It is certainly the view in the United States, and I think it's the view of many of the leaders in the European countries, that if gas prices stay at their levels or--what we fear--go up, it will be a very, very bad disincentive to the economy, and may be the straw that breaks a camel's back that already appears to be very weak.
With regard to the price-gouging, in the 2008 bubble in the United States, essentially most regulators gave up on trying to prove that price-gouging had any influence. I think, as your Competition Bureau is suggesting, when you look at these price differentials--you could go 20 blocks in the United States and get a 70¢ differential--they all tend to be justified by supply and demand price consequences.
If we really want to break the back of this spike, we must do two things. First, we must get position limits in place. Canada has a role to play--as Mr. Sarkozy has just made clear, France has a role to play--by its influence in the G-20 and elsewhere.
Secondly, one thing we haven't talked about--I don't know enough about Canadian government to know where this responsibility lies--is that President Obama asked our justice department and all the regulators to look for manipulation in these markets. That isn't excessive speculation, which is just a fact you find: there are too many speculators, and they may have the best intents in mind. Manipulation is where people conspire to drive the price up.
A major manipulation case was brought in the last two weeks by the Commodity Futures Trading Commission, which is noteworthy, because Dodd-Frank made it easier to prove manipulation. That part of the statute will probably go into effect sometime in July or August. But the manipulation here was deemed to be so bad that the regulators brought it under the older statute, which makes it harder to prove.
What that means is that there are self-evident conspiracies among traders in this market. I can't give you chapter and verse on this, but I would say that whoever has responsibility for manipulation should be looking at the Canadian market. It would not surprise me at all that there are actors in the Canadian market who are manipulating.
Finally, you can say that western Canada is in great shape now because the price is so high. As Mr. McTeague said, the price went from $147 to $31 in six months. This is a bubble. This bubble will burst. The price will go back down. Western Canada will be hurt and eastern Canada will be helped if you look at it from a very narrow perspective.
From the perspective of certainty and production, this kind of volatility.... In the United States it was $65 in 2007, $147 in 2008, $31 in 2009, and now it's $100 in 2011. That is not a healthy market. It certainly doesn't reflect supply and demand.