The federal Competition Bureau won't block the buyout of B.C. Biomedical by LifeLabs, clearing the way for B.C.'s two big chains of private medical labs to merge into a single giant.
The bureau concluded the merger would "not likely result in a substantial lessening or prevention of competition."
It noted diagnostic testing is highly regulated in B.C. through the province's Medical Services Commission and there was "little evidence of direct competition" between the two firms to date, nor much likelihood of it in the future.
BC Biomedical has nearly 800 employees, 500 of them in Surrey, and runs 45 labs across the Lower Mainland that handle 32,000 tests daily.
Toronto-based LifeLabs has 80 service centres in B.C. and does 44,000 tests per day.
With the acquisition, LifeLabs billings to the Medical Services Plan for government-funded testing will now top $200 million a year. A much smaller share of its revenue comes from privately paid tests.
Publicly provided testing in hospitals by B.C.'s regional health authorities will continue to offer an effective alternative to the merged private lab chains, the bureau added.
Health Minister Margaret MacDiarmid had raised concern one firm will end up with 95 per cent of the private lab business, putting it in a better position to wring higher testing fees from government.
A Medical Services Commission (MSC) review of the planned merger has led to certification of LifeLabs to operate the former BC Biomedical testing facilities.
MSC has the power to approve or reject significant changes in medical lab operating hours or capacity changes, MacDiarmid said in an interview Tuesday.
Any post-merger move by LifeLabs to consolidate the number of labs could, for example, be closely scrutinized, she confirmed.
"If changes were proposed and the commission had a concern that access might be impacted, they do have the authority to take steps to address it," MacDiarmid said.
The deal is expected to close in early April.