Evidence of meeting #43 for Natural Resources in the 41st Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was winter.
A recording is available from Parliament.
Conservative
Guy Lauzon Conservative Stormont—Dundas—South Glengarry, ON
Okay. Is it possible to produce more propane here in Canada?
General Manager, Canadian Propane Association
As long as natural gas is produced, it's produced with it.
Conservative
Guy Lauzon Conservative Stormont—Dundas—South Glengarry, ON
So that's the only way you can increase the percentage of propane.
Why is propane so much more expensive than natural gas?
President and Chief Executive Officer, Budget Propane 1998 Inc., and Chair of the Board of Directors, Canadian Propane Association
Propane is a byproduct of natural gas. In order to produce the propane, there's more commercial activity at the refinery level; therefore, there's a cost attached to it. The same is true with the butane that goes into your gasoline and even the petroleum side of it.
Conservative
Guy Lauzon Conservative Stormont—Dundas—South Glengarry, ON
I just think you have such a potential market there, you wonder why....
If you could produce more propane, you could obviously bring your costs down and you could be competitive.
Where are you with oil now?
President and Chief Executive Officer, Budget Propane 1998 Inc., and Chair of the Board of Directors, Canadian Propane Association
The maximum you can get out of a barrel of oil is 3%. You can never get more.
President and Chief Executive Officer, Budget Propane 1998 Inc., and Chair of the Board of Directors, Canadian Propane Association
In a relationship?
President and Chief Executive Officer, Budget Propane 1998 Inc., and Chair of the Board of Directors, Canadian Propane Association
Over the years it averages between 35% to 70%. It has been, historically, in the last 30 years, 70% of the price of crude. Now it's hovering around the 30% to 50% mark in the last three years, depending on the value of oil.
Conservative
President and Chief Executive Officer, Budget Propane 1998 Inc., and Chair of the Board of Directors, Canadian Propane Association
Oh, yes.
Conservative
Guy Lauzon Conservative Stormont—Dundas—South Glengarry, ON
Is the industry doing anything about that?
President and Chief Executive Officer, Budget Propane 1998 Inc., and Chair of the Board of Directors, Canadian Propane Association
We only get what the producers give us. Yes, they could give us some more if industry were willing to do some more marketing. That's where we say we don't want government to isolate a winner or select a winner, but to let the market forces....
Conservative
Guy Lauzon Conservative Stormont—Dundas—South Glengarry, ON
So if we can develop some world markets here, you guys are going to make a tonne of money.
President and Chief Executive Officer, Budget Propane 1998 Inc., and Chair of the Board of Directors, Canadian Propane Association
We don't export; the producers export.
Conservative
Conservative
Guy Lauzon Conservative Stormont—Dundas—South Glengarry, ON
But if we produce more natural gas, you're going to be in heaven here because you're going to have all this extra propane, and your prices are going to come way down, aren't they?
President and Chief Executive Officer, Budget Propane 1998 Inc., and Chair of the Board of Directors, Canadian Propane Association
The consumer in general will benefit.
Conservative
The Chair Conservative Leon Benoit
Thank you, Mr. Lauzon.
We go now to Mr. Gravelle for up to five minutes. Go ahead, please.
Claude Gravelle NDP Nickel Belt, ON
Thank you, Mr. Chair.
I heard you say that because of the cold winter last winter there was a shortage of propane. The only older person in this room is probably the co-chair, and he's quite a bit older than me by several decades. I've seen a lot of winters colder than last winter, and this has not been a problem before.
I got a phone call from a lady by the name of Mrs. Couture in Hanmer, and her propane had gone up 120% last winter. Can I expect more phone calls like that next winter? If no, why? If yes, why?
President and Chief Executive Officer, Budget Propane 1998 Inc., and Chair of the Board of Directors, Canadian Propane Association
We cannot speculate on what the retailers will do. We have said to you that we don't expect prices to be high. We don't expect to have shortages because of that extra storage capacity by the industry. But as far as the marketing side of it goes, I'd probably recommend that Mrs. Hannon—
President and Chief Executive Officer, Budget Propane 1998 Inc., and Chair of the Board of Directors, Canadian Propane Association
—look in the Yellow Pages to see if there are other suppliers to find out about that.