Debates of April 19th, 2005

Gasoline Prices

[Roy Cullen, Liberal, Parliamentary Secretary to the Minister of Public Safety and Emergency Preparedness]

Mr. Speaker, I am pleased to have this opportunity to address the House on Motion No. 165.

Motion No. 165 contains two separate proposals. One deals with the creation of a petroleum monitoring agency and the second deals with amendments to the Competition Act. Today I would like to comment on the first part of the motion, which proposes the creation of a petroleum monitoring agency. The motion states:

That...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....

The report would be considered by the Standing Committee on Industry, Natural Resources, Science and Technology.

The government has frequently been asked to create a federal commission or agency to monitor gas prices. Such proposals usually surface when petroleum product prices are increasing or fluctuating. The most recent proposal was made by the former Standing Committee on Industry, Science and Technology in November 2003.

Its report, “Gasoline Prices in Canada”, recommended that the federal government create an independent agency that would undertake the collection and dissemination of information on gasoline prices. The purpose of this report was to make consumers more fully aware of the competitive nature of the industry.

After careful consideration of the recommendation, the government responded to the committee in April 2004. While the government agreed with the committee on the importance of having publicly available information on petroleum product prices in Canada, it indicated that current government activities, along with the gasoline pricing information collected and publicly distributed by other levels of government, agencies and the private sector, provided the most practical and cost effective method of informing the consumer.

When gasoline prices rise, Canadians naturally are concerned. High prices directly affect our cost of living. We all sympathize with those who have had to cope with these increases, and all of us in this House have had to do that as well.

To handle the issue of gas prices, we must first clearly understand what causes these increases and what action the Government of Canada can take under our Constitution.

The law of supply and demand dictates the price of gas in competitive markets.

Since 1985 the government has been committed to a market-based energy policy. Oil prices are set in the international marketplace. This is the basis for our domestic crude oil prices and ultimately for the price of refined petroleum products.

The current increases in oil product prices are largely due to developments in international markets over which Canada has no control. First, there is the growing world oil demand in China and the United States which has pushed crude oil prices up. Second, the tight supply-demand balance in petroleum product markets, particularly in the United States, is forcing wholesale prices up. Third, speculative commodity forces are affecting prices further.

Although there are no shortages of crude oil or products, these market conditions result in higher petroleum product prices for consumers.

Besides the price of crude oil, numerous other factors influence prices at the pump. I will mention the costs to produce and transport the product, and the level of supply, inventory and demand, on both local and international markets.

As you may know, the price of gas includes federal and provincial taxes.

Information collected by the International Energy Agency shows that on an excluding tax basis Canadian gasoline prices are comparable and even lower than those of most industrialized countries.

As I indicated earlier, there have been calls in the past for the federal government to take action with regard to gasoline prices. The Government of Canada continues to be actively involved in addressing the concerns of all Canadians regarding petroleum product prices. For example, a few years ago Industry Canada and Natural Resources Canada co-sponsored two separate studies by the Conference Board of Canada.

One study focused on Canadian gasoline markets and the other on diesel markets. The purpose of the gasoline study was to take an independent and comprehensive look at the nature and functioning of the wholesale and retail gasoline markets in Canada. The diesel study looked at changes in the Canadian diesel industry over the previous decade and the impact of those changes on the trucking and farming sectors.

The final reports released in 2001 indicated that Canada was well served by our market policy. Overall, it operates efficiently and generates some of the lowest gasoline prices in the world.

In May 2004, in response to consumer concerns, the Competition Bureau undertook a new examination of Canadian oil and gas markets in order to determine if retail price increases in the spring and summer of 2004 were the result of anti-competitive behaviour.

On March 31 this year, the Competition Bureau released the results of its extensive examination. Its general findings indicated that the rapid rise in retail gasoline prices was due to low inventories of gasoline in North America and worldwide increases in the price of crude, that the pricing behaviour in the major centres in Canada was in response to normal market forces and that prices in Canada continued to be lower than in most countries in the industrialized world.

