Debates of Sept. 21st, 2000

Mac Harb Ottawa Centre, ON

Madam Speaker, I am fairly disappointed by what I have heard today. I have been here since 10 o'clock trying to hear a substantial debate about how we are going to resolve this whole crisis of high gasoline prices in Canada but all I have heard from the opposition throughout the whole day is how we are going to solve this problem through a tax reduction of 1.5 cents a litre. I must submit that is not the answer.

My constituents are telling me that even if we reduced the tax on gas by 1.5 cents a litre that they would still be paying 74 cents or 75 cents a litre, which is way too high. In that sense, I have not heard one tangible proposal that would deal with that specific problem.

The second problem is that the opposition wants the government to reduce the tax when in fact if the government were to reduce the tax there would be absolutely no guarantee whatsoever that this tax reduction on gasoline would go into the pockets of consumers, simply because history tells us otherwise.

Let us take the example of New Brunswick. Hon. members will be both happy and disappointed to know that in New Brunswick, which has the fourth lowest tax on gasoline anywhere in Canada at approximately 10.7 cents per litre, the people pay the fourth highest price for gasoline per litre across Canada. The government of New Brunswick decided to reduce taxes in the hope that it would benefit the consumers of New Brunswick but the oil companies sucked up that reduction and pocketed it.

Reducing taxes without talking to the consumers will not solve the problem. So much for the theory of reducing the tax on gasoline hoping that the consumer will get the benefit at the mercy of the oil companies.

I have been involved with this case, like many of my colleagues on this side of the House, for over 14 years, when gasoline prices were not fashionable to talk about, and nothing has changed. We still hear the same lines from the same players on the international market, the major international oil producers. When we ask them why we are paying so much for gasoline or why gasoline prices are moving up and down, they give us three arguments, the first being supply and demand. They tell us that when there is a shortage of supply on the international market we have a higher crude oil price and, as a result, we pay more at the pump.

I did some research through my office and through the Library of Parliament. We looked at the International Energy Agency, a very respected international agency located in Europe that monitors supply and demand internationally. What we found out was quite interesting. The average supply of oil in 1997 was 74.4 million barrels per day. The demand for oil was 73.4 million barrels per day. To that extent, we had approximately one million barrels per day more supply than demand. The average cost per barrel at the time was $18.98. In Ontario we were paying 57.2 cents per litre.

I will jump one year to give the House better statistics. In 1999 the international supply of oil was 74 million barrels per day and demand was 75.2 million. Therefore we had more demand than we had supply. Guess what? The price of oil per barrel on the international scene was $17.79. Hey, the price per litre in Ontario was still at 57.8 cents per litre.

If that is the case, could someone somewhere explain to me why it is that in the second half of the year 2000, when the total supply of oil on the international scene is greater than the demand, in excess of approximately 2.1 million barrels a day, that we are still crying wolf and saying there is a shortage of supply when in fact we have a surplus in supply? There is a huge supply of oil on the international scene and the oil producers are part of an international conspiracy to shaft consumers not only here in Canada but in North America, in Europe and all around the world.

The gentleman who said it best is the president of OPEC. Yesterday in one of the national papers he was reported as saying “Rocketing world oil prices are being fueled by speculation and are out of the oil cartel's control”.

He is absolutely right. Simply put, if we were to look at the oil cartels, OPEC has been pumping more oil on the international scene than there is demand. There is enough oil in the international market to flood rivers all over the world. There is huge racketeering out there and a huge amount of speculation that many of the international players are involved in it. It has nothing to do with supply and demand.

The second one is the market forces. When asked why we are paying so much for gasoline, they tell us it is because of market forces, that if the market can take 80 cents per litre, they are going to charge 80 cents per litre. How can they say it is about market forces when everyone is charging the same? How can the consumer have any choice whatsoever?

What about the poor little independent retailers in our neighbourhoods, like in Quebec a few months ago, where the major players move in and clean the butts of individuals so much so that they sell below cost? How can that be market forces? Oh, no. That is not market forces. The players who control the market wanted to pump out, not in, the independents who are a lot more efficient than the fat elephants that are trying to do everything to stick it to the consumer.

