Mr. Speaker, as we all know, a few short months ago Canadians were hit with huge, unexplainable and what seemed to be frivolous increases in the price of gasoline at the pumps, and immediately began demanding action on the part of the government to assist with those unexpected costs. There were concerns about the impacts on business and on the price of goods generally in the market as cost of transportation increased.
I want to comment briefly on the concerns and the proposals constituents made to me and to, I am sure, other members of Parliament. They were concerned about the sudden windfall to the government of increased taxes as a result of the rising gas prices. In fact, the increased revenues to the government come only from the GST, so if the price of a litre of gasoline goes up by 20¢ to 25¢ as it did, the increased revenue is relatively minimal compared to other taxes on gasoline.
Those increased revenues are offset by additional costs to the government. First, as consumers shift their expenditures for gasoline from other goods and services, other areas of GST drop. Second, as the price of goods go up, then other benefits that the government pays out to Canadians such as old age security increase. The higher revenue from the sale of gas is in fact the excise tax which remains constant at 10¢ a litre regardless of the price and for the province of Ontario, it is close to 15¢ a litre.
The government instead turned its attention to helping Canadians who would face increased heating costs as the winter approached. Quite honestly, people have a little more control over their cost of transportation. They can choose to use the bus, to car pool, and to walk shorter distances, but we have very little control as Canadians over the amount of energy we need to heat our homes through a cold Canadian winter.
The government chose first, to direct help to those most in need with the costs of heating their homes this winter; and second, to help Canadians to reduce on a permanent basis their energy consumption through such things as improvements to their homes and help municipalities reduce the demand for fossil fuels by improving public transit, for example.
This bill and the government's actions respond to the demands from Canadians for greater accountability about how gas prices are set. This was perhaps best exemplified by someone who works at a gas station who, as the prices suddenly jumped 10¢ to 20¢ a litre, said he did not know he was charging more for gas. It was the same gas that was bought before Katrina hit and the price of it did not change, so he did not know why customers were being charged more. Greater accountability with greater powers of enforcement and review from the Competition Bureau are also an important part of the government's measures.
Let me deal with some of the specifics of how we propose to help modest income Canadians. Some 3.1 million households will benefit from payments under the energy cost benefit. To be clear, families who qualify for the national child benefit supplement will be eligible to receive $250. That is not a lot, but it is a fairly significant way of contributing to increased heating costs this winter, which may or may not materialize given the current prices of oil and gas.
A single senior entitled to receive the guaranteed income supplement will get $125. A senior couple, where both spouses are entitled to receive the guaranteed income supplement or where only one is entitled to receive it depending on the household income, will get $250. This will certainly help families on low incomes with children and seniors on low income under existing programs to pay the extra costs of heating their homes this winter.
We should all be pleased for a number of reasons with the other initiatives, which are to help Canadians reduce their dependency on fossil fuels and therefore be less vulnerable to sudden shifts and increases in prices.
A number of measures are in place to help Canadians of modest income, but not just Canadians of modest income, to make their homes more energy efficient and therefore reduce their costs of heating and other uses of energy. For instance, for modest income households we will provide between $3,500 and $5,000 to defray the cost of items such as draft proofing, heating system upgrades and replacing windows. This is under the new EnerGuide for low income households.
Multiple unit buildings and rooming houses will also be eligible for financial assistance and cost savings will average about 30% per household. That is an ongoing year after year reduction in the cost of heating.
We are also providing incentives to acquire the most energy efficient furnaces for homes and providing support to families who heat with electricity, but we are going beyond individual homes. We are also helping public institutions such as schools, hospitals, and municipalities to make the same kind of energy retrofits and cut their costs, and therefore cut the burden on the taxpayer.
What is important about these measures is that not only will they help individuals, families, and the institutions involved, but they will also help meet our commitments to reduce the impact energy use has on our atmosphere. I do not think there is much doubt in the House that we have to act decisively to reduce climate change and to reverse the greenhouse gas effect, which is warming the atmosphere, warming our oceans, causing climatic turbulence, and creating significant economic as well as social risks in the long run. These measures, while they have been brought in to respond to a particular crisis, are helping us meet our long term environmental goals with respect to the atmosphere.
