Competition Commr. v. Superior Propane, 2001 FCA 104

JudgeStone, Létourneau and Evans, JJ.A.
CourtFederal Court of Appeal (Canada)
Case DateApril 04, 2001
JurisdictionCanada (Federal)
Citations2001 FCA 104;(2001), 269 N.R. 109 (FCA)

Competition Commr. v. Superior Propane (2001), 269 N.R. 109 (FCA)

MLB headnote and full text

Temp. Cite: [2001] N.R. TBEd. AP.042

The Commissioner of Competition (appellant) v. Superior Propane Inc. and ICG Propane Inc. (respondents)

(A-533-00; 2001 FCA 104)

Indexed As: Commissioner of Competition v. Superior Propane Inc. et al.

Federal Court of Appeal

Stone, Létourneau and Evans, JJ.A.

April 4, 2001.

Summary:

Superior Propane Inc. and ICG Propane Inc. merged. The Commis­sioner of Compe­tition applied for an order to dissolve the merger, or otherwise to remedy the lessening of com­petition likely to occur in the propane deliv­ery market in Canada as a result of the merger. The Com­petition Tribunal dismissed the application. The Commissioner appealed.

The Federal Court of Appeal, Létourneau, J.A., dissenting in part, allowed the appeal.

Statutes - Topic 1608

Interpretation - Extrinsic aids - General - Administrative policy and interpretation - In 1991, the Director of Investigation and Research published Information Bulletin No. 5: Merger Enforcement Guidelines (MEG) - The Federal Court of Appeal stated that the MEG were not law because they were not made under a grant of statu­tory authority, and they could not deter­mine the meaning of the Competition Act -Indeed, to the extent that they were in­con­sistent with the Act, they should be ignored - Further, the limited nature and intent of the MEG was clearly set out at the beginning of the document under the heading "Inter­pretation" - See paragraph 124.

Statutes - Topic 1608

Interpretation - Extrinsic aids - General - Administrative policy and interpretation - The Federal Court of Appeal stated that "... the possibility that a reviewing court may not agree with an agency's view of the law is an inevitable risk associated with the administrative practice of issuing non-binding guidelines and other policy docu­ments to shed light on agency thinking and to assist those subject to the regulatory regime that it administers. This risk should deter neither the courts from deciding what the law is, nor agencies from engaging in the often useful exercise of administrative rule-making." - See paragraph 126.

Trade Regulation - Topic 245

Regulatory bodies - Competition tribunal - Decisions - Standard of review - Sec­tion 96 of the Competition Act provided for the "efficiency defence" - Under s. 96, a merger was permitted, even though it was likely to prevent or substantially les­sen competition in a particular market, where the efficiency gains flowing from the merger were greater than, and offset, the effects of the lessening of competition - The Competition Tribunal decided which party bore the burden of proving which elements of an "efficiency defence" under s. 96 of the Competition Act - The Feder­al Court of Appeal held that this issue was a pure question of law that was not con­fined to the particularities of the case before the Tribunal - Thus, the standard of review of the Tribunal's conclusion on this issue was correctness - See paragraph 149.

Trade Regulation - Topic 245

Regulatory bodies - Competition tribunal - Decisions - Standard of review - Sec­tion 96 of the Competition Act provided for the "efficiency defence" - Under s. 96, a merger was permitted, even though it was likely to prevent or substantially les­sen competition in a particular market, where the efficiency gains flowing from the merger were greater than, and offset, the effects of the lessening of competition - The Federal Court of Appeal held that the interpretation of the word "effects" in s. 96 involved a pure question of law - Thus, the standard of review of the Tribu­nal's inter­pretation of "effects" was cor­rectness - See paragraphs 39 to 72.

Trade Regulation - Topic 680

Competition - Mergers - Defences - Ef­ficiency - Section 96 of the Competition Act provided for the "efficiency defence" -Under s. 96, a merger was permitted, even though it was likely to prevent or substan­tially lessen competition in a particular market, where the efficiency gains flowing from the merger were greater than, and offset, the effects of the lessening of com­petition - The Federal Court of Appeal held that the Competition Tribunal erred in limiting the relevant effects of the anti-competitive merger to those determined by the application of the total surplus standard because it failed to ensure that all the objectives of the Competition Act, and the particular circumstances of each merger, could be considered in the balancing exer­cise mandated by s. 96 - See paragraphs 73 to 142.

