Annual Report 1994/95 - Action Against Anti-competitive Agreements a Continuing Priority

Household Goods Removal Services

During the year, I examined the terms and conditions in the tender used to procure household goods moving services for the Federal Government and provided recommendations to the Interdepartmental Committee on Household Goods Removal Services. In addition to promoting the benefits of encouraging competition, I had a particular concern that the terms of the tender should not induce a breach of the 1983 Prohibition Order against the major van lines. The Committee made a number of changes to its tender in response to my recommendations. Other changes are pending.

Driving Schools in Sherbrooke

On June 17, 1994, École de Conduite Tecnic Aubé Inc., École de Conduite Lauzon Inc., LeGroupe Lauzon Inc, 2172-3572 Quebec Inc., École de Conduite Tecnic Estrie Inc., André Comeau and Yves Dubé were committed to trial. They were charged with offences under the sections of the price fixing provisions (paragraph 45(1)(c)), the predatory pricing provisions (paragraph 50(1)(c)) and the breach of a prohibition order provision (paragraph 34(6)) all of which relate to the supply of driving courses in the Sherbrooke region. An appeal to quash the committal by way of certiorari by some of the accused was denied by the Superior Court of Québec on March 9, 1995 and the matter is ongoing.

Béton Régional Inc.

On January 16, 1995, an order of prohibition under subsection 34(2) was issued against Béton Régional Inc. and Béton Carrière Ltée by the Federal Court of Canada relating to conduct directed toward the commission of an offence under section 45 in the sale and supply of ready-mix concrete in the Saguenay-Lac St-Jean region. An inquiry had been initiated concerning an agreement on the price of ready-mix concrete, arrived at with a competitor during the course of a proposed merger between these two companies.

Calgary Real Estate

On October 28, 1994, Royal LePage Real Estate Services Ltd. and Ted Zaharko, a former vice-president and regional manager, were convicted on three counts of horizontal price maintenance, one under paragraph 61(1)(a) and the other two under paragraph 61(1)(b). In addition, John Roche, a former branch manager, was convicted on the one paragraph 61(1)(b) count. On December 20, 1994, Royal LePage was fined a total of $200,000; Ted Zaharko a total of $25,000, or 60 days in jail; and John Roche was fined $5,000, or five days in jail.

Australian Mandarin Oranges

In May 1994, the Bureau learned that three Western Canadian brokers of Australian mandarin oranges entered into an agreement with one another and with their Australian suppliers relating to the purchase, sale or supply of these oranges in the Canadian market. Acting on the Bureau's conclusion that the agreement would prevent or lessen competition unduly, the Attorney General applied for, and on August 8, 1994, obtained an interim injunction under sub-section 33(1) of the Act which prohibited the continuation of this agreement. This was the first injunction obtained under section 33 of the Act. Subsequently, on December 12, 1994, the Federal Court Trial Division, on consent of all parties, issued an order of prohibition pursuant to sub-section 34(2) of the Act which prohibits the continuation of the agreement. The outcome of this proceeding is important for the enforcement of the criminal provisions of the Act as the ability to obtain interim injunctions represents a significant alternative to prosecution. Section 33 provides an expedient and cost effective way to restore the benefits of free competition in a market affected by proscribed anti-competitive agreements or arrangements.

Pulp Baling Wire

On February 20, 1995, Tennant Wire Limited pleaded guilty to one charge of conspiracy under paragraph 45(1)(c) of the Act related to the sale and distribution of pulp baling wire and was fined $100,000 in the Supreme Court of British Columbia in Vancouver, B.C. The Court also issued a Prohibition Order against Tennant under sub-section 34(1) forbidding it from engaging in criminal activities of this nature in the future. James Walker, a U.S. resident who was in a position to influence the conduct of Tennant in the market, was ordered to be subject to a Prohibition Order under sub-section 34(2) of the Act.

Alberta Ambulance

On January 23, 1995, the Alberta Ambulance Operators' Association and three of its directors, William Coghill, Andrew Moffat and Daniel Osborne, pleaded guilty to one count under paragraph 45(1)(c) for conspiring to lessen competition in the provision of ambulance services in Alberta between 1984 and 1991. The Association was fined $25,000 and each of the three individuals was fined $5,000. In addition, the court issued a comprehensive prohibition order designed to maintain and encourage competition in the industry.