Anonymised, illustrative composite. A buyer acquired a regional building-materials distributor by share purchase. A supply arrangement the target had signed years earlier — and the buyer simply inherited on closing — became the subject of a private application it never saw coming.
At a glance
A buyer acquired a regional distributor of building materials by way of share purchase. Among the target's long-standing commercial arrangements was a supply agreement with its principal manufacturer, granting the distributor exclusive rights to sell that manufacturer's product line within a defined regional territory. The arrangement had been signed years before the buyer had any involvement, renewed periodically on largely unchanged terms, and carried forward automatically on closing as one of the target's ordinary material contracts — nothing about it had ever been the subject of a regulatory inquiry.
Roughly a year after closing, a regional contractor buying group — a downstream customer with no relationship to the acquisition and no dealings with the buyer beyond being one of the distributor's customers — applied to the Competition Tribunal for leave to bring its own application under s.90.1, arguing the exclusivity arrangement foreclosed its members' access to product in the region and forced it to source elsewhere at a premium.
The buyer's first reaction was that this was the manufacturer's and the target's arrangement, negotiated long before the buyer existed as an owner. The Competition Act does not share that view of who can be made to answer for it.
The buying group's members purchased approximately $2,400,000 a year of product in the affected region. Its application estimated the price premium it had been forced to pay elsewhere, over the two years preceding the application, at roughly $310,000 — the figure it asked the Tribunal to have redirected to it if the application succeeded.
Since 2024, a private party no longer needs the Commissioner's cooperation to bring a case under s.90.1. s.103.1(7) — marginal note “Granting leave — sections 75, 77, 79 or 90.1” — provides that “the Tribunal may grant leave to make an application under section 75, 77, 79 or 90.1 if it has reason to believe that the applicant is directly and substantially affected in the whole or part of the applicant's business by any conduct referred to in one of those sections that could be subject to an order under that section or if it is satisfied that it is in the public interest to do so.” The buying group did not need the Commissioner to investigate, agree, or even be aware the application was coming.
The second piece of the rule is what let the application reach the buyer at all, despite it never having negotiated a word of the arrangement. s.90.1(1) allows the Tribunal to make an order “prohibiting any person — whether or not a party to the agreement or arrangement — from doing anything under the agreement or arrangement.” The buyer had become, by virtue of owning the target, a person operating under the arrangement — and the section is deliberately drafted to reach exactly that person, not only whoever originally signed the contract.
If the Tribunal makes an order on a private application, s.90.1(10.1) allows it to go further than simply stopping the conduct: “it may also order the person against whom the order is made to pay an amount, not exceeding the value of the benefit derived from the conduct that is the subject of the order, to be distributed among the applicant and any other person affected by the conduct.” That is a separate power from the administrative monetary penalty available under s.90.1(1.3), which is payable to the Crown rather than distributed to the applicant — the two remedies can both attach to the same order, but they are not the same thing, and only the (10.1) distribution puts money directly in a private applicant's hands.
What none of this reaches is the acquisition itself. s.103.1's own list of sections a private party may seek leave under — 74.1, 75, 76, 77, 79 and 90.1 — does not include s.92, the merger-review section. A downstream customer can challenge the agreement the buyer inherited. It cannot use s.103.1 to challenge the deal that put the buyer in possession of it.
The Tribunal granted leave, finding the buying group directly and substantially affected in a material part of its business. Rather than litigate a novel private-access application to a final order, the buyer and the manufacturer negotiated a settlement: partial release of exclusivity in the buying group's specific trading area, plus a negotiated payment reflecting the premium the group had documented paying elsewhere. The remainder of the territorial arrangement stayed in place.
Once leave is granted to a private applicant and acted on, s.103.1(10) bars the Commissioner from separately pursuing the same or substantially the same facts — the private route, once engaged, effectively becomes the only one running. Had the buyer instead litigated to a Tribunal order rather than settling, it would have faced both the risk of a conduct order under s.90.1(1)/(1.1) restructuring how it could operate the arrangement going forward, and potentially the distribution remedy under s.90.1(10.1) on top — all over a contract it had not negotiated a word of and had no reason, at diligence, to flag as anything other than an ordinary, long-standing, unchallenged supply relationship.
There was no tell in the target's own history — and that is the point. The arrangement had never been the subject of a Commissioner inquiry, never appeared in any litigation search, and every ordinary diligence question about investigations or complaints came back clean. The exposure existed not because the target had done anything wrong, but because Parliament had, since the arrangement was last renewed, given a category of person who previously had no standing at all a direct route to challenge it. A clean compliance history is not the same as immunity from a section that has since been broadened.
A 30-minute call is enough to tell you whether AI pays for itself here.
Canadian small-business transaction data is not published anywhere, so most valuations in this country quote an American benchmark. The Deavo–Treadstone Acquisition Index is a daily record of Canadian listings built to replace that: asking-price distributions by province and city are published now, and days on market, departure rates and asking-to-sale spreads follow as the series lengthens. Leave an email and we will tell you as each measure lands.
No pitch, no listings. One email when the first report lands.
