Frustrated customers file complaints over snow clearing contracts
Companies referred clients to competitors, hiked prices, south Ottawa residents say
Customers of three Ottawa snow removal companies have complained to the Competition Bureau over what they're characterizing as a dodgy deal that drove up fees, but the businesses say they've done nothing wrong.
Riverside Park resident Talia Brimmell said she used to be able to choose between several competing companies to find the best price to get her driveway cleared in the winter.
But a few weeks ago she got a letter from Odie's advising her the company was no longer serving her neighbourhood, and referring her to a competitor, JR Lawn and Snow. The letter even included a new contract with her personal information already filled out.
A price increase is daunting for them … and a sudden lack of competition is causing a lot of concern.- Travis Croken, Riverside Park Community Association
The quote from the new company was 30 per cent higher than what she paid last winter.
Brimmell's neighbour received a strikingly similar letter and contract from her previous contractor, Andy's Snow Blowing and Lawncare.
"This was not an easy decision, but a decision that must be made to remain profitable and provide a level of service that we can stand behind," both letters said.
At the same time, residents of Hunt Club have received letters from both Andy's and JR, referring them to Odie's.
Nine customers have shared their letters with CBC. They show the prices in Riverside Park charged by JR Lawn and Snow have risen by between 30 and 74 per cent over last year's rates.
Dividing territory illegal
At least two residents in Riverside Park have filed formal complaints to the Competition Bureau, but the federal agency won't comment about specific cases.
"We have to do our work confidentially, but I can confirm that this type of conduct is on our radar," said Pierre-Yves Guay, the associate deputy commissioner of the bureau's cartels directorate.
In a warning to snow removal companies across Canada issued in 2017, the Competition Bureau specifically warned about the practice of dividing territory to hike rates.
If they are talking to their competitors about prices, territories or customers, they are walking on thin ice.- Pierre-Yves Guay, Competition Bureau
"If they are talking to their competitors about prices, territories or customers, they are walking on thin ice," Guay said.
The practice is illegal under the Competition Act, and punishable by fines of up to $25 million and/or a prison sentence up to 14 years.
When companies come to such illegal agreements, it often results in higher prices and removes the incentive to provide high-quality service to customers, Guay said.
"That's why cracking down on illegal agreements between consumers is really the top priority of the Competition Bureau."
'Standard' practice, company says
In response to CBC's questions, JR Lawn and Snow said it purchased parts of other companies' businesses to create greater "operational efficiencies."
As part of that sale, the company gained access to their competitors' customer lists, Vincent Marquardt, director of operations for JR Lawn and Snow, explained in an email.
"As part of the agreement of purchase and sale, the seller agrees that it will not attempt to take back from the customer list which has been sold to us," Marquardt wrote. "This is standard in any agreement of purchase of sale."
He added that increasing the company's market share as part of an agreement of purchase and sale is permitted under the Competition Act.
Andy's Snow Blowing and Lawn Care owner Cindy Harris-Weir confirmed her company sold part of its business in Riverside Park and Hunt Club to JR.
As for the price increases, Marquardt said they reflect the costs and the quality of the company's equipment, personnel and service. His statement did not explain why JR has referred its customers to Odie's in the Hunt Club area.
Harris-Weir said Andy's never recommended Odie's to its customer, and she's concerned her company has been "misrepresented by another business."
In an emailed statement, Harris-Weir said Andy's withdrew from the area because it felt its customer base had dwindled to the point where the company could no longer offer top-quality service there.
She said the company shared its customers' information with JR as part of the sale, but said she never shared customer information with Odie's.
Odie's has not responded to CBC's questions, despite repeated attempts to reach the owner by phone and email.
JR did not respond to further questions about where Odie's got customer information.
Steep price hikes
Some Riverside Park residents told CBC they've tried shopping around to find cheaper quotes, but haven't been able to find a company besides JR Lawn and Snow that will service their neighbourhood.
"We were all really surprised to find out that we seemed to have only one option," Brimmell said. With a one-year-old at home, she said she doesn't have time to shovel her own driveway in the mornings.
One man who received a letter from Andy's said he and his wife are seniors who rely on snow plow service for their front walk and driveway. The quote they received from JR is 74 per cent higher than the price they paid last year, and they haven't been able to find any other providers.
The man shared the details of his snow plow contracts with CBC, but asked not to be named for fear the company would refuse them service, leaving them with no options at all.
"My feeling is [JR Lawn and Snow] is gouging us," he said.
The Riverside Park Community Association said it's been "inundated" with calls from residents.
"We have seniors living off a fixed income, and young families struggling with the cost of daycare," said Travis Croken, vice-president of the community association.
"A price increase is daunting for them … and a sudden lack of competition is causing a lot of concern."