Can the competition watchdog get its groove back?

Canada’s competition watchdog is looking to regain its mojo after face-planting in its attempt to block a merger between Rogers and Shaw last year.

What happened: The Competition Bureau issued a report warning that Bunge’s impending US$8.2 billion acquisition of fellow agriculture company Viterra will seriously reduce competition in Canada’s agricultural sector, particularly in the grain and canola oil markets.

• The merger would create a massive new entity worth ~$34 billion and further consolidate processing and trading in an already heavily consolidated sector.
   
• The bureau also alleges it would create a conflict of interest as Bunge is a minority shareholder in grain facility operator G3 Global Holdings, a top Viterra competitor.

Why it matters: Canada’s competition laws have come under fire for being too soft on monopolies. If the feds take up the bureau's complaint and challenge the Bunge-Viterra merger, it will be an early test of how recent changes meant to modernize the Competition Act and better promote competition will fare. 

• In December, the bureau was granted more power to get information, and a controversial legal mechanism called the “efficiency defence” for companies defending mergers was eliminated.

Big picture: Competitiveness in the Canadian business landscape declined between 2000 and 2020, per the bureau, causing more concentration and, potentially, higher prices. As the feds look to claw back this trend, more changes to competition laws are on the way.—QH