Masse Writes Industry Minister on Proposed Acquisition of RONA by Lowe's

February 5, 2016


Honourable Navdeep Bains

Minister of Innovation, Science, and Economic Development

House of Commons

Ottawa, ON      K1A 0A6


Dear Minister Bains,


I am writing today regarding the proposed acquisition of RONA Inc. by Lowe’s.  This proposal would result in another foreign takeover of one of Canada’s large retail companies and employers.  I write to request that you carefully review this proposed takeover to ensure it is a net benefit to Canadians and that jobs and investment are protected.


This agreement for the acquisition of RONA will decrease the amount of competition in Canada.  We have seen with many of our largest Canadian companies that foreign takeovers can have negative consequences for workers, consumers, and communities.  In too many cases, after the rubber stamping of a takeover, we are left with less competition, increasing prices, and employment losses. 


This proposed deal would result in two major US hardware store chains in the Home Depot and Lowe’s and the Home Hardware Stores left in Canada remain significantly smaller as they are usually franchises and in smaller, more rural communities.  It is unlikely that these and other small Canadian franchises can continue competing with the big, foreign owned companies over the long-term.


Moreover, the proximity of many RONA locations to the existing Lowe’s locations is less than a kilometre in some communities.  It is not feasible that Lowe’s will keep both stores in operation if this deal closes.  Jobs will be lost, regardless of the promises made to the Competition Bureau and yourself, after the approvals process on this acquisition.  Our economy is struggling and Canadians are struggling to find employment.  This transaction between RONA and Lowe’s, if it receives all approvals, promises more of the same - jobs lost. 


In fact, I am worried that the Competition Bureau does not factor in future job losses when considering such mergers and acquisitions.  In 2001 we saw US-based Best Buy purchase Canadian-owned Future Shops in Canada which led to massive job cuts, in many cases without warning to employees.  We learned that the job cuts were specifically due to redundancy in the market – having Best Buy locations in close proximity to existing Future Shop stores.


We further saw American-based Target buy up Canada’s Zeller’s stores, with promises of work for Zeller’s workers – albeit with a wage cut.  Regardless of their promises, Target has left Canada, leaving too many unemployed and a lot of empty real estate following that unfortunate transaction.


Most recently, the Competition Bureau’s approval of Postmedia’s purchase of the English language Sun Media newspapers was approved after promises not to merge bureaus at their respective newspapers.  Instead, just weeks ago Postmedia did just that – cut jobs and merged bureaus.  Now we see newspapers are closing their doors, or ending print.  We need to ensure that the Competition Bureau and your department are scrutinizing these deals and ensuring that they are in the best interests of Canadians, jobs, and our overall economy.


Simply put, the foreign investment review process is broken. It lacks transparency and accountability, fails to include impacted communities, and has far too often failed to protect Canadian jobs. The time is now to start scrutinizing these acquisitions and takeovers before we lose even more Canadian companies to foreign interests.  This proposal leads me to a number of questions:


  1. Does your government have plans to review the Investment Canada Act in the coming months?

  2. Are there plans to change the $600 million threshold for triggering a net benefit analysis?

  3. Will there be a review of the Competition Act?  When will this take place next?

  4. Will you ensure that your review takes into account job losses at RONA and that any commitments by Lowe’s are made public?

  5. Will you ensure that the results of the respective reviews from the Government of Canada are transparent and made public?


    I do feel that these questions need to be answered, especially with the possibility of further foreign takeovers.  I appreciate your taking the time to respond to my concerns and look forward to your response on this matter.

     Yours truly,

     Brian Masse MP
    Windsor West