Canada: Canadian Competition Tribunal Upholds Challenge To Completed Merger

Last month, the Canadian Competition Tribunal released the public version of its reasons for issuing a divestiture order pursuant to the first fully contested proceeding under the merger provisions of the Competition Act in over a decade.

The Commissioner of Competition challenged the completed acquisition by CCS Corporation of Complete Environmental Inc. The Tribunal ordered divestiture of a subsidiary of Complete that owned property in northeastern British Columbia (known as the Babkirk site) which had been licensed for operation as a secure hazardous waste landfill.

The key implications of this decision for future transactions include:

  • Small competitive overlaps may be successfully challenged by the Commissioner – divestiture was ordered notwithstanding a relatively small geographic area of potential competitive overlap between CCS and the Babkirk site, with only 12 customers and a small volume of commerce.
  • Parties need to consider prospective competitive overlap in the absence of the merger – the Babkirk property was not operational and had never competed with CCS; if, as here, the acquired business or assets are found likely to have become a significant competitor of the purchaser in the absence of the challenged merger, that may form the basis for a finding that the merger is likely to substantially prevent competition, and provide grounds for a remedial order by the Tribunal.
  • The Tribunal may be willing to substitute its business judgment for that of a party – the Tribunal found that, at the time of the original transaction, there were no other prospective purchasers for Complete and, absent the merger, the vendors would likely have used the Babkirk site for a bioremediation business that would not have been a significant competitor of CCS. However, the Tribunal also concluded that such a business was likely to fail, following which the site would likely have been operated as a landfill in competition with CCS.
  • Customer complaints are not essential for a successful merger challenge – the Tribunal commented on the "unusual paucity" of evidence from customers, but still found a likely substantial prevention of competition based in part on internal CCS documents.


CCS provides energy and environmental waste management services to upstream oil and gas producers in Western Canada. It owned and operated the only two secure landfills for hazardous waste in northeastern British Columbia when it acquired Complete in January 2011. A subsidiary of Complete owned the Babkirk site and a permit from the B.C. Ministry of the Environment to operate a secure landfill at that site. At the time of the acquisition by CCS, Complete had not begun building a secure landfill at the site.

The CCS/Complete transaction fell well below the mandatory pre-merger notification thresholds in Part IX of the Act. However, CCS was in communication with the Competition Bureau prior to completing the transaction. The Commissioner raised concerns with CCS prior to closing, but no resolution was reached. The Commissioner then agreed not to object to CCS completing the acquisition, subject to an undertaking from CCS to preserve and maintain all approvals necessary for the operation of a secure landfill at the Babkirk site pending determination of the Commissioner's challenge to the transaction. The Commissioner filed an application challenging the merger two weeks after it closed.

In her application, the Commissioner alleged that CCS's acquisition of the Babkirk site would likely result in a substantial prevention of competition in the market for "the disposal of hazardous waste produced largely at oil and gas facilities in northeastern British Columbia". According to the Bureau, the challenged transaction prevented the entry of a "poised competitor" into the relevant market that would have lowered tipping fees for producers of hazardous waste. Significantly, the Bureau alleged that – based on what it claimed was revealed in CCS's internal documents – CCS sought to acquire the Babkirk site for the purpose of preventing such entry and averting a possible "price war".

In addition to naming the acquirer and the acquired entity as respondents to her application, the Commissioner also named as respondents the five individual vendors from whom CCS acquired the shares in Complete. The primary relief requested by the Commissioner was an order to dissolve the merger (i.e., reversing the sale back to the vendors), as opposed to the more usual remedy of divestiture of the business.

Among other things, CCS argued that the merger did not prevent competition because, absent the sale to CCS, the vendors would have used the Babkirk property for a different service that would not compete meaningfully with CCS. As such, CCS argued that the merger was procompetitive because it added capacity to the relevant market. Additionally, CCS asserted that the transaction gave rise to efficiencies that it claimed offset and outweighed any anticompetitive effects of the merger.

The Tribunal's Decision

Substantial Prevention of Competition

The Tribunal found a likely substantial prevention of competition in a small market for the disposal of hazardous waste by oil and gas companies in a part of northeastern British Columbia with only 12 customers. In essence, the Tribunal accepted the Commissioner's argument that, in acquiring Complete, CCS removed its only potential competitor in that market.

While the Tribunal acknowledged Complete's business plan to use the Babkirk site for a different use (bioremediation of hazardous waste) that did not compete closely with CCS, the Tribunal was willing to second guess that plan and determine that the vendors likely would have failed in the bioremediation business after approximately one year, following which they (or a new purchaser) would likely have operated the Babkirk site as a full service secure landfill for hazardous waste. In particular, by the spring of 2013 (i.e., a little more than two years after the challenged January 2011 merger), the vendors likely would have operated a secure landfill for hazardous waste or have sold the Babkirk property to someone who would have done so. (The Tribunal determined that, by the time of the hearing, subsequent events led another firm in the secure landfill business to be a likely purchaser of the Babkirk site.)

Given that, pre-merger, CCS was the only operator of secure landfills for the disposal of hazardous waste in the relevant market, the Tribunal considered that even a small impact on competition resulting from a new landfill at the Babkirk site would be "substantial". The Tribunal rejected CCS's arguments that barriers to entry into the full service secure landfill business were low, finding that it would take a new entrant at least 30 months to enter.


CCS argued that the Commissioner had failed to meet her burden of quantifying the anticompetitive effects of the merger so that any relevant efficiencies established by CCS would be sufficient to invoke the application of the efficiencies defence in section 96 of the Act. In rejecting the efficiencies defence, the Tribunal essentially concluded that the merger would have preserved a monopoly, resulting in various quantifiable and qualitative anti-competitive effects that were not offset by the efficiency gains. The Tribunal also found that most of the claimed efficiencies were not merger–specific – i.e., they would likely still be achieved even if a remedy were ordered.


The Commissioner had requested an order dissolving the merger or alternatively requiring CCS to divest itself of the relevant business to a purchaser approved by the Commissioner. The respondents, and particularly the vendors, strongly opposed dissolution.

The Tribunal ordered divestiture of the Complete subsidiary that owned the Babkirk site and permit. In declining to order dissolution, the Tribunal was concerned that dissolution might not lead to a prompt sale and a timely opening of the Babkirk site as a secure landfill. The Commissioner argued that the vendors would effectively be forced to re-sell the Babkirk site quickly because, given their current financial situations, they would be highly motivated to recover their funds from the sale as quickly as possible. The Tribunal questioned this analysis, pointing out that CCS had indemnified the vendors against all claims arising from the Bureau investigation, and the Commissioner would have no right of approval over a new sale by the vendors (as she would in respect of a sale by CCS pursuant to a Tribunal divestiture order). In addition, the Tribunal noted that dissolution was overbroad since it would involve other businesses of Complete that were not part of the relevant secure landfill market.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Mark C. Katz
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.