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.
12:40 p.m.
NDP
Claude Gravelle NDP Nickel Belt, ON
That's an easy solution. I wish it worked like that, but it doesn't.
TransCanada wants to convert to oil 3,000 kilometres of pipes carrying natural gas between North Bay and Ottawa.
We are talking about a 20% reduction in natural gas.
How will that affect the price of propane?
12:40 p.m.
President and Chief Executive Officer, Budget Propane 1998 Inc., and Chair of the Board of Directors, Canadian Propane Association
I cannot really tell you what impact that will have. We feel that the distance is not huge. I don't think it will have a financial impact.
12:40 p.m.
NDP
Claude Gravelle NDP Nickel Belt, ON
I am not talking about the financial impact, but the impact on clients.
Will clients experience a shortage of propane because of that situation?
12:40 p.m.
President and Chief Executive Officer, Budget Propane 1998 Inc., and Chair of the Board of Directors, Canadian Propane Association
No.
12:40 p.m.
President and Chief Executive Officer, Budget Propane 1998 Inc., and Chair of the Board of Directors, Canadian Propane Association
Absolutely not.
12:40 p.m.
NDP
12:40 p.m.
Conservative
12:40 p.m.
NDP
Dennis Bevington NDP Northwest Territories, NT
Thank you, Mr. Chair.
If 9% of the propane market is residential, and that's used for thermal heating, is there some commercial use for thermal heating from propane as well?
12:40 p.m.
General Manager, Canadian Propane Association
Yes, there's a lot in the construction industry as a temporary heat source when building a building.
12:40 p.m.
General Manager, Canadian Propane Association
No, it's significant, I believe. I don't have my graph in front of me.
12:40 p.m.
NDP
Dennis Bevington NDP Northwest Territories, NT
So you might say that 15% of the propane in Canada is used for heating. If you have a cold winter and the heat days go up by 10%, you're going to see a 10% increase in the heating load. You weren't able to adjust to a 10% increase in the heating load caused by a colder winter? What's the number we're talking about? Did last winter increase the use of propane for heating by 10%, 15%, or 20%?
12:40 p.m.
President and Chief Executive Officer, Budget Propane 1998 Inc., and Chair of the Board of Directors, Canadian Propane Association
I cannot tell you, unfortunately. That is market retailers' information that we do not have. We can only speculate on the percentage, and as far as the activities they have, I can't—
12:40 p.m.
NDP
Dennis Bevington NDP Northwest Territories, NT
But the cold winter could only have affected about 15% of your product use. You could do a calculation based on winter heat days to determine how much that should have impacted your product. You might have only impacted your product by 3% or 4% by the amount of extra propane required to heat Canadian homes. Is my math working here?
12:40 p.m.
General Manager, Canadian Propane Association
Again, the issue wasn't necessarily the abundance of the product in general. It was where it was located. Because of the cold, weather logistics made it harder to access homes. If it's a long driveway in a rural community and that driveway's not plowed, it delays the delivery times from residence to residence.
12:40 p.m.
NDP
Dennis Bevington NDP Northwest Territories, NT
So even though there wasn't a problem with supply, the price went up. You know, honestly, I have a little trouble with this. If you didn't have a supply problem, why did the price go up?
12:45 p.m.
General Manager, Canadian Propane Association
It was certainly down, but there were more logistical problems.
12:45 p.m.
NDP
Dennis Bevington NDP Northwest Territories, NT
So say you were delivering a thousand dollars' worth of propane to somebody's house and you had to go up a driveway and it took you an extra 15 minutes. Did that mean the price of your propane had to go up by 100%? I'm having trouble with this. Once again, why did this price go up so much if you didn't have a supply problem for residential heating?
Residential heating customers were probably the bulk of the customers for that particular retailer, right? There are going to be people who are providing propane for residential heating. That's all they're going to be doing. So if their supply wasn't the issue, and you say that actually it was more the fact that they had trouble driving up the driveway, that doesn't give you a 100% increase in the price of propane.
12:45 p.m.
Conservative
The Chair Conservative Leon Benoit
You have to wrap it up, please, Mr. Bevington.
Is there any response?
12:45 p.m.
President and Chief Executive Officer, Budget Propane 1998 Inc., and Chair of the Board of Directors, Canadian Propane Association
We don't determine the prices. The prices are imposed on us. Retailers at the end get the producers' price, the posted price. It's a commodity, and that's how it is. So at the end, if the commodity goes up because there's a big demand somewhere, we unfortunately inherit that problem.
12:45 p.m.
Conservative
The Chair Conservative Leon Benoit
Thank you.
Thank you, Mr. Bevington.
Ms. Crockatt, do you want one question or not?
