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 Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions