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Provinces promised crackdown on pandemic price gouging. In fact, there have been few repercussions – CBC.ca

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Within weeks of the coronavirus pandemic being declared, one premier after another made tough promises to stop price gouging on essential products. Yet, CBC’s Marketplace has learned that despite tens of thousands of reported complaints, little legal action has been taken across the country.

Marketplace reached out to all provinces and territories and was told consumer complaints to government only led to one business being charged. It’s unclear how many, if any, charges were laid by local bylaw officers. 

A business in Alberta selling personal protective equipment at high prices — $39 for hand sanitizer and $120 for masks — was issued multiple written warnings and orders to lower prices before being formally charged by Service Alberta with failing to comply with a director’s order under the Consumer Protection Act. The company pleaded guilty in September and was fined $1,500. 

This, despite tough talk from a number of premiers.

“We’ve put in place restrictions on price gouging,” B.C. Premier John Horgan announced in May.

“We’re gonna go after you, and throw the book at you,” Alberta Premier Jason Kenney said in April.

“You’re done, you’re gone…. If you’re convicted, you could face … a year in jail,” Ontario Premier Doug Ford said in March. 

Every province, aside from Quebec and New Brunswick, has a law prohibiting price gouging. But these laws simply state sellers cannot sell goods for prices that “grossly” exceed market prices. There is no federal, provincial or territorial law in Canada limiting price markups on consumer goods during a state of emergency. 

Many U.S. states have such legislation. For example, in California, product and service prices cannot increase by more than 10 per cent once an emergency is declared. Kansas limits price increases to 25 per cent.

Provinces confirmed that the majority of price-gouging complaints received were about personal protective equipment and other essential products like disinfecting wipes, toilet paper and paper towels. 

Data gathered by Statistics Canada for Marketplace shows that the price of disinfecting wipes, hand sanitizer and toilet paper had reached higher-than-average prices during the pandemic. 

WATCH | What happened to the promised crackdown on pandemic price gouging?

Canadians have been complaining for months about pandemic-driven price gouging for all kinds of essentials, from hand sanitizer to toilet paper, but Marketplace discovered there’s been hardly any legal action taken by the government despite a promised crackdown. 2:00

April saw the largest price spikes for toilet paper, the product that made headlines around the world when people started hoarding it. Prices averaged $9.41 for 12 rolls. The price has since returned back to normal averages, around $6.70. 

The average price of hand sanitizer shot up in May, nearly $3 more than in previous years. June showed the price of hand sanitizer lowering, but still higher than average. 

Since March, the average price of 35 disinfecting wipes has been higher than $3. Prior to March, the price averaged around $2.43 per pack.

No charges in Ontario investigations

Ontario received the highest number of price-gouging complaints — about 29,500 — after a campaign to promote the province’s price-gouging hotline. 

  • Watch Marketplace Fridays at 8:00 p.m., 8:30 p.m. NT, or stream any time on CBC Gem

To date, Ontario has referred around 900 of those complaints to law enforcement. Marketplace reached out to all police services the province said it forwarded complaints to. Each service confirmed no charges had been laid. 

Alberta and B.C., which received the most complaints after Ontario, as well as Ontario would not confirm the criteria to refer complaints for further investigation by law enforcement or special task forces.

In a statement, Ontario said revealing that benchmark could compromise investigations. Alberta and B.C. cited the difficulty in determining what is actually price gouging and what is a reasonable cost change due to the current market.

Premiers John Horgan, Doug Ford and Jason Kenney made big promises to fight price gouging during the pandemic, but enforcement agencies say few fines have been issued. (The Canadian Press)

Enforcement agencies told Marketplace that most complaints were either unfounded, or resulted in a warning to the business, which then lowered the price on the products in question. 

In written statements to Marketplace, both Alberta and B.C.’s consumer protection agencies wrote that the priority is educating and advising businesses to encourage voluntary compliance. This would also avert a needless months-long investigation, Alberta’s Ministry of Service wrote.

Ontario also said it sent out 1,650 notification letters to businesses, and is taking “decisive action” against retailers that charge excessive prices. 

Manufacturer says price of some hand sanitizers ‘obscene’

Paul Kowdrysh, president and CEO at Protair-X Solutions Group, a hand sanitizer manufacturer, said that he’s had to increase his prices by about 23 per cent due to rising costs. This lowered his profit margin, he said.

