House of Commons Hansard #119 of the 36th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was gas.
Jocelyne Girard-Bujold Bloc Jonquière, QC
Madam Speaker, I rise on a point of order. In his response, the member for Toronto—Danforth involved the provincial governments. The question—
SupplyGovernment Orders
The Acting Speaker (Ms. Thibeault)
This is not a point of order. It is a point of debate. The hon. member for Toronto—Danforth.
Dennis Mills Liberal Broadview—Greenwood, ON
Madam Speaker, I think I have really said it all but I will say one more thing to all the members of the opposition parties. The member of parliament for Pickering—Ajax—Uxbridge put an amendment on the floor today and hopefully before the end of the day something miraculous will happen and all members will come on side and the amendment will be accepted, as the Minister of Finance has suggested.
Mac Harb Liberal Ottawa Centre, ON
Madam Speaker, I am fairly disappointed by what I have heard today. I have been here since 10 o'clock trying to hear a substantial debate about how we are going to resolve this whole crisis of high gasoline prices in Canada but all I have heard from the opposition throughout the whole day is how we are going to solve this problem through a tax reduction of 1.5 cents a litre. I must submit that is not the answer.
My constituents are telling me that even if we reduced the tax on gas by 1.5 cents a litre that they would still be paying 74 cents or 75 cents a litre, which is way too high. In that sense, I have not heard one tangible proposal that would deal with that specific problem.
The second problem is that the opposition wants the government to reduce the tax when in fact if the government were to reduce the tax there would be absolutely no guarantee whatsoever that this tax reduction on gasoline would go into the pockets of consumers, simply because history tells us otherwise.
Let us take the example of New Brunswick. Hon. members will be both happy and disappointed to know that in New Brunswick, which has the fourth lowest tax on gasoline anywhere in Canada at approximately 10.7 cents per litre, the people pay the fourth highest price for gasoline per litre across Canada. The government of New Brunswick decided to reduce taxes in the hope that it would benefit the consumers of New Brunswick but the oil companies sucked up that reduction and pocketed it.
Reducing taxes without talking to the consumers will not solve the problem. So much for the theory of reducing the tax on gasoline hoping that the consumer will get the benefit at the mercy of the oil companies.
I have been involved with this case, like many of my colleagues on this side of the House, for over 14 years, when gasoline prices were not fashionable to talk about, and nothing has changed. We still hear the same lines from the same players on the international market, the major international oil producers. When we ask them why we are paying so much for gasoline or why gasoline prices are moving up and down, they give us three arguments, the first being supply and demand. They tell us that when there is a shortage of supply on the international market we have a higher crude oil price and, as a result, we pay more at the pump.
I did some research through my office and through the Library of Parliament. We looked at the International Energy Agency, a very respected international agency located in Europe that monitors supply and demand internationally. What we found out was quite interesting. The average supply of oil in 1997 was 74.4 million barrels per day. The demand for oil was 73.4 million barrels per day. To that extent, we had approximately one million barrels per day more supply than demand. The average cost per barrel at the time was $18.98. In Ontario we were paying 57.2 cents per litre.
I will jump one year to give the House better statistics. In 1999 the international supply of oil was 74 million barrels per day and demand was 75.2 million. Therefore we had more demand than we had supply. Guess what? The price of oil per barrel on the international scene was $17.79. Hey, the price per litre in Ontario was still at 57.8 cents per litre.
If that is the case, could someone somewhere explain to me why it is that in the second half of the year 2000, when the total supply of oil on the international scene is greater than the demand, in excess of approximately 2.1 million barrels a day, that we are still crying wolf and saying there is a shortage of supply when in fact we have a surplus in supply? There is a huge supply of oil on the international scene and the oil producers are part of an international conspiracy to shaft consumers not only here in Canada but in North America, in Europe and all around the world.
The gentleman who said it best is the president of OPEC. Yesterday in one of the national papers he was reported as saying “Rocketing world oil prices are being fueled by speculation and are out of the oil cartel's control”.
He is absolutely right. Simply put, if we were to look at the oil cartels, OPEC has been pumping more oil on the international scene than there is demand. There is enough oil in the international market to flood rivers all over the world. There is huge racketeering out there and a huge amount of speculation that many of the international players are involved in it. It has nothing to do with supply and demand.
