Mr. Speaker, I thank my hon. colleagues who have preceded me on the debate. I apologize I was not able to be here at the outset, so the parliamentary secretary and I did not have a chance to exchange a few ideas, but I am sure his colleagues will take it to him. I also want to thank our industry critic from Montreal.
I greet today, with some degree of trepidation, this legislation. Although much vaunted as being the panacea for all consumers in Canada, it is in fact significantly short on substance, short on proof and short on the deliverables. This seems to be one of the few things that could have been done, which would be, in some respects, a no brainer.
However, there are much more important issues dealing with the price of fuel and energy that should concern Parliament and the government. However, we need to consider the heat of the moment. An election campaign was triggered by the Prime Minister, who went back on his own word. In one evening gas prices went up 12.9¢ per litre. Most Canadians know that because this member and this party pointed out that the industry had become so monopolistic in the downstream that what took place was nothing short of tragic. The Americans had a major hurricane shut down refinery alley along the Texas Gulf coast. They witnessed a 6¢ a gallon increase at the most. I know that because I spoke to Ali Velshi, a senior correspondent at CNN, to get my information. In Canada it was 60¢ a gallon, converted to 12.9¢ to 13¢ a litre.
If that does not address the fundamental concern about just how clued out we are when it comes to the price of gasoline and energy costs, then I need ask members to look no further than the context in which that legislation was proposed two years ago. It took the government two years to finally come up with something and it said it would probably deal with one in twenty-five gas pumps which it thought was faulty, that it would call them pumps and that the likelihood was they had been tampered with. The minister referred to them as chisellers.
I can not think of an example that demonstrates such ignorance from a minister who obviously does not know anything about a gas tank, let alone how to pump it. Perhaps he spends a little too much time here with his driver and does not pump his own gas so he does not recognize that there can be mechanical failures.
The hon. member for Burlington talked about his experience working at a gas station. No doubt he will be familiar with the former 25, 30 year old equipment, which is used in many parts of the country that is not served by a number of gas stations. Very small communities may be using old electronics and very old equipment. It is very difficult to compromise and to break the electronic sequence that is in those pumps. What often happens, if there is an error, and that is assuming the error does not in fact benefit the consumer, is the product breaks down as a result of wear and tear.
That is why I asked the hon. member a very pointed question and I will ask the experts. In some communities pumps are not used as much. The introduction of ethanol could have an impact. Where we have higher use, there is a probability of breakdown. It is not someone's fault. That is the result of wear and tear on machines, and no machine is guaranteed to go forever, especially if it goes through sustained high use.
I am sure we will hear from Dresser Wayne, or Gilbarco, or Oppenheimer, which has been taken over by Dresser Wayne. We will hear from those individuals who work in the industry and who will pinpoint the shortcomings of their fuel.
Suffice it to say, my website, tomorrowsgaspricetoday.com, receives 30,000 or more hits a day. Out of those are generated hundreds of emails. I probably receive more emails on this subject than any member in the House combined, especially when the prices go up or when they go down and we see the fluctuation which is out of sync with world pricing.
I am concerned because this legislation is a distraction. It is a façade. It can be dealt with by regulation if indeed there is the presence of a problem. The minister has admitted that only 6% of pumps were found to be faulty. Of that 6%, 4% of the 100% that were done, did not favour the consumer.
If we are to prepare ourselves to embark on an idea of working to fix these problems, I want the committee, and I certainly want Parliament and the public listening right now, when we come to fairness at the pumps, there is a suggestion that there has been unfairness at the pumps. I can say with some certainty, it would be almost impossible for independent retailers or agents, as the previous member talked about, to trigger a mechanism that might make those pumps not work. It is very difficult to do.
More important, if we look at the way a pump is made and the way retailers take inventory, to skew the numbers to try to play games for a couple of days would only hurt their inventory. They would get a call saying, “You've used this much. How come you have this much left?” Unless, of course, there is a leak or a problem with the tank, in which case there might be some environmental concerns.
However, what it does not do is address the fundamental concern that I have, and I think many colleagues in this House should have, about where there is in fact a disconnect between consumer value for what they purchase and what in fact they get.
I can say with some certainty, with years of working on this file, that the last problem we have is accuracy in the pumps. If it were such a big issue, we would have had more than one conviction over the past three or four years. I am not saying it does not happen, but I am certainly convinced it is not because people are deliberately fixing the pumps. First, as I just mentioned, it is difficult to do. Second, it skews the inventory to such an extent that it becomes a self-defeating exercise. If they in fact do these things, they are only hurting themselves.