“I don’t think, in a time of need and a time of crisis, that you need to make the same margin you’ve made in the past,” he said.

Marketplace showed Kowdrysh multiple hand sanitizers for sale during the pandemic. 

Kowdrysh called a 500 ml bottle for sale from a Guardian Pharmacy for $19.99 “obscene.”

Marketplace found one of the most expensive hand sanitizers on Walmart.ca – $18.99 for 70ml. Comparing costs per litre of all products, that translates to $271.29/litre compared to average costs of $29.44/litre in Canada in May 2020. (Wendy Martinez/CBC)

“That’s extremely expensive for that size of product,” he said. Guardian Pharmacy told Marketplace the price was a result of scarcity at the time. 

Kowdrysh’s own prices were inflated at a Nations in Toronto — one litre selling for $34.99. 

“I am very surprised,” he said. “That’s unacceptable as far as I’m concerned.” 

Kowdrysh told Marketplace he subsequently stopped selling to the distributor that he said over-priced his products.

Marketplace reached out to Nations about selling his product at such a markup, and the company said the higher prices were a result of products being difficult to acquire, and to maintain profit margins. 

Paper towel price hikes

Statistics Canada confirmed that in April 2020, the average price of a package of six paper towel rolls increased to its highest price — $9.54 — since at least January 2017, when the average price was $5.69.

In April, paper towel shelves across Canada were bare as consumers scrambled to stock up. After crunching numbers for Marketplace, Statistics Canada confirmed paper towel prices were the highest they’d been in recent years. (Bobby Hristova/CBC)

For small businesses, those increases could be detrimental. 

Saga, a tattoo artist based in Calgary who goes by only one name, could be paying thousands of dollars more annually for paper towels alone. 

“I do a lot of colour tattoos, really large tattoos,” said Saga. “So in a day, sometimes I can use three, sometimes six full rolls of paper towels.” 

Heather Ashley, who shops for Saga’s supplies, told Marketplace that she’s had to shop around a lot more. “One day I actually had to go to three separate stores,” she said. “The exact same amount of paper towels … a six-pack … ranged from $6.99 upwards to $16.99.” 

Mendoza, owner of Grapevine Tattoo in Vancouver who also is known only by one name, has concerns about price increases on products too. Just before the pandemic he was purchasing masks for his artists at pennies per mask. When Marketplace spoke with him in May, prices sat at around a dollar per mask. 

Mendoza estimates that the increased costs in masks, hand sanitizer, plexiglass and other pandemic essentials will add $10,000 to $20,000 to his annual operating costs. 

“It costs more for everybody to do their job,” he said. “It’s been definitely a big shock to the system.”

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Commander leading COVID vaccine rollout leaves pending investigation

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A top military commander tasked with Canada‘s COVID-19 vaccine rollout has unexpectedly left his assignment pending the results of a military investigation, a government statement said on Friday.

Major-General Dany Fortin was brought in by Prime Minister Justin Trudeau’s Liberal government to lead Canada‘s vaccine distribution in November, describing the effort as the greatest mobilization effort the country has seen since World War Two.

The brief statement did not elaborate on the nature of the investigation. Acting Chief of the Defence Staff, Lieutenant-General Eyre will be reviewing next steps with Fortin, the statement added.

Fortin, who has decades of experience including in warzones, was a key fixture of the government’s vaccine briefings and his team coordinated the logistical challenge of reaching vaccines to Canada‘s far-flung places.

Canada‘s vaccination campaign has picked up pace after a rocky start, with some 43.1% of the country’s population receiving at least one dose.

 

(Reporting by Denny Thomas; Editing by Sam Holmes)

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Canada slams ‘unconscionable’ Iran conduct since airliner shootdown

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Canada on Thursday condemned Tehran’s “unconscionable” conduct since Iranian forces shot down an airliner last year, killing 176 people, including dozens of Canadians, and vowed to keep pressing for answers as to what really happened.

The comments by Foreign Minister Marc Garneau were among the strongest Ottawa has made about the January 2020 disaster.

“The behavior of the Iranian government has been frankly unconscionable in this past 15 months and we are going to continue to pursue them so we have accountability,” Garneau told a committee of legislators examining what occurred.