We move on to the next one, the so-called players on the international scene telling us that taxes are a problem here in Canada. My colleagues have fallen into their trap. It reminds me of a French story.

I am referring to the fable of the crow and the fox. I am sure my colleagues know this story. The crow had a piece of cheese in its beak. The fox regarded it and said “Ah, how beautiful you are, such lovely eyes”. Suddenly, the crow opened its beak and dropped the cheese into the mouth of the fox, which ate it. A fine story.

My colleagues in the opposition are falling into the trap. It is a problem that can only be resolved through co-operation between the provincial governments and the federal government. This is not a federal problem alone. It is a provincial responsibility. Pricing is the responsibility of the provincial governments. They have to show leadership. They have to respond to the call of the federal government, the Minister of Finance, the Minister of Industry and the Minister of Natural Resources. They have to come to the table in order to talk about solutions.

They cannot sell us peanuts thinking that is going to fill up our tummies. They are starving us. They have to move together in order to respond to the needs of the consumers. Seniors, men and women on fixed incomes will be more responsive to the initiative of my colleague from Pickering who put a very reasonable motion before parliament, and that is to put the money in the pockets of the people rather than give it back to the oil companies.

Ken Epp Elk Island, AB

Madam Speaker, I find this quite interesting. We have put forward a motion today to simply stop collecting a tax which was intended to be collected while we had a deficit. All we are doing is saying to the government that it should now stop collecting that tax and it should stop collecting GST on taxes on fuel.

That little simple request is being countered by all sorts of high powered arguments by the other side. They say no, they will not do that. It is as if a youngster came to my house and said “I want a bowl of soup because I am hungry” and I said “Well, because you did not ask for the whole kettle, I am not going to give you the bowl”.

I do not think the government recognizes what is happening here. It talks about the hon. member from Pickering who has worked on this problem for so many years. How ineffective. He has worked for two years and the government has not listened.

Now the government is blaming us because we are not allowing a motion which simply says that the Minister of Finance should talk to the provinces. Frankly there is not a thing we can do to prevent the Minister of Finance from talking to the provinces. Let him do it. He does not need our approval. He does not need the approval of this parliament. The government has thrown in a red herring in order not to deal with the real issue, which is simply to vote in favour of stopping collecting the 1.5 cent per litre surtax that the government imposed on us along with the GST.

Paul Crête Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC

Madam Speaker, the member for Ottawa Centre spoke of the fable of the fox and the crow. I would like to speak of this fable using another image.

In 1998, a Liberal committee was established with 47 Liberal members. They behaved like the fox and wanted public opinion on their side. They said, in a report, things such as “There is an unreasonable industry concentration”. They also said that it meant a saving for the major oil companies with the way the competition was organized. Further on they said “The federal Competition Act has no teeth and the Competition Bureau is unlikely to uncover the practices”.

Today, the situation facing us is a short term one. There is the problem of overpriced gasoline and there is pressure on governments to lower taxes. There is also a long term problem in this situation. The government in office was not elected yesterday. It set up a committee that made recommendations in 1998. At that point, all the fox wanted from the crow, which represented public opinion, was satisfaction, to try to put an end to the story.

Was there no way to come up with real solutions and to implement the recommendations of the committee without denigrating today those trying to find solutions?

Mac Harb Ottawa Centre, ON

Madam Speaker, I will simply reply that the government has responded very positively to the recommendations of the Liberal committee. It is in the process of a complete review of the Competition Act. The Conference Board of Canada is looking at these issues.

As for prices, I would simply say that they come under provincial, not federal, jurisdiction. Unfortunately, a number of members have failed to make the distinction between prices and competition. Competition comes under federal jurisdiction, while prices come under provincial jurisdiction.

Dave Chatters Athabasca, AB

Madam Speaker, there has been so much rhetoric flying around all day on this issue over and above the incoherent rantings that we just heard from the previous speaker. So much of it simply is not true.

