As reported in the June 2003 issue of The Competitor, Bill C-249 - An Act to amend the Competition Act, was passed by the House of Commons in May 2003. Bill C-249 is a Private Member's Bill, introduced in response to the January 31, 2003 decision of the Federal Court of Appeal, which upheld the Competition Tribunal's determination that efficiencies to be generated by the merger of Superior Propane Inc. with ICG Propane Inc. would outweigh its anticompetitive effects, thereby "saving" the merger pursuant to section 96(1) of the Competition Act (the "efficiencies defence"). In the view of the Commissioner of Competition, this decision had two potentially undesirable consequences, first that an anticompetitive merger might survive on the basis of efficiencies, notwithstanding harm to consumers and, second, that the efficiencies defence could be applied so as to condone mergers that create a monopoly in certain instances.
Bill C-249 would narrow the application of the "efficiencies defence" by providing that efficiencies be considered as just one part of the overall assessment of the merger, along with the other factors set out in section 93 of the Competition Act. A previous version of the Bill went even farther, requiring efficiencies to be passed on to consumers. However, this requirement was removed from the current Bill as many commentators had observed that it all but negated the possibility of the defence ever applying to a merger that causes a substantial lessening or prevention of competition in the first place.
Last fall, Bill C-249 had passed second reading (in the Senate), and had been referred to the Standing Committee on Banking, Trade and Commerce. However, the federal Parliament was prorogued on November 12, 2003, and as a result, Bill C-249 "died on the order paper". On February 2, 2004, Bill C-249 was re-introduced from the previous legislative session, deemed to have had First through Third Readings in the House of Commons, and First Reading in the Senate on February 3, 2004
