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

Full Document:  

Act current to 2024-02-06 and last amended on 2023-12-15. Previous Versions

PART VIIIMatters Reviewable by Tribunal (continued)

Mergers

Marginal note:Definition of merger

 In sections 92 to 100, merger means the acquisition or establishment, direct or indirect, by one or more persons, whether by purchase or lease of shares or assets, by amalgamation or by combination or otherwise, of control over or significant interest in the whole or a part of a business of a competitor, supplier, customer or other person.

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

Marginal note:Order

  •  (1) Where, on application by the Commissioner, the Tribunal finds that a merger or proposed merger prevents or lessens, or is likely to prevent or lessen, competition substantially

    • (a) in a trade, industry or profession,

    • (b) among the sources from which a trade, industry or profession obtains a product,

    • (c) among the outlets through which a trade, industry or profession disposes of a product, or

    • (d) otherwise than as described in paragraphs (a) to (c),

    the Tribunal may, subject to sections 94 and 95,

    • (e) in the case of a completed merger, order any party to the merger or any other person

      • (i) to dissolve the merger in such manner as the Tribunal directs,

      • (ii) to dispose of assets or shares designated by the Tribunal in such manner as the Tribunal directs, or

      • (iii) in addition to or in lieu of the action referred to in subparagraph (i) or (ii), with the consent of the person against whom the order is directed and the Commissioner, to take any other action, or

    • (f) in the case of a proposed merger, make an order directed against any party to the proposed merger or any other person

      • (i) ordering the person against whom the order is directed not to proceed with the merger,

      • (ii) ordering the person against whom the order is directed not to proceed with a part of the merger, or

      • (iii) in addition to or in lieu of the order referred to in subparagraph (ii), either or both

        • (A) prohibiting the person against whom the order is directed, should the merger or part thereof be completed, from doing any act or thing the prohibition of which the Tribunal determines to be necessary to ensure that the merger or part thereof does not prevent or lessen competition substantially, or

        • (B) with the consent of the person against whom the order is directed and the Commissioner, ordering the person to take any other action.

  • Marginal note:Evidence

    (2) For the purpose of this section, the Tribunal shall not find that a merger or proposed merger prevents or lessens, or is likely to prevent or lessen, competition substantially solely on the basis of evidence of concentration or market share.

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

 [Repealed, 2023, c. 31, s. 10]

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
 

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