Competition Tribunal orders Secure to sell 29 facilities to resolve ongoing harm to competition in Western Canada
GATINEAU, QC, March 7, 2023 /CNW/ - On March 3, 2023, the Competition Tribunal ruled in favour of the Commissioner of Competition in his challenge of Secure Energy Services' acquisition of Tervita Corporation. The Tribunal ordered Secure to sell 29 facilities to resolve the substantial lessening of competition found in 136 relevant markets.
The Commissioner is pleased with the decision, which protects competition for oil and gas waste services used by producers in the Western Canadian Sedimentary Basin (WCSB).
The Bureau launched its challenge on June 29, 2021 when it filed an application with the Competition Tribunal. Prior to the merger, Secure and Tervita were the two largest suppliers of oilfield waste services in the WCSB. The Commissioner alleged that the loss of rivalry between the two would result in oil and gas producers likely paying higher prices and experiencing a reduced quality of service as a result of the transaction. The Commissioner also stated that the transaction would result in Secure having market power with respect to three different types of oilfield waste services in 143 local markets in the WCSB.
In its decision, the Tribunal agreed that there was a substantial lessening of competition in 136 of these 143 markets. In addition, the Tribunal also determined that Secure did not meet the requirements of the efficiencies defence which it invoked during the hearing.
The Commissioner is aware that Secure intends to appeal the Tribunal's decision at the Federal Court of Appeal. The Bureau is hopeful that this appeal will be heard as quickly as possible to remedy the harm to competition in the affected markets which has been ongoing since July 2021.
Although the Tribunal's full reasons are confidential at this time, a summary of the decision is available on the Tribunal website. A public version of the reasons will be released at a later date.
"Secure and Tervita were close competitors pre-merger, which led to better outcomes for their customers. I am pleased with this result, as it means that Canadian businesses using oil and gas waste services will once again be able to have access to competitive pricing and quality service."
Mathew Boswell,
Commissioner of Competition
- Pre-merger, Secure and Tervita were the two largest suppliers, and in many areas, the only suppliers of oil and gas waste services in the WCSB and vigorously competed with one another to win customers.
- The WCSB, which spans southwestern Manitoba, southern Saskatchewan, Alberta, northeastern British Columbia and the southwest corner of the Northwest Territories, contains one of the world's largest reserves of petroleum and natural gas.
- Section 96 of the Competition Act prevents the Competition Tribunal from issuing an order with respect to a merger if the merging parties can demonstrate efficiencies that will be greater than, and offset, the anticompetitive effects resulting from the merger.
- Summary of the Competition Tribunal's decision
- Competition Bureau's application to the Competition Tribunal
- Competition Bureau challenges proposed merger of rival oil and gas waste service providers Secure and Tervita
- Federal Court of Appeal confirms that the Competition Tribunal has the power to temporarily block mergers
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SOURCE Competition Bureau
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