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 of our recommendations with respect to mergers is for Canada to adopt a rebuttable structural presumption system in our merger law.
The idea is quite straightforward. Mergers that significantly increase concentration in highly concentrated markets are more likely to harm competition. Beyond certain thresholds, there should be a presumption in the law that a merger is anti-competitive, and merging parties should then 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 threshold 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 retrospective studies that look at the actual effects of mergers in concentrated industries. Harmonizing Canadian law with the U.S. merger guidelines would, of course, also 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 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. As a result, 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. accepts only merger remedies that fully maintain competition, reflecting, once again, 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, in my submission, no reason why it should be any different in this country.
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 Bill 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 very much. We look forward to your questions this morning.
