Earlier today, the Supreme Court of Canada (the “SCC”) issued its long-anticipated decision in Tervita Corp. v. Canada (Commissioner of Competition), where it allowed the appeal on the basis that the Commissioner of Competition (the “Commissioner”) had failed to “quantify quantifiable anti-competitive effects”. By allowing the appeal,In its decision, the SCC overturned the findings by the Federal Court of Appeal and the Competition Tribunal.


In 2011, Tervita Corporation (“Tervita”), a waste management services company in Western Canada, acquired Complete Environmental Inc. (“Complete”), which owned land in northeastern British Columbia and a permit allowing it to operate a secure landfill at that site.

While the value of the transaction was well below the pre-merger notification thresholds under the Competition Act, it was challenged by the former Commissioner of Competition (the “Commissioner”) on the basis that it was likely to result in a substantial prevention of competition in the market for “the disposal of hazardous waste produced largely at oil and gas facilities in northeastern British Columbia”. The Commissioner also believed that the transaction would prevent the entry of a competitor that was otherwise poised to enter that market and would have resulted in lowering tipping fees for producers of hazardous waste.

The matter was brought before the Competition Tribunal (the “Tribunal”), which agreed with the Commissioner that the transaction would result in the substantial prevention of competition. The Tribunal also considered – and rejected – Tervita’s efficiencies defence, on the basis that any potential efficiency gains were not likely to be offset by the anti-competitive effects flowing from the merger. On appeal, the Federal Court of Appeal (“FCA”) upheld the Tribunal’s decision and Tervita subsequently appealed to the Supreme Court of Canada.


The SCC decision is important for several reasons.

First, it upheld the Tribunal and FCA’s finding that the transaction was likely to substantially prevent competition.

Second, it overturned the decisions of by the Tribunal and Federal Court and upheld Tervita’s ability to invoke the efficiencies defence.  In doing so, the SCC clearly stated that the Commissioner bears the “burden to quantify all quantifiable anti-competitive effects”.  This finding was determinative because the Commissioner had made no effort to quantify the alleged anticompetitive impact of the merger.

Third, the SCC noted that, in assessing the application of the efficiencies defence, the Tribunal should consider all available quantitative and qualitative evidence. Further, effects that can be quantified should be quantified, even as estimates, so long as the estimates are grounded in evidence that can be challenged and weighed.

Lastly, the SCC did not establish a minimum threshold of efficiency gains that must be present before an efficiency defence can be raised.  In this case, because the Commissioner did not quantify the alleged anticompetitive effects, the relatively modest efficiencies that Tervita was able to quantify were held to be sufficient for the efficiencies defence to apply.

Key Takeaways

The Tervita decision provides guidance with respect to the type and scope of analysis the Bureau must complete before it can properly challenge the validity of an efficiency defence raised by merging parties in the context of a merger review.

This appears to be supported by the statement released by the Commissioner shortly after the SCC decision was released, which stated that “the Bureau will consider the guidance provided on efficiencies and any changes to our analysis and information gathering that may be required during merger review”.

Practically, this means that, where a merger raises significant substantive issues and the merging parties could raise an efficiencies defence, the Competition Bureau will have to proactively quantify the alleged anticompetitive effects.  As a result, the Bureau is likely to ask for more information from both the merging parties and other industry participants than has previously been the case.  This additional layer of work may impact both the timing of Bureau’s review of transactions and increase the use of compulsory production orders against third-party industry participants.

For more information, please contact Chris Hersh, Imran Ahmad or David Wingfield.

For a copy of the Supreme Court decision, please click here and here.

For a copy of Competition Bureau’s press release, please click here.