I received two emails this morning that dealt with a far more credible issue that the government could have addressed and may fall into the very same category that we had when we were in government. I note that the hon. member for Abbotsford and some of his colleagues said our government did very little about it. I want to encourage the members of the government to recognize not to make the same mistakes of fooling themselves into the belief that somehow what they provided here is a panacea. In fact, it is very much a tinkering, a glossing around the edges of a very serious problem.
By that I mean the following. In every region in this country today, every community has the identical wholesale price, and I see that the rack price is out as of just a few minutes ago. I cannot think of a more vivid example of the lack of competition than when we see the exact same price in any community across Canada. I will be glad to show members, for the purposes of their edification. If I look today, for instance, I will see that the rack price is identical everywhere in Ottawa. Everyone will charge the same thing tomorrow. It will be somewhere in the vicinity of 60.8¢ a litre; Quebec's will be 61.4¢; Montreal's will be 61.4¢; Toronto's will be 62¢. The hon. member for Abbotsford will happy to know his will be 66.8¢. The point is that the price is determined by one player. No one challenges that price at the retail level nor at the wholesale level. And so, what Canadians are faced with tonight is a 2¢-a-litre increase. That is above world prices as established at the NYMEX just 25 minutes ago.
So when members talk about a skew in a pump of 1% on 80 litres, which would be the average fill-up of most cars in my community, that is .8¢.
How about the 2¢ ripoff that is going to happen tonight?
Let us deal with some real issues in this House for once and not go around contenting ourselves with some idea that we have a better widget than the people who preceded us or than the ones who preceded them. The reality is far more serious.
I know that members on the industry committee should have the benefit of all the questions, not just Measurement Canada, but to look beyond this first step. I am hoping it is a first step, because members will recall that, in the 2008 campaign, the Conservative Party pledged to deal with the issue of potential problems at the gas pumps, which I might point out came from an Ottawa Citizen article during the 2008 election. That Ottawa Citizen article seems not to have a lot of people backing it. Certainly people at Measurement Canada have not verified it. So, it is interesting that we have erected today two years of investigation based on an article for which no one really wants to take credit. More important, why should they?
When the CBC national news runs with a story saying 75% of all pumps are skewed, what a great horror. Every pump we are using now, almost every one is going to rip us off.
Let us try to infuse some facts into a debate on something that is important to Canadians. For every penny they save at the pumps every given week, that could mean hundreds for a family at the end of the year.
As members will know, if someone can get away with having a monopoly in the gasoline industry, one might be able to have the same or near monopoly in the propane industry or the natural gas industry.
I will not get into the issue of arbitrage because that is not for the debate today. However, it is important for us to understand another ripoff, which the government fails to understand.
How is it possible that a wholesale price of 60¢ a litre for regular versus mid-grade at 62.3¢, which is a 3.25¢ difference, or premium, which is always 5¢ above regular, translates into a 13.5¢ ripoff?
Someone has to have a lot of control and a lot of power to be able to move prices from a wholesale differential of 3¢ to 13¢. I want hon. members in the House to understand that we are dealing now with not one penny or one-eighth of a penny or 1% when it comes to premium, when it comes to mid-grade, which many vehicles must run on, or when it comes to diesel. We are dealing with a wholesale margin translated to the retail level that could be in excess of 8¢ to 10¢ a litre. Then multiply that by 50.
I can guarantee that, when we look at those kinds of numbers, it is very clear that the government has either tried to distract the public with this legislation, a bit of smoke and mirrors, a bit of a smokescreen, or it just does not want to address the fundamental problem that exists with this industry, as it may with others.
I am not saying there is not a desire to change. Members know that I have built part of my career on trying to deal with this, but I am very suspicious of the context of this legislation. It is a quick fix aimed at the wrong people, which gives false hope that somehow people are going to see better prices at the pumps come this summer.
Let us be honest. Summer driving season is coming up. Although demand for fuel across North America is low and supply is very high, we now see prices heading north for no reason. If we had competition that would not be the case.
Every week the Americans provide what is called the weekly petroleum status report. Since 1979 the Americans have ensured that every drop of energy that they produce, that they use, that they anticipate using for inputs and refineries, is accounted for.
I see three citations in this document, which gives transparency to the Americans and to the world as to what the price should be every Wednesday morning at 10:30. I see three footnotes here from Natural Resources Canada. We supply the Americans with data to help them get a better understanding of the world, to protect consumers and to ensure transparency, but we will not do it for Canadians. Why?
There was an attempt to do this in 2006. The member for Abbotsford talked about what he did in 2006 during the election. Wonderful. We had a little proposal that said we would replicate the exact same thing, a weekly petroleum report, through something called the office of petroleum monitoring. We would give Canadians a better and more accurate understanding of how much is produced in this country, including the stock market, the commodities market. Why would we want to fly blind? The rest of the world wants to know how much they are producing. That makes sense. But no, the first act of the Conservative government was to kill the petroleum price monitoring system. I still have not received an answer.
