Opening Statement to the Standing Committee on Finance: Competition Act modernization in Bill C-59

Remarks from Matthew Boswell, Commissioner of Competition
Standing Committee on Finance
Ottawa, Ontario

April 18, 2024

(As prepared for delivery)

Good morning Mr. Chair and members of the committee. Thank you for the invitation to appear before you today.

My name is Matthew Boswell and I am the Commissioner of the Competition Bureau. Joining me today are my colleagues Jeanne Pratt, Senior Deputy Commissioner of the Mergers and Monopolistic Practices Branch, and Anthony Durocher, Deputy Commissioner of the Competition Promotion Branch.

As part of your study into Bill C-59, we submitted a brief outlining a number of recommendations that we believe could strengthen this already important piece of legislation. During these opening remarks, I would like to focus on our two recommendations relating to merger review.

The first is our recommendation to adopt rebuttable structural presumptions.

The idea is straightforward: mergers that significantly increase concentration in highly concentrated markets are more likely to harm competition. Beyond certain thresholds, there should be a presumption that a merger is anti-competitive, and merging parties should have an opportunity to rebut that presumption.

This is not a novel idea. The U.S. has taken this common-sense approach for over 60 years, backed by U.S. Supreme Court precedent. We recommend adopting the thresholds set out in the U.S. Merger Guidelines. Those thresholds are supported by a large number of economists and legal scholars and are consistent with merger retrospective studies that look at the actual effects of mergers in concentrated industries. Harmonizing with them would increase predictability for businesses and improve co-operation in cross-border merger reviews.

This is the kind of definitive reform that’s needed if we want to see a true course-correction in the way that mergers are treated, and avoid further harmful consolidation in Canada.

The second recommendation I’d like to highlight is our recommendation to strengthen our ability to remedy anti-competitive mergers.

Merger review is our first line of defence for protecting competition. However, when we find that a merger is anti-competitive, the law does not require strong remedies. The Supreme Court has held that the goal of a merger remedy is simply to mitigate the harm from a merger so that it is no longer substantial, and to do so in the least intrusive way. We sometimes end up with merger remedies that take a strong competitor in a market and replace it with a weaker one.

The U.S. only accepts merger remedies that “fully maintain competition”, reflecting a common-sense view that the “public should not bear the cost of a risky remedy”. In the European Union, merger remedies have to “eliminate the competition concerns entirely and have to be comprehensive and effective from all points of view”. In the United Kingdom, the “objective is to ensure that competition following the…remedy is as effective as pre-merger competition.” There is no reason why it should be any different in Canada.

Our brief provides model legislative text that would implement each of these recommendations.

In closing, allow me to reassure you, we are committed to transparent, principled, and evidence-based enforcement of the Act for the benefit of all Canadians. If C-59 becomes law, with or without our proposed amendments, we will implement the changes responsibly and provide guidance to business and stakeholders on our approach.

I want to thank Parliamentarians for their diligent efforts in modernizing Canada’s competition law framework. A more competitive economy will benefit all Canadians – by offering more choice and greater affordability for consumers and businesses and by stimulating productivity throughout the economy.

Thank you and we look forward to your questions.