Competition Bureau Cautions Winnipeg Businesses Signing Commercial Waste Removal Contracts

OTTAWA, July 18, 2008 – The Competition Bureau would like to advise Winnipeg businesses of certain precautions they should take when signing or reviewing an existing contract for commercial waste removal, following the dissolution of assurances agreed to by the three major waste removal companies in Winnipeg regarding their contracting practices.

The Bureau negotiated voluntary assurances in 2003 with Canadian Waste Services Inc., BFI Canada Inc. and Johnson Waste Management Ltd., to help create more competition and choice for businesses in this market. The companies gave the Bureau assurances that, for their standard form contracts, they would limit the initial and each renewal term to three years and would not include right of first refusal clauses. However, the Bureau has received information that one of the parties is no longer willing to honour all of these assurances.

As a result, the Bureau would like to remind businesses that when signing a new contract or reviewing an existing one, they should read it thoroughly and ensure that they understand all of the terms. Careful consideration should be given to the following terms:

• the length of the contract;
• the process and notice period for cancelling the contract before the end of its term;
• the damages imposed for cancelling the contract before the end of its term;
• whether the contract is automatically renewed at the end of its term; and
• the existence of a right of first refusal clause that requires a customer to notify the company if it receives an offer from a competitor, and permits the company to match the offer to retain the customer, which may restrict a business’ ability to change suppliers.

If the terms are not satisfactory, businesses should negotiate changes with their suppliers before they sign a new contract.

While the assurances are no longer in effect, the Bureau is satisfied that its intervention allows businesses in Winnipeg to enjoy the benefits of a competitive market.

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

For media enquiries, please contact:
Marilyne Nahum
Communications Advisor
External Relations and Public Affairs Branch
819-953-9760

For general enquiries, please contact:
Information Centre
Competition Bureau
819-997-4282
Toll free: 1-800-348-5358
TDD (hearing impaired): 1-800-642-3844
compbureau@cb-bc.gc.ca