TORONTO — In a provincial court filing, Canada Bread Co. Ltd. claims former majority shareholder Maple Leaf Foods Inc. used the company as a “shield” to avoid liability in an industrywide bread price-fixing scheme, resulting in the bread maker having to pay a substantial fine.

Toronto-based Canada Bread on Sept. 12 filed an amended statement of defense and crossclaim in the Ontario Superior Court of Justice alleging that, in connection with the bread price-fixing arrangement, Maple Leaf violated Canada’s Competition Act and breached its management agreements with the bread company.

However, in an email statement on Sept. 13, Mississauga, Ont.-based Maple Leaf Foods rejected the charges.

The Competition Bureau of Canada in January 2016 began an investigation into alleged price-fixing in the nation’s commercial bread industry by major suppliers and retailers. Covering a period from late 2001 to March 2015, the probe led to class actions being brought against Canada Bread and, in June 2023, a settlement in which the company agreed to pay a C$50 million fine.

Canada Bread was acquired by Grupo Bimbo SAB de CV in May 2014. When the C$1.83 billion deal was announced in February 2014, Maple Leaf owned 90% of the bread company’s voting stock.

In announcing its counterclaim last week, Canada Bread said that, from 1995 to 2014, Maple Leaf was its controlling shareholder and appointed directors to serve on Canada Bread’s board and senior Maple Leaf officers to run Canada Bread. Canada Bread also said Maple Leaf represented to Canada Bread that, in performing services for the company, it would comply with all applicable laws.

“To the extent that Canada Bread engaged in any actionable anticompetitive conduct before May 23, 2014 (when Grupo Bimbo closed its Canada Bread acquisition), this conduct was carried out at the behest and direction of Maple Leaf personnel as officers or members of the board of directors of Canada Bread and for whom Maple Leaf is vicariously and contractually liable,” Canada Bread alleged in its counterclaim. “Maple Leaf, through its personnel acting as senior officers or members of the board of directors controlling and directing Canada Bread, knew or ought to have known of any anticompetitive conduct by Canada Bread.

“To the extent Canada Bread is found liable for common law conspiracy or pursuant to the Competition Act for alleged anticompetitive conduct, Maple Leaf participated fully in these activities, both through its personnel providing services to Canada Bread and otherwise. The violations of the Competition Act identified in the Plea and Statement of Agreed Facts were committed on behalf of and to the benefit of Maple Leaf, who was using Canada Bread as a shield for its unlawful conduct. To the extent that Canada Bread is found liable for damages for common law conspiracy or any breaches of the Competition Act, it is entitled to contribution and indemnity from Maple Leaf.”

Also, in announcing its counterclaim, Canada Bread said “Grupo Bimbo, owner of Canada Bread since 2014, intends to hold accountable those responsible for its damages.”

In a statement, Suzanne Hathaway, senior vice president and general counsel at Maple Leaf Foods, denied the allegations made in Canada Bread’s counterclaim.

 “We reject these claims in their entirety,” Hathaway said. “Maple Leaf Foods acted appropriately at all times, including with respect to making full, plain and true disclosure to Grupo Bimbo at the time of its acquisition of Canada Bread. The court ruled in 2021 that the plaintiffs had no valid legal claims against Maple Leaf Foods. That ruling stands today. We will continue to vigorously defend ourselves against these unfounded claims.”

Canada Bread, which also does business as Bimbo Canada, produces and distributes packaged fresh bread and bakery products and operates 16 bakeries.

A year ago, the Canadian government put Canada Bread on its ineligible and suspended suppliers list for its role in the price-fixing arrangement involving certain packaged bread products. The move came two months after the Ontario Superior Court levied the C$50 million fine on Canada Bread following its guilty plea for its role in the scheme — the highest price-fixing fine imposed by a Canadian court.