Supreme Court Decision Underscores Importance Of Quantifying Efficiency Gains In Merger Reviews

The Supreme Court of Canada has provided important guidance for determining whether a merger is likely to prevent competition substantially, and for the proper application of the "efficiencies defence" under section 96 of the Competition Act ("Act").

In Tervita Corp. v. Canada (Commissioner of Competition) ("Tervita"), issued January 22, 2015, the Court upheld the finding of the Competition Tribunal ("Tribunal") that a merger can be blocked based on a forward-looking analysis of whether, but for the merger, competition would likely be substantially greater. This "but for" analysis can consider a range of evidence and the analysis is not entirely dependent on the parties' assets, plans and businesses at the time of the merger.