Contractors accused of rigging Manitoba Housing bids after years-long investigation want charges stayed
Documents shed light on investigation into 5 men charged following Competition Bureau probe
Two anonymous letters first tipped the Manitoba government off to possible collusion by contractors vying for dozens of public housing projects more than a decade ago, according to search warrant documents — but charges against the people accused could now be stayed because the process has taken so long.
The search warrant documents, obtained by CBC, shed light on years-long investigations, which led to five Westman-area contractors being charged with federal conspiracy offences in 2022.
The tips prompted the Manitoba Housing and Renewal Corporation to order an external review in 2015 of the regional office's tender policies and practices.
That review, which was shared with the Competition Bureau, unearthed surprising comments by contractors and led the bureau to discover "out of whack" bids, including one that was nearly double the province's estimated cost for the renovation project.
The Competition Bureau, an independent law enforcement agency focused on ensuring market competition, then spent about seven years investigating the bids.
The bureau alleges five contractors — Geoff Gregoire, Guy Pringle, James Kauk, Ryan Lamont and Doug Gunnarson — manipulated at least 89 contracts awarded by Manitoba Housing from December 2011 to February 2016. The value of the contracts was estimated at $4.5 million.
The five were charged with conspiracy to commit fraud over $5,000 under the Criminal Code and conspiring to allocate contracts under the Competition Act.
Lawyers representing the contractors did not respond to a request for comment prior to publication.
'Out of whack' bids
In February 2015, Manitoba Housing hired the consulting firm PricewaterhouseCoopers to conduct an external review, after the department identified 33 concerning contract awards involving the Brandon regional office's operations manager and local contractors.
The awards could indicate "collusion, bid-rigging and/or payment of secret commissions," housing officials told the consulting firm, according to the 2015 review filed as part of the search warrant.
The operations manager was terminated with cause in the midst of the review, according to the search warrant documents, and was never charged.
One incident flagged in the review was an email between the operations manager, who was in charge of renewal projects for publicly owned housing in Brandon, and Geoff Gregoire, one of the contractors accused.
In the September 2014 email, Gregoire questioned why he won a recent bid, telling the operations manager, "I don't think this one is mine." Then he said he didn't think his company was "supposed to win," but said "let me figure it out."
After the review wrapped in late 2015, PricewaterhouseCoopers and Manitoba Housing contacted the Competition Bureau to file a complaint about suspected "anti-competitive conduct" in Brandon.
'Robbing the public of a fair deal'
The Competition Bureau launched an investigation and found multiple instances where three or more contractors placed inflated bids, according to the documents.
In a 2017 sworn affidavit, an officer with the Competition Bureau detailed an incident where several Brandon-area contractors bid $30,000 to $37,000 for a social housing renovation contract that should have been in the $16,000 range.
An employee with Manitoba Housing said that was "out of whack." When the bidders were asked to resubmit, only two bids came back, offering the same work for far less money — including one bid for just over $13,000.
An expert with the Competition Bureau told officers the fact contractors were able to make "significant price reductions" between the bids indicated they didn't submit their most competitive bids in the first place.
The expert believes the initial bids were "likely to have been arrived at by way of an agreement or arrangement between the bidders," according to the document.
Keldon Bester, the executive director of the research and advocacy group Canadian Anti-Monopoly Project, said when the Competition Bureau is investigating possible bid-rigging, it will often look for bids that don't make sense.
"Seemingly innocuous behaviour really can hide something that is robbing the public of a fair deal for their tax dollars," said Bester, who previously worked at the Competition Bureau as a special adviser.
Bid-rigging is a serious offence, Bester said, and a conviction can lead to jail time, large fines and being barred from future procurement processes.
Any bid-rigging on public housing contracts would have other impacts as well, says the City of Brandon's community housing and wellness co-ordinator.
On housing, the city needs to stretch every dollar as far as possible, said Shannon Saltarelli.
She couldn't comment specifically on the case involving the five accused contractors, but said anything that leaves less money to support housing hurts the people who need help the most.
"It doesn't hurt you or I, it doesn't hurt the developer. It hurts the people that are living there and needing that space and needing that support," she said.
The PricewaterhouseCoopers reviewers made a series of recommendations to Manitoba Housing to close gaps in the procurement process.
The reviewers, at the request of the government, did not interview any of the contractors allegedly involved, and so wrote they couldn't find sufficient information to support the allegations of collusion or bid-rigging — but stated they were open to changing their conclusions should more information come to light.
A spokesperson for the province said since the review took place over a decade ago, the entire process of government procurement has changed. Manitoba Housing's role in procurement has "shrunk substantially" and most work is now centralized by the government, the spokesperson said.
Accused to appear in court next month
The five charged are scheduled to appear in court Feb. 5 to ask for a stay of proceedings under the Charter of Rights and Freedoms, because it took so long to charge them after the investigation began.
Bester said it's concerning that it took a decade for the matter to get to court, as having no resolution erodes people's confidence in government purchasing practices.
"We need to be able to push more and understand, why are these taking so long?"
Affidavits filed by some of the contractors in August 2024 argue it is not possible to recall matters that took place over a decade ago, and they cannot defend themselves against the charges.
They also said material seized as part of the investigation was never returned to them.
One of the accused, Doug Gunnarson, wrote in his affidavit that he was never contacted by anyone regarding his alleged involvement and his properties were never searched.
He said he had "no knowledge of this matter whatsoever" until he got a letter in December 2022 telling him he had a court date in Brandon.
Another accused, Guy Pringle, wrote in his affidavit that he thought the investigation was complete since he did not hear anything for such a long period.
"To then find out, over six years later, that I was being charged criminally was shocking to me and detrimental to my business and health," Pringle wrote.
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