Merger Review Benchmarking Report — Chapter 3

Table of Content

This chapter complements the information in Chapter 2 on the Canadian Merger Review Process. The purpose of the employee survey was to give all Mergers Branch employees the opportunity to provide input into the benchmarking process. It was intended to provide a way for employees to openly and confidentially share their views and perspectives on the Branch.

Branch and non-Branch employees developed and reviewed a brief questionnaire (Annex A) to ensure that terminology would not be a problem for anyone answering the questions and that the questionnaire was clear and concise. In light of the responses received, the authors believe that parts of the questionnaire could have been better expressed to avoid some apparent ambiguity. This appears to have had only a minor impact on the results, however.

Employees received the survey at a Branch meeting in March 2000. The Deputy Commissioner and one of the Assistant Deputy Commissioners were present and provided a brief overview of the purpose and importance of the survey. Most employees were already familiar with the benchmarking initiative, although others were hearing about it for the first time.

All employees were encouraged to complete and return the questionnaire. They could complete it anonymously or include their name and telephone number so they could be reached if clarification about a particular comment was needed. About one third of respondents included their name and number. The survey was distributed to all 44 employees of the Branch and 23 (52.3 percent) completed questionnaires were returned.

The survey consisted of five questions, which were designed to gauge employee perceptions not generate fact-based responses. Employees were invited to expand on their views based on their experience. To encourage broad participation, the questionnaire was kept very brief; there were two pages of multiple-choice questions and additional space to elaborate if required.

The results are presented in the same order as the order of the questions in the questionnaire. Explanations related to each question are also given.

Results

Question 1: How many years/months have you worked for the Mergers Branch?

Among the 23 employees who responded, the average time in the Branch was 6.3 years, with the shortest time being 6 months and the longest 13 years.

Question 2: In your opinion, how could the merger review process be improved? Rank your responses 1 to 5 where 1 is most important and 5 is least important.

This question contained a list of 13 hypothetical improvements, 12 of which were to be ranked individually according to their importance on a sliding scale of 1 to 5. Some employees only chose five from the list and ranked them from 1 to 5. Other employees ranked all of the items, while others ranked more than five, but not all 12. The last item in the list was "Other (please explain)" and was intended to allow employees to write in additional details or other suggested improvements not included in the list.

Table 1 shows the items in the order they were presented in the questionnaire, and also the number of responses to each. The right-hand column indicates the ranking of importance most often given for each item. For example, a 1 appears in the right hand column beside the first item, "Delegate signing authority for non-complex opinions," because most respondents ranked this as most important.

Table 1

	Number of responses	Majority ranking
1. Delegate signing authority for non-complex opinions	17	1
2. Improve turnaround through the Prenotification Unit	16	4
3. Improve turnaround through Assistant Deputy Commissioner and/or Deputy Commissioner's offices	17	3
4. Simplify filing requirements	15	5
5. Review service standards	15	1
6. Review definitions of complexity	15	1
7. Delegate assignment of cases to someone other than the Assistant Deputy and Deputy Commissioners	17	5
8. Review and make more use of case weighting criteria	16	5
9. Hire more officers	21	1
10. Hire more support personnel	19	2
11. Provide more funding for experts	18	2
12. Improve tracker system	15	2
13. Other (please explain)	11	See below

The following list shows the suggested improvements in the order of importance respondents indicated. In other words, a majority of employees ranked all of the items under the heading Majority Ranking 1 as being the most important. Moreover, with each ranking level, each item has been listed in order of priority, based on the number of responses. For example, more employees ranked "Hire more officers" with a 1 than "Delegate signing authority for non-complex opinions."

Majority Ranking 1

Hire more officers
Delegate signing authority for non-complex opinions
Review definitions of complexity
Review service standards

Majority Ranking 2

Provide more funding for experts
Hire more support personnel

Majority Ranking 3

Improve turnaround through Assistant Deputy Commissioner and/or Deputy Commissioner's offices

Majority Ranking 4

Improve tracker system
Improve turnaround through the Prenotification Unit

Majority Ranking 5

Simplify filing requirements
Review and make more use of case weighting criteria
Delegate assignment of cases to someone other than Assistant Deputy and Deputy Commissioners

Other (please explain)

The "Other (please explain)" category generated many comments. These are summarized and grouped below.