The second one is the market forces. When asked why we are paying so much for gasoline, they tell us it is because of market forces, that if the market can take 80 cents per litre, they are going to charge 80 cents per litre. How can they say it is about market forces when everyone is charging the same? How can the consumer have any choice whatsoever?
What about the poor little independent retailers in our neighbourhoods, like in Quebec a few months ago, where the major players move in and clean the butts of individuals so much so that they sell below cost? How can that be market forces? Oh, no. That is not market forces. The players who control the market wanted to pump out, not in, the independents who are a lot more efficient than the fat elephants that are trying to do everything to stick it to the consumer.
We move on to the next one, the so-called players on the international scene telling us that taxes are a problem here in Canada. My colleagues have fallen into their trap. It reminds me of a French story.
I am referring to the fable of the crow and the fox. I am sure my colleagues know this story. The crow had a piece of cheese in its beak. The fox regarded it and said “Ah, how beautiful you are, such lovely eyes”. Suddenly, the crow opened its beak and dropped the cheese into the mouth of the fox, which ate it. A fine story.
My colleagues in the opposition are falling into the trap. It is a problem that can only be resolved through co-operation between the provincial governments and the federal government. This is not a federal problem alone. It is a provincial responsibility. Pricing is the responsibility of the provincial governments. They have to show leadership. They have to respond to the call of the federal government, the Minister of Finance, the Minister of Industry and the Minister of Natural Resources. They have to come to the table in order to talk about solutions.
They cannot sell us peanuts thinking that is going to fill up our tummies. They are starving us. They have to move together in order to respond to the needs of the consumers. Seniors, men and women on fixed incomes will be more responsive to the initiative of my colleague from Pickering who put a very reasonable motion before parliament, and that is to put the money in the pockets of the people rather than give it back to the oil companies.
Ken Epp Reform Elk Island, AB
Madam Speaker, I find this quite interesting. We have put forward a motion today to simply stop collecting a tax which was intended to be collected while we had a deficit. All we are doing is saying to the government that it should now stop collecting that tax and it should stop collecting GST on taxes on fuel.
That little simple request is being countered by all sorts of high powered arguments by the other side. They say no, they will not do that. It is as if a youngster came to my house and said “I want a bowl of soup because I am hungry” and I said “Well, because you did not ask for the whole kettle, I am not going to give you the bowl”.
I do not think the government recognizes what is happening here. It talks about the hon. member from Pickering who has worked on this problem for so many years. How ineffective. He has worked for two years and the government has not listened.
Now the government is blaming us because we are not allowing a motion which simply says that the Minister of Finance should talk to the provinces. Frankly there is not a thing we can do to prevent the Minister of Finance from talking to the provinces. Let him do it. He does not need our approval. He does not need the approval of this parliament. The government has thrown in a red herring in order not to deal with the real issue, which is simply to vote in favour of stopping collecting the 1.5 cent per litre surtax that the government imposed on us along with the GST.
Mac Harb Liberal Ottawa Centre, ON
Madam Speaker, I must admit I came to this issue with an open mind. I wanted to be able to vote for the motion but when I read it, one thing came to my mind: either naivety or stupidity is involved. I think both of them were when this motion was put before the House.
The Canadian Alliance is trying to get Canadians to believe that by reducing the surtax by 1.5 cents a litre we are going to solve the gasoline price crisis in Canada. This is misleading, nothing more, nothing less.
I was interested in seeing the opposition come forward with proposals, such as how the provincial government should set up some mechanism. A good idea would be an ombudsman at the provincial level to monitor the price of gasoline. Has that party proposed it? Some sort of mechanism should be set up at the provincial level so whenever there is an increase by 10% the oil companies have to notify consumers. This is a provincial responsibility. Has that party proposed this? No, none of that. All that party has come forward with is rhetoric all day. It is terrible. I wasted part of my day listening to nonsense.
Paul Crête Bloc Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC
Madam Speaker, the member for Ottawa Centre spoke of the fable of the fox and the crow. I would like to speak of this fable using another image.
In 1998, a Liberal committee was established with 47 Liberal members. They behaved like the fox and wanted public opinion on their side. They said, in a report, things such as “There is an unreasonable industry concentration”. They also said that it meant a saving for the major oil companies with the way the competition was organized. Further on they said “The federal Competition Act has no teeth and the Competition Bureau is unlikely to uncover the practices”.
