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Competition Act (R.S.C., 1985, c. C-34)

Full Document:  

Act current to 2022-07-13 and last amended on 2022-06-23. Previous Versions

PART VIIIMatters Reviewable by Tribunal (continued)

Mergers (continued)

Marginal note:Factors to be considered regarding prevention or lessening of competition

 In determining, for the purpose of section 92, whether or not a merger or proposed merger prevents or lessens, or is likely to prevent or lessen, competition substantially, the Tribunal may have regard to the following factors:

  • (a) the extent to which foreign products or foreign competitors provide or are likely to provide effective competition to the businesses of the parties to the merger or proposed merger;

  • (b) whether the business, or a part of the business, of a party to the merger or proposed merger has failed or is likely to fail;

  • (c) the extent to which acceptable substitutes for products supplied by the parties to the merger or proposed merger are or are likely to be available;

  • (d) any barriers to entry into a market, including

    • (i) tariff and non-tariff barriers to international trade,

    • (ii) interprovincial barriers to trade, and

    • (iii) regulatory control over entry,

    and any effect of the merger or proposed merger on such barriers;

  • (e) the extent to which effective competition remains or would remain in a market that is or would be affected by the merger or proposed merger;

  • (f) any likelihood that the merger or proposed merger will or would result in the removal of a vigorous and effective competitor;

  • (g) the nature and extent of change and innovation in a relevant market;

  • (g.1) network effects within the market;

  • (g.2) whether the merger or proposed merger would contribute to the entrenchment of the market position of leading incumbents;

  • (g.3) any effect of the merger or proposed merger on price or non-price competition, including quality, choice or consumer privacy; and

  • (h) any other factor that is relevant to competition in a market that is or would be affected by the merger or proposed merger.

Marginal note:Exception

 The Tribunal shall not make an order under section 92 in respect of

  • (a) a merger substantially completed before the coming into force of this section;

  • (b) a merger or proposed merger under the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act or the Trust and Loan Companies Act in respect of which the Minister of Finance has certified to the Commissioner the names of the parties and that the merger is in the public interest — or that it would be in the public interest, taking into account any terms and conditions that may be imposed under those Acts;

  • (c) a merger or proposed merger approved under subsection 53.2(7) of the Canada Transportation Act and in respect of which the Minister of Transport has certified to the Commissioner the names of the parties; or

  • (d) a merger or proposed merger that constitutes an existing or proposed arrangement, as defined in section 53.7 of the Canada Transportation Act, that has been authorized by the Minister of Transport under subsection 53.73(8) of that Act and for which the authorization has not been revoked.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45
  • 1991, c. 45, s. 549, c. 46, ss. 592, 593, c. 47, s. 716
  • 1999, c. 2, s. 37
  • 2000, c. 15, s. 14
  • 2001, c. 9, s. 579
  • 2007, c. 19, s. 62
  • 2018, c. 10, s. 88

Marginal note:Exception for joint ventures

  •  (1) The Tribunal shall not make an order under section 92 in respect of a combination formed or proposed to be formed, otherwise than through a corporation, to undertake a specific project or a program of research and development if

    • (a) a project or program of that nature

      • (i) would not have taken place or be likely to take place in the absence of the combination, or

      • (ii) would not reasonably have taken place or reasonably be likely to take place in the absence of the combination because of the risks involved in relation to the project or program and the business to which it relates;

    • (b) no change in control over any party to the combination resulted or would result from the combination;

    • (c) all the persons who formed the combination are parties to an agreement in writing that imposes on one or more of them an obligation to contribute assets and governs a continuing relationship between those parties;

    • (d) the agreement referred to in paragraph (c) restricts the range of activities that may be carried on pursuant to the combination, and provides that the agreement terminates on the completion of the project or program; and

    • (e) the combination does not prevent or lessen or is not likely to prevent or lessen competition except to the extent reasonably required to undertake and complete the project or program.

  • Marginal note:Limitation

    (2) For greater certainty, this section does not apply in respect of the acquisition of assets of a combination.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45

Marginal note:Exception where gains in efficiency

  •  (1) The Tribunal shall not make an order under section 92 if it finds that the merger or proposed merger in respect of which the application is made has brought about or 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 or proposed merger and that the gains in efficiency would not likely be attained if the order were made.

  • Marginal note:Factors to be considered

    (2) In considering whether a merger or proposed merger is likely to bring about gains in efficiency described in subsection (1), the Tribunal shall consider whether such gains will result in

    • (a) a significant increase in the real value of exports; or

    • (b) a significant substitution of domestic products for imported products.