Only in the case of an emergency does the federal government have the authority to take measures to affect product pricing. Those authorities and the broad circumstances in which they can be used are set out in legislation. Under the Energy Supplies Emergency Act, a system of price and allocation controls can be imposed in a national emergency caused by shortages or market disturbances affecting “the national security and welfare and the economic stability of Canada”.

Under the Emergencies Act, the government can take special temporary measures during a national state of emergency. A “national emergency” means an urgent or critical situation of a temporary nature that seriously endangers the lives, health or safety of Canadians and that cannot be effectively dealt with by a province or under any other law of Canada.

Declaration of a national emergency requires approval by the governor in council. It is not a power to be exercised lightly. There are currently no shortages of crude oil or petroleum products in Canada that would necessitate such actions.

Under Canada's Constitution, the provinces have the authority to regulate retail prices and some provinces have taken this path.

Currently, Prince Edward Island, Newfoundland and Labrador and Quebec regulate prices in some manner. In Prince Edward Island the Island Regulatory and Appeals Commission regulates the timing and the frequency of wholesale price changes and determines the minimum and maximum mark up between the wholesale price to the retailer and the retail price to the consumer. In Newfoundland and Labrador the Petroleum Pricing Office within the Board of Commissioners of Public Utilities is responsible for regulating fuel prices by setting the maximum retail price at the pump in each region.

In Quebec, the Régie de l'énergie is responsible for monitoring gas and diesel prices and calculating the minimum retail price that retailers in each region can set. Clearly, the provinces and the federal government do not view regulation as a power to be exercised lightly.

Public information on petroleum product prices is already available through various sources, including provincial governments, petroleum agencies, the private sector, international agencies and governments. Natural Resources Canada is working to ensure that Canadians are aware that such information is available and that they can access it by NRCan's website.

At the federal level, the Competition Bureau plays a role in overseeing competitive aspects of the gasoline sector.

The creation of an agency could confuse consumers about the federal government's role with regard to gas prices. As a result, the public might believe that the federal government can intervene in the regulation of gas prices. This runs counter to the fact that, in the absence of a national emergency, retail price regulation comes under provincial jurisdiction, as I stated earlier.

In conclusion, because gasoline pricing falls under provincial jurisdiction, because the federal government's action is limited to emergency situations and because anti-competitive behaviour can be appropriately addressed under the Competition Act, I would ask members not to support the motion.

[Brian Jean, Conservative, Athabasca, AB]

Mr. Speaker, it is an honour today to rise to speak to Motion No. 165. This is a motion that concerns all Canadians and one that constantly grabs the headlines in our national newspapers, as it does affect every Canadian in their pocketbook.

The motion is about gas pricing and what the government an do to discourage and prevent price fixing. The motion requires that the government should take action with respect to gasoline prices by:

--setting up 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...appointed for a three-year term after consultation with sector representatives and the Standing Committee on Industry, Natural Resources, Science and Technology...and 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.

In essence it is to set up an agency to monitor and report on pricing and to strengthen the Competition Act.

The Standing Committee on Industry, Science and Technology recommended legislation that did not go as far as this motion. The government has still not acted on any of these recommendations.

The Conservative Party does not support the motion as we believe it is the first step to regulating gas prices in the country which would ultimately hurt consumers and taxpayers.

On Thursday, March 30, the federal Competition Bureau ruled, “Low inventories of gasoline in North America and worldwide increases the prices of crude oil”. This led to the increase in retail gasoline prices in 2004 and indeed it was found that there was no evidence of collusion among gasoline companies.

This industry in Canada has been investigated by the Competition Bureau for collusion more times than any other industry, in fact 19 to 20 times. All these investigations have found no evidence of collusion among gasoline companies.

The Conservative Party of Canada does not support the idea of regulating gas prices. We believe competition is the right road to follow. We believe supply and demand in a free market economy is the best regulator of prices for consumers.