Today, the situation facing us is a short term one. There is the problem of overpriced gasoline and there is pressure on governments to lower taxes. There is also a long term problem in this situation. The government in office was not elected yesterday. It set up a committee that made recommendations in 1998. At that point, all the fox wanted from the crow, which represented public opinion, was satisfaction, to try to put an end to the story.
Was there no way to come up with real solutions and to implement the recommendations of the committee without denigrating today those trying to find solutions?
Mac Harb Liberal Ottawa Centre, ON
Madam Speaker, I will simply reply that the government has responded very positively to the recommendations of the Liberal committee. It is in the process of a complete review of the Competition Act. The Conference Board of Canada is looking at these issues.
As for prices, I would simply say that they come under provincial, not federal, jurisdiction. Unfortunately, a number of members have failed to make the distinction between prices and competition. Competition comes under federal jurisdiction, while prices come under provincial jurisdiction.
Dave Chatters Reform Athabasca, AB
Madam Speaker, there has been so much rhetoric flying around all day on this issue over and above the incoherent rantings that we just heard from the previous speaker. So much of it simply is not true.
Liberal members are speaking out of so many corners of their mouths that I do not know how anybody could ever figure out what the Liberal position actually is. Everybody understands when the NDP raves about the immorality of profits in the petroleum industry. That is socialism and we can understand that but the Liberals have been all over the map on this issue and continue to be.
The member for Pickering—Ajax—Uxbridge has flipped so many times he must feel like a burned pancake on the way to the breakfast table. The motion we brought forward to vote on comes directly out of his task force on gasoline pricing. He is trying to change the content of the motion so he will somehow be able to support it. He has managed to change it instead of simply supporting the context that he recommended to his government and with which it has done nothing for a year and a half. That makes no sense at all.
Everybody is blaming this whole issue on the evil oil cartel and the big oil companies that are gouging the consumer and all the rest of the things we have just heard. The previous member talked about doing research in his office and finding evil people hiding in places and ripping us off.
Looking back at the history of crude oil prices, in 1991 as a result of the gulf war crisis crude oil prices spiked to a record $41 a barrel. At that time the pre-tax cost of a litre of gasoline was only 42 cents when crude oil hit $41 a barrel. Today in 2000 with crude oil hitting $37 plus a barrel, gasoline prices have gone through the roof but the pre-tax price of gasoline is only 44 cents a litre.
No one can tell me that the gouging that is going on is by the oil companies. The pre-tax price of oil indicates that it is not the oil companies. It is the provincial and federal governments and their taxes that are gouging the Canadian people on this issue. There is no question about it. The information is there. The facts are there. A good part of the problem—
Roy Cullen Liberal Etobicoke North, ON
How about the fact that the federal tax has not changed in the last four years?
Dave Chatters Reform Athabasca, AB
Madam Speaker, the member said “What about the fact that the federal taxes have not changed in four years”. That is absolute rubbish. He knows better than that. He knows that the GST on gasoline increases every time the price of gasoline increases so the federal portion of the tax on gasoline goes up every time the price of gasoline goes up. It has done that all along.
The miserable failure of the government's economic policies and the supported weakness in the Canadian dollar are creating a huge problem in the energy industry that is yet to come home to roost. Sooner or later it will do that simply because refineries in this country have to buy their crude oil in American dollars and sell their product in Canadian dollars. With the Canadian dollar situated where it is, the margins in the refining industry are so fine that there has not been an oil refinery built in this country in 30 years.
Part of the problem that is driving the high price of oil, as the member we heard earlier suggested, is that while actual production is outstripping demand, the price of gasoline is not dropping because the lack of profitability in the refining industry has meant that there have been no new refineries built in 30 years and we do not have the refining capacity to catch up with demand. That is a fact. It is as clear as can be if anybody wants to look at it.
Earlier an NDP member suggested that energy is the lifeblood of Canada's economy and I certainly would agree with that. How in the world could we expect to have enough of this energy to sustain the lifeblood of the economy if we refused to allow the industry to be profitable, to expand and to build refineries and to find more oil and invest in the industry as they are doing?
In my riding alone the private sector has announced $35 billion of investment in the industry to ensure that the lifeblood of the Canadian economy is there 10 or 15 years down the road. I do not think that is a bad thing.
I think of the Liberal government and the division within the caucus with small groups of backbenchers running off with the minister's blessing to hold up a strawman to show consumers that they are really concerned about prices at the pump. I think of them making recommendations and the minister not having any intention of following up on them. I think of the socialist part of the caucus, or the environmental extremist part of the caucus, demanding higher prices at the pumps in the interest of reducing consumption, conserving energy and saving the environment.
