SHERBROOKE, Quebec -- Federal authorities have executed dozens of search warrants against gasoline retailers in Quebec, looking for evidence of price-fixing, reported The Globe & Mail.
Starting May 29, Competition Bureau authorities, with the help of police, visited up to 80 locations, many of them in the Sherbrooke, Quebec, area, including facilities controlled by some big industry players, the report said.
"It's something we are aware of," Carol Montreuil, the eastern vice-president of the Canadian Petroleum Products Institute ([image-nocss] CPPI), told the newspaper about the searches.
CPPI represents Canada's biggest gasoline companies, including Ultramar, Shell, Imperial and Petro-Canada. Montreuil said Competition Bureau officials went to offices and stations affiliated with all of these companies, particularly in "the Sherbrooke-Victoriaville area."
"It's clearly an exceptional event. It does not take place regularly. It is taken very seriously," Montreuil said. But he hastened to add that these firms have weathered "dozens" of similar probes before, usually without any finding of wrongdoing by the Competition Bureau.
Little else is known about the investigation, the report said, including whether it is focusing mostly on the big companies, and how much it may be touching on smaller, independent retailers. Some companies may emerge as targets, whereas others might simply end up providing contextual information about gas prices.
Sheridan Scott, commissioner of competition, issued the following statement: In response to questions from the media, I can confirm that the Competition Bureau is investigating alleged price fixing between competitors in the retail gasoline industry in local markets in the province of Quebec. The Superior Court of Quebec has granted search warrants based on evidence that there are reasonable grounds to believe that price fixing has occurred. There is no conclusion of wrongdoing at this time and no charges have been laid.All evidence will be analyzed and we will refer the case to the Attorney General if appropriate.
Like in the United States, price-fixing conspiracies in Canada are frequently alleged, but seldom proven, The Globe & Mail said. As prices threaten to rise again this summer, many consumers are renewing their suspicions that a wide-ranging conspiracy is afoot to hose them at the pumps, it added. Yet the Competition Bureau routinely deflates such preconceptions, finding again and again in its reports that "there is no national conspiracy to fix gasoline prices." Still, while market forces may be the rule across the country, the federal government keeps an eye out for local exceptions.
In fact, the Competition Bureau openly cultivates whistle-blowers and offers immunity from prosecution to sources who can expose gasoline price-fixing in any jurisdiction. Price-fixing is against the law in Canada and can lead to Criminal Code conspiracy charges.
In 2003, the bureau pointed out it had brought 13 cases to trial since 1972, and only eight of those resulted in conviction. In that period, fines have ranged from $1,500 to $200,000 for vendors found guilty of price-fixing.
In some cases, the conspiracy was as simple as one station owner calling a rival owner and threatening to initiate a price war if prices weren't kept up. In others, head offices were found to have pressed their retailers to inflate prices, said the report.
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