decisions relating to pricing, purchasing, distribution, marketing or investment) of that business or part of that business. Given the range of management and ownership structures that are possible, the determination of whether a significant interest exists is made on a case-by-case basis.

What is the anti-competitive threshold for mergers?

Under the Act, the Competition Tribunal (the tribunal) may, on application by the Commissioner, issue an order in respect of a proposed or completed merger where it is found to have prevented or lessened competition substantially or to be likely to do so (SPLC). The MEGs state that this test is satisfied by a merger only when it is likely to create, maintain or enhance the ability of the merged entity to exercise market power.

As noted in the MEGs, market power can be exercised unilaterally or in coordination with other competitors. A unilateral exercise of market power arises when a merger enables the merged entity to profitably raise prices or influence other dimensions of competition without relying on any accommodating response from its competitors. Conversely, a coordinated exercise of market power arises where a merger reduces competitive vigour in a market due to accommodating responses from other competitors.

How are markets defined?

The MEGs provide that market definition is generally but not necessarily a first or required step in assessing the competitive effect of a merger. Markets have both product and geographic dimensions. In essence, products that fall within the same product market are good substitutes for one another. The geographic dimension of a relevant market recognises that there are limits to the geographic areas that purchasers would consider to be acceptable sources of supply, having regard to factors such as transportation costs and the need for timely deliveries. Hence, market definition is based on substitutability and focuses on demand responses to changes in relative prices. The analysis focuses on what would happen if a ‘hypothetical monopolist’ of a product or in a geographic area, as applicable, were to impose a 5 per cent price increase. If the price increase causes switching to other products or areas, those products or areas are added to the candidate market. This process continues until the hypothetical monopolist can impose and maintain (for a period of one year) the price increase in the candidate product or geographic market, at which point the market has been defined.

When detailed data on prices and quantities of the relevant products and their close substitutes is available, statistical measures (own-price elasticity, cross-price elasticity, diversion ratios, etc) are used to define the relevant product markets. Where such data is not available, or to supplement or test such data, indirect evidence of substitutability is employed, including views of buyers and other participants in the market, price relationships, end use, physical and technical characteristics, and a host of other factors.

Similarly, in defining the relevant geographic market or markets reference will be made to data that evidences the buyers’ willingness to switch their purchases in sufficient quantity from one location to another in response to changes in relative prices. Where such data is not available, or to supplement or test such data, indirect evidence of substitutability is employed, including views of buyers and other participants in the market, price relationships, characteristics of the product, transportation costs, shipment patterns and other factors.

Are there ‘safe harbour’ market-share thresholds and what are they?

Market shares of the merging entities are typically calculated based on revenues, although volume or units of production, or in some instances, reserves or other indicators of size, may be equally or even more relevant. Generally, a merger will not be challenged where the market share of the merged entity will be less than 35 per cent. This ‘safe harbour’ is based on the assumption that an entity will likely be unable to exercise unilateral market power in a manner that would enable it to raise prices profitably for a non-transitory period.

There is also a safe harbour in respect of the interdependent exercise of market power where the market share of the four largest firms (the CR4), post-merger, does not reach 65 per cent or where the merged entity does not have a 10 per cent or higher market share.

Exceeding either or both of the foregoing safe harbours does not, in and of itself, mean that the Bureau will challenge the merger; instead, it indicates that additional analysis (having regard to the evaluative criteria discussed below) will be required by the Bureau to determine whether an SPLC necessitating enforcement action will arise from the merger.

How are anti-competitive effects assessed and what factors are considered?

The Act expressly states that an SPLC cannot be found to exist based merely upon evidence of concentration or market share. In this regard, the Act identifies a non-exhaustive list of factors that the tribunal (and hence the Bureau) may consider in evaluating whether a merger gives rise to an SPLC. These factors and others identified in the MEGs include:

