Evidence of meeting #69 for Industry, Science and Technology in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was refineries.
A recording is available from Parliament.
5:05 p.m.
President, Les Pétroles Crevier and member of the AQUIP's Economic Affairs Committee, Association québécoise des indépendants du pétrole
About 7 per cent.
5:05 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
Is there reason to believe that the ability to import refined product and roll it in with other products sold by Canadian companies results in downward pressure on prices?
5:05 p.m.
President, Les Pétroles Crevier and member of the AQUIP's Economic Affairs Committee, Association québécoise des indépendants du pétrole
Yes.
5:05 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
So, just for the sake of argument, if it was possible to add 10 per cent refined products to total Canadian consumption, there would be significant downward pressure on prices for a product coming out of the refineries?
5:05 p.m.
President, Les Pétroles Crevier and member of the AQUIP's Economic Affairs Committee, Association québécoise des indépendants du pétrole
You need to be able to redistribute it from the point of entry. As Ms. Savage was saying earlier, product distribution is also a factor.
5:05 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
I understand.
We know that, at the present time, there are barriers to the entry into Canada of Brazilian ethanol. If those barriers were to be eliminated, would that not have the effect of bringing significant downward pressure on refinery prices?
5:05 p.m.
President, Les Pétroles Crevier and member of the AQUIP's Economic Affairs Committee, Association québécoise des indépendants du pétrole
There is a good chance it would. You're right.
5:05 p.m.
Independent
5:05 p.m.
Liberal
Dan McTeague Liberal Pickering—Scarborough East, ON
I see no difficulty, given that we're doing very well in time, in permitting the chair to ask a question. I think we talked about a couple of things. I would encourage the chair to ask the question. I think he clearly deserves it.
5:05 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you, Mr. McTeague. The trouble is, I have about 20.
First of all, I want to thank you all for coming. I want to thank you all for focusing on the refining margin, because that is where we have most of the questions, I believe.
I'll just limit it perhaps to Ms. Savage. I very much liked your presentation because it was very specific and straightforward. I'll put out a few questions. If you can answer them quickly, I'd appreciate that.
On inadequate refining capacity, my understanding is that we have 19 refineries operating at 95% capacity. The first question would be, how many refineries, ballpark, would we need to address that issue?
For the second question, you talked about too few suppliers in the wholesale market. Again, could we have an estimate on your part as to how many more suppliers we would need?
Then you talked about a very small number of refiners. Is that the same as suppliers, or are you distinguishing there?
Then in terms of inventories, how difficult is it to actually keep a system of inventories as to how much we actually have?
I have many more questions, but perhaps I could get those answered. If we could have some of that information, I believe we have to have it translated, but if we could get these recommendations from you, we will translate them into both official languages for all members.
Could you address those three questions for me?
5:10 p.m.
President and Chief Executive Officer, Canadian Independent Petroleum Marketers Association
On the first one—I have a good memory, but it's short—you were talking about the number of refineries and how many more we need. I'm afraid I don't have those data handy in terms of what we would need to balance supply and demand; in other words, to eliminate....
It's also very regional, I might add. There's the broad Canada question, and then there is, for example, Ontario or the Prairies, which is a different answer. Certainly, directionally, more refining capacity is necessary.
5:10 p.m.
Conservative
The Chair Conservative James Rajotte
In terms of suppliers, because I think you're distinguishing suppliers from refineries—
5:10 p.m.
President and Chief Executive Officer, Canadian Independent Petroleum Marketers Association
Right.
5:10 p.m.
President and Chief Executive Officer, Canadian Independent Petroleum Marketers Association
Well, on the number of suppliers, again, we're talking about that fluid of competition. What makes markets perfect is an infinite number of competitors. Ideally you have a huge number of suppliers, but in terms of going from a handful of refiners to double that or triple that...and I am talking about suppliers in the broader sense, not just refiners, but wholesalers, traders, independent suppliers, and so on.
5:10 p.m.
Conservative
The Chair Conservative James Rajotte
And then there's the inventory question. Is this actually difficult to track and to keep a record of?
5:10 p.m.
President and Chief Executive Officer, Canadian Independent Petroleum Marketers Association
It would take some work, no question. This is not a straightforward one-person job. I'm not suggesting it's a huge bureaucracy either. I think it's something we could accomplish quite easily.
5:10 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you for that.
If there's anything further any of you would like the committee to have, please feel free to submit it to me or to the clerk, and we will ensure that all members get that.
Thank you very much for your attendance here today. I apologize for the shortened meeting, but we do have votes, I believe, in about half an hour.
So we are going to suspend the meeting for a couple of minutes. We will clear the room, and then we will go in camera for our discussion of the counterfeiting and piracy report.
Thank you for being here.
[Proceedings continue in camera]