Trade Regulation - Topic 680

Competition - Mergers - Defences - Effi­ciency - Section 96 of the Competition Act provided for the "efficiency defence" - Under s. 96, a merger was permitted, even though it was likely to prevent or substan­tially lessen competition in a particular market, where the efficiency gains flowing from the merger were greater than, and offset, the effects of the lessening of com­petition - The Federal Court of Appeal held that the merging entities bore the onus of proving every aspect of the s. 96 defence, save for the anti-competitive effects of the merger - The Commissioner of Competition was better situated to gather evidence respecting the merger's anti-competitive effects - See paragraphs 143 to 154.

Words and Phrases

Effects - The Federal Court of Appeal discussed the meaning of the word "effect" as found in s. 96 of the Competition Act, R.S.C. 1985, c. C-34 - See paragraphs 73 to 142.

Cases Noticed:

Canada (Director of Investigation and Research) v. Hillsdown Holdings (Canada) Ltd. (1992), 41 C.P.R.(3d) 289 (Comp. Trib.), refd to. [para. 34].

Director of Investigation and Research, Competition Act v. Southam Inc. et al., [1997] 1 S.C.R. 748; 209 N.R. 20, refd to. [paras. 39, 170].

Pushpanathan v. Canada (Minister of Citi­zenship and Immigration), [1998] 1 S.C.R. 982; 226 N.R. 201; 160 D.L.R.(4th) 193, refd to. [para. 40].

United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316; 153 N.R. 81; 106 Nfld. & P.E.I.R. 140; 334 A.P.R. 140, refd to. [para. 47].

Pezim v. British Columbia Securities Commission et al., [1994] 2 S.C.R. 557; 168 N.R. 321; 46 B.C.A.C. 1; 75 W.A.C. 1, refd to. [para. 48].

President and Fellows of Harvard College v. Canada (Commissioner of Patents), [2000] 4 F.C. 528 (F.C.A.), refd to. [para. 56].

Director of Investigation and Research, Competition Act v. Southam Inc. et al., [1995] 3 F.C. 557; 185 N.R. 321 (F.C.A.), refd to. [para. 72].

R. v. V.T., [1992] 1 S.C.R. 749; 134 N.R. 289; 7 B.C.A.C. 81; 15 W.A.C. 81; 71 C.C.C.(3d) 32, refd to. [para. 87].

Paccar of Canada Ltd. v. Canadian Asso­ciation of Industrial, Mechanical and Allied Workers, Local 14, [1989] 2 S.C.R. 983; 102 N.R. 1; 62 D.L.R.(4th) 437; 89 C.L.L.C. 14,050; [1989] 6 W.W.R. 673; 40 Admin. L.R. 181, refd to. [para. 87].

Standard Oil v. Federal Trade Commission (1951), 340 U.S. 231, refd to. [para. 174].

Staley (A.E.) Manufacturing Co. v. Federal Trade Commission (1943), 135 F.2d 453 (7th Cir.), refd to. [para. 174].

Statutes Noticed:

Competition Act, R.S.C. 1985, c. C-34, sect. 1.1 [para. 84]; sect. 96 [para. 7].

Authors and Works Noticed:

Andretsch, David B., Divergent Views in antitrust Economics (1988), 33 Antitrust Bull. 135, generally [para. 160].

Brodley, J.F., The Economic Goals of Antitrust: Efficiency, Consumer Welfare, and Technological Progress, (1987) 62 N.Y.U. L. Rev. 1020, pp. 1035, 1036 [para. 137].

Canada, Competition Bureau, The Merger Guidelines as Applied to a Bank Merger (1998), generally [para. 123].

Canada, Consumer and Corporate Affairs, Competition Law Amendments: A Guide (December 1985), p. 4 [para. 100].

Canada, Consumer and Corporate Affairs, Combines Investigation Act Amendments 1984: Background Informa­tion and Ex­planatory Notes (April 1984), p. 2 [para. 101].

Canada, Department of Justice and Federal Trade Commission (1992) (Revised 1997), pp. 148, 149, 150 [para. 21].