Resource requirements: Many employees felt that the Branch should hire more officers and support personnel. Other requests included setting up another division, and better training and coaching for new employees. Others thought that additional experienced in-house economic assistance was required. One noted that "we need additional resources to review mergers as well as to contest them so that a body of jurisprudence can be developed."

Prenotification Unit: Several employees suggested expanding the Unit into a dedicated unit to handle the non-complex, non-overlapping and routine advance ruling certificate cases. Some noted that this unit should be headed by a CO-3 who could also classify cases (complexity levels).

Training: Some respondents noted that managers and senior officers should provide clearer guidance and instructions related to files, procedures, etc., and others noted that a detailed list of information required by industry should be developed.

Efficiency: Some noted that advance ruling certificates should go through the system more quickly and be signed by the Senior Deputy Commissioner¹⁷. Others felt that experienced CO-1s and CO-2s should handle the non-complex cases, that certificates should not take any longer than a day or two to process and that practices in both divisions should be harmonized.

Complexity definitions and service standards: There were comments that a new category should be created for files that fall somewhere between the current categories of non-complex and complex. Others felt that service standards should be reviewed and that the time when the waiting period clock starts should be clarified.

Question 3: In your opinion, what issues are of most concern to merging parties? Rank your responses from 1 to 5, where 1 is most important and 5 is least important.

This question contained a list of six items, five of which were to be ranked individually according to their importance on a scale of 1 to 5. For this question, employees ranked each of the items in order of importance as compared to the other items on the list. In other words, those who thought that "Turnaround times" was more important than "Quality of response" rated the first with a 1 and the second with a 2. The sixth item, "Other (please explain)" was intended to allow employees to write in additional details or other suggested improvements not included in the list.

Table 2 shows the items in the order they were presented in the questionnaire, and also the number of responses to each. The right-hand column indicates the ranking of importance most often given for each item. For example, a 1 appears in the right hand column beside the first item, "Turnaround times," because most respondents ranked this as most important.

Table 2

	Number of responses	Majority ranking
Turnaround times	19	1
Quality of response	19	2
Lower fees	18	4
Filing requirements simplified, less burdensome	17	3
Reduce number of letters from Mergers Branch	17	5
Other (please explain)	9	See below

Other (please explain)

The "Other (please explain)" category generated several comments. These are summarized and grouped below.

Turnaround times: There were many comments related to the importance, to stakeholders, of turnaround times. Some respondents also noted that lawyers also want a "clear idea of where the concerns are."

Information requirements: Several respondents commented that stakeholders feel that "extensiveness of information requests is another concern."

Complexity definitions and service standards: Some respondents noted that complexity definitions are a cause of concern. "Turnaround time is the key point of interest for the bar".

Question 4: How could costs related to complex and very complex cases be reduced? Rank your responses 1 to 5, where 1 is most important and 5 is least.

This question contained a list of five items, four of which were to be ranked individually according to their importance on a scale of 1 to 5. For this question, employees ranked each of the items in order of importance as compared to the other items on the list. In other words, those who thought that "Use more internal economists" was more important than "Use Justice lawyers more often than outside counsel" rated the first with a 1 and the second with a 2. The "Other (please explain)" category was intended to allow employees to write in additional details or other suggested improvements not included in the list.

Table 3 shows the items in the order that they were presented on the questionnaire. It also shows the number of responses for each item and, in the right-hand column, the importance that was given most often. In other words, if most respondents thought the first item "Use more internal economists" was most important, then a 1 appears in the right-hand column.

Table 3

	Number of responses	Majority ranking
Use more internal economists	17	2
Use Justice lawyers more often than outside counsel	15	1
Make more use of weighting criteria and link to budgets	12	3
Monitor work products of contractors and conduct post-assessment of the work and costs involved	13	4
Other (please explain)	13	See below

Other (please explain)

The "Other (please explain)" category generated several comments. These are summarized and grouped below.

