Canadian COMPETITION LAW

November 11, 2012

In an interesting note earlier today, the National Post reported (from The Canadian Press) that the federal Competition Bureau was working with Quebec’s corruption unit in the ongoing Quebec corruption and competition investigation which has so far led to the resignations of the mayors of Montreal and Laval and involved testimony that working in this area for some years now I can only describe as astonishing.

The articles published earlier today confirmed that the Bureau is working with Quebec’s provincial anti-corruption authorities in relation to a number of cartel and bid-rigging cases under investigation in Quebec (which was also recently confirmed by the Acting Senior Deputy Commissioner of Competition, Criminal Matters Branch, Matthew Boswell in recent remarks, including the fact that Bureau officers have been included in recent dawn raids in Quebec – see: here).

According to the Post’s reporting, the Competition Bureau, in addition to cooperating in searches, is “keeping tabs” on the ongoing Charbonneau inquiry, where testifying witnesses have made criminal and competition law allegations in relation to a wide range of conduct that includes bribery of public officials, illegal political campaign contributions and competition law violations, including criminal bid-rigging and conspiracy under sections 47 and 45 of the Competition Act.  The Post also cites correspondence with the Bureau stating that criminal bid-rigging remains an enforcement priority for the Bureau.

While the Bureau’s enforcement powers include the ability to obtain court orders for search warrants and wiretaps, and uses enforcement partnerships as part of its efforts to detect and investigate Competition Act offences, it may be some time yet until any charges or laid or formal Bureau announcements are made given the relatively slower pace of criminal matters under the Act.  For example, developments (e.g., pleas) and announcements are still being made in the Quebec’s Quebec gas price fixing investigation, which first began about five years ago.

In another recent report that I can also only describe as astonishing, Charbonneau Commission witness Lino Zambito described one alleged breakfast bid-rigging meeting as follows:

“It was the spring of 2008, and the former head of Infrabec Construction claims he had been invited to attend a Saturday morning breakfast meeting at a hotel in Blainville.  The fact that the event started at 6 a.m. was unusual in itself.  Who showed up and what reportedly happened next was far more astonishing.

Around the table, said Zambito, were representatives from more than a dozen small and medium-sized construction companies operating on the North Shore — including Doncar, Pavages 4 Saisons, G. Giuliani Inc., Poly Excavation and Civex.

As they sipped their coffee, the event’s host, identified as businessman André Durocher of Groupe Panthère, ‘took out the list of calls for tender that were underway for the following month, which was public.  And he started to ask the entrepreneurs who had an interest in this or that project.’  The guests happily obliged, Zambito said, and it was agreed who would win each contract by placing the lowest bid.

The anecdote is one of several new pieces of information that can now be reported following the lifting of a partial publication ban on Zambito’s testimony before the Charbonneau Commission.

On Oct. 4, the former construction boss told commissioners that he thinks Durocher was trying to establish a bid-rigging system similar to the one that existed at the time in Montreal but that Durocher purposely neglected to invite the biggest players in construction in the region to the breakfast because he ‘honestly thought (the smaller companies) would be able to form a sort of force and impose that force on (the bigger contractors).’”

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