There is no question in my mind that the price of energy will continue to rise. It is a finite resource and as the resource becomes scarcer and the demand becomes greater the price will rise. It is unavoidable. I will be splitting my time with my colleague from Calgary—Nose Hill.
The Liberal caucus is not telling consumers what is the real agenda. I am looking forward to going out and fighting the next election based on the government's plan to implement the Kyoto protocol. The Liberals are not saying it, but the David Suzuki Foundation, Greenpeace and the Pembina Institute are all telling us that it will not be that bad, that it will only mean a 3% to 5% reduction in GDP if we implement the Kyoto protocol.
I am looking forward to going out and fighting an election on the government's promise not of zero growth in the economy or zero growth in the GDP but a 3% to 5% drop in the country's GDP. That will be a lot of fun.
The public should know that. The determination of the environment minister to implement sulphur levels in gasoline is totally out of sync in Canada with the United States agenda. Here in Canada we will be creating a speciality market that will cost consumers dearly at the pumps, simply because of the minister's decision not to follow the timetable of the Americans in reducing sulphur in gasoline.
There is certainly nothing wrong with the proposal to reduce sulphur. It is commendable, but if we do not stay in sync with the United States we will be a speciality market in Canada. One only has to look at what happened in the United States when California implemented stringent environmental regulations on gasoline compared to the rest of the country and created a specialty market in one state. Its price skyrocketed above those in the rest of the United States. The same will happen when the government implements its sulphur levels in gasoline, but it is not telling consumers that. It is telling them that it is very concerned with the price of gasoline at the pumps and that it will step forward and save the consumer in Canada.
The government is not being open and honest with Canadian consumers. It is throwing up strawmen to deflect its real position on energy prices and where it is going. I think it is time it came clean with Canadians. I am looking forward to the election campaign so that we might be able to do that.
Pat Martin NDP Winnipeg Centre, MB
Madam Speaker, the member spent most of his speech shamelessly shilling for the corporations. He tried to convince Canadians that the corporations get by on a razor thin profit margin and struggle along with their oil and gas industry. I guess if one is trying to sell tickets to dinners at $25,000 per table one would pretty well have to butter up the executives of the oil companies. Who else would spend $25,000 to attend a Reform Party dinner?
Let us look at the actual facts. Let us look at some of the profits of these major oil companies, many of which I am sure are in the riding the member represents. Husky Energy in the last quarter made profits of $198 million, an increase of 2,302% over the previous year, and the hon. member is telling us they are not making a profit.
Let us look at Petro-Canada with $439 million in the last quarter with an increase over the previous year of 314%. Suncor Energy made a $619 million profit in a quarter, not per year, which is an increase of 156% over one year previously.
The hon. member is telling us that they are not gouging us at the pumps with profit margins like that. It is beyond credibility. Canadians do not believe it. Nobody buys it except for the guy wearing rose coloured glasses who is speaking for the corporations and trying to be a champion and an apologist to the oil companies. It is really grating for me to sit here and listen.
Dave Chatters Reform Athabasca, AB
Madam Speaker, I am glad it is grating on this member because his comments have been grating on me all day.
I am not ashamed to stand and defend a corporation making a profit. A year and a half ago the price of crude oil was $10.50, which was below the cost of production. Today the oil companies are making a healthy profit. I do not think that is immoral.
Those profits are driven by the marketplace. If consumers were not demanding that volume of energy, the energy prices would not be there. The price of crude oil is set on the open market through a bidding process. If the demand is there the price will be there.
Certainly, when the Liberals talk about a made in Canada energy program, that old chestnut will not sell in Canada anywhere. They tried that under the Trudeau regime and it did not work. Those members rave about the evil, gouging oil companies and today the government announces a stamp honouring Petro-Canada. The hypocrisy around here just staggers me.
Jocelyne Girard-Bujold Bloc Jonquière, QC
Madam Speaker, I am extremely disappointed in the performance of the Canadian Alliance member.
I thought that the motion introduced in the House this afternoon was so that taxpayers would benefit from what reformers were proposing.
I note that the member, in his speech, says that it is the oil companies that should have all this money and then make even bigger profits.
I am truly disappointed and I would like the Canadian Alliance member to tell me what place there is for consumers in all this. Where do they come in, the people who are paying 79.9 cents a litre for gasoline, the people who are going to be paying astronomical amounts for heating oil next fall? Is he there to defend ordinary folks or the oil companies? I am extremely disappointed.
