Class action seeking damages for high gas prices in BC shot down by BC Supreme Court
The plaintiff claimed that companies have been "systematically overcharging" consumers and hiking up gas prices.
A BC Supreme Court has shot down a class action that sought damages for nearly everyone who’s filled gas in the province since 2015 from several gas companies, including Parkland Fuel Corporation—which operates the Burnaby Refinery.
The plaintiff, Antonio Pantusa, claimed that Parkland, along with Suncor Energy, Imperial Oil, Shell Canada, and Husky Energy, “have been systematically overcharging their wholesale customers, who then sell to consumers”, in breach of a BC provision prohibiting suppliers from engaging in an ‘unconscionable’ pricing practices. In other words, Pantusa accused the companies of conspiring to fix their prices.
Pantusa alleged that as a result, British Columbians have been paying inordinately high prices at the pump.
His claim relied on findings from a 2019 inquiry into gas prices in BC, commissioned by the provincial government and led by the BC Utilities Commission.
The BCUC’s report, which was released on August 30, 2019, found that there was an unexplained disparity of 13 cents per litre in the price of gas in Metro Vancouver compared to neighbouring markets, like the rest of Western Canada and Seattle.
While the commission said that unexplained disparity was proof that large gas companies can exercise power over the market, it also found no evidence of misconduct like agreements to fix prices.
In their application to dismiss Pantusa’s action, the companies jointly denied any conspiracy and said that increased demand since 2015 meant that oil needed to be imported to BC (rather than being sourced only from Burnaby Refinery and the Prince George Refinery).
The defendants said also that the Trans Mountain Pipeline, by which most imports enter BC, has become “increasingly constrained” since 2015. And they provided affidavits saying that there have never been any agreements among them in relation to pricing.
Justice Warren Milman agreed with the companies that Pantusa’s allegations of conspiracy should be dismissed from the claim altogether, pointing out that both the defendants’ evidence and the BCUC report refuted those accusations.
Milman also found that companies couldn’t be considered to be acting “unconscionably” simply based on inflated prices and a market that was less competitive than ideal.
“… The doctrine of unconscionability would be stretched beyond all recognition. It would render actionable conduct that has long been held to be lawful. It would also extend the reach of the doctrine to cover many other segments of the economy, wherever a market is less than perfectly competitive,” he wrote in his reasons for judgement.
“Mr. Pantusa’s claim, as now advanced, effectively seeks to have the court regulate wholesale gasoline prices, a task for which it is not well suited. The problem identified by the BCUC is one of public policy. Any solution, if one is called for, lies more properly with government.”
Milman said he wasn’t convinced that allowing Pantusa’s claim to proceed to discovery and trial would have any prospect of improving matters—saying that the dispute was about public policy, rather than any unconscionable actions by the defendants.
And he also noted that the BCUC similarly said that if it were called on to regulate gas prices in the province, it may not do a better job than is currently being done by the companies involved.
The decision came last Wednesday, as gas prices in Metro Vancouver reached their highest levels ever—largely thanks to the Russian invasion of Ukraine pushing prices up worldwide.
Prices at many stations across the Lower Mainland surpassed $2 a litre by Friday—although, as the Beacon saw at the Shell near Kingsway and Grange Ave, some remained just under.