However, we must encourage those through legislation the ease of entry of other players into the market to keep prices fair without unconscionable profits by oil and gas companies. The Conservative Party recognizes, however, that there is a problem of perception or consumers in Canada. That perception is that there is price fixing, but there is no evidence of that so far. High prices are seen equally at every gas station.

We support further efforts by the industry itself and we also support further efforts by non-governmental organizations and by the federal natural resources department to provide more information to Canadians on the price of gasoline. Information is the key to beat any perception.

In short, the Conservative Party believes that the price of gas is an important consumer issue and that the government and industry should do more to explain to consumers: first, how the price of gas is set; second, why it fluctuates so greatly; and third, to ensure regulations are in place to promote a competitive environment and a competitive pricing environment that eliminates all forms of collusion in the industry.

This recommendation would go a long way to help Canadians' perceptions about the oil and gas industry itself with regard to the issue of price fixing.

In November 2003 the Conservative Party called on the government to immediately contact the oil and gas industry to encourage the industry to fund and appoint a petroleum information commissioner to provide information to all Canadians and help address consumer concerns.

Quite simply, gasoline is one of the most heavily taxed products in Canada, with taxes reaching approximately 40% to 50% of the retail price. If we take out the tax component, Canada ranks in the lowest percentile of all countries in the world as far as gas prices.

The leader of the official opposition has repeatedly demanded that the Liberal government take immediate action on the soaring gas prices by using its tax power to lower prices at the pump through tax reduction. Canada's gas prices have reached record highs and prices have nearly doubled since the Liberal government took power in 1993.

The fastest and the easiest way to give Canadians relief at the pump is for the federal government to stop charging GST on top of gasoline excise taxes. It is time to axe the tax on the tax.

Industry analysts estimate that for every 1¢ increase in gas prices per litre federal reserves swell by $32 million per year. Tax. Tax. Tax. That is the Liberal way.

The rapid changes in prices are a sign of healthy competition, not a sign of collusion, with the exception of course of the percentage of taxes levied by the Liberal government. Taxes are, indeed, the fastest growing component of the final price of gasoline.

Some other recommendations from the Conservative Party, other than tax reductions include: first, that the Competition Bureau should be provided with the resources necessary to ensure the effective enforcement of the Competition Act; and second, that the government should bring forward amendments to strengthen the Competition Act, but not for the sole purpose of regulating gas prices.

Due to the healthy competition of oil and gas prices, infrastructure developments in Canada by oil and gas companies and the government are part of everyday life. We are looking forward to, in my riding of Fort McMurray--Athabasca, some investment in infrastructure from a reduction in taxes and from the gas tax rebate.

I would like to give some examples of recent developments in my riding due to the fact that the government does not regulate gas pricing. Unfortunately, because the amount of investment in our infrastructure requirements in northern Alberta is, quite frankly, so pathetic, given our fast growth of 15% to 20% per year, there are no examples I can give of this type of investment.

We in northern Alberta continue to wait for investment for our infrastructure needs to replace our collapsing water and sewer systems, to replace our dangerous roads, and to fund our overtaxed municipalities. There is no question that a deregulated, competitive oil and gas sector would give us lower pricing, and would create more and better infrastructure in my region.

I am giving notice now, though, that I am not going to hold my breath and wait for the Liberal government to provide that type of investment. I am wondering however if the Liberal government would be prepared to hold its breath until we receive a fair return in northern Alberta for what we invest in Canada every year.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, it is a pleasure for me to speak to motion M-165 by the member for Abitibi—Baie-James—Nunavik—Eeyou. This motion calls for the creation of a petroleum monitoring agency and amending the Competition Act so that the Competition Commissioner would have the power to launch investigations, summon witnesses and ensure confidentiality.

I am speaking in favour of this motion because we are very familiar with the plight of Canadian families all across the country. For 10 years these families have been suffering from an income shortfall. All across the country, average workers have lost 60¢ on their hourly rates. They have lost 60¢ in real terms. At the same time, we know that they have been working longer and longer weeks. All this means that Canadian families have fewer and fewer resources.