Dave Chatters Reform Athabasca, AB
Madam Speaker, there has not been one shred of evidence presented here all day to indicate that the benefit would not be passed along to the consumer if the government followed our proposal and reduced the tax on gasoline by some $1.5 billion and therefore challenged the provinces to do the same, amounting to between a six and seven cent reduction in the cost of gasoline at the pump. Historically and every shred of evidence out there shows that it would and that consumers would benefit by the government reducing those taxes.
Governments traditionally have taxed gasoline as a luxury. For 40 years governments at all levels have had a need for income so they raised the taxes on cigarettes, booze and gasoline. They have done it over and over again. It is time to recognize what gasoline and energy are, to drop the tax and to pass the savings on to the people at the pumps.
Diane Ablonczy Reform Calgary Nose Hill, AB
Madam Speaker, I am pleased to speak to our supply day motion today which reads as follows:
That given the record increases in the price of gasoline and home and diesel fuel, severely hurting Canadian consumers, truck drivers and businesses, and given the recent promise by the Minister of Finance to reduce taxes, this House call upon the government to give immediate relief on fuel taxes, including repealing the increase in gasoline excise tax introduced as a temporary deficit elimination measure in 1995 and implementing the 1998 recommendation of the Liberal Caucus committee on gasoline pricing in Canada to remove the double taxation of the GST.
I cannot for the life of me figure out why government members who made these recommendations only two short years ago are bleating about their opposition to this motion. We are simply giving the House a chance to implement what the Liberal committee recommended.
In fact the Liberal committee consisted of 47 Liberal MPs. That is about a third of the Liberal caucus. They did not even have to worry about any opposition or any other input from other parties because they did not let other parties on their Liberal committee.
In spite of that, 47 Liberal MPs who heard over 1,000 people in their committee work two years ago recommended very clearly that the double taxation be removed from the price of gasoline, that is the GST duplication, and that the 1.5 cents per litre put on in 1995 to reduce the deficit be eliminated because it has worked and reduced the deficit.
The Liberals proposed this motion two years ago. Now we have the bizarre spectacle of those same individuals who loudly recommended that the motion be passed opposing it in the House. Why? We are not sure.
Is it a bad motion because the Alliance has put it forward? Was it a good recommendation when 47 Liberal MPs brought it forward in 1998? Today, when the Alliance is agreeing that it should be done because consumers are hurting, the Liberals will not agree to it.
Who is serving the interest of Canadians in the House? Is the interest of Canadians even uppermost in the minds of those members of the House? Is it sheer partisanship? Canadians are hurting and worried about how they will fill their home fuel oil tanks this winter. That does not matter to them. What matters is that they do not want to get together with the opposition. I would tell Liberal members opposite to grow up. We are here to serve Canadians. We are not here to serve just partisan interests.
We have brought forward a motion which is exactly the same as the one that 47 Liberal members travelling across the country came back with and recommended to their government. We are recommending the same thing. We are agreeing with the Liberals. We are saying that it should be implemented today. Let us vote for this motion. Let us get on with it. Let us help Canadians. Let us ease some of the burden. Yet we find somehow that ridiculous and specious reasons are put forward as to why all of a sudden their own recommendation does not have any merit. That is simply ridiculous.
I have heard the most bizarre reasons in the debate, one of them being that if we lower taxes it will not help consumers because the people who supply the product will simply raise the cost of the product. By that logic, we should raise taxes sky high to make sure that government gets all the money from products. By that logic the higher the taxes, the lower the actual price and profit to the producer.
NDP members are saying “God forbid that producers should get any money. Let us tax higher. Let us not cut taxes”. By that logic, why do we not add a 10 cents per gallon tax on fuel? Anyone can see that is an illogical position to take. Let us not go there. Let us go where Canadian people want us to go. That is to give them some hope, some relief and some means of paying the price of fuel that they desperately need. Canadians need fuel to heat their homes. This is not a luxury. This is a cold country. We need to tell Canadians that we will do what we can to make sure they have a reasonable chance of meeting the necessary costs.
People need fuel for transportation, whether it is for their own transportation or for car pooling or for taking the bus or for sending their goods by truck or for any kind of transportation that takes fuel. This is not rocket science. We are glad we do not have the horse and buggy economy anymore.
