Heated debate
Bread scandal puts focus on immunity program
The national bread price-fixing scandal has sparked heated debate over the Competition Bureau’s immunity granting program, with a law enforcement expert defending the practice and a government accountability critic arguing it just lets offenders get away with crimes.
Bakery wholesaler George Weston Ltd. and subsidiary grocer Loblaw Companies Ltd. were granted immunity from prosecution in return for co-operation in the price-fixing probe under a long-standing bureau program that grants freedom from sentencing to the first party in a cartel who volunteers to co-operate.
According to court documents released Wednesday, the bureau alleges that senior officers at George Weston and rival Canada Bread Co. Ltd. communicated to raise prices in lockstep, then met with five national bread retailers who agreed to implement the higher prices.
“If you have an effective whistleblower program and you have the resources to be doing effective best-practice inspections and audits, then the immunity program just amounts to letting one of the violators off the hook. And
that’s a bad idea,” said Duff Conacher, co-founder of Democracy Watch.
Conacher said the Competition Bureau’s immunity program offers an offending company an escape route if it becomes aware that its violations are about to be exposed — for example, if a disgruntled employee threatens to do just that.
He said the bureau would be better off if it provided sufficient compensation and better protection for whistleblowers to offset their significant personal risk of losing their jobs or being taken to court.
The immunity program was employed in 2007 when Cadbury Adams Canada Inc. agreed to provided details of a chocolate price-fixing conspiracy in return for avoiding prosecution. The investigation resulted in criminal charges against three companies and three individuals, and one of the companies, Hershey Canada Inc., subsequently pleaded guilty and was fined $4 million in 2013.
“The bureau’s immunity and leniency programs offer powerful incentives for organizations and individuals to come forward and co-operate with the bureau’s investigations, and have proven to be among our best weapons to combat criminal cartels under the Competition Act,” the bureau stated in 2015 as it announced charges had been stayed against the rest of the defendants.
Investigator Sandy Boucher of accounting firm Grant Thornton said being able to offer immunity is a vital tool in crime-fighting. “If you are trying to investigate and prosecute people involved in conspiracy, there really isn’t a better way to do it than to get a co-operating insider.”