A third guilty plea in residential construction bid‑rigging scheme in Montreal

More than a decade after a tip led the Competition Bureau to conduct an investigation on eight Montreal-area companies suspected of rigging bids for private sector contracts, a Quebec numbered company specializing in the installation of ventilation systems was fined $140,000 fine after it plead guilty to one count of bid-rigging.

The company, 9201-2640 Québec Inc., admitted in Quebec Superior Court that it conspired with two competing firms, Les Entreprises Promécanic ltée and Les Industries Garanties ltée, to obtain a ventilation contract by ensuring it offered the lowest bid.

On December 2010, the Competition Bureau laid criminal charges against eight companies and five individuals accused of rigging bids for private sector ventilation contracts for residential high-rise buildings in the Montreal area. The Bureau said that it uncovered evidence indicating that several companies specializing in ventilation, air conditioning and heating services, “secretly coordinated their bids” between 2003 and 2005 in order to pre-determine the winners of the contracts, while blocking out competitors.

The charges against François Lemay, president of 9201-2640 Québec Inc., were withdrawn in exchange for his full cooperation, including the sharing of any information that could assist the Competition Bureau’s investigation. The numbered company is the third firm that pleaded guilty for participating in the bid-rigging scheme.

“Given the weight of the evidence against it, a third company admitted to colluding with competitors in the construction industry and pleaded guilty to bid-rigging,” said Matthew Boswell, senior deputy commissioner of competition. “These pre-trial resolutions help secure testimony that reinforces the evidence against the other accused, and allow the Bureau to settle cases in a quick, effective and cost-efficient way that benefits all Canadians.”

In 2011, Promécanic plead guilty to three charges of bid-rigging before Quebec Superior Court and was fined $425,000. The company admitted to secretly arranging with its competitors bids on three calls for tenders issued by general contractors in 2004 and 2005 to install ventilation systems. As part of the guilty plea, Quebec Superior Court issued a ten-year prohibition order against Promécanic and its estimator, Joël Perreault, preventing them from engaging in acts that could lead to further contraventions of section 47 of the Competition Act. Perreault as well as the company must also fully cooperate with the prosecution of the remaining accused in this case.

In March 2016, Les Entreprises de ventilation Climasol Inc. and its president, Roch Raby, plead guilty before Quebec Superior Court in Montreal to similar offences. They were fined $130,000 and $10,000 respectively for their role in an agreement to rig bids for a private sector ventilation contract in the Faubourg St‑Laurent Phase II project in Montreal. Raby admitted that he had secretly participated in the coordination of his bid with competitors to pre‑determine the winner of the contract.

The trial of the other accused, Lys Air Mécanic Inc. and its vice-president France Sergerie, and Les Industries Garanties ltée and its estimator, Houmam Nashar, is scheduled for October 2017.

Under section 47 of the Competition Act, bidders are prohibited from entering into an agreement not to submit bids or to submit pre-arranged bids when responding to a bid or a call for tender. Under the Act, there are three distinct criminal bid-rigging offences. It is a criminal offence to agree to not to submit a bid or tender. It is also illegal to agree to withdraw a bid or tender already submitted. And it is a criminal offence to submit a bid or tender that is reached by agreement.

According to competition lawyer Steve Szentesi, bid-rigging in Canada is per se illegal. “No anti-competitive effects on a relevant market (or markets) needs to be established in order to make out an offence,” wrote Szentesi. “However all of the elements need to be established on the criminal standard, such as beyond a reasonable doubt.”

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