Competition Bureau
Fuel / Gasoline Prices in CanadaAPPENDIX History of Bureau’s Activities in the Gasoline Industry
Convictions - Resale Price Maintenance (section 61) May 1991 Perry Fuels Inc. $40,000 (Oshawa, Ontario). Perry Fuels Inc. agreed with a competitor not to reduce its prices on heating oil and threatened a competitor that it would initiate a price war if the competitor did not cease offering discounts. May 1991 Ultramar Canada Inc. $150,000 (North York, Ontario). Ultramar agreed with a competitor not to reduce prices on heating oil. February 1989 Shell Canada Products Limited $200,000 (Winnipeg, Manitoba). A marketing representative of Shell called a local Shell dealer and pressured him to raise his prices. June 1986 Sunoco Inc. $100,000 (Toronto, Ontario). Sunoco removed one of its dealer price supports because the dealer initiated price reductions. April 1984 Imperial Oil Limited $75,000 (Waverley, Ontario). Imperial refused to supply gasoline to an independent retailer because of the retailer’s low pricing policy. October 1980 Arrow Petroleums Limited $7,500 (Ontario). Arrow attempted to influence upward the price of its own retailers. September 1974 Petrofina Canada Ltd $15,000 (Ontario). Petrofina attempted to influence upward the price of its own retailers. June 1972 Arrow Petroleums Limited $1,500 (Ontario). Arrow attempted to induce its dealer to maintain resale prices.
Discharged - Resale Price Maintenance (section 61)
Merger Reviews In 2000, the Merger Branch opposed Ultramar's proposed acquisition of Ottawa terminal. A consent order was sought to maintain competition in Ottawa region. In June 1998, the Bureau examined a proposed transaction between Husky Oil Limited and Mohawk Canada Limited. Through a newly incorporated company, Husky purchased by way of a takeover bid all the issued and outstanding shares of Mohawk (retail outlets and bulk plants). The Bureau's Mergers Branch deemed that the transaction was unlikely to result in a substantial prevention or lessening of competition. In 1998, proposed joint venture between Petrocan/Ultramar -summer 1998, parties abandoned transaction due to the Bureau’s concerns. In August 1997, the Bureau examined a proposed transaction between Shell Canada Products Limited and Petrowest Terminals Corp. Shell purchased the Petrowest petroleum product terminal located in Calgary. The Bureau's Mergers Branch deemed that the transaction was unlikely to result in a substantial prevention or lessening of competition. In August 1996, the Bureau examined a proposed transaction between Husky Oil Marketing Company and Gasland Oil Ltd. Husky acquired all of Gasland's 31 retail gasoline sites situated primarily in Alberta. The Bureau's Mergers Branch deemed that the transaction was unlikely to result in a substantial prevention or lessening of competition. In December 1995, the Bureau examined a proposed transaction between Ultramar Canada Inc. And Sunoco Inc. Ultramar and Sunoco traded their respective stations in Ontario and Quebec. Ultramar had 96 Ontario-based petroleum retail outlets; Sunoco had 134 outlets in Quebec. The Bureau's Mergers Branch deemed that the transaction was unlikely to result in a substantial prevention or lessening of competition. In June 1994, the Bureau examined a proposed transaction between Ultramar Canada Inc. and Sergaz. Ultramar acquired Sergaz's service station assets (about 180 stations) and related business. The Bureau's Mergers Branch deemed that the transaction was unlikely to result in a substantial prevention or lessening of competition. In August 1993, the Bureau examined a proposed transaction between Pioneer Petroleums Inc. And Sunoco Inc. Pioneer Petroleums and Sunoco, a subsidiary of Suncor, created a joint venture which combined the retail service station business of Pioneer with approximately 125 Sunoco service stations. The Bureau's Mergers Branch deemed deemed that the transaction unlikely to result in a substantial prevention or lessening of competition. In February 1992 the Bureau examined a proposed transaction between Pay Less Holdings and Canadian Turbo Inc. Pay Less acquired all issued and outstanding common and non-voting shares of Turbo, whose business included roughly 328 retail, bulk and cardlock outlets, most in Saskatchewan, Alberta and British Columbia. The Bureau's Mergers Branch deemed that the transaction was unlikely to result in a substantial prevention or lessening of competition. In May 1991, the Bureau examined a proposed transaction between Shell Canada Limited and Cango Petroleum Inc. Shell acquired 27 retail gasoline outlets from Cango. The Bureau's Mergers Branch deemed that the transaction was unlikely to result in a substantial prevention or lessening of competition. In May 1991, the Bureau examined a proposed transaction between 99943 Ontario and Cango Petroleum Inc. In May 1990, the Bureau examined a proposed transaction between Shell Canada Products Ltd. and Penny Fuels Inc. Shell leased 20 sites from Penny which were previously leased by Penny to Imperial Oil. The Bureau's Mergers Branch deemed that the transaction was unlikely to result in a substantial prevention or lessening of competition. In November 1989, the Bureau examined a proposed transaction between Shell Canada Products Ltd and Pay Less Gas Co. Shell had a right of first refusal to acquire all 66 Pay Less outlets in British Columbia. The Bureau's Mergers Branch deemed that the transaction was unlikely to result in a substantial prevention or lessening of competition. In 1989, the Bureau sought a consent order directing the divestiture of assets including certain assets acquired by Imperial Oil Ltd. by virtue of its acquisition of all of the outstanding shares of Texaco Canada Inc.