In this state of affairs, it is very important to protect these families when the industry or companies decide to take advantage of the situation to raise prices unnecessarily. It is a way to boost their profits, but on the backs of consumers of course.

I am speaking in favour because when we look at gas prices we know that it is affecting people across this country. In the Vancouver region, the riding of Burnaby—New Westminster where I come from, gas prices have now hit $1.03 a litre. In other parts of the country it is approaching $1 a litre. In Sydney, Nova Scotia, is at 97¢, Halifax is at 96¢, and Yarmouth is at 98¢. In other parts of the country it is approaching $1 a litre.

Some declarations in the House over this motion have stated that it is not because of windfall profits that the prices have been moving so extremely high, but that it is because of the price of crude per barrel. That is indeed why these prices have risen so much.

Historically, we know that prices of retail gasoline, adjusted for inflation, have remained on average fairly stable. However, the prices have decreased. The price of crude, for example, was about $15 a barrel in the 1990s and we did not see significantly lower prices at the pump during that period. In fact, the normal rule of thumb is that when a barrel of crude goes up $1, the price at the pump goes up 1¢.

Over the last three months we have seen the price of crude increasing per barrel by $14 and the price at the pump has not increased by 14¢. In places like Burnaby and New Westminster the retail price of gasoline has increased 20¢ to 22¢ a litre. We are not talking about a situation where wholesale prices have made the difference in the retail price at the pumps. In fact, it is quite the contrary. What we are seeing is an acceleration. As the price of crude is going up at the wholesale level, we are seeing a marked increase for consumers across this country.

We know that we have to address the situation. We cannot simply agree because the industry says, “The price of crude went up so much, we have jacked the prices up and that is all right”. We have to look at all the facts. The facts are that the big five oil companies in Canada have had skyrocketing profits estimated at $7 billion this year. Imperial Oil was $1.68 billion, Husky was $1.3 billion, and Petro-Canada was $1.66 billion. We are seeing record profits in the oil industry as well.

As prices have gone up at the wholesale level a certain amount, we are seeing windfall profits being forced upon consumers because the Liberal government has done nothing and, same old same old, the Conservative opposition says, “Yes, let the oil companies gouge consumers”.

One of the speakers before me said that there was no evidence of collusion. There is certainly not any from the Liberal government that is not looking after the interests of Canadians and consumers, but let us look at the senate permanent subcommittee on investigations in the United States that has some experience dealing with antitrust and anti-competition efforts to gouge consumers. In an April 2002 report by the U.S. senate permanent subcommittee on investigations, it found that markets, in which a few firms dominated, such as Canada, tended to decrease supply in order to raise prices.

The Competition Bureau looked into this issue and because it is toothless under the Liberal government, rather than look at the entire issue of how wholesale prices have gone up a certain amount and retail prices much more and rather than look at the issue of how we have reduced supply and how that is being manipulated for windfall profits, it chose to simply look at the retail price at the pump. That is not defending consumers; that is not defending Canadians. That is why this motion is so important. We need to monitor this in the best interests of all Canadians.

I would like to mention that the efforts of the Liberal government, when we talk about environmental efforts and initiatives, have been absolutely pathetic. We are looking at a situation where, when the government set targets to decrease greenhouse gas emissions by 20%, it missed the mark so badly that greenhouse gas emissions actually increased by 20%.

We have seen a government that, in dealing with both the oil industry and the auto industry, has dealt with voluntary compliance measures. Voluntary compliance is as good as any other request one makes. There is no meaningful way of meeting targets that are set for voluntary compliance.

I should mention that we had a reduction in what the oil and gas industry should have put in to meet the Kyoto objectives. We had talked originally about 55 megatonnes. The Liberals capitulated, as they have in so many other areas, and reduced the annual emission targets to 37 megatonnes. I should also mention that 20% of Canada's greenhouse gas emissions came from the oil and gas sector in 2002.

