Evidence of meeting #23 for Industry, Science and Technology in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pumps.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Sonia Marcotte  President and Chief Executive Officer, Association québécoise des indépendants du pétrole
Serge Harnois  Chair of the Board of Directors, Association québécoise des indépendants du pétrole
René Blouin  Senior Advisor, Association québécoise des indépendants du pétrole
Jane Savage  President and Chief Executive Officer, Canadian Independent Petroleum Marketers Association

10 a.m.

Conservative

Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB

I wanted to actually get to one other question, if I could. I'll just throw the other question out and then you can answer both of them, if you want.

We did have a consumer advocate at the committee at the last meeting who argued fairly intensely that the penalties are simply not strong enough to deter the type of behaviour that she purported was happening in the industry--negative behaviour to the detriment of consumers. She made an argument that significantly stronger penalties were needed.

I'd like to hear your comments on that and on whether the penalties within this legislation are strong enough or whether you think significantly stronger penalties are needed. I have a feeling I know which direction you might go with that, but I would like to hear it for the record, if we could.

10 a.m.

Liberal

Dan McTeague Liberal Pickering—Scarborough East, ON

A point of order, Mr. Chairman. For the benefit of the witnesses, very clearly, on Mr. Lake's question to that individual representative who came forward from the consumer organization, she said that she had not “read the bill”. That's just for the benefit of the witnesses who weren't here.

Thank you.

10 a.m.

Conservative

The Chair Conservative Michael Chong

Thank you.

Monsieur Blouin.

10 a.m.

Senior Advisor, Association québécoise des indépendants du pétrole

René Blouin

I have two comments to make in response to your first question.

First, with respect to a retailer being able to take a screwdriver and make adjustments, that can't happen because seals have to be used and they are put on the pumps. So it's not possible to do that.

My second comment is on the $20 million that you spoke about. If you're talking about $20 million being taken away from consumers because some pumps aren't calibrated, then you also have to take into account those pumps that are giving too much to the consumers. When you talk about $20 million you're only referring to the money that consumers are losing, you're not talking about the money that some might be making.

I think you need to remember that overall—this is what I think and I stated so earlier—there are probably as many pumps that are giving a little bit too much as those that are giving too little. So from our point of view those amounts cancel each other out.

10:05 a.m.

Conservative

Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB

On that point, though, yes, the $20 million is net. So it's a net detriment to the consumer of $20 million, from my understanding.

10:05 a.m.

Senior Advisor, Association québécoise des indépendants du pétrole

René Blouin

That's what you understand from this but we haven't seen any documents on that. That's simply an opinion.

10:05 a.m.

Conservative

Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB

That's Measurement Canada's information.

10:05 a.m.

Senior Advisor, Association québécoise des indépendants du pétrole

René Blouin

Fine. They say that this is money that has been lost but they did not state whether or not they were taking into account the money that had been made by consumers and whether or not that was a net amount. I did not read that.

10:05 a.m.

Conservative

Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB

Yes, they did actually. It was net. So the amount of money to the benefit of the retailers minus the amount of money to the benefit of the consumers was $20 million.

10:05 a.m.

Conservative

The Chair Conservative Michael Chong

Madame Savage, go ahead.

10:05 a.m.

President and Chief Executive Officer, Canadian Independent Petroleum Marketers Association

Jane Savage

On the subject of the $20 million, I have not been able to recreate that number using the data of 130,000 meters in the country, 12,500 sites, and a dollar a litre of gas, and the statistics that were in the report. In fact, in the Ottawa Citizen report it says here:

...using the most conservative figures, pumps that fell outside the tolerance zone would have shortchanged consumers by at least $17 million annually... ... ...however, fast pumps would give out $8 million in free gas.

So on the small percentage of pumps outside the tolerance zone, consumers come out about $9 million behind, versus the $20 million that seems to be running around. I can recreate the $9 million, but I cannot get close to the $20 million.

10:05 a.m.

Conservative

Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB

Just to be clear, I can't speak for the Citizen's report. I'm talking about Measurement Canada's information when I'm using the numbers I'm using.

10:05 a.m.

President and Chief Executive Officer, Canadian Independent Petroleum Marketers Association

Jane Savage

And we can't corroborate that.

10:05 a.m.

Conservative

The Chair Conservative Michael Chong

Thank you, Mr. Lake.

Monsieur Cardin.

10:05 a.m.

Bloc

Serge Cardin Bloc Sherbrooke, QC

Thank you, Mr. Chairman.

Ladies and gentlemen, good morning and welcome.

With respect to your concerns about the bill's title, if it's helpful, I would say that I also don't think it makes any sense. It means... How can I put it? It's precisely because the government cannot measure its own words that it chooses these types of titles.

I'm going to use an example to show you how the Conservative government works. When we were talking about minimum sentences and law and order, Sébastien's Law was created. This law made people emotional. Another act amending the Criminal Code referred to “trafficking in persons”. That meant that the government, if we didn't agree on certain parts of it, could say, for example, that the Bloc Québécois was protecting pedophiles. So you can see how this government doesn't know how to measure its words.

Now, in terms of fairness at the pump, it should be pointed out that Bill C-14 deals with all weights and measures for electricity and gas, obviously. On the other hand, we also know that the federal government has to market its message. We know that it hasn't received good press over petroleum, with western petroleum companies and everything that's happening. Therefore, it's making the retailers shoulder the responsibility. I don't think that's the way to do things. The title of this legislation could simply have included words such as “fairness in measuring”, “accurate measuring” or something like that that involves all devices for weights and measures.

