CT-89/3
COMPETITION TRIBUNAL IN THE MATTER OF an Application t' by the Director of Investigation and Research under sections 92 and 105 of the Competition Act, R.S.C., 1985, c.C-34, as amended;
AND IN THE MATTER OF the acqu~.;j.;j;;""l-f'~~~--~~~~--..... by Imperial Oil Limited of th sha~PnmmJ TRfBUt~AL of Texaco Canada Inc. TirlENAl DF. LA CONCURRENCE P R 0 BETWEEN L A~~ 18 1989 ./8JJ D f J I THE DIRECTOR OF INVESTIGATIO D REGl~TRAR - Ktvl>iRAIRE T AND RESEARCH ----- -- --- --- --r:-COMPETITION TF-118UN.A.L OriAWA, ONT. ~~ TRiBUNAL DE LA CONCURRENCE
File No. e..r-J'i /a - and -Noil\~~ ~~er ~ IMPERIAL OIL LIMITED ~• V~------~~~~-e! Exhibit No /q-~ Respondent --'-----No. Lie 1a PU / / Filed oh • .JJ./ j/'j ~ /tr'ft ,,) f - and -Deposee le j ¥r 1 Registrar • ~ ATTORNEY GENERAL OF QUEBEC Greffier / Intervenor SUPPLEMENTARY AFFIDAVIT OF GEORGE LERMER I, George Lermer, of the City of Lethbridge, in the Province of Alberta in Canada MAKE OATH AND SAY AS FOLLOWS:
1. I am the Dean of the Faculty of Management at the University of Lethbridge and have been retained by the Director of Investigation and Research, Consumer and Corporate Affairs - Canada, to assist the Director in the preparation of his Application, his Consent Order Impact Statement and to provide my opinion on the Draft Consent Order's ("DCO") merits as a remedy for the merger.
- 2 -2. This affidavit is supplementary to my affidavit dated the 17th of July, 1989 and sets out certain comments which were overlooked and not included in Exhibit "A" of my earlier affidavit. These comments do not affect my view, expressed therein, that with the approval of the DCO, the merger of Imperial Oil Limited and Texaco Canada Inc. would be unlikely to substantially lessen competition in the three distinct Canadian gasoline wholesale and retail markets identified by the Director in his Application.
3. The DCO addresses potential concerns about competition in the Prairies and British Columbia. The DCO's divestments are required because potential competition problems are significant in the Prairies, given the weakness of the import option and that Imperial's share of refinery capacity, although unaffected by the merger, is large. After demand grows to absorb surplus refinery capacity the risk of cartelization must be considered for the same reasons set out in the discussion dealing with the Quebec/Ontario market. To the extent that the DCO's divestitures strengthen third and fourth ranking refiner-marketers, the regional refiner-marketers or the independent marketers, the probability is reduced that the majors would be in a position to assert market power by raising gasoline prices. It is on this basis
- 3 that I concluded, as set out in my affidavit of July 17, 1989 and as referred to in paragraph 2 above, that with the DCO, Imperial's acquisition of Texaco's assets in the Prairies and British Columbia will not likely reduce competition substantially.
SWORN before me at the City of Hull, in the Province of Quebec this 18th day of August, 1989
CT-89/3 THE COMPETITION TRIBUNAL IN THE MATTER OF an Application by the Director of Investigation and Research under sections 92 and 105 of the Competition Act, R.S.C. 1985, c.C-34, as
amended;
AND IN THE MATTER OF the acquisition by Imperial Oil
Limited of the shares of Texaco Canada Inc.
B E T W E E N: THE DIRECTOR OF INVESTIGATION AND RESEARCH
Applicant - and -IMPERIAL OIL LIMITED Respondent - and -ATTORNEY GENERAL OF QUEBEC Intervenor
SUPPLEMENTARY AFFIDAVIT OF GEORGE LERMER George N. Addy Consumer and Corporate Affairs Canada Legal Services, 22nd Floor 50, Victoria Street Hull, Quebec
KlA OC9
(819) 997-3325 Counsel for the Applicant