Canada’s merger review regime looks different than it did eighteen months ago. Bill C-59 received royal assent on June 20, 2024, completing a series of amendments to the Competition Act that repealed the efficiencies defence, introduced rebuttable structural presumptions and changed the test the Competition Tribunal applies when ordering remedies. For Alberta acquirers and sellers, the amendments alter both the probability and the cost of regulatory intervention in a transaction.

The changes arrive at a time when deal activity in the province is being supported by falling interest rates. The Bank of Canada reduced its policy rate to 3.25% on December 11, 2024, and its next announcement is scheduled for January 29, 2025. Cheaper capital brings more buyers to the table, and more buyers mean more transactions that will need to be assessed against the new rules.

Most Alberta mid-market deals will never require a formal filing with the Competition Bureau, but that does not make the amendments irrelevant. The Bureau can review any merger, whether notifiable or not, and the structural presumptions apply regardless of whether a filing was made. Sellers and buyers alike need to understand where the lines are drawn.

This article summarizes the key amendments, explains the notification thresholds and offers practical guidance on timelines, deal certainty and the allocation of regulatory risk in purchase agreements for parties on both sides of an Alberta transaction.

Key Takeaways

• Bill C-59, which received royal assent on June 20, 2024, repealed the efficiencies defence and introduced rebuttable structural presumptions into Canadian merger review
• A merger that creates a market share above 30% or exceeds prescribed concentration thresholds is presumed anti-competitive unless the parties rebut it on a balance of probabilities
• Pre-merger notification is required when the $93 million transaction-size threshold and the $400 million size-of-parties threshold are both exceeded
• Non-notifiable deals can still be reviewed, so market-share analysis belongs in early-stage planning for every Alberta acquisition
• Purchase agreements should allocate regulatory risk explicitly through conditions, covenants, outside dates and, where appropriate, termination fees

What Bill C-59 Changed

The efficiencies defence allowed a merger that substantially lessened competition to proceed if the efficiency gains outweighed the anti-competitive effects. It was a distinctive feature of Canadian law, and its repeal brings Canada closer to the approach taken in most other jurisdictions. Parties can no longer rely on cost savings as a shield when a transaction reduces competition.

The structural presumptions are the more consequential change for day-to-day planning. Under the amended Act, a merger that results in a market share above 30%, or that pushes concentration above prescribed thresholds, is presumed to substantially lessen or prevent competition. The burden shifts to the merging parties to rebut the presumption on a balance of probabilities. The presumption applies to mergers that were not notified or substantially completed before June 20, 2024.

The amendments also changed the test for remedies, giving the Tribunal a stricter standard to apply when deciding what relief is required. In practice, the divestitures or commitments that parties offer to resolve concerns can be expected to face closer scrutiny than before, and buyers should not assume that a modest remedy package will be accepted.

Notification Thresholds and the Filing Decision

Pre-merger notification is mandatory only when two thresholds are both exceeded. The transaction-size threshold, which looks at the value of the assets in Canada or the revenues generated from those assets, stands at $93 million and has been unchanged since 2021. The size-of-parties threshold, which looks at the combined assets or revenues of the parties and their affiliates, is $400 million and is not indexed.

Most Alberta mid-market transactions fall below the transaction-size threshold and are therefore not notifiable. That does not exempt them from the substantive provisions of the Act. The Bureau retains the ability to review any merger, including for a period after closing, and the structural presumptions apply whether or not a filing was made. A non-notifiable deal between two of the three largest players in a regional market is precisely the kind of transaction that the presumptions are designed to capture.

Where a filing is required, the parties must submit their notification and observe a statutory waiting period before closing. Requests for additional information can extend that period considerably. Buyers and sellers should build the filing into the deal timeline from the outset rather than treating it as a formality to be handled after signing.

Timelines and Deal Certainty

Regulatory review introduces time, and time introduces risk. Between signing and closing, the business can lose customers or key employees, market conditions can shift and financing commitments can lapse. The longer the expected review, the more important it becomes to structure the agreement so that both parties are protected during the interim period.

For Alberta transactions where the presumptions may be engaged, early engagement with competition counsel is the most effective way to preserve certainty. A preliminary assessment of market definition and share, prepared before the letter of intent is signed, allows the parties to decide whether the deal is viable, whether a filing is advisable even if not mandatory and what remedies might be needed.

Sellers in particular should understand that a buyer with a high market share is not necessarily the best buyer, even at the highest price. A transaction that stalls or fails on competition grounds can leave the seller with a damaged business, a disrupted workforce and a market that now knows the company is for sale. Certainty of closing has real value and should be weighed against headline price.

Allocating Regulatory Risk in the Purchase Agreement

Conditions and Covenants

The agreement should specify whether competition clearance is a condition of closing, which party is responsible for preparing filings, how costs are shared and how the parties will cooperate in responding to the Bureau. A covenant requiring the buyer to use reasonable efforts to obtain clearance is standard, but the definition of what efforts are required varies widely and deserves careful negotiation.

Remedies and Divestiture Obligations

A central question is whether the buyer must accept divestitures or other remedies to secure clearance. A seller will want the buyer bound to accept whatever remedy is required, while a buyer will want to limit its obligation to remedies that do not undermine the strategic rationale of the deal. Purchase agreements often cap the scope of remedies the buyer must offer, and the cap is frequently a point of contention.

Outside Dates and Termination Fees

An outside date sets the point after which either party may walk away if clearance has not been obtained. A reverse termination fee, payable by the buyer if the deal fails on regulatory grounds, compensates the seller for the risk of a lengthy process that ends without a closing. Neither mechanism is universal in Alberta mid-market deals, but both become more relevant as the structural presumptions raise the probability of intervention.

Practical Planning for Alberta Buyers

The amendments do not prevent consolidation, but they raise the standard of preparation required to achieve it. Buyers pursuing roll-up strategies in fragmented Alberta industries, from oilfield services to construction to health care, should map their existing market positions before each acquisition and understand where cumulative share is approaching the presumption threshold.

Market definition is critical. A 30% share of a narrowly defined regional market may trigger the presumption where a national or continental definition would not. The Bureau’s approach to defining markets is fact-specific, and the parties’ own documents, including board materials and marketing plans, are often the most persuasive evidence. Buyers should be mindful of how internal documents describe competitors and market position.

Buyers should also consider whether other regulatory regimes apply. Transactions involving foreign purchasers may be subject to the Investment Canada Act, under which national security review can apply regardless of the size of the investment. Coordinating competition and investment reviews adds complexity that should be reflected in the timeline and the risk allocation.

Preparing for the New Environment

For sellers, the practical implications are to identify likely buyers early, assess which of them might face competition issues and weigh certainty of closing alongside price. Sellers who run a process with several credible bidders retain leverage to negotiate strong regulatory covenants and to walk away from a buyer whose clearance prospects are weak.

For buyers, the amended Act rewards disciplined preparation: a realistic view of market share, early legal advice, an agreement that allocates regulatory risk fairly and a timeline that accounts for review. None of this is unusual for well-advised acquirers, but the consequences of neglecting it are now greater than they were before June 2024.

At Pragma Capital, we expect the amended Competition Act to become a routine part of transaction planning rather than an obstacle to it. Alberta businesses that understand the new rules and structure their deals accordingly will continue to find opportunities to grow through acquisition. Parties should seek legal advice specific to their circumstances, since competition analysis depends heavily on the facts of each transaction.