Fuel must be paid. If the government is taking the lion's share of the cost of this commodity, then ordinary regular Canadians trying to live their lives, heat their homes and carry on the ordinary commerce of their society are going to suffer.
I quote from an editorial from the Calgary Herald on June 13 which says:
Between 1996 and 1999, even before adjusting for inflation, the base price of gas declined from 30.2 to 28.6 cents per litre. By contrast, the government take in fuel taxes almost doubled—from 17.6 to 29 cents per litre.
Who is hurting Canadians? The government has imposed tax after tax on Canadians. The error of its ways has been recognized. A recommendation has been brought forward that that be reversed, that there be no tax on tax and that the temporary tax to eliminate the deficit be eliminated. Now we find that these common sense measures, these measures that would bring relief to every Canadian in this country cannot be supported.
I would say to every Canadian watching this debate who has a Liberal member of parliament representing them—and I use that term very loosely—to phone their member of parliament and ask them why they want to keep a temporary tax when the purpose of the tax has been fulfilled. Ask them why they would have a tax on top of tax. Ask them why they will not follow the recommendation of 47 of their own MPs and give Canadians the relief they want and need for peace of mind as winter approaches. Ask them if there will be some help from the people being paid to represent them. I ask Canadians to put these questions to their Liberal members of parliament.
If an election is called, I ask that someone get up at every single forum and take their Liberal candidate to task. Ask them why they want to keep a tax that they themselves said was temporary and now ought to be eliminated. Canadians should ask Liberal candidates about double taxing them.
I say to all members of the House that we put partisanship aside. Let us put our pet projects aside, our pet peeves against big corporations and all the things that have muddied the waters of this debate. Let us simply stand in our place when the time comes to vote on this motion and say to Canadians that yes, we will eliminate a temporary tax which is no longer necessary and whose purpose has been served and that we will no longer tax Canadians on tax. Canadians might actually applaud that.
I certainly hope that Canadians who see their member of parliament vote against such a common sense, reasonable, rational, helpful measure will punish those representatives who have kicked them in the teeth once again when it was totally unnecessary.
Dan McTeague Liberal Pickering—Ajax—Uxbridge, ON
Madam Speaker, I cannot speak right now about what the punishment is going to be for various members of parliament, but I can assure Canadians this evening that when it comes to this issue, this party, unlike that party, knows it implicitly. More importantly, it does not play the kind of hair splitting recommendations where members selectively pick certain parts of this wonderful document. They have given credit to one simple area.
On the question of the resolution, the member across has conspicuously forgotten that as part of the condition of that recommendation, it recommended that if the GST was removed from other taxes, the federal government should undertake measures to ensure the resulting savings were passed on to consumers and not merely absorbed by the oil industry. They cannot talk out of both sides of their mouth. On the one hand they want the resolution. On the other hand they do not want to accept the mechanism, which is to give it directly to Canadians.
That member, her party and her leader today had an opportunity to give the tax back to Canadians, assuming of course it was going to bring down the level of gasoline and somehow remove the hardship on Canadians. I know Canadians understand this, that they are johnnies-come-lately on that side. They are shamelessly sitting here and trying to pass off their defence of an industry that for the past three years has been making excessive profits, cutting back production and creating all sorts of disruptions in a country where we have paid through our taxes to make sure that industry received more benefits than others.
I suggest they start talking about the oil patch, the difficulty Canadians are facing and understand how dangerous the resolution is without the amendment and give Canadians an opportunity to receive those taxes, not the oil industry.
Diane Ablonczy Reform Calgary Nose Hill, AB
Madam Speaker, I feel sincere pity for this member who chaired a committee of 47 of his colleagues unsullied by any common sense from the opposition. Now he has to twist himself inside out to oppose recommendations which he himself brought forth. Surely that is a sad indictment of Liberal politics when a fine member of parliament has to twist and turn to repudiate his own findings. This is sad.
I am glad that my appeal to Canadians to take their Liberal members of parliament to task on this issue has struck a nerve. The only thing that will bring sanity back to the policies of the government is if they feel some electoral heat.
It is simply ridiculous to suggest that somebody who made a recommendation to repeal a tax, which was temporary and whose purpose has been served, and who spoke out against tax on tax should now speak out of both sides of his mouth and oppose the very measure that would have brought that forward.
If anything is more dangerous than a member of parliament doing that I would like to know.
