Canadian C-Store Count, Study Released

23,500 Canadian c-stores generate $16 billion in tax revenues each year

LAVAL, Quebec -- Convenience stores may be small, but they pack a big economic punch. The conclusion is drawn by the first Convenience Stores of Canada Industry Report, a macro-economic study released by the Canadian Convenience Stores Association (CCSA) and carried out by HEC Montreal in collaboration with PricewaterhouseCoopers and Desjardins. It said there are 23,500 c-stores in Canada.

"This report demonstrates how important convenience stores are to Canadians and the sizeable impact our industry has on the Canadian economy," said Dave Bryans, president of the Canadian [image-nocss] Convenience Stores Association. "We're in every community, in every neighbourhood, serve every demographic and are entrusted by government to sell more age-restricted products than any other retailer. We're unique. There isn't another retail industry like ours. If we can leave people with one message from today it's that the contribution of convenience stores to job creation, the public purse and entrepreneurship is an exceptional one and must be preserved."

According to the report by HEC Montr a a'al:
Canada has 23,500 c-stores. 10.4 million Canadians shop in a c-store each day, approximately twice the population of Canada every week. C-stores employ 165,000 Canadians and generate $32.1 billion in annual sales. C-stores pay $2 billion in salaries each year, make $26.8 billion in purchases from Canadian suppliers and generate $15.8 billion in tax revenues to governments. "Convenience stores are key players in the Canadian economy...essential to governments in the sale of controlled products and in the collection of all sorts of taxes. They also play a crucial role in the chain of activities that enables businesses to reach consumers," the report said.

The report also stressed the fragility of an industry in which growth is curtailed by the dramatic increase in tobacco smuggling that every year deprives c-stores of close to $2 billion in revenues and $260 million in profits and deprives governments of $1.3 billion in taxes.

And in other Canadian industry news, lawyers representing drivers in Quebec were in court Monday to ask a judge to widen their class-action lawsuit to almost every region in the province over price-fixing in the retail gasoline market, reported the Canwest News Service. The lawsuit was filed following a Competition Bureau of Canada investigation revealed that gas station owners in four Quebec cities called one another to set the pump price; 13 Quebecers and 11 companies were charged with gas-price fixing last June in Victoriaville, Thetford Mines, Magog and Sherbrooke.

The lawyers for the plaintiffs argued that after reviewing the evidence collected by the Competition Bureau, notably some 2,000 phone conversations, they are convinced the price-fixing scheme was taking place all over Quebec.

"Our sense is that the activity went on over much of the province and for a much longer period than the wiretap evidence," said George Iny, president of the Automobile Protection Association, who is joining the lawsuit.

The plaintiffs want to receive authorization to represent residents across the province against oil companies and the officials involved. They also want to expand their lawsuit to cover a period of six years from an initial period of three years as exposed by the Competition Bureau.

In their motion to amend, they are targeting 42 companies or individuals, up from eight in the initial class-action lawsuit. It includes Ultramar, Esso, Shell, Couche-Tard, Canadian Tire, Provigo, Irving, Olco and La Coop Federee, which operates Sonic stations.

Quebec Superior Court Justice Dominique Belanger expressed concerns this case would become a "monster" to manage if so many respondents and so many regions were to be included.

Lawyers for the oil companies opposed the changes adamantly and stressed it is not sustained by the evidence of the Competition Bureau, which laid charges in specific markets in Quebec over a three-year period. "Nothing justifies any broadening of the lawsuit to other regions or other people," said Louis Belanger, counsel for Ultramar and speaking on the behalf other companies involved. "If you were to do that, you would totally lose control. It wouldn't be manageable and we wouldn't be out of court for several years."

He noted that the plaintiffs will have to prove conspiracy for every gasoline price hike in every market.

The lawyers for the plaintiffs allege that one official at Ultramar and one at Couche-Tard were the "puppet masters of the cartel."

"If Ultramar didn't follow the price hike, the other stations would bring their price back down. It's Ultramar that had the last word," said Pierre Lebel, a lawyer for the plaintiffs.

He noted that the impact for Quebec drivers over the years could represent hundreds of millions of dollars. "Some nine billion liters of gas are sold in the province each year. You can imagine what a hike of only one cent a liter can represent."

The judge will render her decision on the right to amend the class-action in a few weeks, said the report.

Following the Competition Bureau investigation in Quebec, three companies have pleaded guilty and been fined slightly more than $2 million: Les Petroles Therrien Inc. operating under the Petro-T banner; Distributions Petrolieres Therrien Inc.; and Ultramar. Six individuals have also pleaded guilty in this matter and they have been sentenced to terms of imprisonment totaling 44 months.