A Clarification of Canadian Merger Policy

• Author: G. B. Reschenthaler,W. T. Stanbury
• Published date: 01 September 1977
• Date: 01 September 1977
• DOI: http://doi.org/10.1177/0003603X7702200308
• Subject Matter: Article

A CLARIFICATION

,OF

CANADIAN

MERGER

POUCY

by

G. B.

RESCHENTHALER·

and W. T.

STANBURY··

INTRODUCTION

In

an unanimous decision in R. v. K.C. Irving Ltd. et al./

in November

1976,

the Supreme Court of Canada removed

much of the uncertainty which has shrouded the merger sec-

tions of the Combines Investigation Act,"

In

this, the first

merger case reviewed by the Supreme Court, the Court ruled

that

the creation of monopoly power by merger, even if the

elimination of all competitors is involved, does not violate

the antimerger provisions of the Act. No offense occurs un-

less the merger has, or is likely to lessen competition

"to

the

detriment or against the interest of

the

public, whether con-

sumers, producers or others." The effect of the decision is to

emasculate the existing legislation.

The timing of the decision may be fortuitous since the gov-

ernment has recently brought before Parliament revisions in

the merger and monopolization provisions in the Act.sCur-

rently,

the

merger and monopolization provisions

are

em-

bedded in the criminal code; under the proposed revisions, an

administrative tribunal will be established to review mergers.

However, serious doubts have been raised respecting the con-

stitutionality of these proposals.' Consequently, the

state

of

the law under the criminal code remains of interest.

• Associate Professor, Faculty of Business Administration &;

Com-

merce, University of Alberta, Edmonton, Alberta.

••

Associate Professor, Faculty of Commerce &; Business Adminis·

tration, University of British Columbia, Vancouver, B.C.

673