Price-fixing, bid-rigging found in St. John's school bus contracts
CBC News | Posted: February 20, 2009 7:14 PM | Last Updated: February 20, 2009
Trial averted as 13 companies agree to share fine
The Competition Bureau of Canada has ruled that more than a dozen bus companies in the St. John's area broke competition rules on school bus tenders.
The bureau found that 13 companies were involved in price fixing and bid-rigging during a three-year period, between 2001 and 2003.
The bureau determined that the bus services were essentially conspiring to limit competition in the marketplace, and were applying to tenders as a group.
Dermot Jardine, a Halifax-based assistant deputy commissioner for the Competition Bureau, said the moves violated competition rules.
"If this had gone to court, the penalties for the conspiracy … could include fines of up to $10 million and imprisonment for up to five years, or both," said Jardine, adding that the bid-rigging penalties could have meant imprisonment for as long as 15 years, with penalties at the discretion of the court.
The matter, though, did not proceed to the courts because the Competition Bureau felt that the case would have been costly, and that fair competition had since returned to the marketplace.
Jardine said the companies are under prohibition for seven years, and are not allowed to engage in similar activity.
The companies have agreed to pay $21,000 toward the cost of the bureau's investigation, Jardine said.
Jardine said another reason the penalties were not higher is that the Eastern School District — which was formed in 2004, incorporating schools boards that included the Avalon Peninsula board that had been involved in the matter — has taken steps to protect itself against price-fixing and bid-rigging.
The companies cited in the Competition Bureau's decision are:
- ATC Enterprises Ltd. and its director Aaron Thomas Carey.
- Carey's Bus Service Ltd. and its director Thomas Carey.
- Crawley's Bus Service Ltd. and its director James P. Crawley.
- D&D Buslines Ltd. and its director Goldie Halley.
- Eastern Bus Lines Ltd. and its director John Evans.
- Fleetline Buses Ltd. and its director Wilbert F. Furey.
- Garry Mahon Services Inc. and its director Garry Mahon.
- Joseph Gladney Ltd. and its directors Joseph Gladney and Diane Gladney.
- Kelloway Investments Ltd. and its director James Kelloway.
- Parsons and Sons Transportation Ltd. and its directors Scott Parsons and Terrence Parsons.
- Paul Cummings operating as Paul Cummings Island Bus Service.
- S&D Transport Ltd. and its director Donald Ash.
- Streamline Bus Company Ltd. and its directors Donald Tapper and William Thorne.
- Newfoundland Vending Services Ltd. operating as 11113 Newfoundland Ltd. and its directors Randy Baldwin, Robert Whitty and Garry Mahon.