A federal judge has certified a class-action lawsuit against Canada Post for allegedly failing to transparently disclose the full price of its shipping services.
The claims, which include allegations of “drip pricing” in contravention of Canada’s Competition Act, could affect hundreds of thousands of people using the postal service’s business shipping services, according to an amended statement of claim filed at a Vancouver courthouse.
The class action alleges Canada Post’s online shipping tools display one shipping rate, only to disclose a “fuel surcharge” later in the process. The fuel surcharge changes with the cost of fuel. In April 2024, it ranged between just under 14 per cent to 26 per cent of the cost of a package shipping fee, according to a decision handed down earlier this month by federal Justice Jocelyne Gagné.
“The latter higher price can only be visible to users if they scroll up to the top of the page,” wrote Gagné, summarizing the plaintiff's argument.
The case is the latest to target a large company for alleged drip pricing since the Competition Act was amended in 2022. Canada's Competition Bureau describes drip pricing as deceptive because consumers are not presented with an attainable price upfront.
In 2024, the Competition Tribunal ruled in favour of the Competition Bureau, finding that the movie theatre chain Cineplex had engaged in drip pricing due to a mandatory online booking fee that was added later in the process. Cineplex was ordered to pay a $38.9-million financial penalty — at the time, the highest administrative penalty ever imposed under the Competition Act.
This year, the Competition Bureau has continued to go after other large corporations. In May, the bureau announced it was suing the amusement park owner Wonderland Company for allegedly make false or misleading claims about its park ticket prices before disclosing mandatory fixed fees of between $0.99 and $9.99.
In June, the watchdog agency announced it was taking legal action against DoorDash Inc. and one of its Canadian subsidiaries for promoting their online delivery services at a lower price than what consumers were eventually left to pay. In a press release, the Competition Bureau said its investigation found consumers were unable to pay the advertised prices because of mandatory fees at checkout.
“Parliament has made it clear that businesses must not engage in drip pricing by advertising unattainable prices and then adding mandatory fees,” Commissioner of Competition Matthew Boswell said in a statement.
“The Competition Bureau has been fighting against this misleading practice for years.”
The latest legal action against Canada Post names Marci Deane as the lead plaintiff, a mortgage broker who operates a small business in North Vancouver and who has used Canada Post’s online business shipping services for more than 15 years.
Reached for comment, Deane deferred questions to Hammerco Lawyers LLP, the firm leading the class action. The firm did not return BIV’s calls.
In submissions to the court, Deane alleged that the additional fuel surcharge is an obligatory fee that is not imposed by the federal or a provincial government.
In its defence, the postal service claimed all the information was provided on a single page and that its services did not constitute fixed drip pricing because the cost varies from transaction to transaction.
Justice Gagné ruled that by disclosing the fuel surcharge later in the shipping process, it is arguable that Canada Post contravened the Competition Act.
The judge found there was a reasonable cause for action and the case was not “doomed to fail.” She did not, however, assess the merits of Deane’s claims. That will be left to a trial judge in a hearing that has yet to be set.
The class action covers people residing in Canada since June 23, 2022 who used Canada Post’s Snap Ship, Ship Online and Shipping Manager services — all online tools used create, pay for and print shipping labels to send parcels around the world.
