It would appear that the hon. member believes it is rather cute to deal with taxes. Let us talk about taxes. Let us talk about the fact that his friends in the oil industry keep taxes for 45 and up to 90 days that could otherwise be remitted to the government. Let us talk to this member about the devastation that taxes have wrought on independent mom and pop efficient retailers.
This is not just happening in my riding or the ridings of those members, it is even happening in the riding of the hon. Leader of the Opposition where he goes jet boating on a little water ski. Does he not understand that last year and the year before ARCO came in with predatory prices below the cost of wholesale and knocked out a number of independents? The people of British Columbia, many of them supporters of the Alliance Party I am sure, have now found out the real effect of predatory pricing. What happened? Prices went from 30 cents to 80 cents a litre to the great shock of the good people of British Columbia, and of course the hon. member is correct in pointing out the tax component.
We have addressed this and the province of British Columbia has addressed the reasons why this should be examined. Unfortunately those hon. members never thought this was a problem. Their single track, uni-minded view of always focusing on taxes allows them to look at something that is totally irrelevant to the actual problem.
I and every member of the House knows about the record profits being made by oil companies. I have no difficulty with people making money. In the free market that is exactly how business works. However, if one is able to do it based on a vertical integration and a near monopoly, and one is able to take advantage of weaknesses in our laws, lack of oversight or apologists in the Alliance Party, is it any wonder that Canadians today from coast to coast are being hurt by high fuel prices that have nothing to do with taxes?
I believe we have an opportunity here. If the Alliance is serious about dealing with this issue it will join with the government in not only reading a little more than four sentences out of a 69 page document, which I believe colleagues on my side of the House will know is very well written, but it will look at the other aspects of taxation.
The Alliance has accused the finance minister of saying that there should not be any co-operation. I know why it does not like that. It is because the finance minister listens to backbenchers, unlike certain leaderships in other parties who ignore or perhaps chastise backbenchers.
The committee made recommendations on a couple of issues. We have already dealt with the question of tax on tax. Let me deal now with the six other recommendations with respect to taxes. Given the first speaker's view on this issue of transportation, he might be interested to read—although I have not heard him phrase this the right way—that provincial governments should refrain from using revenues generated by gasoline consumption taxes and vehicle fees for projects other than road repair and transportation infrastructure. I do not see that recommendation on the floor today.
The joint action between the federal and provincial governments aimed at restoring Canada's national highway system should be given a priority and an appropriate cost sharing formula in public-private partnerships should be established to undertake repairs at the earliest opportunity.
The federal government should remove the requirement for a tax bond to be posted by independents who have sales indicating reasonable financial stability and extend the same tax collection authority that is granted and enjoyed by refiner marketers. Alternatively, wholesalers can be required to pay taxes on balances until they are remitted.
Has it not dawned on the Alliance that if it wants to make inroads in Ontario it might follow the leadership of the Ontario provincial government which, ironically, last evening pretty well endorsed the very findings of the Liberal committee on gasoline pricing?
I have heard from Ontario's minister of transport, the finance minister and the premier who have gone out of their way to compliment the work that we have done and to establish the single most important issue of taxation with respect to decline, which is that a mechanism needs to be put in place to ensure that the consumer receives the benefit, not the oil companies.
Are the Alliance members talking through their hats? Obviously they have forgotten the maritimes. The motion does not say anything about rising home fuel, natural gas or the relevance of using diesel on which there is very little federal tax that cannot be remitted to the individual.
I know the Alliance Party has problems with people in the maritimes from time to time, certainly some of its members do, but let me read from the New Brunswick select committee on gasoline pricing. The committee noted that reducing taxes did not necessarily translate into lower prices at the pumps.
Members know that New Brunswick has the second lowest tax regime for gas in Canada next to Alberta but it probably has the highest prices in Canada. Why is this a phenomenon? It is not because of me. It is not because we are trying to play some kind of game over the question of taxation. It is because the New Brunswick government was the first government in 1992 to implement a 2 cent a litre tax reduction. According to it, as crude costs were comparable it was assumed that the refiner and retailer margins were also comparable to other Canadian cities.
The select committee found that during the first six months of the tax decrease refiner and retailer margins were 3.7% higher in Saint John than the national average of other major cities. This led the committee to conclude that over time the tax reduction was captured in large measure by the oil markets and that consumers had not received the full benefits. In the committee's opinion, lowering the gas tax in that province did not produce corresponding lower gasoline prices to consumers.
The motion proposed by the hon. member's party and the silly subamendment that prevents common sense to be put into this motion ignores the fact that consumers could be badly hurt and that the companies, unless we understand the market we are dealing with, will never see the benefit of a tax reduction.
