Commissioner of Competition V. Tervita Corporation

The Supreme Court of Canada (SCC) has granted Tervita Corporation leave to appeal from a decision of the Federal Court of Appeal (FCA). The FCA had dismissed Tervita's appeal from a decision of the Competition Tribunal. The case was the first contested merger to be heard by the Competition Tribunal since 2006. A hearing has been tentatively set for the spring of 2014.

At issue before the tribunal was the acquisition of a landfill site permitted for the disposal of solid hazardous waste generated by oil and gas companies in northeastern British Columbia. Tervita acquired the company that owned the site, in a transaction that the commissioner of competition alleged would substantially prevent competition.

The acquisition was well below the mandatory reporting threshold for mergers under the Competition Act, but the commissioner was alerted to the deal by a competitor's complaint. The deal closed even though the commissioner warned the parties that she was in the process of reviewing the proposed deal and would bring a case to the tribunal pursuant to section 92 of the Competition Act.

The commissioner succeeded before the tribunal, which ordered that Tervita divest the landfill site to a buyer to be approved by the commissioner. The tribunal found that the merger had maintained Tervita's monopoly on hazardous waste landfill services in an area of northeastern British Columbia and had prevented competition. The tribunal held that, absent the impugned transaction, the owners of the acquired site would have developed a landfill to compete with Tervita or would have sold the site to a third party that would have done so. The tribunal based these findings on, in addition to other evidence, internal documents from Tervita and the vendors that had been obtained by the commissioner during her investigation.

The FCA upheld the tribunal's decision. It found that the tribunal was correct to look into the future, based on the evidence before it, to determine whether competition had been prevented. It rejected Tervita's contention that the tribunal had engaged in unwarranted speculation, finding that the tribunal's role requires it to project into the future to ascertain a merger's (or the absence of a merger's) potential economic and commercial impacts, and that the tribunal's findings of fact and of mixed fact and law require deference from a reviewing court. It rejected Tervita's arguments that the efficiencies to be achieved through the transaction would outweigh and offset the anticompetitive harm that would arise as a result of Tervita perpetuating its monopoly.

The Commissioner of Competition was represented by Nikiforos Iatrou, Scott Mc-Grath and Bronwyn Roe of WeirFoulds LLP, and Jonathan Hood of Competition Bureau Legal Services.

Torys LLP represented Tervita with Linda Plumpton, John Laskin, Crawford Smith, Dany Assaf, Justin Necpal, Ishat Reza, Matthew Murphy and Miranda Callaghan.

The vendors were represented by Davis LLP with a team of Kevin Wright, Jonathan Gilhen and Morgan Burris.