As part of its active monitoring of Canadian retail gasoline markets, the Competition Bureau became aware several years ago of allegations of price-fixing at gas stations in Victoriaville, Quebec. The evidence gathered during the Victoriaville investigation led to further probes in other local markets in Quebec; namely, Thetford Mines, Sherbrooke and Magog, ultimately supporting that there was a criminal price-fixing cartel in those four local markets.

During the investigation, the Bureau uncovered evidence of agreements between competitors to fix the price at the pump where gasoline was sold to consumers. The evidence indicated that participants carried out the conspiracy mainly by phoning one another to agree on the price of gasoline and about the timing of price increases, contrary to the conspiracy provision, section 45 of the Competition Act.

While some of the accused operated under the name or "banner" of a major oil company, it was the local operators of the gas stations who were responsible for setting the final price at the pump. There is no evidence that the three major national oil companies' corporate offices were involved in these offences.

A number of investigative tools were used to uncover this cartel, including wiretaps, searches and the Competition Bureau's Immunity Program. Following the execution of search warrants in 2006, corporations approached the Bureau to cooperate in the investigation. Under the Immunity Program, the first party to disclose to the Competition Bureau an offence not yet detected or to provide evidence leading to the filing of charges may receive immunity from the Public Prosecution Service of Canada (PPSC), as long as the party cooperates with the Bureau. The Immunity Program provides a powerful incentive for persons involved in cartel agreements to come forward.

Charges in this case were divided among two groups owing to the size of the case. A first wave of charges was laid in June 2008, followed by a second wave in July 2010 against important additional alleged cartel participants. The accused were identified during the Bureau's extensive investigation and the criminal cartel could not have been successful without their participation. The second wave of charges brings the total number of accused in this case to 38 individuals and 14 companies. The names of the individuals and companies charged are available on the Bureau's Web site.

The Competition Bureau devotes considerable resources to investigating allegations that competitors have engaged in price-fixing, also referred to as cartel activity.

A cartel is an agreement between businesses not to compete with one another.

Changes were made to the Competition Act in March 2010. Under the amended provision of the Act, participants in a cartel face prison terms of up to 14 years or a fine of up to $25 million, or a combination of both. Anyone who has suffered a loss or damages as a result of such a cartel may also initiate a private legal action against cartel participants to recover damages suffered.

Given that the conduct in question occurred prior to March 2010, the accused in this particular case face the same penalties as those charged in June 2008: possible jail terms of up to five years or a fine not exceeding $10 million, or a combination of both. Under the former conspiracy provision, it was a criminal offence for two or more persons to enter into an agreement to prevent or lessen competition unduly, such as where competitors agree to fix prices. The requirement to prove that the agreement would lessen competition unduly was eliminated from the law when the changes to the Act were made in March 2010.

Detecting and stopping cartels is a priority for the Bureau, as price-fixing deprives consumers of the benefits of competition, such as competitive prices, choice and innovation. This activity is a fraud on the market.

The covert nature of cartels makes their detection time-consuming and labour intensive. The Bureau has several tools at its disposal to combat cartels, including wiretaps and searches. The Bureau must obtain authorization from the court to use its search and wiretap tools.

The Competition Bureau currently has investigations underway into alleged price-fixing in a range of industries in markets across the country.

The retail gasoline market is unique in that retailers post their prices on large, street-side signs. Since retailers know that the majority of consumers are very sensitive to price, gasoline stations often strive to meet or beat their competitors' posted rates. As a result, competing retailers frequently charge similar or identical prices. Similar gasoline prices, or similar changes in the price of gasoline, do not necessarily indicate price-fixing. High prices are a concern under the Competition Act only when they are the result of anti-competitive conduct, such as price-fixing.

The Competition Bureau is an independent law enforcement agency that contributes to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.

Detecting and stopping cartels is a top priority for the Bureau. However, it is active in many other areas. For instance, the Bureau regularly investigates allegations of anti-competitive behaviour, such as abuse of a dominant position in a given market, and false and misleading advertising. It is also responsible for reviewing mergers to ensure that they will not result in a substantial lessening of competition.

The Competition Bureau is an independent federal agency headquartered in Gatineau, Quebec. It has a staff of approximately 430 with offices in major cities across Canada.