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Canadian Tire pleads guilty in gas price-fixing scheme

The Canadian Tire store in Bowmanville, Ontario. In addition to the substantial size of the store, redesigned features of the automotive department include hands on touch screen product demonstrations, a designated drive-in oil change garage, lounge service centre waiting area with wifi, and a car audio booth.

Michelle Siu For The Globe and Mail/michelle siu The Globe and Mail

Canadian Tire Corp. pleaded guilty Tuesday to taking part in a "criminal price-fixing cartel" that artificially inflated gas prices in two cities in Eastern Ontario, agreeing to pay a $900,000 fine.

The national retailer, along with Pioneer Energy LP and Mr. Gas Ltd., pleaded guilty to fixing retail gasoline prices in Kingston and Brockville, Ont., between May and November, 2007, the Competition Bureau announced Tuesday.

The pleas in a Brockville courtroom came after a bureau investigation revealed evidence that "gas retailers or their representatives in these local markets phoned each other and agreed on the price they would charge customers for gasoline," the bureau said in a press release.

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The companies were fined a total of $2-million, with Pioneer facing a $985,000 fine and Mr. Gas, which pleaded guilty to price-fixing only in Brockville, will pay a $150,000 fine. They will also be subject to a court order for 10 years and must educate their employees about the Competition Act, the bureau said.

"Consumers in Kingston and Brockville were denied a competitive price for gasoline as a result of this criminal price-fixing cartel," Melanie Aitken, the commissioner of competition, said in a statement. "The bureau will not hesitate to take action when it uncovers evidence of illegal price-fixing."

The bureau said its investigation into gas-pump price fixing continues in the "Southeastern Ontario market." Similar probes have resulted in numerous charges in Quebec. The Competition Bureau, granted new powers in 2009, has stepped up its enforcement in recent years.

Liz Hamilton, a spokeswoman for Canadian Tire, said the company's participation in the price-fixing ring was the work of a single regional business manager, who is no longer with the company after an internal investigation.

The company launched its own probe after Competition Bureau first approached it with the allegations four years ago, she said. Canadian Tire co-operated fully with the bureau, she said, and has since "reinforced" its code of conduct, and brought in new training and new controls for employees.

"We've been selling gas for 53 years," Ms. Hamilton said. "And we have never come across a situation like this. … We were shocked and disappointed."

Pioneer responded to request for a comment with an e-mailed statement, saying it would continue to educate its employees about the rules governing the sale of gasoline: "Pioneer regrets that this situation occurred some five years ago and is satisfied that we were able to resolve the concerns of the Competition Bureau on a consensual basis."

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A spokesman for Mr. Gas could not be reached.

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