Canadian Manufacturing

Review finds no evidence of propane price fixing in Ontario, Quebec

NEB, Competition Bureau found no evidence anti-competitive behaviour drove up prices



OTTAWA—A joint report from the National Energy Board (NEB) and Canada’s Competition Bureau has found no evidence of price fixing that drove the cost of propane up over the winter.

“The Competition Bureau did not uncover sufficient evidence, based on the information collected, to conclude that anti-competitive behaviour exacerbated the impact of high prices on consumers,” according to the report published this month.

The federal government requested the joint review in January after a “fairly serious” propane supply crisis that led to propane prices nearly doubling since the fall.

In the report, the NEB and Competition Bureau said a combination of factors led to the spike in price, but price fixing or other anti-competitive behaviour has been ruled out.

A colder-than-normal winter across the eastern parts of Canada and the United States led to increased demand and “supply chain congestion and disruptions,” and rapid growth in U.S. exports of propane overseas and increased demand from the farming sector in the U.S. Midwest were all determined to be factors in the winter woes, according to the report.

The report notes that while tight supply continued for most of the winter, prices “came down considerably” after peaking in late January, spurring Ottawa’s call for the investigation.

Redirection of supply from the U.S. Gulf Coast to the U.S. Midwest helped moderate prices in both Canada and the U.S., the report reads.

The report goes on to conclude that there is no evidence to suggest a long-term issue with supply-demand imbalance.

“We sympathize with Canadians who were affected by the issues with the availability and pricing of propane this past winter, given the importance of this commodity to heat their homes,” Natural Resources Minister Greg Rickford and Industry Ministry James Moore said in a joint statement issued following the report’s release.

“Fortunately, market conditions and prices have improved considerably, and there were no findings of longer-term market issues that would cause a repeat of last winter’s events.”

According to the ministers’ statement, investigators with the Competition Bureau and NEB interviewed more than 68 propane market players for their review.

The investigation was requested after customers in parts of Ontario and Quebec without fixed price contracts had been paying as much as $1.10 per litre for propane, up from the 70 cents-per-litre range in October.

—With files from The Canadian Press

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