Susan M. Hutton and Patricia Martino
In the Fall of 2004, Canada's Commissioner of Competition (the "Commissioner") called for comments on a Consultation Paper issued by the Competition Bureau which dealt with the treatment of efficiencies under the Competition Act.1 On March 18, 2005, pursuant to calls by the Canadian Bar Association and others for more in-depth analysis, she announced that an advisory panel of experts had been appointed to assess the role that efficiencies should play "in the context of Canada's economy in the 21st century".
A springboard for this debate was the decision in The Commissioner of Competition v. Superior Propane,2in which the Federal Court of Appeal ultimately upheld the Competition Tribunal's decision that section 96 of the Act applied to save an otherwise anti-competitive merger, because the evidence showed that the efficiencies likely to be generated by the merger outweighed its likely anti-competitive effects. In so doing, the Federal Court of Appeal rejected the use of the "total surplus" standard for the measurement of anti-competitive effects in all cases. The appropriate treatment of efficiencies has also been the subject of debate in other countries, including the European Union, where Section VII of the EC Horizontal Merger Guidelines sought to clarify the European approach, and more recently, the United States, where the Antitrust Modernization Committee will study whether current policies are appropriate and effective.
The Canadian Advisory Panel on Efficiencies will consider the general economic and business implications of the current treatment of efficiencies under the Competition Act as well as the characteristics required of Canada's competition policy in order to ensure that efficiencies are properly addressed. The Panel is to report to the Commissioner by June, 2005 - a somewhat short time-frame for such a task.
FOOTNOTES:
1] See the The Competitor, October 2004.
2] (2000), 7 C.P.R. (4th) 385 (Comp. Trib.); revd Canada (Commissioner of Competition) v. Superior Propane Inc. (2001), 11 C.P.R. (4th) 289, [2001] F.C.J. No. 455 (F.C.A.); (leave to appeal to S.C.C. refused 14 C.P.R. (4th) vii, 202 D.L.R. (4th) vi, 278 N.R. 196; reconsidered Canada (Commissioner of Competition) v. Superior Propane Inc. (2002), 18 C.P.R. (4th) 417 (Comp. Trib.), affd [2003] F.C.A. 53.