  • the existence of barriers to entry and the effect of the transaction on such barriers: the tribunal will assess the likelihood of entry in the relevant market within two years on a sufficient scale to constrain a material price increase or other change in the relevant market as a result of the merger. Entry can come from a variety of sources including expansion by firms already in the market, entry by firms on the fringe of the market that have machinery that can be readily converted into producing and selling the relevant products, firms selling the relevant products in adjacent geographic markets, and de novo entry. Other relevant factors include the need to incur sunk costs and regulatory requirements or controls;
  • whether there will be effective competition remaining after the merger: The collective influence of all sources of competition in the market is assessed to determine whether they will be able to act as a constraining factor against the exercise of market power by the merged entity acting unilaterally or interdependently with other participants in the market. If the merging parties are key competitors of one another, it may be that effective competition remaining after the merger will be imperilled;
  • whether the proposed transaction will eliminate a vigorous and effective competitor: among other things, the acquired firm will be analysed for any uniquely competitive (namely ‘maverick’) attributes, such as whether it is innovative in some way, is known for aggressive pricing strategies, has a history of not following price leadership, is a disruptive force in an otherwise interdependent environment, offers unique service or warranty benefits or appears to have made impressive gains in market share. Acquisition of a maverick by a leading competitor will, all other things being equal, be regarded as more problematic than an acquisition of a less vigorous and effective competitor;
  • whether one of the merging firms can be characterised as a ‘failing or exiting firm’: consideration is also given to whether one of the merging entities would fail or exit the industry if the merger were not to occur. A firm’s likely failure or exit from a market will influence the determination of whether an SPLC will arise because the loss of the acquired firm as a competitor cannot necessarily be attributed to the merger;
  • the extent to which foreign products or foreign competitors provide or are likely to provide effective competition to the business of the merging parties: the presence and viability of foreign competition to counter the increased power of the merged entity is examined having regard to factors such as the existence of tariffs, regulations and other impediments for foreign businesses in Canada;
  • the nature and extent of change and innovation in a relevant market: while change and innovation are considered in relation to other evaluative criteria, a separate analysis is also undertaken with respect to the general impact that change (for example, technological change) and innovation may have on competition; and
  • countervailing market power of buyers: buyers may constrain the merged entity’s market power if, among other things, they can immediately switch to other suppliers, if they can vertically integrate their operation into the upstream market, and if there are potential suppliers not already in the market who may be enticed into entry by orders from buyers switching from the merged entity.

The MEGs also identify possible harm to competition resulting from vertical mergers, namely input and customer foreclosure and increased likelihood of coordinated effects.

Are efficiencies considered and how?

The Act provides that the tribunal may not make an order in respect of a merger if it finds that the merger is likely to bring about gains in efficiency that will be greater than, and will offset, the effects of any prevention or lessening of competition that will result or is likely to result from the merger, and that the gains in efficiency would not be likely to be attained if the order were made. This provision was the subject of extended litigation in the Superior Propane case, and both the law resulting from that decision, and the related enforcement policy, are complex. The essential point to note under the current law is that efficiencies are relevant and ought to be identified, at least in general terms, at the outset and explored in detail if a merger that lessens or prevents competition is being proposed.

What is the process for challenging a merger?

Typically, if the Bureau determines that a merger has resulted, or is likely to result, in an SPLC, it will seek to negotiate a consent agreement that addresses the SPLC. A consent agreement that is registered with the tribunal has the same force and effect as a tribunal order.

Where a negotiated resolution cannot be achieved, the Commissioner may file an application with the tribunal for a remedy in respect of the merger. The Commissioner must establish that the merger has resulted or is likely to result in an SPLC. As discussed above, it is open to the merging parties to defend the merger on the grounds that it is likely to bring about gains in efficiency that are greater than and will offset any SPLC.

What measures can the authority take in respect of a proposed merger while it conducts its review?

The Act provides for the granting of an interim order by the tribunal, on application by the Commissioner, prohibiting any person named in the application from taking any steps directed towards the completion or implementation of a proposed merger where the Commissioner certifies that more time is required to complete his or her enquiry into the proposed merger and establishes that in the absence of an interim order the person is likely ‘to take an action that would substantially impair the ability of the tribunal to remedy the effect of the proposed merger on competition’. The duration of an interim order is 30 days, but may be extended by up to an additional 30 days where the Commissioner is unable to complete his investigation due to circumstances beyond his control.

Parties often agree not to proceed with a proposed merger or to a hold-separate agreement covering the portions of the business that raise competitive concerns, pending completion by the Bureau of its investigation and thus obviating the requirement for an interim order.

Does the authority cooperate with competition authorities outside the jurisdiction?

