Thank you, Mr. Chair.

I want to express appreciation on behalf of the CBA section for the invitation to appear today. Our members have significant experience advising a wide range of clients in competition matters. We appreciate the opportunity to be heard, so thank you for that.

By way of overview, many of the issues addressed in Bill C-352 have either been addressed in Bill C-56, which received royal assent in December 2023, or contained in Bill C-59, which is currently before the Senate. I would like to speak today regarding two proposals in Bill C-352. namely, the merger prohibition and structural presumption provisions, at clauses 8 and 9 of the bill; and the inclusion of efficiencies as a factor when assessing competitive effects for mergers and civil competitor collaborations, at clauses 7 and 10 of the bill.

Beginning with the merger and prohibition provision, Bill C-352 would create an arbitrary bright line precluding Canada's Competition Bureau and the Competition Tribunal from evaluating the competitive effects of mergers with a combined market share at or above 60%. The proposal would not take into account or differentiate between any level of increased concentration, even if the acquired target had, for example, a share of 1%.

This would be unprecedented and would make Canada a global outlier. Competition and antitrust laws globally recognize that market share and concentration alone are not themselves determinative of market power and competitive effects. As the Competition Act already recognizes, a conclusion regarding the competitive impact of a merger must evaluate such important factors as the likelihood of entry and expansion, the role played in the market by the acquired entity, the presence of other vigorous and effective competition in a market, and the nature of change and innovation in a market, among other things. In our submission, it would be inappropriate to fetter the ability of the Competition Bureau and the Competition Tribunal to conduct an analysis of market power and competitive effects based on the facts and evidence before them.

Bill C-352's emphasis on market share and concentration to the exclusion of other factors also presents three further significant problems.

First, the approach would remove entirely the analysis of what matters most, which is competitive conditions pre- and post-merger, in favour of a focus on just market share statistics that are not themselves determinative of market effects.

Second, in many cases a factual conclusion regarding market share cannot be reliably drawn based on a company's current market share.

Third, merging parties frequently do not have the requisite data to determine what their market share is in any relevant antitrust market. The Competition Bureau collects such information as part of its review, but unless the bureau plans to share this information with merging parties or their counsel as part of the enforcement process, which they don't currently do unless required to in litigation, significant due process concerns arise for merging parties.

Turning to the structural presumption provisions, the CBA section does not support the inclusion of structural presumptions in the Competition Act. We agree that concentration and market share levels can provide a useful preliminary screening mechanism to identify potentially problematic mergers. However, we disagree that a merger should be presumed to cause anti-competitive effects on the basis of market share alone.

Further, including structural presumptions in the Competition Act, a statute, will not harmonize Canadian law with U.S. law. This is important. In the U.S., structural presumptions were introduced in non-statutory enforcement guidelines, which are flexible in nature and are preferable to a fixed statute. It's not part of any U.S. legislation. If structural presumptions are introduced, we would submit that the appropriate place to introduce them would be in the Competition Bureau's merger enforcement guidelines, similar to the approach that continues to be taken in the U.S.

Finally, turning now to efficiencies, Bill C-352 proposes the inclusion of efficiencies as an explicit statutory factor in sections 93 and subsection 90.1(2) of the Competition Act when assessing whether a merger or a civil competitor collaboration would likely substantially lessen or prevent competition.

The CBA section agrees with this inclusion. It's well recognized in Canada and globally that efficiencies are a relevant factor when assessing competitive effects, because they can result in mergers or competitor collaborations being pro-competitive, enhancing productivity and benefiting consumers. The Competition Bureau has advocated for efficiencies to be among the list of factors that the Competition Tribunal can consider when assessing competitive effects. This change would also reinforce the bureau's current approach when assessing the competitive impact of mergers and civil competitor collaborations, in any event.

Thank you for the opportunity.