  • Marginal note:Restriction

    (3) For the purposes of this section, the Tribunal shall not find that a merger or proposed merger has brought about or is likely to bring about gains in efficiency by reason only of a redistribution of income between two or more persons.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45

Marginal note:Limitation period

 No application may be made under section 92 in respect of a merger more than one year after the merger has been substantially completed.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45
  • 2009, c. 2, s. 430

Marginal note:Where proceedings commenced under section 45, 49, 79 or 90.1

 No application may be made under section 92 against a person on the basis of facts that are the same or substantially the same as the facts on the basis of which

  • (a) proceedings have been commenced against that person under section 45 or 49; or

  • (b) an order against that person is sought under section 79 or 90.1.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45
  • 2009, c. 2, s. 430

Marginal note:Conditional orders directing dissolution of a merger

  •  (1) The Tribunal may provide, in an order made under section 92 directing a person to dissolve a merger or to dispose of assets or shares, that the order may be rescinded or varied if, within a reasonable period of time specified in the order,

    • (a) there has occurred

      • (i) a reduction, removal or remission, specified in the order, of any relevant customs duties, or

      • (ii) a reduction or removal, specified in the order, of prohibitions, controls or regulations imposed by or pursuant to any Act of Parliament on the importation into Canada of an article specified in the order, or

    • (b) that person or any other person has taken any action specified in the order

    that will, in the opinion of the Tribunal, prevent the merger from preventing or lessening competition substantially.

  • Marginal note:When conditional order may be rescinded or varied

    (2) Where, on application by any person against whom an order under section 92 is directed, the Tribunal is satisfied that

    • (a) a reduction, removal or remission specified in the order pursuant to paragraph (1)(a) has occurred, or

    • (b) the action specified in the order pursuant to paragraph (1)(b) has been taken,

    the Tribunal may rescind or vary the order accordingly.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45

Marginal note:Interim order where no application under section 92

  •  (1) The Tribunal may issue an interim order forbidding any person named in the application from doing any act or thing that it appears to the Tribunal may constitute or be directed toward the completion or implementation of a proposed merger in respect of which an application has not been made under section 92 or previously under this section, where

    • (a) on application by the Commissioner, certifying that an inquiry is being made under paragraph 10(1)(b) and that, in the Commissioner’s opinion, more time is required to complete the inquiry, the Tribunal finds that in the absence of an interim order a party to the proposed merger or any other 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 under that section because that action would be difficult to reverse; or

    • (b) the Tribunal finds, on application by the Commissioner, that the completion of the proposed merger would result in a contravention of section 114.

  • Marginal note:Notice of application

    (2) Subject to subsection (3), at least forty-eight hours notice of an application for an interim order under subsection (1) shall be given by or on behalf of the Commissioner to each person against whom the order is sought.

  • Marginal note:Ex parte application

    (3) Where the Tribunal is satisfied, in respect of an application for an interim order under paragraph (1)(b), that

    • (a) subsection (2) cannot reasonably be complied with, or

    • (b) the urgency of the situation is such that service of notice in accordance with subsection (2) would not be in the public interest,

    it may proceed with the application ex parte.

  • Marginal note:Terms of interim order

    (4) An interim order issued under subsection (1)

    • (a) shall be on such terms as the Tribunal considers necessary and sufficient to meet the circumstances of the case; and

    • (b) subject to subsections (5) and (6), shall have effect for such period of time as is specified in it.

  • Marginal note:Duration of order: inquiry

    (5) The duration of an interim order issued under paragraph (1)(a) shall not exceed thirty days.

  • Marginal note:Duration of order: failure to comply

    (6) The duration of an interim order issued under paragraph (1)(b) shall not exceed

    • (a) ten days after section 114 is complied with, in the case of an interim order issued on ex parte application; or

    • (b) thirty days after section 114 is complied with, in any other case.

  • Marginal note:Extension of time

    (7) Where the Tribunal finds, on application made by the Commissioner on forty-eight hours notice to each person to whom an interim order is directed, that the Commissioner is unable to complete an inquiry within the period specified in the order because of circumstances beyond the control of the Commissioner, the Tribunal may extend the duration of the order to a day not more than sixty days after the order takes effect.