Iran’s Revolutionary Guards shot down the Ukraine International Airlines flight shortly after it took off from Tehran Airport. Iran said its forces had been on high alert during a regional confrontation with the United States.

Iran was on edge about possible attacks after it fired missiles at Iraqi bases housing U.S. forces in retaliation for the killing days before of its most powerful military commander, Qassem Soleimani, in a U.S. missile strike at Baghdad airport.

Garneau complained it had taken months of pressure for Iran, with which Canada does not have diplomatic relations, to hand over the flight recorders for independent analysis and said Tehran had still not explained why the airspace had not been closed at the time.

In March, Iran’s civil aviation body blamed the crash on a misaligned radar and an error by an air defense operator. Iran has indicted 10 officials.

At the time, Ukraine and Canada criticized the report as insufficient. But Garneau went further on Thursday, saying it was “totally unacceptable … they are laying the blame on some low-level people who operated a missile battery and not providing the accountability within the chain of command.”

Canada is compiling its own forensic report into the disaster and will be releasing it in the coming weeks, he said.

 

(Reporting by David Ljunggren; Editing by Peter Cooney)

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Mexican union was set to lose disputed GM workers’ vote

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General Motors Co workers in Mexico were on track to scrap the contract negotiated by one of the country’s biggest unions, according to a Mexican government report on a vote last month that led to a U.S. complaint under a new North American free trade deal.

On Wednesday, the Biden administration called for a probe into allegations that worker rights were denied at GM’s Silao pickup truck plant during the vote to ratify workers’ collective contract with the Confederation of Mexican Workers (CTM).

Mexican President Andres Manuel Lopez Obrador on Thursday said he accepted the U.S. recommendation to make sure there would be no fraud in union votes, noting that many “irregularities” had been detected in the union-led vote at GM.

The CTM, which represents 4.5 million workers, is one of several traditional unions accused by workers and activists of putting business interests over workers’ rights.

A ministry report into the vote, reviewed by Reuters, shows that 1,784 workers cast ballots against keeping the CTM contract, while 1,628 workers voted to maintain it.

Allegations of interference – including the ministry’s findings that some blank ballots in union possession were cut in half – have raised suspicions among some activists and experts that the CTM may have been headed for a deeper defeat.

A follow-up vote, which the Labor Ministry ordered to take place within 30 days, could result in a wider margin against keeping the current contract, especially if more workers who were apathetic or scared of voting turned out the second time, said Alfonso Bouzas, a labor scholar at Mexico’s National Autonomous University.

“This whole new opportunity is going to awaken conscience and interest,” Bouzas said.

CTM’s national spokesman, Patricio Flores, said the union supported the regional trade deal and would comply with the law and whatever “would not harm investment in Mexico.”

He did not dispute the vote tally in the labor ministry report, but called for an investigation into the disputed proceeding before a second vote.

“We should listen to the voice of these workers and not let pressure from unions in the United States and Canada have influence right now,” CTM said in a statement.

‘DOESN’T SEEM RIGHT’

The ministry document showed that just over half of the 6,494 workers eligible to vote did so in the first of two days of voting, before labor inspectors halted the process.

If GM workers scrap their contract, either the CTM or a new union could negotiate new collective terms.

Many collective bargaining contracts in Mexico consist of deals between unions and companies without workers’ approval, which has helped keep Mexican hourly wages at a fraction of those in the United States.

The United States-Mexico-Canada Agreement, which took effect last year and replaced the 1994 NAFTA, sought to strengthen worker rights in Mexico and slow migration of U.S. auto production south of the border.

GM has said it respects the rights of its employees to make decisions over collective bargaining, and that it was not involved in any alleged violations. It declined to comment on the Labor Ministry report.

GM has indicated that it is ready to shift away from the old system that had let companies in Mexico turn a blind eye to worker rights, said Jerry Dias, the head of Canada‘s largest private sector union, Unifor.

“The rules are changing and a company like GM is not going to get caught,” he said.

Dias said he hoped to personally monitor the follow-up vote at the Silao plant.

Contract ratification votes are required under Mexico’s 2019 labor reform, which underpins the renegotiated free trade pact, to ensure workers are not bound to contracts that were signed behind their backs.

(Reporting by Daina Beth Solomon; Editing by Christian Plumb, Richard Pullin, Paul Simao and David Gregorio)

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