Bill C-11, an Act to amend the Canada Transportation Act and the Railway Safety Act and to make consequential amendments to other Acts, received Royal Assent on June 22, 2007. Bill C-11 changes the merger review regime for all transactions involving transportation undertakings which transactions otherwise are required to be notified under Part IX of the Competition Act.
According to the new provisions of the Canada Transportation Act, when notification is required under s. 114(1) of the Competition Act, parties to a proposed transaction involving any "transportation undertaking" (as opposed to only air transportation undertakings, as before) must now give notice to the Minister of Transportation (the Minister). The requirement that the Canadian Transportation Agency (the Agency) must also be given notice for air transportation undertakings remains unchanged.
Notice to the Minister is to contain the same information as is provided to the Competition Bureau (the Bureau) under s. 114(1) of the Competition Act, as well as information on the public interest as it relates to national transportation, as required by the Minister's (non-statutory) guidelines. These guidelines have yet to be published and will be elaborated in consultation with the Bureau.
Under the revised CTA, the Minister has forty-two days to decide whether the transaction raises "issues" (formerly "concerns") with respect to the public interest as it relates to national transportation. If so, he or she can direct the Agency to examine the issues, or may appoint someone else for that purpose. The Agency or other appointee must report back within 150 days, unless the Minister allows for a longer period of time. The report now becomes public immediately after it is given to the Minister.
Previously, on receipt of the report, the Minister would inform the Commissioner and the parties of his or her concerns, and state which part of those concerns the parties should address with the Commissioner. Now, however, the Minister first consults with the Commissioner as to where their respective concerns overlap, then instructs the parties whom to address in respect of their respective concerns. The parties are to inform each of the two officials what measures they are willing to undertake to tackle the issues. The Minister consults with the Commissioner as to the adequacy of the parties' commitments, and may then recommend to the Governor in Council to approve the transaction.
Under the old CTA, if a party completed or was about to complete a notifiable air transportation transaction without the requisite approval from the Governor in Council, the Minister could recommend to the Governor in Council (after consulting with the Commissioner) to issue an order directing the parties to take action to protect the public interest. Now, the Minister instead applies to a superior court for such an order, with respect to any transportation undertaking.
The amendments described above broaden the scope of the potential "public interest" review to include transactions involving all types of transportation undertaking, rather than only air transportation, as before. The amendments also clarify that when the Minister has ordered a public interest review, the Minister - and not the Commissioner - will have the last word. It remains to be seen whether public interest reviews will be used to block such transactions on political grounds, or to enable politicians to approve of transactions which the Commissioner would reject.