Nine Years After Bread Price-Fixing Scheme, Canada’s Anti-Trust Measures Are Still ‘Weak,’ Competition Commissioner Says

Commissioner Matthew Boswell says Canada’s competition laws are out of date and enforcement is weak.

A worker restocks shelves in the bakery and bread aisle at an Atlantic Superstore grocery in Halifax on Jan. 28, 2022. The Canadian Press/Kelly Clark

Nine years after opening an investigation into how Canadian food companies colluded to fix bread prices, the competition commissioner is warning that the government’s competition laws are out of date and enforcement is weak.

“The problem of concentration in this country is getting worse. It has gotten a lot worse over the last generation and it’s something that all of us as people who are passionate about our country and our economy and policy need to address,” testified Competition Commissioner Matthew Boswell at the Senate National Finance Committee on Dec. 13.

In June, Canada Bread agreed to pay $50 million after conspiring with Weston Foods executives to increase bread prices in 2007 and 2011. At that time, Weston Foods was a subsidiary of George Weston Ltd., the parent company of grocery chain Loblaws, and Canada Bread was owned and controlled by Maple Leaf Foods.

Canada Bread pleaded guilty to four counts under Section 45 of Canada’s Competition Act, each of which comes with a maximum penalty of $10 million for the first two and $25 million for the latter two. Canada Bread received leniency in sentencing for cooperating with the Competition Bureau during its investigation.

The Competition Bureau launched its investigation in 2017 after receiving information from an anonymous source. It executed search warrants against companies such as Loblaws, Metro Inc., Walmart Canada, Sobeys Inc., Giant Tiger Stores Ltd., and Canada Bread. Weston and Loblaws were granted immunity from prosecution for their cooperation during the investigation.

The investigation is ongoing, and 17 search warrants have been served to date, according to Blacklock’s Reporter.

“I understand why people are concerned. It’s a significant endeavour. I understand people are concerned that we’re still investigating but it’s a large, complex investigation,” Mr. Boswell said.

He told the committee that Canada Bread was ordered to pay the largest fine in Canadian history for price fixing.

The price-fixing scheme was worth up to $5 billion according to court records, Blacklock’s said.

Mr. Boswell said Canada scores poorly when it comes to anti-trust measures, as competition has experienced “atrophy” in the last few decades. He said Canada’s Competition Law has been “weak” since 1986, with policies and approaches that are “out of line with the rest of the world and a weak enforcement.”

Earlier this year, federal courts and regulators approved the $26 billion takeover of Shaw Communications of Calgary by its larger Toronto rival, Rogers Communications. The Royal Bank’s $13.5 billion takeover of its seventh-largest rival HSBC of Vancouver was also approved.