March 23, 2022
Practical Law Canada Competition, of which I am Lawyer Editor, published a new Legal Update, which discusses recent conspiracy (cartel) law developments under sections 45 and 90.1 of the Competition Act. In particular, this Update discusses recent announcements made by the Competition Bureau, the federal Innovation, Science and Industry Minister and the Supreme Court of British Columbia’s decision in Pantusa v. Parkland Fuel Corporation, 2022 CarswellBC 519 (S.C.).
Below is an extract of the new Legal Update with a link to the full Update.
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There have been several criminal conspiracy related developments in Canada, including in the wholesale gasoline and agricultural sectors. These include a recent decision of the Supreme Court of British Columbia granting an application for summary judgment dismissing a gasoline related class action, recent conspiracy related statements by the Commissioner of Competition and federal Innovation, Science and Industry Minister and an announcement by the Competition Bureau (Bureau) that it was discontinuing an investigation in the Canadian crop inputs sector.
These recent conspiracy related developments and their implications are discussed below.
On March 2, 2022, the Supreme Court of British Columbia issued its decision granting an application for summary judgement dismissing a retail gasoline related class action (see Pantusa v. Parkland Fuel Corporation, 2022 CarswellBC 519 (Pantusa)).
In Pantusa, the plaintiff claimed that since 2015, the defendant refiners and wholesale marketers had been systematically overcharging their wholesale customers for the sale of gasoline in British Columbia, constituting an unconscionable act under section 9 of the British Columbia Business Practices and Consumer Protection Act, S.B.C. 2004. The plaintiff also alleged that that the defendants agreed to impose an additional overcharge to increase wholesale gasoline prices contrary to section 45 of the Competition Act, R.S.C. 1985, c. C-34 (Competition Act).
In support of his claim, the plaintiff relied primarily on a pair of reports issued by the British Columbia Utilities Commission (BCUC), which was directed by the British Columbia provincial cabinet to inquire into factors influencing gasoline and diesel prices in the province since 2015.
The BCUC found, among other things, that four oil companies (Parkland Fuel Corporation, Suncor Energy Inc., Imperial Oil Limited and Shell Canada Limited) collectively controlled about 88% of the wholesale gasoline and diesel supply in British Columbia, that the level of concentration in the market met the technical definition of an oligopoly and that the defendants possessed market power. The BCUC concluded, however, that there was no evidence “of the kind of misconduct that would fall under the regulatory purview of the Competition Bureau” (for example, a price-fixing agreement or dominant companies exploiting market power or engaging in conduct to lessen competition).
In granting the defendants’ summary judgment application, the Court found that there was no evidence to support either the plaintiff’s allegation of a conspiracy under section 45 of the Competition Act or common law conspiracy claims.
Under section 45 of the Competition Act, evidence of an agreement between two or more competitors to fix prices, divide/allocate markets or restrict output is an essential element of the offences. For more information about section 45 of the Competition Act, see Practice Notes, Canadian Conspiracy (Cartel) Law, Establishing and Avoiding a Conspiracy Agreement, Concerted Refusals to Deal (Boycotts) and Information Exchanges Between Competitors.
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For the full Legal Update, see here.
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