  • Marginal note:Completion of inquiry

    (8) Where an interim order is issued under paragraph (1)(a), the Commissioner shall proceed as expeditiously as possible to complete the inquiry under section 10 in respect of the proposed merger.

Marginal note:Right of intervention

 The attorney general of a province may intervene in any proceedings before the Tribunal under section 92 for the purpose of making representations on behalf of the province.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45

Marginal note:Advance ruling certificates

  •  (1) Where the Commissioner is satisfied by a party or parties to a proposed transaction that he would not have sufficient grounds on which to apply to the Tribunal under section 92, the Commissioner may issue a certificate to the effect that he is so satisfied.

  • Marginal note:Duty of Commissioner

    (2) The Commissioner shall consider any request for a certificate under this section as expeditiously as possible.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45
  • 1999, c. 2, s. 37

Marginal note:No application under section 92

 Where the Commissioner issues a certificate under section 102, the Commissioner shall not, if the transaction to which the certificate relates is substantially completed within one year after the certificate is issued, apply to the Tribunal under section 92 in respect of the transaction solely on the basis of information that is the same or substantially the same as the information on the basis of which the certificate was issued.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45
  • 1999, c. 2, s. 37

General

Marginal note:Leave to make application under section 75, 76, 77 or 79

  •  (1) Any person may apply to the Tribunal for leave to make an application under section 75, 76, 77 or 79. The application for leave must be accompanied by an affidavit setting out the facts in support of the person’s application under that section.

  • Marginal note:Notice

    (2) The applicant must serve a copy of the application for leave on the Commissioner and any person against whom the order under section 75, 76, 77 or 79, as the case may be, is sought.

  • Marginal note:Certification by Commissioner

    (3) The Commissioner shall, within 48 hours after receiving a copy of an application for leave, certify to the Tribunal whether or not the matter in respect of which leave is sought

    • (a) is the subject of an inquiry by the Commissioner; or

    • (b) was the subject of an inquiry that has been discontinued because of a settlement between the Commissioner and the person against whom the order under section 75, 76, 77 or 79, as the case may be, is sought.

  • Marginal note:Application discontinued

    (4) The Tribunal shall not consider an application for leave respecting a matter described in paragraph (3)(a) or (b) or a matter that is the subject of an application already submitted to the Tribunal by the Commissioner under section 75, 76, 77 or 79.

  • Marginal note:Notice by Tribunal

    (5) The Tribunal shall as soon as practicable after receiving the Commissioner’s certification under subsection (3) notify the applicant and any person against whom the order is sought as to whether it can hear the application for leave.

  • Marginal note:Representations

    (6) A person served with an application for leave may, within 15 days after receiving notice under subsection (5), make representations in writing to the Tribunal and shall serve a copy of the representations on any other person referred to in subsection (2).

  • Marginal note:Granting leave

    (7) The Tribunal may grant leave to make an application under section 75, 77 or 79 if it has reason to believe that the applicant is directly and substantially affected in the applicant’s business by any practice referred to in one of those sections that could be subject to an order under that section.

  • Marginal note:Granting leave to make application under section 76

    (7.1) The Tribunal may grant leave to make an application under section 76 if it has reason to believe that the applicant is directly affected by any conduct referred to in that section that could be subject to an order under that section.

  • Marginal note:Time and conditions for making application

    (8) The Tribunal may set the time within which and the conditions subject to which an application under section 75, 76, 77 or 79 must be made. The application must be made no more than one year after the practice or conduct that is the subject of the application has ceased.

  • Marginal note:Decision

    (9) The Tribunal must give written reasons for its decision to grant or refuse leave and send copies to the applicant, the Commissioner and any other person referred to in subsection (2).

  • Marginal note:Limitation

    (10) The Commissioner may not make an application for an order under section 75, 76, 77 or 79 on the basis of the same or substantially the same facts as are alleged in a matter for which the Tribunal has granted leave under subsection (7) or (7.1), if the person granted leave has already applied to the Tribunal under section 75, 76, 77 or 79.

  • Marginal note:Inferences

    (11) In considering an application for leave, the Tribunal may not draw any inference from the fact that the Commissioner has or has not taken any action in respect of the matter raised by it.

  • Marginal note:Inquiry by Commissioner

    (12) If the Commissioner has certified under subsection (3) that a matter in respect of which leave was sought by a person is under inquiry and the Commissioner subsequently discontinues the inquiry other than by way of settlement, the Commissioner shall, as soon as practicable, notify that person that the inquiry is discontinued.

 
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