Liberal members are speaking out of so many corners of their mouths that I do not know how anybody could ever figure out what the Liberal position actually is. Everybody understands when the NDP raves about the immorality of profits in the petroleum industry. That is socialism and we can understand that but the Liberals have been all over the map on this issue and continue to be.

The member for Pickering—Ajax—Uxbridge has flipped so many times he must feel like a burned pancake on the way to the breakfast table. The motion we brought forward to vote on comes directly out of his task force on gasoline pricing. He is trying to change the content of the motion so he will somehow be able to support it. He has managed to change it instead of simply supporting the context that he recommended to his government and with which it has done nothing for a year and a half. That makes no sense at all.

Everybody is blaming this whole issue on the evil oil cartel and the big oil companies that are gouging the consumer and all the rest of the things we have just heard. The previous member talked about doing research in his office and finding evil people hiding in places and ripping us off.

Looking back at the history of crude oil prices, in 1991 as a result of the gulf war crisis crude oil prices spiked to a record $41 a barrel. At that time the pre-tax cost of a litre of gasoline was only 42 cents when crude oil hit $41 a barrel. Today in 2000 with crude oil hitting $37 plus a barrel, gasoline prices have gone through the roof but the pre-tax price of gasoline is only 44 cents a litre.

No one can tell me that the gouging that is going on is by the oil companies. The pre-tax price of oil indicates that it is not the oil companies. It is the provincial and federal governments and their taxes that are gouging the Canadian people on this issue. There is no question about it. The information is there. The facts are there. A good part of the problem—

Roy Cullen Etobicoke North, ON

How about the fact that the federal tax has not changed in the last four years?

Dave Chatters Athabasca, AB

Madam Speaker, the member said “What about the fact that the federal taxes have not changed in four years”. That is absolute rubbish. He knows better than that. He knows that the GST on gasoline increases every time the price of gasoline increases so the federal portion of the tax on gasoline goes up every time the price of gasoline goes up. It has done that all along.

The miserable failure of the government's economic policies and the supported weakness in the Canadian dollar are creating a huge problem in the energy industry that is yet to come home to roost. Sooner or later it will do that simply because refineries in this country have to buy their crude oil in American dollars and sell their product in Canadian dollars. With the Canadian dollar situated where it is, the margins in the refining industry are so fine that there has not been an oil refinery built in this country in 30 years.

Part of the problem that is driving the high price of oil, as the member we heard earlier suggested, is that while actual production is outstripping demand, the price of gasoline is not dropping because the lack of profitability in the refining industry has meant that there have been no new refineries built in 30 years and we do not have the refining capacity to catch up with demand. That is a fact. It is as clear as can be if anybody wants to look at it.

Earlier an NDP member suggested that energy is the lifeblood of Canada's economy and I certainly would agree with that. How in the world could we expect to have enough of this energy to sustain the lifeblood of the economy if we refused to allow the industry to be profitable, to expand and to build refineries and to find more oil and invest in the industry as they are doing?

In my riding alone the private sector has announced $35 billion of investment in the industry to ensure that the lifeblood of the Canadian economy is there 10 or 15 years down the road. I do not think that is a bad thing.

I think of the Liberal government and the division within the caucus with small groups of backbenchers running off with the minister's blessing to hold up a strawman to show consumers that they are really concerned about prices at the pump. I think of them making recommendations and the minister not having any intention of following up on them. I think of the socialist part of the caucus, or the environmental extremist part of the caucus, demanding higher prices at the pumps in the interest of reducing consumption, conserving energy and saving the environment.

There is no question in my mind that the price of energy will continue to rise. It is a finite resource and as the resource becomes scarcer and the demand becomes greater the price will rise. It is unavoidable. I will be splitting my time with my colleague from Calgary—Nose Hill.

The Liberal caucus is not telling consumers what is the real agenda. I am looking forward to going out and fighting the next election based on the government's plan to implement the Kyoto protocol. The Liberals are not saying it, but the David Suzuki Foundation, Greenpeace and the Pembina Institute are all telling us that it will not be that bad, that it will only mean a 3% to 5% reduction in GDP if we implement the Kyoto protocol.