The Bureau operates under a number of cooperation arrangements with foreign competition authorities to facilitate the exchange of information and the coordination of investigations and remedies sought by the authorities in respect of mergers involving multiple jurisdictions. In these cases, the Bureau often requests waivers permitting it to access confidential information filed with foreign authorities.

What remedies are available?

In the case of a proposed merger, the tribunal has authority under the Act to order the merging parties or any other person not to proceed with all or part of the proposed merger and to prohibit any act or matter that is necessary to ensure that the merger does not result in an SPLC, should all or a part of the merger proceed. In the case of a completed merger, the tribunal may order dissolution of the merger or direct the disposition of designated assets or shares.

The Commissioner has negotiated and obtained a broad range of remedies to address expected competitive harm through consent agreements including structural remedies (generally asset divestitures) and quasi-structural or behavioural remedies (such as licensing of intellectual property rights, non-discriminatory access to facilities or supply).

Can decisions be appealed and/or be subject to judicial review?

Decisions of the tribunal are subject to appeal to the Federal Court of Appeal as of right on issues of law and jurisdiction and with leave of the court on issues of fact.

Is there a substantive test for joint ventures?

In many cases, a joint venture will qualify as a ‘merger’ under the expansive definition of this term in the Act (see the discussion above). A joint venture between competitors or potential competitors that does not qualify as a merger is subject to the civil competitor collaboration provisions of the Act. Under those provisions, the Commissioner may apply to the tribunal for an order prohibiting any person from doing anything under an agreement or arrangement between competitors or potential competitors that prevents or lessens or is likely to prevent or lessen competition substantially in a market. This is the same substantive test as the one applied to mergers. As in the case of mergers, relief under the civil competitor collaboration provisions is barred where there are or are likely to be gains in efficiency that are greater than and offset any SPLC resulting from the arrangement.

What is the recent enforcement record for mergers?

As reiterated in the MEGs, the Commissioner remains vigilant of non-notifiable transactions which may give rise to substantive competition law concerns. On 24 January 2011, the Commissioner brought an application before the tribunal seeking, among other remedies, a dissolution of the aquisition by CCS Corporation (since renamed Tervita Corporation) of Complete Environmental Inc, a transaction that was not subject to pre-merger notification.

The Commissioner concluded that the transaction was likely to result in a substantial prevention of competition in relation to the secure landfill market in north-eastern British Columbia. According to the Commissioner’s application, CCS operated the only two existing secure landfills in north-eastern British Columbia and Complete Environmental had a permit to build another secure landfill in that region. The Commissioner’s theory of competitive harm is that CCS was acquiring Complete Environmental in order to thwart the entry of a competitor. This matter is of particular interest in that it:

  • arises from a non-notifiable transaction;
  • is the first merger challenge by the Commissioner since 2005;
  • is purely a ‘prevention’ case; and
  • involves the Commissioner seeking a dissolution of the transaction as a remedy, the availability of which remedy was confirmed by the tribunal.

On 29 May 2012, the tribunal issued its decision concluding that the transaction was likely to result in a substantial prevention of competition in the market for the supply of landfill services for solid hazardous oil and gas waste. As a result, the tribunal ordered CCS Corporation to divest itself of the acquired entity. The tribunal’s decision is under appeal to the Federal Court of Appeal, which has granted a stay of the tribunal’s order pending appeal.

On 27 June 2011, the Commissioner filed an application with the tribunal seeking remedies under both the merger and civil competitor collaboration provisions of the Act in respect of existing and proposed joint venture arrangements between Air Canada and United Continental. The Commissioner’s position was that the joint venture would monopolise 10 important Canada/United States routes, and substantially reduce competition on nine additional routes, leading to increased prices and reduced consumer choice on key transborder routes. On 24 October 2012, the Commissioner reached a consent agreement with the parties in relation to the joint venture agreements in order to address the Commissioner’s concerns. Pursuant to the consent agreement, Air Canada and United Continental are prohibited from coordinating on key aspects of competition (eg, pricing and revenue sharing) in relation to 14 transborder routes.

On 2 July 2014 the Commissioner issued a no-action letter in respect of the acquisition by Maple Group of TMX Group, in light of the recognition orders issued by the Ontario Securities Commission, which changed ‘the regulatory environment sufficient to substantially mitigate the [Commissioner’s] concerns’. The decision is important in highlighting the potential significance of regulation in addressing competition concerns.

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