Mr. Speaker, I am pleased to rise today to speak to Motion No. 165, and I would like to read the motion into the record. The motion states:
That, in the opinion of the House, the government should take action with regard to gasoline prices by: (a) setting up a petroleum monitoring agency responsible for preparing an annual report on all aspects of the industry, including how prices are set and competition issues, whose director would be independent and appointed for a three-year term after consultation with sector representatives and the Standing Committee on Industry, Natural Resources, Science and Technology, and that the Committee be tasked with considering the report; and (b) by bringing forward amendments to strengthen the Competition Act, including measures to ensure that the Competition Commissioner has the power to launch investigations, summon witnesses and ensure confidentiality.
As a member of the industry committee that studied this issue, I want to provide some background for members of the House. The committee studied it extensively. It issued a report in November 2003. The committee recommended something similar to what is in part (a) of the motion, although as the member just pointed out, something not quite as extensive.
With respect to part (b) of the motion, it is true that gas prices in Quebec tend to be higher than they are in Ontario. Members of the Bloc have claimed for a long time that there is collusion in the industry and that gas prices should be regulated.
However, it is important to point out that no evidence of collusion has actually come forward. In fact, the Competition Commissioner pointed out that the industry had been studied 18 to 19 times on that basis and each time it was found that there was no collusion, except in minor cases at the local retail level, not at the crude oil price, which is a world price, nor at the wholesale level, which is done within the North American context.
As well, I should point out as the government has done on a number of occasions, rightly, that the regulation of gasoline prices in Canada can be done at the provincial level. Provincial governments are free to regulate gasoline prices. In Quebec, if it feels a need to do so, the provincial government can certainly step in and regulate gasoline prices if it feels it is in the best interests of their citizens.
It is important to point out, though, that Canada ranks very low on the list in terms of gasoline prices across the world. These figures are free to anyone who wants to surf them. International Energy Agency points out that in 2003, when this study was done by the industry committee, Canada had the second lowest gasoline prices to the United States and the world at that time. If we took the comparative levels of taxation out from both the American side and the Canadian side, Canada would rank the lowest in terms of our gasoline prices. To put it into perspective, it is important for us to realize that.
I also want to provide some background on the price. People look at the price as they drive by, but they do not understand what goes into setting that price.
First, there is the international price of crude oil as set by global supply and demand. This is what people are referring to when they are talking about the cost of a barrel of oil. Obviously, that price has been very high in recent years for various reasons.
The second component to look at is the wholesale or the rack price which is the finished gasoline product used by cars and involves refining by oil refineries. For us in Canada, the price is set within a North American context.
Third is the local price that we see when we drive into fill up our vehicles, and this is a regional market price. It varies from city to city, province to province, region to region. It is a very locally driven price. However, the retail price includes taxes to which we in this party have certainly drawn attention.
I would like to point out that the standing committee report, which was done in 2003, pointed out that over the long term the price of gasoline, excluding taxes, increased by 50% while taxes on the price of gasoline increased by 67%. Taxes are the fastest growing component of the final price of gasoline, a fact that should be clearly understood by all of us.
The tax burden at the pump has been raised as one of the reasons why prices are higher in Canada than in the United States. In fact, once the taxes are stripped out and do the exchange rate, the price of gasoline is very similar, even lower in Canada than it is in the United States.
I would like to remind my colleagues on the government side that they promised to look at the whole policy of taxation on gasoline from the GST standpoint, but also in terms of the 10¢ a litre excise tax and sharing that with the provinces and municipalities for infrastructure. That has been promised for two to three years. It should certainly be fulfilled in our view.
In terms of returning to the issue of whether there is collusion within this industry, members of the standing committee listened to witnesses from all sides. Members of all parties had the opportunity to bring forward their arguments. The evidence was clear that collusion was not the cause of the increase in the price of gasoline in early 2003. This issue has been investigated 19 times. I think it is important to actually quote the competition commissioner who stated at that time, “We have never found any evidence of any kind of collusion, except at a very local level, which is usually a bunch of stations getting together and trying to maintain the price at a certain level. Those we have prosecuted with some success”.
Even those who testified that they believed collusion was possible in gasoline pricing offered no concrete evidence. The Quebec consumer coalition was unable to offer any proof except its belief, not the actual data that it presented to committee, but just a belief that there was a strong possibility of a price fixing arrangement. A possibility is not a fact.
One thing that should be emphasized here with respect to part (b) of the motion is that the Competition Bureau currently has all the powers it needs to investigate collusion. Those Canadians watching the debate who feel there is collusion should get five of their friends to write specifically about whether it is two stations or three stations they suspect and submit that to the competition commissioner. If people have a suspicion, they should gain a little bit of evidence and submit that to the Competition Bureau to deal with it.
The Competition Bureau did say to the committee that it is hampered by resources. It obviously has a finite level of resources and could use more resources to fulfill its mandate. Our party would be willing to look at that. However, we do not feel that the proper thing to do here, based on the fact that it has investigated this 19 times and has found no evidence of collusion on a grand scale, is to give the Competition Bureau more authority in this area. We feel it has enough power as it is.
Nevertheless, we have called for the industry itself to do more in explaining the actual price, to do more in explaining about the components of what goes into the price in terms of the crude price, the wholesale price, the retail price and the taxes. The industry has made some efforts in that area, but it could certainly do more.
As I mentioned, if the commissioner feels there are too many cases being presented and the bureau needs more resources, we would look at that.
I want to say indirectly, just as support for the member, that there was a report done in 2003 and the government talked about setting up some form of information commissioner. We supported that even though frankly we did not see a great need for it. That is why I asked the member if he questioned the data that was available from MJ Ervin & Associates. This information is available and every Canadian can monitor the price of gasoline across Canada. I encourage them to do that to obtain more information about how prices fluctuate across Canada.
Nevertheless, the industry itself would even support having a petroleum information commissioner who would provide information to Canadians on a regular basis. We see it as a double bureaucracy and is not necessary, but if it would give more credence to the argument that the gasoline industry is not colluding, then maybe we should look at that.
The main point we would make is that those who would want to launch an accusation of collusion ought to do so by bringing forward specific allegations against that industry. We should be very hesitant about launching accusations against industries within this country unless there is actual data. If there is such data, it should be submitted to the Competition Bureau to investigate it.
In our view, and going back to the main point in the committee report, the fastest growing component of gasoline prices is taxes. Our party called for a reduction in taxes and certainly the GST in a 2003 report. That simply has not been implemented by the government. We would encourage it to do so immediately.