Examinations of the market Gasoline Pricing Examination 2004 On May 4, 2004 the Bureau commenced an examination of the Canadian petroleum market to determine whether recent increases in retail gasoline prices may have resulted from a breach of the Competition Act. The Competition Bureau found no evidence to suggest that the rapid rise in retail gasoline prices in the spring and summer of 2004 resulted from a national conspiracy to fix prices. The report "The effects of recent volatility in international petroleum markets on Canadian wholesale and retail gasoline prices" was released on March 31, 2005.
2003 Investigation The Bureau conducted an investigation into increasing retail gasoline prices in Canada during February and March 2003 price increases. The Bureau found that theses increases can be attributed to increasing crude oil prices due to world events and abnormally cold weather on the eastern seaboard of North America. The Bureau updated four elements of the 2001 Conference Board report on gasoline in Canada. The Commissioner of Competition appeared before the Standing Committee on Industry, Science and Technology in May 2003.
1999 Investigation The Bureau conducted an investigation into increasing retail gasoline prices in Canada after July 1999. The Bureau found that these increases can be attributed to increasing crude oil prices on world markets, which caused wholesale gasoline prices to rise throughout North America. Given the lack of evidence of anti-competitive behaviour, it is the conclusion of the Competition Bureau that the July 1999 price increases, while dramatic, were the result of normal market forces.
1996 Investigations During the Spring and Summer of 1996, four gasoline inquiries were initiated into allegations of price fixing, predatory pricing practice, abuse of dominant position and misleading advertising against the major gasoline companies. In particular, one of the allegation was that the major gasoline companies had engaged in a national price fixing conspiracy. The investigations determined that there was no evidence to support any of these allegations.
1994 Investigation The investigation was triggered by a complaint alleging that retail gasoline prices in Ottawa were consistently 3 ¢ to 4 ¢ a litre higher than prices in Southern Ontario. The investigation gave no indication of a "general offensive" or co-ordination of anti-competitive acts on the part of the major petroleum companies to eliminate or discipline unintegrated marketers.
1991 Investigation The Bureau’s investigation of retail gasoline prices in various markets (National Capital Region, Sudbury, and other markets in Ontario and Alberta) in Canada in 1991 together with the report of an industry expert (Dr. George Lermer: Retail Gasoline Pricing in Ontario and Alberta: The Post-Kuwait Experience), found no evidence of collusion or other anti-competitive behaviour among the major oil companies.
1986 RTPC Report Executive Summary of RTPC hearings. Commission releases a three-volume report entitled "Competition in the Petroleum Industry".
Interventions/invitations July 2004 - Intervention of the Bureau before the Nova Scotia Legislature Select Committee on Petroleum Pricing. May 2003 - Intervention before the Standing Committee On Industry, Science And Technology (Recent Increases in the Price of Gasoline and update of 4 elements of the 2001 Conference Board Study). March 2000 - Intervention before the Ontario Gas Prices Review Task. April 1999 - Intervention before Standing Committee on Industry (Bill C-235). March 1999 - Standing Committee on Industry (Bill C-235). June 1995 - Standing Committee on Natural Resources (The application of the Competition Act to gasoline pricing issues). June 1991 - Bureau's Appearance, Nova Scotia House of Assembly. The Nova Scotia Board of Public Utilities' 1989 proceedings relating to the possible licensing of an independent retailer received wide media coverage. This led to hearings before the Nova Scotia Law Amendments Committee of the House of Assembly on whether or not Nova Scotia should deregulate the gasoline industry. On June 20th, representatives of the Competition Bureau appeared before the Committee to support the deregulation of the gasoline industry and to provide an overview of the Competition Act and answer questions from the Committee. Subsequently, the industry was deregulated, effective July 1st, through the passing of Bill 138 which amended the Gasoline and Fuel Oil Licensing Act, Chapter 184 of the Revised Statutes of Nova Scotia, 1989. November 1989 - The Competition Bureau intervened before the Nova Scotia Board of Public Utilities in support of an independent gasoline retailer and wholesaler seeking a licence to open a retail outlet in Truro, Nova Scotia. At the time, the gasoline industry was regulated by Nova Scotia laws in terms of licencing entry, setting wholesale prices, and regulating retail margins. The Competition Bureau's intervention focussed on the pro-competitive effects of allowing independent retailers to open outlets. The Bureau submitted that a free market, allowing the opportunity for the expansion of independent retailers, would enhance competition and greatly benefit the public interest. The Board denied the retailer's application and the retailer's appeal to the Supreme Court of Nova Scotia, appeal Division, was dismissed on November 20.
Others 2001 - Conference Board Study The Conference Board of Canada said in its 2001 study on the Canadian gasoline markets that Canadians are well served by the current market system that determines gasoline prices. It also pointed out that Canadians enjoy some of the lowest gasoline prices in the world. The Conference Board also concluded that the change in the retail price of gasoline in response to a change in crude oil prices was the same for both increases and decreases in prices. 
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Created: 2005-09-22 Updated: 2006-09-19 |
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