The European Commission announced last week that it will be relaxing its rules on

corporate mergers

to enable the growth of global champions that can compete with United States and Chinese companies. It’s a message that Canada’s

Competition Bureau

, which is reviewing

Keyera Corp.’s

$5-billion purchase of the Canadian assets of U.S.-based

Plains All American Pipeline LP

, should heed.

The EU said it will now evaluate transactions on the basis of innovation, investment and resilience to benefit the European economy. In other words, the usual focus on concentration in a particular sector is being set aside in favour of growing larger,

more competitive entities

.

The decision brings to mind a book written by Canadian business icon Dick Haskayne in 2007, entitled Northern Tigers, which explored the idea of creating Canadian global champions. Northern Tigers is a whirlwind tour of Canada’s economic history, which is littered with homegrown companies taken over by foreign entities — and a successful few that took risks and became global players.

The impetus for the book came from Haskayne’s time as chair of MacMillian Bloedel — ‘Mac Blo’ for short — which was taken over by the U.S. pulp and paper giant Weyerhaeuser in 1999, but there have been many more examples since.

Miners Inco Ltd. and Falconbridge Ltd. were both bought by foreign players. Nova Chemicals Corp. was taken over by the Mubadala Investment Company in 2009 and is now under the umbrella of Borouge Group International AG. And Viterra Ltd. — which was created through the merger of Agricore United Inc. and the Saskatchewan Wheat Pool in 2007 — was bought by Glencore PLC in 2012 and is now part of the conglomerate Bunge Global SA.

Keyera’s proposed deal would run against that trend, fitting with Haskayne’s thesis that Canadian companies should grow and compete.

It would expand the company’s position from being

primarily Alberta-focused

onto the national stage, establishing a fully connected NGL corridor stretching from the West Coast to eastern Canada. It would bolster Canadian ownership over domestic assets, at a time when Canadians have made clear that a strong economy and economic sovereignty are priorities. And it would increase exports, seemingly supporting the federal government’s stated goal of growing trade with non-U.S. markets, at a time when the demand for Canadian energy is rising.

Overall, those outcomes would appear to align with the federal government’s own priorities, which Industry Minister Melanie Joly outlined plainly last fall in a speech to business groups on Canada’s new industrial strategy.

“When it comes to creating jobs, we will be building Canadian champions,” Joly said. “We need bigger Canadian companies. And we need to make sure these companies become bigger and at the same (time) we have more of these Canadian champions … that we help them grow and ultimately that they are strong at home and abroad.”

So it’s more than a bit curious that Keyera’s acquisition, announced last June, has yet to receive approval from the Bureau. Instead, the Bureau announced this month that it was opening an investigation to gather more information about the transaction.

The focus of the probe appears to be on whether the deal will create barriers to entry and stifle competition — including how much of the fractionation capacity the new entity will control in the Edmonton region. Fractionation is the process by which

natural gas liquids

(NGLs) are turned into products such as propane, butane and diluent for the oilsands.

Research reports from Bay Street analysts, however, have yet to identify such a risk.

A report released by Scotiabank noted that the “frac” share of the merged company will sit at about 39 per cent — which is higher than the 35 per cent threshold preferred by the Bureau — but falls below the 50 per cent market share of their largest competitor in the region, Pembina Pipelines Corp. In the scheme of things, the four per cent difference should not stand in the way of approval.

Also worth noting is that this is the same Bureau that was ordered to pay $13 million in costs over its failed attempt to block Rogers Communications Inc.’s purchase of Calgary-based Shaw Communications Inc. That deal is now three years old, and, flowing from the sale of Shaw’s Freedom Mobile to Quebecor’s Videotron, cellphone rates have dropped in Canada.

  • Competition Bureau steps up probe of proposed Keyera gas acquisition
  • ‘No one is going to build a pipeline without certainty,’ Keyera CEO says

Whether the Bureau decides to approve the Keyera deal on the condition a portion of the frac capacity is sold remains to be seen, but it needs to be aware that, in this case, it could act as a disincentive for the growth needed to create Canadian champions — Keyera or others.

The importance of economic sovereignty, highlighted on Sunday by Prime Minister Carney in his Forward Guidance message, cannot be ignored. This deal, which significantly increases Keyera’s assets and future growth opportunities, checks that box.

Former Alberta premier Peter Lougheed was the first board chair of Keyera. He would be applauding the company’s bold decision to grow and establish itself as a strong midstream company, serving Canadians from coast to coast. Given what we face as a country, it behooves the Bureau to think boldly and allow transactions that position Canadian companies for future growth — rather than as takeover targets for foreign buyers.

Deborah Yedlin is the chief executive of the Calgary Chamber of Commerce