Appendix B - The Competition Bureau's Letter to the Toronto-Dominion Bank and Canada Trust

To ensure that competition concerns in each local market in which the Toronto-Dominion and Canada Trust compete are accurately identified, the Competition Bureau used the following approach.

Personal and business transaction accounts in each local market are the core of most banking relationships for consumers and businesses. If the combined market share of Toronto-Dominion and Canada Trust:

• - of either the personal or business transaction accounts is 45 percent or more, the local geographic market falls in the category "Will result in a substantial lessening of competition."
• - of either the personal or business transaction accounts is between 35 and 45 percent, or any of the following product categories — personal loans and lines of credit, residential mortgages, small or medium-sized business operating loans — is 35 percent or greater, the local geographic market falls into the category "May result in a substantial lessening of competition."
• - of either the personal or business transaction accounts, and any of the following product categories -- personal loans and lines of credit, residential mortgages, small or medium-sized business operating loans -- is below 35 percent, the local geographic market falls into the category "Will not result in a substantial lessening of competition."

These rules have been adjusted to discount very small changes in market share.

The detailed formula applied to each local market is set out below.

Will result in a substantial lessening of competition

Local geographic markets fall into this category if:

• - the combined market share of the merging parties in:
  • - either personal or business transaction accounts is 45 percent or more; and
  • - the market share being acquired as a result of the merger is 5 percent or more.

  May result in a substantial lessening of competition

  Local geographic markets fall into this category if:

  • - the combined market share of the merging parties in:
    • - either personal or business transaction accounts is 45 percent or more; and
    • - the market share being acquired as a result of the merger is less than 5 percent.
  • or
  • - the combined market share of the merging parties in:
    • - either personal or business transaction accounts is between 35 and 45 percent; and
    • - the market share being acquired as a result of the merger is 5 percent or more.
  • or
  • - the combined market share of the merging parties in:
    • - any one of the following: personal loans and lines of credit, residential mortgages, small and medium-sized business operating loans are 35 percent or greater; and
    • - the market share being acquired as a result of the merger is 5 percent or more.

  Will not result in a substantial lessening of competition

  Local geographic markets fall into this category if:

  • - the combined market share of the parties is below 35 percent in any product market.
  • or
  • - the combined market share of the merging parties in:
    • - either personal or business transaction accounts is between 35 and 45 percent; and
    • - the market share being acquired as a result of the merger is less than 5 percent.
  • or
  • - the combined market share of the merging parties in:
    • - any of the following: personal loans and lines of credit, residential mortgages, small and medium-sized business operating loans are 35 percent or greater; and
    • - the market share being acquired as a result of the merger is less than 5 percent.

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