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A group of local contractors admitted on Wednesday that they violated the federal Competition Act roughly 10 years ago during a scheme to bid on projects for Manitoba Housing.
Geoff Gregoire, Guy Pringle, James Kauk, Ryan Lamont and Doug Gunnarson appeared in Brandon Court of King’s Bench to plead guilty under the act. The contractors reached an agreement with the Crown prosecutor to accept fines as high as $61,000 each on condition that the criminal charges against them be stayed.
The agreement came as the Crown acknowledged weaknesses in its evidence that could undermine the case. Defence lawyers added it was a representative from Manitoba Housing who had approached and encouraged the contractors to bid on the projects in a way that led to the Competition Act violations.
Under the plea bargain, the contractors would admit violation of the Competition Act and receive fines of: $61,000 to Gregoire, $53,000 to Kauk, $33,000 to Pringle, $25,000 to Gunnarson and $24,000 to Lamont. Justice Elliot Leven noted that the fines reflected the length of time each contractor was involved in the scheme.
The contractors were previously charged with conspiracy to commit fraud over $5,000, a Criminal Code violation, and conspiring to allocate contracts under the Competition Act.
The Crown said to the court on Wednesday that the contractors, before they submitted their project offers to Manitoba Housing, would discuss their bids amongst each other and decide who would win the bidding process. The Crown said this created an uncompetitive bidding system that appeared competitive.
Prosecutor Dan Manning said the Crown had several concerns with the strength of evidence going to trial. Examples included that the contractors’ roughly 10-year-old text messages, seized as evidence, were now harder to submit to court because Canada had strengthened its digital privacy laws.
Other issues included that, had the matter gone to trial, a Crown witness would be testifying against the contractors based on 10-year-old memory and notes, and that a separate testimony was shaky as the witness was interviewed by investigators using leading questions.
In addition, defence lawyers said it was a Manitoba Housing representative who “brought in” all five contractors into the scheme and encouraged them to bid on projects in an anti-competitive way. Details about the representative, such as whether they were charged or penalized, were not discussed in court.
The defence also stressed that the contractors delivered high-quality work and netted profit margins that are typical of the industry.
Defence lawyer Richard Wolson said that the contractors made profit margins averaging about 10 per cent on the projects where the bids were placed that violated the Competition Act. He said that margin is within reasonable bounds for the industry, and noted the Crown agreed the finished projects for Manitoba Housing were quality, and done at an expert level.
Prosecuting lawyer Dan Manning told the court that the Crown can prove more than 50 bids were manipulated in a time period from 2011 to 2016. The total value of those bids was $3.3 million.
Before closing the court proceedings, Leven said he supported the agreement reached between the defence and Crown lawyers. Leven said the penalties were logical and proportionate, and the guilty pleas were a sign of remorse. He said with the potential weaknesses in evidence, it was possible some of the accused may have been acquitted at trial if the prosecution proceeded without a plea bargain.
The goal of justice proceedings in this realm is to deter and denounce crime, Manning told court. He noted that the fines were issued against each contractor individually, which carries a heavier penalty than if the fine were issued to a corporation in a similar case.
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