Dan McTeague Liberal Pickering—Ajax—Uxbridge, ON
Madam Speaker, I rise on a point of order. This hon. member has in some respects attempted to try to put words in my mouth in terms of what I have said. For the record, this is clearly—
SupplyGovernment Orders
The Acting Speaker (Ms. Thibeault)
I am afraid this is a point of debate.
Diane Ablonczy Reform Calgary Nose Hill, AB
Madam Speaker, I would just say this. I know sometimes in the heat of debate and totally appalled at the hypocrisy of other members sometimes we get carried away.
Again, we need to focus on what is right and best for Canadians. What is right and best for Canadians is that we do what we can to alleviate the stress and the hardship that they are not only feeling now but will increasingly feel as winter continues and as their fuel costs rise. Let us put all of this aside and simply help Canadians. That is why we are here.
Rose-Marie Ur Liberal Lambton—Kent—Middlesex, ON
Madam Speaker, I will be splitting my time with the hon. member for Abitibi—Baie-James—Nunavik.
I am pleased to offer my comments on the motion before us today. I, too, am very concerned by the increase in price for gasoline, diesel and home heating fuel. This affects all of us as individuals, as businesses and as consumers.
As the hon. member for Pickering—Ajax—Uxbridge has outlined so very well, our fellow government caucus members saw a need to study the whole issue of gasoline pricing and this included taxation. We issued a report in June 1998. As one of the co-chairs of that committee, I was and am certainly proud of our report.
This was a group of MPs who were concerned enough to go out and gather material that may have helped explain price fluctuations in Canada. We travelled to dozens of communities, speaking not only with members of the gas-buying public, but with representatives of the oil companies, independent retailers and trucking firms.
One of our committee's recommendations stated that double taxation, with GST on top of the retail price before and after provincial and federal excise taxes, must end, conditional on a guarantee that the tax decrease would be passed on to consumers and not absorbed by oil companies.
The 1.5 cents per litre deficit cutting tax we suggested also must be removed. These are but two of the Liberal committee's 29 recommendations.
This motion specifically refers to taxation and that, I agree, is an important element, but not the only one when it comes to price. There are other issues at play here that must also be addressed, such as competition in the industry, appropriate laws that prevent predatory pricing.
For example, the general mandate of the Liberal committee on gasoline pricing was to examine all aspects of the oil industry that had a direct impact on the pricing of gasoline in Canada. We examined such issues as operations and procedures in the oil industry, wholesale and retail selling, refining, gasoline exports, federal-provincial legislation and consumer protection.
As hon. members know, the Conference Board of Canada is currently undertaking a study of the pricing situation as well to give Canadians a solid and forthright accounting of the situation.
With regard to a tax cut on gasoline, we must ensure it is done in concert with the provinces. We must also guarantee that the price will not be taken up by the large oil companies.
I note that the official opposition is not calling for an inquiry into the domination of 85% of the gasoline market by only four refiner-marketers. It is not calling for a study of the fact that all wholesale prices are identical or that refiner-marketers' domination allows control of retail and wholesale pricing or that there have been no new entrants into the market, while independents are going out of business and the retail margins are uneconomic for even the most efficient independent operator.
Today's motion emphasizes the tax portion only. Perhaps this provides good optics, but we in government are responsible for good public policy. I want to emphasize, however, that I support the elimination of the 1.5 cent per litre excise tax that was added in 1995 as a deficit cutting measure.
Let us look at some measures of how to help low income people buy home heating oil this winter. I believe we must be creative and help where we can in the days ahead. The Minister of Finance, it is rumoured, may move in the weeks ahead on this aspect. As well, the minister has stated that the issue of the GST being charged both on the wholesale price and retail price is eminently worthy of further examination.
I have heard from my constituents in the trucking industry about the rise in diesel fuel costs. I recognize that truckers are an important part of our economy. I know the trucking industry is aware that the rack price for diesel is up about 105% from a year ago. The rack price is the wholesale price a refiner charges for fuel sold directly to trucking companies.
In the same time period, the rack price of gasoline is up 65%. This will impact not only on truckers' wallets, but also on those of all consumers.
School bus fleet owners have contracts in my riding of Lambton—Kent—Middlesex. Based on a 50 cents per litre gasoline cost, they are losing money.
Farmers are also being hit by higher prices. It is costing them $20 an acre more to put in a crop of corn because fuel costs increased by 97% between May 1999 and March 2000. In good farming years that $20 an acre was often all that was left over.
