It’s Time for Canada’s Competition Bureau to Think Green during Merger Reviews

The pressing nature of the climate crisis, coupled with national climate action plans that are inadequate to restrict the global temperature rise of 1.5 degrees Celsius and achieve the targets of the Paris Agreement has led to growing calls for more robust environmental policies. This has motivated competition law scholars to advocate for a ‘green antitrust policy’. The aim is to amend competition rules to support the achievement of a climate-neutral economy. As the global community increasingly recognizes the imperative of climate action and revises their competition laws to facilitate this, the omission of explicit environmental considerations in merger reviews becomes glaring. While countries around the world revise their competition laws to facilitate climate goals, Canada’s competition policy framework lags behind, leaving a critical gap that can be exploited by companies engaged in climate-washing.

Across the globe, there is emerging literature on the environmental challenges for competition law, which focuses on how it can further climate goals and necessary changes to better promote these climate objectives. In a recent speech, Commissioner of Competition Matthew Boswell emphasized the need for a whole-of-government approach, focusing on competition in Canada, which includes a modernized Competition Act, a well-resourced and skilled Competition Bureau, and coordinated public policies at all government levels that actively support competition. While Canada is making attempts to modernize the Canadian Competition Act with the recent Bill C-19, Bill C-56 and Bill C-59, it still has not incorporated climate considerations and made competition policy a part of the solution to the ongoing climate crisis.

Leading the charge, countries like the European Union and Australia have already begun integrating environmental concerns into their merger reviews, setting a precedent that Canada would do well to follow. Below are two landmark merger cases from these regions that demonstrate the benefits of such an approach.

In the European Commission's review of the Aurubis/Metallo merger, the environmental implications were front and center. Aurubis, Europe’s largest copper producer, sought to merge with Metallo Group, the world’s largest metal recycling company. The Commission’s primary concern was whether the merger would allow the combined entity to reduce the price paid for copper scrap, potentially discouraging recycling efforts. This, in turn, could lead to a deterioration in the production cycle and increased CO2 emissions, as companies might substitute recycled copper with primary copper. Recognizing the environmental stakes, the Commission conducted an in-depth investigation before ultimately clearing the merger, finding that the feared price effects were unlikely to materialize. The decision underscored the importance of maintaining a competitive recycling industry to meet Europe’s future industrial needs and limit environmental impact.

Similarly, the Australian Competition and Consumer Commission (ACCC) made a historic decision by prioritizing climate concerns in its approval of Brookfield’s $18.7 billion acquisition of Origin Energy’s utility business. Despite initial fears that Brookfield's significant stake in AusNet could hinder competing renewable projects, the ACCC was swayed by Brookfield’s ambitious commitment to develop 13.7 GW of new wind, solar, and storage capacity over the next decade. While the ACCC remained skeptical about the feasibility of Brookfield achieving this target due to grid constraints, it recognized the potential environmental benefits, including lower emissions and energy costs. Some lawyers believe this may be the first instance in Australian competition history where environmental benefits played a major role in a merger decision. The ACCC concluded that accelerating the development of renewable energy projects would significantly benefit the Australian public by reducing greenhouse gas emissions sooner than planned.

These examples illustrate the critical need for Canada to incorporate environmental sustainability into its merger reviews. While Canada’s Competition Bureau has made strides in modernizing competition policy, it has yet to fully embrace the integration of climate considerations. In contrast, Australia’s recent decisions demonstrate that such integration is not only possible but essential for ensuring that mergers contribute positively to the public good.

Failing to include environmental factors in merger reviews risks Canada falling behind its global counterparts and missing out on opportunities to promote a more sustainable economy. As investors increasingly prioritize Environmental, Social, and Governance (ESG) criteria, companies are responding by adopting greener business practices, often through strategic mergers. Canada must update its competition framework to reflect the realities of the 21st century. The time to act is now—before the climate crisis deepens further and the costs of inaction becomes too great to bear for Canadians.

Margi Pandya is an alumna from the University of Calgary’s School of Public Policy.