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The CN Tower, office buildings and condos are seen in downtown Toronto. The Competition Bureau is invesigating what it calls ‘allegations of bid-rigging and conspiracy’ involving the Greater Toronto Area’s multimillion-dollar condo renovation industry.Fred Lum/The Globe and Mail

Canada's Competition Bureau is setting its sights on the booming condominium sector in the Greater Toronto Area, ordering more than 100 condo boards to hand over records as part of a sweeping criminal investigation.

The bureau is probing what it calls "allegations of bid-rigging and conspiracy" involving the region's multimillion-dollar condo renovation industry.

Earlier this month, a Toronto court granted an order allowing federal Commissioner of Competition John Pecman to compel 141 condominium buildings across the GTA to turn over records related to "the budget, tendering, bidding, negotiating and awarding of a contract for renovations to the common areas of the condominium corporation's building(s)," according to court records.

The investigation was launched by the federal bureau's Cartels Directorate and requests condo boards provide details about the companies and individuals involved in bidding on contracts to renovate shared spaces, such as lobbies, party rooms and parking garages.

"The bureau is looking into allegations of bid-rigging and conspiracy in the supply of condominium refurbishment services in the Greater Toronto Area," Competition Bureau spokesperson Marie-France Faucher confirmed in an e-mail. Both are considered to be criminal charges under the federal Competition Act.

While most of the buildings are in Toronto, the bureau's investigation involves condominiums from Burlington to Newmarket to Whitby. All of the buildings have hired companies to perform extensive renovations to their common areas.

The renovation contracts date as far back as August of 2006 and as recently as September, 2014, and the bureau said in court filings that it may expand its investigation to other condos.

Those familiar with the situation say the board may be targeting up to 400 condominiums whose names were found on computers seized by investigators roughly a year ago as part of a probe into a small group of three or four interior designers and contractors involved in condo renovations.

Condo lawyers say the federal watchdog's order compelling more than 100 individual condo buildings to hand over detailed financial records is highly unusual.

"I've been doing this 28 years and I've never seen the Competition Bureau ask condominiums any information," said lawyer Mario Deo, who is also president of the Canadian Condominium Institute, a condo-industry lobby group.

The May 10 court order gives condo boards 90 days to turn over the information, which has left many boards scrambling to compile records that go back up to a decade.

"They're not the world's best record-keepers," said condo lawyer Audrey Loeb, who was working on drafting letters for her clients that explain their legal obligations in plain English. "In a single-purpose company, you would have all these records, but in a condo, God only knows what they're going to find."

Most of the details of the Competition Bureau's investigation were sealed by the court. Bureau lawyers wrote in court filings that the records should be sealed "due to the size and complexity of the bureau's investigation" and also over fears that "future targets … may destroy or remove evidence."

However, Ms. Faucher said condominium owners were "not the targets" of the investigation. She declined to elaborate, citing the confidentiality of the investigation, which the bureau says is "ongoing" and had not yet found any evidence of wrongdoing. "Should evidence indicate that the Competition Act has been contravened, the Commissioner will not hesitate to take appropriate action," she wrote.

Legal experts say the bureau appears to be targeting companies that supply the goods used in the renovations or the interior-design companies that oversee the projects, rather than condo boards or property managers. The federal agency may be looking into whether condo directors and owners are the victims of potential collusion and price-fixing when they enter into contracts for renovation projects that can run into the millions of dollars.

"I think what they're worried about is people from whom our clients may have bought goods may have done something improper or illegal in terms of pricing their goods," Ms. Loeb said.

Most condos hire third-party professionals to manage their renovation projects, including dealing with suppliers and handling budgets. Many use a formal tender process to award renovation contracts, involving sealed bids and overseen by professional engineers, particularly for large and expensive projects.

But the contracts are just as often left to relatively unsophisticated condo owners struggling to navigate a complex and expensive bidding process.

"If the goal of this investigation is to say: Listen, there are forces in the marketplace that are causing condo corporations to spend more money than they otherwise ought to, then it's probably a good thing," condo lawyer Chris Jaglowitz said.

Robert Weinberg, president of the Association of Condominium Managers of Ontario, said members of his property-management organization adhere to strict ethical standards when it comes to managing the bidding process for renovation contracts, including requiring interior-design companies to disclose any relationship they have with suppliers.

But the association represents a minority of the more than 300 property-management companies in the province. "Whether or not it goes on, this has been a shock to most management companies who have started getting served with this," he said.

The move by the federal competition watchdog is part of a broader push by government to examine the burgeoning industry that services the proliferation of high-rise construction in the GTA, where close to three-quarters of new homes are condos and many aging buildings now require costly upgrades.

"There is this gargantuan sea change in just the size and the value of the services and materials that these condo corporations consume," Mr. Jaglowitz said. "It is now a sizable portion of just about any aspect of the economy."

The provincial government recently overhauled its condo laws and is working on regulations that would require condo boards to award certain contracts through a proper tender process.

Canada Revenue Agency has also looked into the financial activities of condo corporations, which are considered non-profits but that often have profitable businesses renting out parking spaces, empty suites or signing leases with companies to put solar panels and cellular towers on the rooftops.

In a 2013 report that charity lawyer Mark Blumberg obtained under the federal Access to Information Act and posted to his blog last month, the CRA concluded some of the profits were actually flowing to individual condo owners and should be taxed as personal income.