Thursday, September 30, 1999

OTTAWA - Today, at a news conference, Democracy Watch released its petition to the federal Cabinet calling for the removal of the head of the Competition Bureau, Commissioner Konrad von Finckenstein, and a full review of the enforcement of the Competition Act. The petition, which sets out in detail the flaws in the Bureau's review of the takeover of Provigo by Loblaw, was submitted to the Cabinet and others yesterday. The Commissioner approved the takeover on August 12, 1999. The petition cites the following problems with the Bureau's review and approval of the Loblaw-Provigo takeover:

• Loblaw was represented by a lawyer, Mr. Robert Russell, who had represented the Commissioner before the Competition Tribunal from February 1995 to March 1998.
• The Commissioner and the Attorney General of Canada failed to take appropriate, effective and timely measures to prevent or address the above described situation.
• The Commissioner authorized Loblaw to buy Provigo's shares in November 1998, effectively approving the takeover nine months before the review was completed.
• Loblaw set out in its 1997 Annual Report a plan to open three to five stores annually in Québec, and had opened stores since then, but these plans were ignored by the Bureau.
• The Commissioner failed to seek approval from the Competition Tribunal of the irreversible decisions made during the review, as required under the Competition Act.
• Similar situations in the U.S. have resulted in much more effective rulings requiring the sale of stores and measures that maintain competition and choice for consumers.

"The Loblaw-Provigo takeover is an example of regulatees regulating regulators" said Daniel Martin Bellemare, Counsel for Democracy Watch and new Coordinator of Democracy Watch's Montreal office, "The lack of enforcement of competition laws has negative impacts on all Canadians, and the replacement of the Competition Commissioner and a full review of enforcement are key first steps to ensuring protection from abusive big businesses." Democracy Watch's petition calls on the federal Cabinet to do the following:

• Remove the current Competition Commissioner, and appoint a new Commissioner.
• Appoint an independent ad hoc commissioner to review the approval of the Loblaw-Provigo takeover, specifically to apply to the Competition Tribunal for orders that will halt any further steps from being taken in the takeover process.
• Direct the House of Commons Standing Committee on Industry to hold hearings reviewing the enforcement of competition laws since they were passed in 1986.