Predictions of a colder winter than usual will certainly increase the use of home heating oil and natural gas. This past February the sudden cold snap along the eastern shores of Canada meant that the demand for middle distillates increased. Home heating oil was one. As people turn up the heat in their homes, some of the crude that would go to diesel is diverted to heating oil. Gas retailers will tell us that there is less profit and volume in diesel and that the only significant user of diesel is the trucking industry.
At the same time it should be understood that the increase in the price of diesel fuel in Canada is almost totally attributable to the rise in the world crude oil price, which has more than doubled over the past. Of all the increases in the pump price of diesel, only about a half cent per litre is related to federal taxes, namely the GST.
However, GST revenues have not increased dramatically because most diesel is used by businesses that recover their GST through the input tax credit mechanism. For example, in January the GST input tax credit effectively offset the pump price for diesel. The same applies for businesses using gasoline where the GST has resulted in a one cent per litre increase at the pumps. Again, most commercial users recover the GST they pay through the input tax credit.
Canada has the lowest excise tax on diesel fuel in the G-7 at 4 cents per litre and the second lowest excise tax on gasoline at 10 cents per litre. The federal excise taxes on gas and diesel fuels are fixed. They do not fluctuate with price changes. That is important to note. Even when the excise tax is combined with the GST, total federal taxes on diesel are par with the United States.
We must address the issue of competitiveness at the federal level. This motion disregards and overlooks the larger perspective. Taxation on gasoline is but one element of a much greater examination of public policy. Governments have a responsibility to use the means at their disposal to ensure that consumers are protected and true competition exists. Our caucus committee firmly recommended that the preservation of true competition is the most important aspect in the protection of the interests of the Canadian consumer.
Jim Gouk Reform West Kootenay—Okanagan, BC
Madam Speaker, in listening to the hon. member, I could not help but note that she said “We in government are responsible”. Never have truer words been spoken. From what we have heard, the government's big concern, if there is a tax reduction, is where it will go, to the consumer or to the rich oil companies.
I want to remind the government of the figures that I used in my speech earlier on. These are the facts. Over an 18 year period the price of the gas component of gas taxes has gone down 25% in real dollars. The price of the excise tax component, or the total tax component of the price of gas, not just federal but all governments, has gone up 57%. These are not Canadian Alliance facts, they are Statistics Canada facts. When the member says “We in government are responsible”, those facts certainly support what she says.
I would also like the member to comment on the fact that not only has the hon. member for Pickering—Ajax—Uxbridge, who is sitting beside her, been on a task force, but so has the hon. member for Ottawa Centre, who spoke earlier. He was on a 1990 all-Liberal task force while in opposition studying municipal infrastructure. That task force recommended that there be a dedicated commitment of fuel tax revenues to highway infrastructure, a commitment that suddenly slipped out of the Liberals' minds when they became the government.
Therefore, the real question is not whether can we trust the oil companies but whether we can trust the government.
Rose-Marie Ur Liberal Lambton—Kent—Middlesex, ON
Madam Speaker, it is interesting that in the debate today we are debating whether the taxes have gone up or whether the cost of crude oil has gone up.
The member mentioned the taxes and whether governments will follow through, provincial or federal. I would like to share an example with my hon. colleague. Not too long ago we had the AIDA program. The federal government reviewed the criteria and felt that additional dollars were available and that a negative margin should be covered. It moved unilaterally in Ontario because Ontario was not fixed to go ahead.
This is the kind of rhetoric we hear when the national government wishes to move ahead and the provincial government does not follow.
René Laurin Bloc Joliette, QC
Madam Speaker, the hon. member has given us an argument in explanation of the government's refusal to lower the excise tax by 10 cents a litre. We are told “The government is prepared to do this, but only if the provinces are also prepared to discuss doing so, and to do it”.
I cannot see how this argument, which strikes me as more of a pretext, relating to the absence or presence of provincial co-operation would ensure that this tax would no longer serve to add to the profit margin of the companies.
The federal government says “If we proceed unilaterally, we fear the benefits will end up in the companies' coffers”. But is there not the same risk if it is done along with the provinces? In my opinion, it is not because the provinces are involved that this obstacle, the risk that the profits will end up in the companies' coffers, will be avoided.
How can the hon. member explain this logic? It strikes me as more of a pretext used by a government that is actually thinking “If I am going to go short of revenue, the provinces have to as well”. This is bad logic.