Canada, Hansard, House of Commons Debates (April 7, 1986), pp. 11927 [paras. 89, 100]; 11928 [para. 91].

Canada, Supply and Services Canada, Director of Investigation and Research (March 1991), Information Bulletin No. 5: Merger Enforcement Guidelines, gen­erally [para. 33]; sect. 5.5 [paras. 78, 121].

Constan­tine, Lloyd, An Antitrust Enforcer Con­fronts the New Eco­nomics (1989), 58 Antritrust L.J. 661, generally [para. 160].

Davidson, Roy M. (1991), 12 Canadian Competition Policy Record 44, pp. 46, [paras. 115, 160]; 47 [para. 115].

Denis, P.T., Advances in the 1992 Hori­zontal Merger Guidelines in the Analysis of Competitive Effects (Fall 1993), Antitrust Bulletin, pp. 479 to 515 [para. 135].

Driedger, Elmer A., Construction of Stat­utes (3rd Ed. 1994), pp. 263 to 268 [para. 87]; footnote 37 [para. 121].

Fisher, Alan A., Johnson, Frederick I., and Lande, Robert H., Price Effects of Hori­zontal Mergers (1989), 77 Calif. L.R. 777, generally [para. 160].

Halli­day, Jennifer, The Recognition, Status and Form of the Effi­ciency Defence to a Merger: Current Situ­ation and Prospects for the Future (1999), World Competi­tion 91, generally [para. 160].

Hazle­dine, Tim, Rationalism Rebuffed? Les­sons from Modern Cana­dian and New Zea­land Com­petition Policy (1998), Review of Indus­trial Organization 243, generally [para. 160].

Lande, Robert H., The Rise and (Coming) Fall of Efficiency as the Ruler of Antitrust (1988), 33 Antitrust 429, gen­erally [para. 160].

Ross, S.F., Afterword - Did the Canadian Parliament Really Permit Mergers That Exploit Canadian Consumers So the World Can Be More Efficient? (1997), 65 Antitrust L.J. 641, pp. 643 to 646 [para. 160]; 652 [para. 137]; note 41 [para. 137].

Sopinka, John, Lederman, Sydney N., and Bryant, Alan W., The Law of Evidence in Canada (2nd Ed. 1999), pp. 86, 87, 88 [para. 151]; 89 [paras. 151, 153]; 90 [para. 151].

United States, Department of Justice and Federal Trade Commission, Horizontal Merger Guidelines (April 2, 1992) (Rev. Ed. 1997), pp. 148, 149 [para. 21]; 150 [paras. 21, 136].

Counsel:

John F. Rook, Q.C., William J. Miller, Jo'Ann Strekof, Christopher P. Naudie and Donna Blois, for the appellant;

Neil Finkelstein, Mélanie Aitken, Russell Cohen and Brian Radnoff, for the respondents.

Solicitors of Record:

Osler, Hoskin & Harcourt, Toronto, Ontario, for the appellant;

Blake, Cassels & Graydon, Toronto, Ontario, for the respondents.

This appeal was heard on January 9, 10 and 11, 2001, by Stone, Létourneau and Evans, JJ.A., of the Federal Court of Appeal. The Court of Appeal delivered its decision on April 4, 2001, which included the fol­lowing opinions:

Evans, J.A. (Stone, J.A., concurring) - see paragraphs 1 to 158;

Létourneau, J.A., dissenting in part - see paragraphs 159 to 178.

