Competition Tribunal Approves Superior Propane/ICG Merger

On April 4, 2002, the Competition Tribunal dismissed the Commissioner of Competition’s application to set aside the Superior Propane/ICG Propane merger for the second time.

The case is the first to have applied Canada’s merger “efficiency defence” as set out in the Competition Act. In its initial ruling on August 30, 2000, the tribunal dismissed the commissioner’s application to set aside the merger on the basis that the efficiencies resulting from the merger of $29 million would substantially exceed the merger’s anti-competitive effects of $6 million, measured as purely economic effects and excluding redistributive effects. On appeal of the initial ruling, the Federal Court of Appeal remanded the case back to the tribunal to reconsider the efficiency defence with regard to more than just the economic effects of the merger.

The redetermination decision of April 4, 2002 held that the efficiencies resulting from the merger of $29 million would substantially exceed all the anti-competitive effects of the merger, including the socially adverse income transfer from consumers to producers, of $8.6 million. The tribunal’s redetermination decision is the first to apply the Federal Court of Appeal’s reasons in the application of the defence. The commissioner has appealed the decision to the Federal Court of Appeal.

Superior Propane is represented by Neil Finkelstein, Jeff Galway, Martha Cook, Charlotte Kanya-Forstner and Cal Goldman, Q.C., of Blake, Cassels & Graydon LLP, and Brian Facey of Ogilvy Renault. The commissioner is represented by John Rook, Q.C., Jo’Anne Strekaf and Steven Robertson of Bennett Jones LLP; William Miller and Donna Blois of Industry Canada, competition; and Christopher Naudie of Osler, Hoskin & Harcourt LLP.