The Supreme Court of Canada has essentially overturned two previous rulings that cast Ontario-based environmental solutions company Tervita Corp. as a potential monopolist operating in the B.C. hazardous waste market
What started for Tervita as a $6-million merger in the oil-waste landfill business in B.C., eventually fell under the scrutiny of Canada’s Competition Bureau.
In a 6-1 ruling on Jan. 22, the Supreme Court overturned previous decisions by the Competition Tribunal and the Federal Court of Appeal.
In 2011 Tervita owned the only two operating facilities in northeastern B.C. capable of handling contaminated soil from the oil and gas sector. Two other landfill permits for handling hazardous waste had been issued in the province, but neither had been operating.
Eventually, the site owned by Babkirk Landfill Services Inc. came up for sale, and Tervita attempted to acquire the site. In fact, Tervita actually acquired Babkirk as a company in 2011.
An unsuccessful bidder for the Babkirk hazmat site, however, registered a complaint with the Commissioner of Competition. The complainant claimed that Tervita’s purchase of the site would prevent competition for other secure landfill services in northeastern B.C.
Tervita fought against the earlier court rulings, appealing the case all the way to the Supreme Court of Canada.
The primary issue at hand for the Supreme Court was the efficiencies defence under s. 96 of the Competition Act.
The court also found that the Commissioner had not presented evidence of the quantifiable effects of the anti-competitive results of the merger.
“Specifically, there is no price elasticity information which means that the possible range of deadweight loss resulting from the merger is unknown,” the court ruled.
The judgment added:
“To permit the Tribunal to consider the price decrease evidence without the rest of the information necessary to quantify deadweight loss admits far too much subjectivity into the analysis, with no guarantee that the Tribunal will have enough information to ensure that a subjective assessment would align with what would actually be observed if the effect were properly quantified. As a result, those quantifiable anti competitive effects should be assigned zero weight.”