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TransAlta Ruling a Mixed Bag for Calgary & Alberta

November 4, 2015

A settlement in the price-gouging and insider-trading case in which power provider TransAlta profited to the tune of around $25 million dollars has finally been reached, and it looks like the penalty they have to pay might actually be enough to dissuade them—and other utility companies—from trying anything similar again in the near future.

When corporations are caught cutting corners (or taking extra steps) to boost their bottom line on the backs of every-day Calgarians and Canadians, the fines are all too often little more than slaps on the wrist. Whether it's environmental damage, "creative" accounting, or outright illegal deals, many major companies make far more from illicit practices than they are forced to pay when they're caught (and who knows about the times they aren't caught at all?). Instead of working to prevent companies from taking these actions—actions that are harmful and/or costly to the rest of us—government-imposed penalties often simply become "the cost of doing business" in a manner not in keeping with legislation and regulations.

In this case, the penalty is estimated to be a little more than twice the profit TransAlta made through its illegal actions. As reported in the Calgary Herald, TransAlta will be paying a total of $56 million dollars to settle this case. $25 million of that is an administrative penalty, $4 milion is to pay for the cost of the investigation (as part of the settlement, TransAlta also had to agree that the investigation was fair and just, after having previously complained that it was unfairly invasive and prejudicial), and an additional $27 million specifically to offset any profits the company earned.

By making the penalty paid more than double what the TransAlta earned, the government made the company hurt where it counts—in the pocketbook (or ledger). Other companies will think twice about conducting business the way TransAlta did, or making other ethically nebulous decisions in an attempt to pad their profit margins.

It's not all good news, though.

Despite the fact that many people in Alberta overpaid on their utilities as a result of TransAlta's actions, they won't be seeing a dime of the settlement money—not directly, at any rate. Everything the company pays will go into Alberta's general revenue, which is spent on all of the province's departments and programs, including many services provided here in Calgary. While this might ease some tax burdens and/or lead to the offering of more services due to the revenue boost, it doesn't quite spell justice when the people who were directly victimized receive no compensation.

Still, we should be happy that the government is making strides in correcting the behavior of Canada's biggest criminals—its corporations—and not simply focusing on non-existent terrorist threats and prosecuting drug offences.

Calgary Defence Lawyer for the Little Guy

If you've been charged with a crime in Calgary, chances are you're a person and not a corporation. People are my favorite kind of clients, so please feel free to contact me any time for a passionate and experienced legal defence.


This entry was posted on November 4, 2015


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