The government refers mainly to petroleum because it does not want to give more power to the Competition Bureau. You know, collusion is much more profitable than inaccurate instruments and differences of 0.5% at the pump. Neither do they want any sort of monitoring agency. They know that this affects many individuals and people who buy gas. So they come up with a pompous title for marketing purposes, simply because they're concerned with their image, it's obvious. They think they can improve their image by doing that.

That said, we know perfectly well, as Mr. Lake said earlier, that the government is surprised by that $20-million loss to the consumer. Obviously, that's not right. However, it's a relatively small amount compared to the $40 billion worth of gas sold every year in Canada. If retailers wanted to, rather than manipulate their instruments—this is what Mr. Lake is claiming—they could simply increase their costs by a tenth of a cent, or a cent, and that would easily cover it.

Generally speaking the Weights and Measures Act covers all measuring devices. What's important is that consumers can feel confident that when they buy something they're getting the right amount.

I do not believe that retailers are going to manipulate their pumps to get a price that will set them a few cents more. Not everyone sells 10 million litres annually. In any case I don't believe it. That would be rare. They should not be accused without any proof. Accusing them offsets to some degree everything the Conservatives have done on the other side. Twenty million dollars is a lot of money for Mr. Lake when the issue is pump adjustments, but $1 billion over three days doesn't appear to be a problem. We could pay for a lot of inspections with that money.

With respect to inspection costs, I've heard that they would vary between $50 and $200. How much are they now? How much does a retailer pay currently for inspection and calibration, approximately?

10:10 a.m.

Chair of the Board of Directors, Association québécoise des indépendants du pétrole

Serge Harnois

I can try to give you an approximate figure, but it has to do with the number of pipes. Stations with large volumes can certainly have up to 8 or 10 meters per station. Small stations may have from 2 to 4 meters, as the case may be.

In Quebec, they are not doing only calibration. They are doing all kinds of inspection. However, it costs less than $1,000 per site, on the average. This is because the certified inspector has to come and he must be paid. For calibration, I could not tell you exactly, but I could give you an answer fairly quickly.

10:10 a.m.

Bloc

Serge Cardin Bloc Sherbrooke, QC

There is inspection and calibration. The same inspector does not do both these things.

10:10 a.m.

Chair of the Board of Directors, Association québécoise des indépendants du pétrole

Serge Harnois

No. The inspector checks the calibration that has already been done. The person in charge of calibration makes his report, and the certified inspector checks to see if it has been done and imposes the seals. He checks the results.

I could call the office to ask for that data.

10:10 a.m.

Bloc

Serge Cardin Bloc Sherbrooke, QC

Thus, the cost is not actually what puts retailers off. In fact, it is a normal practice, and they must simply go along with it.

There is also the environmental aspect, that we touched upon several times. Appropriate measures must be taken, even if it is only to make sure that there are no leaks or losses.

10:10 a.m.

Chair of the Board of Directors, Association québécoise des indépendants du pétrole

Serge Harnois

This is part of the routine. There is reception and there are the sales. The sales and the deliveries must balance out. However, if the meters are inaccurate, it may be difficult to find out whether there are any leaks in the tanks.

10:10 a.m.

Conservative

The Chair Conservative Michael Chong

Okay. Merci, monsieur Cardin.

Mr. Brown.

June 15th, 2010 / 10:10 a.m.

Conservative

Gord Brown Conservative Leeds—Grenville, ON

Thank you very much, Mr. Chairman.

And thank you to our witnesses for coming today. My family was in the gasoline retailing business when I was a boy, so this one hits a little closer to home. I understand a fair bit about this.

Over the years the industry has been characterized in a fairly negative light, much of which has to do with the public's perception about gasoline pricing, but also with this article in the Ottawa Citizen about the accuracy of the pumps.

Madam Savage, you mentioned that the pumps have wear and tear. Mr. Lake got into this as well, in questioning the accuracy of that in terms of the 74%--maybe it's 65%--but if there's wear and tear, you would think it would actually benefit the consumer.

Maybe you could address that a bit. If there's wear and tear on the device, you'd think it would be letting more gas out rather than restricting it more. Can you tell us your thoughts on that?

10:15 a.m.

President and Chief Executive Officer, Canadian Independent Petroleum Marketers Association

Jane Savage

I can't really comment on the internal mechanics of the pump, to be honest. It's not my area of expertise. I can only go from my understanding in talking to the industry that manufactures these devices, as well as some inspection companies that inspect the devices. That is where my data comes from. And the data I have is that some pumps wear in favour of the consumer and some pumps wear in favour of the retailer. That's all I can contribute to that.

10:15 a.m.

Conservative

Gord Brown Conservative Leeds—Grenville, ON

Has either of your organizations had any internal audits in checking the accuracy of the pumps? It was a big issue when it came out in this Ottawa Citizen article, and obviously there would have been concern in your organizations about retailers being put in a negative light.

Were there any internal audits or efforts by your organizations to check the accuracy of what was in that article?

10:15 a.m.

President and Chief Executive Officer, Canadian Independent Petroleum Marketers Association

Jane Savage

Well, in terms of the accuracy of the data, we did attempt to understand where the data came from and to gain some understanding of why there was the data skew, as I explained.