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6 practice notes
  • Table of cases
    • Canada
    • Irwin Books Canadian Competition Law and Policy
    • June 23, 2021
    ...509 Canada (Commissioner of Competition) v Superior Propane Inc (2000), 7 CPR (4th) 385 (CCT), rev’d 2001 FCA 104, leave to appeal ref’d [2001] SCCA 252 ............... 74, 78, 111, 118–19, 122, 123, 146–47, 150–51, 156, 157–58, 166, 177, 187, 204, 210–16, 219, 230–37, 252, 390 Canada (Comm......
  • Toronto Real Estate Board c. Canada (Commissaire de la concurrence,
    • Canada
    • Court of Appeal (Canada)
    • December 1, 2017
    ...Inc. v. Dispill Inc., 2013 FC 1043 , 440 F.T.R. 209.REFERRED TO:Canada (Commissioner of Competition) v. Superior Propane Inc., 2001 FCA 104, [2001] 3 F.C. 185; CarGurus, Inc. v. Trader Corporation, 2017 FCA 181; Graat v. The Queen, [1982] 2 S.C.R. 819 , (1982), 144 D.L.R. (3d) 267; Hunt (......
  • Canadian Competition Law Objectives and Foundational Economic Concepts
    • Canada
    • Irwin Books Canadian Competition Law and Policy
    • June 23, 2021
    ...of Statutes , 6th ed (Toronto: LexisNexis, 2014) at §§14.39, 14.41. 3 Canada (Commissioner of Competition) v Superior Propane Inc , 2001 FCA 104 at paras 106–7 [ Propane FCA1 ], leave to appeal to SCC refused [2001] SCCA 252. 4 Propane FCA1 , above note 3 at para 105. Canadian Competition L......
  • Making sense of the shift in paradigm on cartel enforcement: the case for applying a desert perspective.
    • Canada
    • McGill Law Journal Vol. 58 No. 1, September 2012
    • September 1, 2012
    ...Bureau [VanDuzer-Paquet Report]. The majority decision in Canada (Commissioner of Competition) v. Superior Propane Inc. (C.A.) (2001 FCA 104 at paras 90, 98-109, [2001] 3 FC 185 [Superior Propane]) also highlights the contradictions in the objectives set out in section 1.1. Ross (supra no......
  • Request a trial to view additional results
1 cases
  • Toronto Real Estate Board c. Canada (Commissaire de la concurrence,
    • Canada
    • Court of Appeal (Canada)
    • December 1, 2017
    ...Inc. v. Dispill Inc., 2013 FC 1043 , 440 F.T.R. 209.REFERRED TO:Canada (Commissioner of Competition) v. Superior Propane Inc., 2001 FCA 104, [2001] 3 F.C. 185; CarGurus, Inc. v. Trader Corporation, 2017 FCA 181; Graat v. The Queen, [1982] 2 S.C.R. 819 , (1982), 144 D.L.R. (3d) 267; Hunt (......
5 books & journal articles
  • Table of cases
    • Canada
    • Irwin Books Canadian Competition Law and Policy
    • June 23, 2021
    ...509 Canada (Commissioner of Competition) v Superior Propane Inc (2000), 7 CPR (4th) 385 (CCT), rev’d 2001 FCA 104, leave to appeal ref’d [2001] SCCA 252 ............... 74, 78, 111, 118–19, 122, 123, 146–47, 150–51, 156, 157–58, 166, 177, 187, 204, 210–16, 219, 230–37, 252, 390 Canada (Comm......
  • Canadian Competition Law Objectives and Foundational Economic Concepts
    • Canada
    • Irwin Books Canadian Competition Law and Policy
    • June 23, 2021
    ...of Statutes , 6th ed (Toronto: LexisNexis, 2014) at §§14.39, 14.41. 3 Canada (Commissioner of Competition) v Superior Propane Inc , 2001 FCA 104 at paras 106–7 [ Propane FCA1 ], leave to appeal to SCC refused [2001] SCCA 252. 4 Propane FCA1 , above note 3 at para 105. Canadian Competition L......
  • Making sense of the shift in paradigm on cartel enforcement: the case for applying a desert perspective.
    • Canada
    • McGill Law Journal Vol. 58 No. 1, September 2012
    • September 1, 2012
    ...Bureau [VanDuzer-Paquet Report]. The majority decision in Canada (Commissioner of Competition) v. Superior Propane Inc. (C.A.) (2001 FCA 104 at paras 90, 98-109, [2001] 3 FC 185 [Superior Propane]) also highlights the contradictions in the objectives set out in section 1.1. Ross (supra no......
  • Merger Review
    • Canada
    • Irwin Books Canadian Competition Law and Policy
    • June 23, 2021
    ...about this concern in situations where divestitures can restore competition: Canada (Commissioner of Competition) v Superior Propane Inc , 2001 FCA 104 at paras 41–42 [ Propane FCA1 ] . 9 Combines Investigation Act , RSC 1970, c C-23, s 33. 10 Ibid , s 2. 11 Competition Law Amendments, A Gu......
  • Request a trial to view additional results

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