Fair and competitive bidding ensures that Canadians receive the highest value for their tax dollars
The Competition Bureau is warning businesses that participating in illegal agreements related to public contracts, such as bid‑rigging and price‑fixing, can lead to criminal charges, significant fines and lasting reputational harm.
The risk of illegal agreements between competitors is heightened in periods of rapid growth in public procurement opportunities. As the number of public contracts calling for bids increases, Canadian companies pursuing the same opportunities may find it tempting to coordinate bids, prices, or outcomes to reduce uncertainty and secure a win.
Cracking down on illegal agreements between competitors targeting public contracts has long been a priority for the Competition Bureau. Businesses have legal obligations under the Competition Act when bidding on federal, provincial, territorial, and municipal contracts. Ensuring businesses follow these rules protects the significant investments being made by the Government.
Agreements between competitors, such as bid-rigging, price-fixing, market allocation, supply restriction, or wage-fixing and no-poaching agreements are illegal and criminal offences under the law. The consequences for these practices can be significant fines and possible prison sentences of up to 14 years. Businesses who collude can also face class action lawsuits for damages. And in the case of bid-rigging on public sector contracts, businesses can face debarment by public procurement agencies, and be cut off from bidding on future projects.
Businesses must understand how to compete fairly, act independently and take proactive steps to avoid pitfalls when submitting bids. To support lawful and independent bidding, the Bureau encourages businesses to use trusted guidance tools and implement compliance programs that help employees understand and avoid collusion risks.
Fighting collusion protects taxpayer investment
Collusion in public contracts undermines fair competition and erodes public confidence in government contracting. Illegal agreements between competitors can increase the cost of public procurement by more than 30%, diverting public funds away from taxpayers and essential public services.
When businesses operate in a fair and competitive manner, it helps ensure that Canadians receive the highest value for their tax dollars, allowing governments to reduce costs while improving the quality of goods and services procured. Playing by the rules also ensures that small and medium sized businesses and new market entrants can compete on a level playing field, rather than being excluded by collusion among established suppliers.
The Competition Bureau is committed to cracking down on collusion, and we'll take action if we find evidence of illegal agreements between competitors.