As part of our new partnership with cities, we are accelerating the release of funds to upgrade and improve public transit. I am particularly pleased that in my own community in Ottawa we have made a substantial investment of $600 million toward public transit in cooperation with the province and the City of Ottawa.
As we do this in communities throughout Canada, we are meeting our environmental objectives. We are making it easier for Canadians to choose to use public transit instead of relying on gas for their automobiles and other vehicles.
Let me say a few words about what we are doing in terms of market transparency and accountability. Canadians are deeply concerned about the fact that prices can jump overnight. In the few weeks immediately following Katrina, gas prices went up by approximately 25%.
There is no explanation for that. My constituents see that as clear and blatant profiteering by the oil companies. Perhaps some would say in defence of the oil companies that it is just insurance in case the price goes up. The simple fact is a lot more people paid a lot more for gas than they needed to. Fortunately the oil companies seem to have come to their senses and I hope it is in part because consumers are refusing to buy gas at those higher prices.
Nonetheless, I do not think we are out of the woods yet in terms of the impact on people and their home heating costs this winter. No one needs to be reminded how cold it can get in Canada just about anywhere.
I should point out that people also suggested that we limit the price companies can charge. Constitutionally only the provinces have the right to put a price on a commodity like gas or oil. We heard earlier today that Nova Scotia in fact does that. Companies have to justify an increase in the price of fuel.
The federal government does not have that authority countrywide, so we have chosen other ways to assist people. Where we do have some authority is with the Competition Bureau, and the ability to oversee and to ensure as far as possible that there is no collusion around price fixing.
The bill strengthens the Competition Act to deter anti-competitive practices, gives the Competition Bureau more powers for enforcement, and increases fines for those convicted of price fixing significantly to $25 million from $10 million.
The problem is that after a number of reviews by the Competition Bureau, it has not been able to find evidence of collusion or price fixing. Therefore we will have to wait and see I am afraid as to whether the strengthening of the act in fact will give the Competition Bureau more latitude and more possibility of finding that in fact there is some collusion that is contrary to the public interest.
Market transparency and accountability is also important. As Canadians know more, they can make their own judgments on what is being done at the gas pumps and whether the price of fuel coming into their home during the winter is fair and reasonable based on the actual cost to the companies of the product they are selling.
We are providing much better information to Canadians. What good does that do? I think if Canadians have good information, they can use the power of their purse to bring pressure on companies that they think are being unfair. I am a great believer in the power of the consumer where people refuse to take out their wallets and pay for a product if they think they are being unfairly charged for it.
There have been a number of consumer actions that I can remember throughout my adult life that were extremely effective because consumers said “No more”. They would not pay what was being asked for by a product.
To sum up, we have been concerned. The price of gas is down again at the pumps, so I suppose the political pressure is off. Nonetheless, we have no idea what the situation will be as Canadians start paying for fuel to heat their homes this winter.
We are focusing our efforts to: help low income families with children; help seniors with the cost of heating their homes; invest in those energy saving measures for families and individuals in their own homes that will help reduce their long term dependency on fossil fuels; help our public institutions, hospitals, schools, and municipalities to reduce their longer term cost to the benefit frankly of all taxpayers because we all know who pays the bills of those institutions; and to work with the municipalities to speed up public transit.
Leading up to the development of this program, one of the things I urged was for the province to look at ways to cooperate and support the kind of measures being taken by the federal government. One area in particular concerns the thousands of public housing units in my community that were built in the 1960s and early 1970s. In those days these units certainly were not built using the best environmental standards in terms of energy conservation.
I urge the province of Ontario, the municipalities and other provinces where this situation prevails to look at whether we should not be upgrading the energy efficiency of publicly owned housing.
I am proud of what we are doing. I suppose sometimes it is never enough but it certainly is important to the families who would be helped.