Mr. Speaker, I am pleased to rise today to support Bill C-235, a bill that would mandate that major oil companies selling gasoline to independents would have to sell it to independents at the same price that they sell it to their own branded dealers.
I have had the good pleasure of working with the member of parliament for Pickering—Ajax—Uxbridge on this initiative and I would like to commend him for his leadership on gasoline pricing and for chairing a task force that he put together. I was fortunate enough to work with him on that initiative.
Some might ask “What is the concern? If independents are charged for gasoline at a different price they can go to someone else. Instead of buying from Esso they could go to Shell or Petro-Canada”. The problem is that the wholesale market is very much a homogeneous market. It is controlled by three or four major companies: Petro-Canada, Shell, Esso and Ultramar. There is really one wholesale price that is driven by what they call the rack price. I will touch on that briefly later.
There really are not many choices, so it is imperative that the independents are charged the same price as the branded dealers.
When we set up this task force we met with Canadians all across Canada. In my own riding of Etobicoke North we had a meeting on January 23. There were representatives from the Etobicoke Chamber of Commerce, the gas dealers, trucking companies and others.
What we consistently heard across Canada is that Canadians want fair gasoline pricing. They are concerned also about the long weekend pricing and the volatility of pricing, but they really want a competitive and open market for gasoline pricing to ensure that prices are fair.
In fact, looking at gasoline prices right now, they really are not that bad. But the problem is that if the independent gasoline dealer is eliminated in Canada, then prices in the short run might be low but we will be burdened later with higher prices through this sort of oligopolistic market.
To achieve the goal of allowing independents the room to operate, to make a fair profit and to survive in a very competitive industry is a very challenging and daunting task. The independent gasoline dealers are really squeezed by the major oil companies.
In the oil industry there is a high level of concentration. There are now only 18 refineries in Canada, down from about 44 in 1960.