I want to compliment the finance minister, the Prime Minister and our colleagues for having the wisdom and the foresight two years ago to say that when the country could afford these kinds of tax reductions they would be given directly to Canadians.
We know the market functions in a supply and demand free market system. Where it does not work there is danger, especially when governments simply co-operate with an industry that can arbitrarily pad the increase or the decrease to consumers to its bottom line.
On that point let me make something very clear. Right now we are dealing with an international situation, and particularly in the United States of America there are inventory shortages. Almost any disruption is used as an excuse in the marketplace to drive prices up. The tragedy for Canadians is that we accept these things as inevitable.
No one here on this side is arguing for a world price. No one here is looking to revisit 1980 with the national energy program. Rather, we want to make sure that competition is free and abundant in this industry. To that end one has to ask the question, if there is a shortage in the United States and average refiner margins in that country posted in New York harbour are about six cents a litre in response to this tightening of supply, why is it that refiners in Canada in my area of Toronto can charge 11.5 cents a litre?
It is because that six, seven or eight mystery cents that are being tacked onto the price are the result of a lack of competition which the Alliance members have consistently and from a determined point of view decided to ignore. Not only have they ignored the wisdom of what is in this document, and they have thought enough of picking at least one of 29 recommendations, but they are ignoring the impact it is having on ordinary Canadians from coast to coast.
I plead with them to get off their hobby horses if they want to deal with this industry. I understand that the oil patch is in the background. There are refiners in Toronto; there is a nuclear reactor that leaks from time to time in my riding. That does not prevent me from speaking out on those issues.
This is a place where for generations we have enjoyed the freedom to speak out on things we know are true. We should not be confined to looking at only one issue that is totally irrelevant to the problem. That is exactly what this resolution is. It is irrelevant. It is dangerous. It is politically loaded. It will harm consumers because not only will consumers not see the benefit of the redistributive effect of governments being able to pay for the very things the provinces are calling for, it will also mean that consumers will never see any relief.
More important, if the Alliance members claim to be the great knowledgeable marketeers that they are, would it not make sense for them to at least consider that given the distortions in the marketplace they would have an opportunity to see the price, or any decrease that is contemplated, passed on through the tax system? I too would like to see taxes passed on.
I could go on at great length, but I want to move my motion. It is absolutely important that we put some balance in what is otherwise I am sure a well-intentioned idea to deal with high fuel prices, notwithstanding the fact that it does not deal with fuel prices but deals with taxation.
Mr. Speaker, with your indulgence I will read once again the motion I wish to put before this House today. The motion by the opposition initially reads “That given the record increases in the price of gasoline and home and diesel fuel, severely hurting Canadian consumers”. The amendment would be to replace the text after the word “consumers” with the following “, especially those with lower incomes, this House calls upon the government to assist Canadians in coping with the rising financial burden and that this House strongly urges provincial and territorial governments to consider providing similar assistance”.
I want to ask a few simple questions of my colleagues across the way before they ask me some. I am sure they will know that after some four or five years I have not been a dilettante on this issue. I have done many interviews in their ridings and I think there is some common ground that we can deal with.
The motion the Alliance has provided does nothing to ameliorate or improve the condition or the misfortune of Canadians to deal with the underlying uncompetitiveness of an industry that is dominated by three or four players that control most of the 18 refineries in this country and which cannot, for whatever reason and like any other industry, operate at the retail level without being a vertically integrated supplier.
That is a fairly serious indictment about the state of oil and the cost of oil in this country. It explains why 10 cents or 12 cents a litre, not even dealing with the upstream, at the downstream, is consistently and routinely passed on to consumers without even the opportunity of oversight.
When hon. members quote they do so shamelessly by quoting from only one part of the document written by Liberal members. They should deal with the issues of temperature compensation; deal with the fact that independence has been wiped out of this industry; try to reconcile the idea of environmental standards that are necessary for some people who cannot exit the industry; deal with the Come By Chance refinery which has had a restrictive covenant placed upon it; do not battle us when we are in the industry committee trying to propose new changes; and come one, two, three against good bills that might otherwise prove that parliament and backbenchers have a role.
Finally I urge hon. members not only to consider the ideology which underpins their views on taxation. Think of the people who are going to have to put away what little money they have because of a marketplace somewhere else outside Canada, a country blessed with an abundance of energies, in which taxes have built the infrastructure to ensure that our oil companies are profitable and competitive, and now find themselves at mercy's end and may not be able to get sufficient fuel or sufficient resources to meet the basic necessities. This has nothing to do with taxes and everything to do with the price of this commodity.
I call upon all members of the House to not just accept the amendment to the motion which would make the motion relevant and appropriate, but to have some compassion and put aside their tax battle until the election. Let us fight for Canadians.