Regulated Conduct Defence Applies to Issuance of Taxi Licenses - Allegations of Conspiracy Unsubstantiated

OTTAWA, May 2, 2000 -- The Competition Bureau today announced that it has closed its inquiry into the issuance and administration of taxi owner licenses (plates) in the City of Toronto.

The Bureau began this inquiry in June of 1998, after receiving a complaint from six Canadian residents. The allegations concerned the activities of owners of taxi licenses and how these licenses are administered by the City. Specifically, the complainants alleged that there was a conspiracy that restricted the number of taxi licenses issued by the City. It was alleged that this was done in an attempt to maximize the value of the taxi plates. It was also alleged that this conspiracy served to promote, maintain and encourage the leasing and sub-leasing of taxi plates, contrary to City by-laws and regulations.

While the Bureau's investigation confirmed that there were no new taxi licenses issued between the years 1993 and 1998, it determined that the City of Toronto is authorized to control the number of taxi licenses being issued. This brought into consideration the regulated conduct defence, as established by Canadian courts.

The regulated conduct defence applies when a specific activity is authorized or carried out in keeping with valid regulation; such activity is deemed to be in the public interest and cannot be found to be in violation of the Competition Act. This defence applies as long as the regulator has exercised its authority and has not been frustrated in its operations by the conduct or activity in question.

The allegations of a conspiracy affecting the number of licenses issued were unsubstantiated. In addition, there was no evidence to suggest that the City was frustrated from effectively exercising its regulatory powers.

As part of its investigation, the Bureau examined the information provided by the applicants, reviewed the applicable provincial and municipal legislation and regulations relating to the taxi industry in the City of Toronto, and interviewed industry participants and representatives of the City and the Licensing Commission. The Bureau also reviewed public sources of industry information.

For the above reasons, this inquiry is closed.

For more information, please contact:

Cynthia Grant
(819) 994-0349