03/21/2012 08:02 EDT | Updated 05/21/2012 05:12 EDT

Canadian Tire, Pioneer Guilty In Gas Price Fixing In Kingston, Brockville

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Canadian Tire outlets in Brockville and Kingston, Ont., colluded with other gas stations to fix gas prices in what the Competition Bureau described as a "criminal price-fixing cartel."

The bureau said that for seven months in 2007, the company along with Pioneer Energy and Mr. Gas fixed gas prices in the two markets. The bureau is also investigating other attempts to collude in the Southeastern Ontario market.

Under this scheme, the gas retailers or their employees in the markets agreed over the phone on how they would fix prices. The bureau searched six sites and five residences as part of the investigation, and also conducted wiretaps and seized records.

“The accused gasoline retailers agreed among themselves to only follow price changes, by matching major-branded competitors who had either increased or decreased prices,” the bureau said in its backgrounder detailing the investigation.

After being found guilty, the two companies were fined $2-million and placed under “court order” for 10 years. Their employees must also undergo training.

"Consumers in Kingston and Brockville were denied a competitive price for gasoline as a result of this criminal price-fixing cartel," Melanie Aitken, bureau commissioner, said in a statement.

Toronto-based Canadian Tire, which has 1,700 retail and gasoline outlets, was fined $900,000 for price fixing in both markets, as was Pioneer, which has to pay $985,000. Mr. Gas pleaded guilty in Brockville and was fined $150,000.

Gas prices this spring are expected to reach record highs. One report calls for $1.50 to $1.55 a litre by April. The average price of gas in Canada has been creeping steadily upward since the start of the year, rising from $1.17 at the end of December to more than $1.25 this week.

Gas prices tend to fluctuate by season. February traditionally tends to be a period of lower gas prices, while springtime sees large jumps in demand and therefore prices. With prices already at the $1.25 mark, many gas market watchers fear a record-setting spring.

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