Case management: There were many comments related to increasing efficiency through improved management practices. For example, there was reference to the need to ensure a disciplined approach to developing a case to ensure that a change in direction does not occur in mid-stream. There was also reference to the need to quickly close cases where there is a low probability of success or where concerns really are not serious, as a way of focussing resources on key cases. Others noted that more information related to experts is required and that post-case assessments should be conducted in order "to prevent hiring experts who have not performed well and were unreasonably costly in earlier files" from being rehired. On the other hand, some expressed the view that "we do not spend enough, or do not have enough money to spend on complex and very complex cases" and that "the amount we spend on experts is a fraction of what's spent by the defence bar; cutting dollars here is a false economy."

Justice lawyers and experts: Respondents noted that the Branch should consider increased incentives to attract Justice lawyers. Some also felt there was a need for increased internal industry expertise.

Question 5: Any other comments and suggestions?

The following are examples of other issues respondents felt are important to an effective process.

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• Complexity letters should be signed by CO-3s, and delegation of authority for non-complex cases and advance ruling certificates is a priority to streamline the process.
• Teams of officers, economists and outside counsel should be created at the earliest stage of a large case.
• A "moderate" complexity level with turnaround of five weeks should be established for cases for which market contacts are required.
• The Mergers Branch tracker system should be improved to facilitate searches and to ensure that important documents are accessible (i.e. expert contracts, precedents and Question Period cards).
• It is critical for the Mergers Branch to address fundamental staffing and budget issues.
• "We lack resources. The demands impose a great burden and cause much stress. Each officer has probably a file too many." "We need to recruit the best new graduates available and hire lawyers who want to move from the private sector to government."
• "Given that fees in the U.S. are more than twice as high as in Canada, fees are not an issue; in fact, an increase in fees is probably necessary given the number of times we have needed to get funding from Treasury Board on large, visible cases."

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Summary

There are important insights provided when employees are asked about their views on how to improve the process of doing merger review. Looking at the process from the "inside" has the benefit of raising issues that might not otherwise come to light.

Most interestingly, most of the issues identified as important are the same internally as they are externally. Many employee concerns and comments are very similar to those of stakeholders and those identified from an international perspective.

Annex A

Merger Review Benchmarking Project

Questionnaire

Please take a few minutes to complete this brief questionnaire. Your input will be used to complement other research from sources both within and outside the Bureau. All completed questionnaires will be treated as confidential. A final report will be provided to managers and employees of the Mergers Branch by the end of this fiscal period.

1. How many years/months have you worked for the Mergers Branch?____________
   
   
2. In your opinion, how could the merger review process be improved? Rank your responses 1 to 5, where 1 is most important and 5 is least important.

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___ 1. Delegate signing authority for non-complex opinions

___ 2. Improve turnaround through the Prenotification Unit

___ 3. Improve turnaround through Assistant Deputy Commissioner and/or Deputy Commissioner's offices

___ 4. Simplify filing requirements

___ 5. Review service standards

___ 6. Review definitions of complexity

___ 7. Delegate assignment of cases to someone other than Assistant Deputy and Deputy Commissioners

___ 8. Review and make more use of case weighting criteria

___ 9. Hire more officers

___ 10. Hire more support personnel

___ 11. Provide more funding for experts

___ 12. Improve tracker system

___ 13. Other (please explain):

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1. In your opinion, what issues are of most concern to merging parties? Rank your responses 1 to 5, where 1 is most important and 5 is least important.

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Turnaround times ___

Quality of response ___

Lower fees ___

Filing requirements simplified, less burdensome ___

Reduce number of letters from Mergers Branch ___

Other (please explain):

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2. How could costs related to complex and very complex cases be reduced? Rank your responses 1 to 5, where 1 is most important and 5 is least important.

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___ 1. Use more internal economists

___ 2. Use Justice lawyers more often than outside counsel

___ 3. Make more use of weighting criteria and link to budgets

___ 4. Monitor work products of contractors and conduct post-assessments of the work and costs involved

___ 5. Other (please explain):

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3. Any other comments and suggestions?

Thank You

Chapter 2   Chapter 4