An oath under section 116, instead of four years of board minutes

The situation

Two regional grocery-distribution companies notified their proposed merger under s.114(1). Within the initial 30-day window, the Commissioner's office issued a supplementary information request under s.114(2), asking for four years of board minutes and strategic-planning documents across both companies' entire operations — not limited to the one region where their businesses actually overlapped.

The problem

Both companies operated in three regional markets beyond the overlapping one, none of which competed with each other in any of those other regions. Producing everything the request asked for, as drafted, meant a document-review exercise across business lines that had nothing to do with the merger's actual competitive overlap — and, under the waiting-period mechanics, the clock would not restart until that full production was complete, whatever it contained.

The numbers

The request as issued covered board minutes and strategic plans across the full four-year lookback and the whole enterprise on both sides — an estimated production volume many times larger than the material actually touching the overlapping region. Narrowing production to the overlapping region's minutes and plans cut the volume to roughly 15% of what had originally been demanded, and cut an estimated nine weeks off the anticipated production timeline.

The rule that decided it

Competition Act s.123(1) sets the baseline: a transaction may not be completed before 30 days after the Commissioner receives the information required under s.114(1), or, where a supplementary request has issued under s.114(2), before 30 days after the Commissioner receives that information. Read plainly, the waiting period does not restart on partial compliance — it restarts once whatever is actually owed has been supplied, and what is actually owed is not automatically everything the request names.

Section 116(2) lets a party, instead of supplying information, “inform the Commissioner under oath or solemn affirmation of the matters in respect of which information has not been supplied and why the information was not considered relevant”, where that information “could not, on any reasonable basis, be considered to be relevant to an assessment by the Commissioner as to whether the proposed transaction would or would be likely to prevent or lessen competition substantially”. Board minutes and strategic plans from three regions where the two companies do not compete at all are a reasonable candidate for that declaration: nothing in them bears on whether the merger lessens competition in a market the two companies do not both serve.

Section 116(3) is the check on that declaration: if the Commissioner “notifies that entity or individual, within seven days after the Commissioner is so informed, that the information is required, the entity or individual shall supply the Commissioner with the information”. The right to withhold is not unilateral — it is a burden-shifting mechanism, and the Commissioner keeps a fast, real check on it.

The outcome

The parties swore to the irrelevance of the out-of-region board and strategic materials under s.116(2). Within the seven-day window, the Commissioner's office reviewed the declaration and did not exercise the override on most of the withheld categories — but did require production of two specific categories the parties had tried to exclude: pricing-strategy memos from two of the unrelated regions, on the theory that they might show cross-regional competitive dynamics relevant to the assessment. The parties produced those two categories and the waiting period restarted once that narrower production was complete.

What it would have cost otherwise

Producing everything as originally demanded, without invoking s.116(2), would have meant months of document review across business lines with no bearing on the merger's actual overlap, before the waiting period could even begin to run again — cost and delay that tracked how broadly the request happened to be drafted, not the transaction's actual competitive risk.

The tell

The tell is treating a supplementary information request as an all-or-nothing production obligation. It is not. s.116(2) is a standing, underused right to make the Commissioner justify anything a party genuinely believes falls outside the relevance standard, on pain of a sworn statement, with the Commissioner retaining a fast but real seven-day check — which is exactly why the partial override on the pricing memos was not a failure of the strategy, it was the mechanism working as written.

Takeaways

• • The waiting period restarts only once the information actually owed under s.114(2) is supplied — and what is owed is not automatically everything the request names.
• • s.116(2) lets a party swear to categories of information that could not, on any reasonable basis, be relevant to the substantial-lessening-of-competition assessment, instead of producing them.
• • s.116(3) gives the Commissioner seven days to override the declaration category by category — a partial override on some categories does not undo the narrowing achieved on the rest.
• • Scope a supplementary information request against the merger's actual overlap before assuming it must be answered as broadly as drafted.

Sources

• • Competition Act, R.S.C. 1985, c. C-34, s.116(2) and s.116(3) — the relevance declaration and the Commissioner's seven-day override.
• • Competition Act s.123(1) — the waiting period and its restart on a supplementary information request.
• • Competition Act s.114(2) — the Commissioner's power to request additional information.
• • Treadstone Law — regulatory approval as a closing condition in an Ontario business sale — general overview naming Competition Act review as a category; does not address supplementary information requests or the s.116 relevance mechanism above.