Industry Committee on June 11th, 2007

[Brian Masse, NDP, Windsor West, ON]

That was 2006.

[Geoff Trueman]

That's right, and that was coming off the drop in the previous year.

[Lise Potvin]

An important point is that the GST rate was cut, so—

[Brian Masse, NDP, Windsor West, ON]

I understand that, but what we're trying to find out is who was right or wrong in terms of whether or not the government gets more cash from revenue coming in when the price at the pump goes up, whether the GST is at 6%, 7%, 8%, 5%, 4%, 3%, 2%, or 1%?

[Lise Potvin]

In that case I would say the GST revenue increases with prices, but the rate was cut, so all in all, it's more or less the same.

[Brian Masse, NDP, Windsor West, ON]

I'll go quickly over to Mr. Jennings.

With regard to your deck here, on the back page you did have some comparatives. I would like to see Canada compared to other gasoline- and also oil-producing nations like Russia, Saudi Arabia, Venezuela, as opposed to some of the ones that are on there. It would be interesting to get those comparisons, because there also may be comparisons with dual-pricing countries. I don't believe there's anyone in the deck here that had a dual-pricing country.

Could I quickly move to the question on your other chart here, with regard to the increasing refining and marketing costs. When you look at the comparatives here, it's a really good deck because it shows that the price of gasoline is just over...and then doubled, whereas federal taxes are fairly constant, just a bit increased, and provincial taxes are fairly constant. What's really significant is that there's almost a tripling of the refining and marketing costs and margins, including basically a significant jump even last year.

Has there been any explanation in terms of either refining techniques or any types of marketing requirements that have increased substantially from basically 1996 to 2007--

[The Chair, Conservative, James Rajotte]

Thanks for the question.

Just a brief answer, if we could.

[Philip Jennings]

I just want to make sure I understand your question. You're trying to understand why the refining margins have increased over time?

[Brian Masse, NDP, Windsor West, ON]

So much different from the rest of the departments.

[Philip Jennings]

As I said, the current spike—you see a spike in the last couple of months—is really, as I mentioned before, a question of the inventory levels being very low in the United States. So we actually have an inventory level in the United States as low as it was after Hurricane Katrina. The second thing is that you have refiners that have gone off—

[Brian Masse, NDP, Windsor West, ON]

I'm sorry, it's the percentage difference here.

[The Chair, Conservative, James Rajotte]

We're well over time, I'm sorry.

[Brian Masse, NDP, Windsor West, ON]

Maybe what I can do is table the question to the committee later.

Thank you, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Yes, Mr. Masse will table that as a question.

[Brian Masse, NDP, Windsor West, ON]

Thanks.

[The Chair, Conservative, James Rajotte]

Mr. Bevilacqua, please.

[Maurizio Bevilacqua, Liberal, Vaughan, ON]

Thank you, Mr. Chairman.

Maybe this is not fair, because I'm not going to access all the skills you bring to the committee in the sense of experts in Finance as well as Natural Resources, but I do want you to speak to our constituents, knowing what you know about this particular issue. As a consumer, how does that knowledge affect you when you go to the pump?

[Howard Brown]

I'll be happy to volunteer on that.

I first confronted this when the hurricanes took out capacity and we really had a spike in gasoline prices. We put together some information for Canadians about how to save on gas, and I felt maybe I should actually put some of them into effect myself, as opposed to simply telling people what to do. So I slowed down from 100 kilometres an hour to 90 kilometres an hour, and I found that I actually got to my destination in exactly the same time. My brakes were used a little less frequently as well.

I don't mean to be facetious about this. There are options that Canadians can pursue to reduce gas consumption in the short term. Don't make unnecessary trips. If you have to go to three places in a day, do it at once, and don't make three separate trips. If you can get people together to go on the same trip, by all means do that. Make sure your tire pressure is properly inflated. Most important of all is to slow down.

[Maurizio Bevilacqua, Liberal, Vaughan, ON]

Anybody else?

[Geoff Trueman]

Buy your gas during the week. We all live in neighbourhoods; we've all seen the prices go up and down on weekends and holidays. Certainly I'm aware from speaking with my neighbours as the tax guy—they always quiz me on how much tax is in it and what not. Most are surprised that the federal excise tax is only 10¢, and that it hasn't changed in 12 years, that the diesel tax hasn't changed in 20 years.

We're certainly sensitive to the pricing issues out there, and we understand it's a concern for Canadians. One of the things the government has done well is, for example, the Fuel Focus, where there is more information available to consumers. There is a greater awareness, or there is starting to be an awareness of how the market works.

[Lise Potvin]

And when you need to replace your vehicle, buy a more fuel-efficient one.

[Maurizio Bevilacqua, Liberal, Vaughan, ON]

I'm going to ask this question. It was brought to my attention by Mr. McTeague. The question is in relation to one of the charts of the regular gasoline pump price components and the four-week average, May 15 to June 5, 2007. The question is about refining and marketing costs and margins and why this particular element of the chart is not subdivided.

[Philip Jennings]

Why are the refining and marketing margins not subdivided?

[Maurizio Bevilacqua, Liberal, Vaughan, ON]

Yes.

[Philip Jennings]

They could be, and we'd be happy to provide the same chart.