Canada: Mediation In Canadian Competition Tribunal Proceeding Leads To Settlement In Merger Challenge

On March 29, 2016, the Canadian Commissioner of Competition and Parkland Fuel Corp. entered into a consent agreement to resolve the Commissioner's challenge to Parkland's acquisition of Pioneer Energy. This marks the first time in a Canadian Competition Tribunal proceeding that a consent agreement has been negotiated through mediation.

The consent agreement includes not only divestitures and termination of fuel supply agreements in certain local markets but also a cap on margins in supply provisions applicable to some other local markets. While such supply provisions are typically not a merger remedy favoured by competition law enforcers, the Parkland resolution demonstrates that the Commissioner may be willing to consider non-standard behavioural remedies or processes in particular cases.


In April 2015, the Commissioner challenged Parkland's proposed acquisition of Pioneer Energy, alleging that the transaction would likely result in a substantial lessening of competition in the retail supply of gasoline in 14 local markets (representing about 10% of the acquired business). At the same time, the Commissioner applied for an injunction to prevent the merging parties from implementing the transaction in the identified local markets pending the outcome of the Commissioner's challenge, but otherwise allowing the acquisition to proceed. In May 2015, the Tribunal granted an interim injunction, ordering Parkland and Pioneer Energy to preserve and hold separate retail gas stations and related supply arrangements in 6 of the 14 markets pending a full hearing on the contested merger, which was scheduled for May 2016. (See our discussion of the case following the Tribunal's injunction decision.)

The Consent Agreement

The consent agreement requires Parkland to divest six retail gas stations – five in Ontario and one in Manitoba. In at least one case, Parkland has the option to terminate a fuel supply arrangement, rather than divest service station assets in the local market. The consent agreement also requires Parkland to adhere to certain price restrictions in the wholesale supply of gas to dealers in two additional local markets in Manitoba.

While some details of the consent agreement are included in confidential schedules, the public version includes a few provisions of note:

  • Divestiture to One or More Purchasers. The consent agreement permits Parkland to divest the relevant assets to one or more purchasers. Competition authorities often require assets to be divested to a single purchaser to ensure sufficient competition in the relevant market(s). This is typically the case where sale of a subset of the divestiture assets to more than one purchaser may negatively impact the divested business. In this case, the option to sell to more than one purchaser suggests that the Commissioner views the divestiture assets as sufficiently distinct that a single purchaser of all the divestiture assets in the six markets is not necessary to ensure effective and sufficient competition in those markets.
  • Parkland's Choice of Divestiture Assets. The consent agreement includes the usual pre-approval requirements that must be satisfied before the Commissioner signs off on a proposed purchaser, including that Parkland will have no direct or indirect interest in the divestiture assets following the divestiture. Interestingly, the consent agreement also provides Parkland with some choice relating to the assets it divests. In particular, Parkland must (i) in Kapuskasing, Ontario, divest "the business of Parkland at a corporate station of its choice"; and (ii) in the remaining five markets in Ontario and Manitoba, divest one Parkland corporate station or, in at least one case, terminate a fuel supply contract with a dealer.
  • Margin Caps. In the two markets subject to restrictions on wholesale supply arrangements, rather than divestitures, the consent agreement prohibits Parkland from increasing its rack forward margin for six years. In addition, for six years, Parkland is prohibited from increasing its delivery fees to dealers in these two markets, except if the increase is cost justified and/or there is a province-wide increase in delivery fees. (Presumably, the province-wide exception is included on the basis that competition across the province is sufficient to prevent an anti-competitive price increase.) Notably, based on the Tribunal record, it appears that neither Parkland nor Pioneer Energy has a corporate station in either of these two markets.

While the Commissioner's application challenging the proposed merger sought divestiture of retail gas stations and related supply agreements in 14 local markets, the negotiated consent agreement involves remedies in only 8 of the 14 markets and requires divestiture in only 6 of these. Again interestingly, some of the required divestitures are in markets that were not subject to the Tribunal's interim preservation and hold separate order.

The Parkland consent agreement signals the Commissioner's flexibility and willingness, at least in some circumstances, to negotiate terms in the course of a mediation process to foster timely and efficient resolutions.  It remains to be seen how widely, and how early in a proceeding, the Commissioner will be prepared to participate in a mediation process to resolve future merger challenges.

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.

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.