Some anecdotal discussions with people in the industry, the downstream, have told me that it was really the folks at Imperial Oil who did not like it. Esso did not like it because it did not like it. That is funny; Imperial Oil's parent Exxon Mobil in the United States has been required by law since 1979 to furnish all data on supply and demand. It just makes sense.
I would have thought that the government might have actually dealt with that particular issue, but it did not. It chose instead to go to defective pumps and translate that and torque it somehow into greedy little retailers conspiring in the dark of night to wreck their pumps to make sure Canadians do not receive full value for that which they have worked so hard to obtain.
It is important for us to recognize quite a few things that have not come forward yet.
The margins and the racks that Canadians are forced to pay are substantially higher than those around the world. This means that the infrastructure in which so much taxpayers' money has been invested over the years, to build a pipeline to serve the entire country, energy self-sufficiency being one of the goals, has now been translated into virtually a network, a system, an infrastructure that is controlled by a handful.
I come from Toronto, and my region used to have three or four refiners. How many do we have today? None. Half the supply in my riding comes from Montreal because of the number seven line that was produced to push petroleum from the west to the east to create energy self-sufficiency.
My colleagues from the Bloc and all hon. members of the House are well aware that another refinery is closing. I told them that would happen in November. The declining number of refineries is worrisome. In 2007, a report indicated that the small number of refineries in Canada would create a supply problem. Even before the Petro-Canada and Sunoco merger and the proposed closure of the refinery in Montreal, regulatory officials were concerned.
To put this in proper context, if Canada is in a tight supply situation and, even though there is plenty of crude going around, we cannot produce enough, it puts us at a strategic disadvantage not only for our ability to ship abroad but, more importantly, to make sure premium prices are not charged to Canadians because we do not have enough refinery capacity in this country.
It is important for the government to recognize this. It can pay lip service to the idea that fixing the pumps is going to somehow prevent prices from going up unduly. Frankly, that is hollow. It is irrelevant and untrue.
I can say with some certainty that, if we do not deal with the issue of supply in this country, we are going to wind up as truckers did in western Canada. Yes, western Canada. I am speaking of Saskatchewan, Mr. Speaker, your very region. Truckers were scrambling for supply because of the way in which crude can be bent or configured and the way in which refineries are made. Some emphasize gasoline and some emphasize diesel.
It is very clear to me that we cannot afford a repeat of what happened in 2008. It seems to me that the first responsibility of any government is to ensure adequacy of supply, regardless of what party it is. It failed. It utterly failed, and it is important for the government to clue into that as well.
I will come to my last concern. I want to devote the last three minutes remaining to something far more serious, which Parliament appears not willing to understand, much less address. The government, in particular, must understand this in the context of the comments by the Minister of Finance and I am sure it must concern the Minister of Industry. That is the speculative and changing nature of our markets.
Ten years ago it was acceptable to see NYMEX, the New York Mercantile Exchange, as being the way in which prices were derived. A producer or consumer would go in and trade, and on a 30-day or 60-day basis, act on the deal, sell a bit of oil and take delivery of the oil. That has all changed.
With the growth of Goldman Sachs Commodity Index, AIG, Lehman Brothers, Bear Stearns, Morgan Stanley and over-the-counter derivatives, traders right here in Canada, in Winnipeg, through the Intercontinental Exchange, we have seen massive distortions in the price of fuel, which hurt industry, retailers and refiners. Bringing the price of crude up to $147 and then dropping it to $35 is in no one's interest. Yet it happened.
Whereas that happened two years ago, what happened just last Thursday? I know some are wanting to say there are fat fingers and someone made an error and put million or billion. The way in which trades take place today is that there are high-frequency traders on computers who, if they see something drop 1%, will suddenly sell everything they have. The market then closes and many companies are left in ruin.
We have a golden opportunity at the G20 and G8 next month to lead the charge to regulatory reform, which is at the heart of the cost of energy for Canadians and the price they pay for gasoline. I know what I am talking about on this subject. The Obama administration is trying to tackle this, and I think Canada can play a leading role at precisely the right time to signal to the rest of the world that we want real people consuming and producing. We do not want index investors or sovereign investors, people who go in high, bid, hold the product at a certain price and create volatility in the market, which destroys the market.
I call on the government to look a lot further than the nano or micro step it has taken with respect to regulation of gasoline pumps. Look at the bigger picture, stand up for constituents, hear what I have said and measure it against what we have seen around the world today. Stand up for Canadians and I think Parliament will have their support.