I am looking forward to going out and fighting an election on the government's promise not of zero growth in the economy or zero growth in the GDP but a 3% to 5% drop in the country's GDP. That will be a lot of fun.

The public should know that. The determination of the environment minister to implement sulphur levels in gasoline is totally out of sync in Canada with the United States agenda. Here in Canada we will be creating a speciality market that will cost consumers dearly at the pumps, simply because of the minister's decision not to follow the timetable of the Americans in reducing sulphur in gasoline.

There is certainly nothing wrong with the proposal to reduce sulphur. It is commendable, but if we do not stay in sync with the United States we will be a speciality market in Canada. One only has to look at what happened in the United States when California implemented stringent environmental regulations on gasoline compared to the rest of the country and created a specialty market in one state. Its price skyrocketed above those in the rest of the United States. The same will happen when the government implements its sulphur levels in gasoline, but it is not telling consumers that. It is telling them that it is very concerned with the price of gasoline at the pumps and that it will step forward and save the consumer in Canada.

The government is not being open and honest with Canadian consumers. It is throwing up strawmen to deflect its real position on energy prices and where it is going. I think it is time it came clean with Canadians. I am looking forward to the election campaign so that we might be able to do that.

Pat Martin Winnipeg Centre, MB

Madam Speaker, the member spent most of his speech shamelessly shilling for the corporations. He tried to convince Canadians that the corporations get by on a razor thin profit margin and struggle along with their oil and gas industry. I guess if one is trying to sell tickets to dinners at $25,000 per table one would pretty well have to butter up the executives of the oil companies. Who else would spend $25,000 to attend a Reform Party dinner?

Let us look at the actual facts. Let us look at some of the profits of these major oil companies, many of which I am sure are in the riding the member represents. Husky Energy in the last quarter made profits of $198 million, an increase of 2,302% over the previous year, and the hon. member is telling us they are not making a profit.

Let us look at Petro-Canada with $439 million in the last quarter with an increase over the previous year of 314%. Suncor Energy made a $619 million profit in a quarter, not per year, which is an increase of 156% over one year previously.

The hon. member is telling us that they are not gouging us at the pumps with profit margins like that. It is beyond credibility. Canadians do not believe it. Nobody buys it except for the guy wearing rose coloured glasses who is speaking for the corporations and trying to be a champion and an apologist to the oil companies. It is really grating for me to sit here and listen.

Dave Chatters Athabasca, AB

Madam Speaker, I am glad it is grating on this member because his comments have been grating on me all day.

I am not ashamed to stand and defend a corporation making a profit. A year and a half ago the price of crude oil was $10.50, which was below the cost of production. Today the oil companies are making a healthy profit. I do not think that is immoral.

Those profits are driven by the marketplace. If consumers were not demanding that volume of energy, the energy prices would not be there. The price of crude oil is set on the open market through a bidding process. If the demand is there the price will be there.

Certainly, when the Liberals talk about a made in Canada energy program, that old chestnut will not sell in Canada anywhere. They tried that under the Trudeau regime and it did not work. Those members rave about the evil, gouging oil companies and today the government announces a stamp honouring Petro-Canada. The hypocrisy around here just staggers me.

Dave Chatters Athabasca, AB

Madam Speaker, there has not been one shred of evidence presented here all day to indicate that the benefit would not be passed along to the consumer if the government followed our proposal and reduced the tax on gasoline by some $1.5 billion and therefore challenged the provinces to do the same, amounting to between a six and seven cent reduction in the cost of gasoline at the pump. Historically and every shred of evidence out there shows that it would and that consumers would benefit by the government reducing those taxes.

Governments traditionally have taxed gasoline as a luxury. For 40 years governments at all levels have had a need for income so they raised the taxes on cigarettes, booze and gasoline. They have done it over and over again. It is time to recognize what gasoline and energy are, to drop the tax and to pass the savings on to the people at the pumps.