Unfortunately, we have no action from the Liberal government to protect consumers and Canadians. We know that at the retail gas level, gas station owners are hardworking business people, but they are dealing with reduced supply, a small number of refineries, and they are in a bind as well, yet the government has done nothing.

In this corner of the House we are doing things. We called for a competition inquiry into the relationship between corporate concentration and gas price increases that have gouged Canadians. As well, the hon. member for Windsor West brought Motion No. 177, dealing with the petroleum monitoring agency, to the industry committee. As a result we had the industry committee itself recommending that we create and fund a petroleum monitoring agency to ensure that we understand what is happening with the oil and gas industry and to ensure that consumers and Canadians are protected.

In two corners of this House, the Liberal corner and the Conservative corner, they could not care less about consumers and Canadian families that are dealing with more and more challenges as their actual real wages fall, and as government programs get cut, but in this corner of the House we are standing up for consumers and Canadians. We have seen windfall profits. We have seen the gouging of consumers by taking advantage of a moderate rise in the wholesale price to bring about a huge rise in the retail price.

We will continue to speak out. We will support this motion because it is in the interests of Canadians from coast to coast to coast, and we will not let up. We will continue to fight for Canadians.

[Paul Crête, Bloc, Rivière-Du-Loup—Montmagny, QC]

Mr. Speaker, I am very happy to speak to this motion introduced by my colleague from Abitibi—Baie-James—Nunavik—Eeyou. He has particular reasons for wanting this motion adopted. Living in a outlying region, he is more aware than anyone of the impact on regional economies of increases in the price of gasoline.

He is therefore proceeding with an idea that had been suggested in the Standing Committee on Industry, National Resources, Science and Technology, namely creating a petroleum monitoring agency. It is not a question of controlling prices but simply of having an agency that can report to the House for three consecutive years on market developments.

Another recommendation had to do with strengthening the Competition Act to enable the Commissioner of Competition to conduct investigations. It was the current Commissioner's predecessor, Mr. Finckenstein, who proposed this, claiming that the act did not give him the necessary powers and that he absolutely had to prove collusion before he could do anything else.

We do not mean to say by this motion that there is collusion. We do say, though, that there are unacceptable increases now in the price of gasoline on the market and that this has harmful effects on the economy. Our position was greatly strengthened at the end of last week. The G7 finance ministers, including Canada's, agreed on one of the main elements, and I quote one of the sentences from their press release:

The group of seven countries endorsed more timely and accurate information about the oil market, which officials said could help control price fluctuations and make companies more willing to expand production.

In other words, the G-7 finance ministers have said that the rise in gasoline prices has negative impacts on the economy and that some way absolutely must be found, not to control prices, but to gain a better understanding of the situation so that it will not recur, as it is at present.

So there are some major consequences for the economy. I might add that the U.S Secretary of the Treasury—and I do not believe the Republican party in power there can be accused of any leftist leanings—has said that the purpose of the press release is to indicate to the financial community that the G-7 is handling the situation. The proposal on the table is the outcome of an in-depth study in the Standing Committee on Industry, Natural Resources, Science and Technology.

What we in the Bloc Québécois emphasized was that the committee ought to call in the oil companies, hear what they have to say, and hear the other experts, and that was done. This was followed by an analysis and a four part recommendation. The Alliance, as it was at the time, was opposed, because it was particularly representative of western Canadian interests. We were surprised that the petroleum products institute was in favour of the creation of the petroleum monitoring agency, because they too are totally fed up with having to justify price increases every six months, year in and year out.

How then today could we not adopt a motion relating to the creation of that very monitoring agency? It is important, because this agency is needed in the immediate future in order to ensure there is no sudden price fluctuation, which would have a very negative impact on the economy. In an economy such as ours, where trade is so important and there are more and more international exchanges, it is very important for gas prices not to reduce the efficiency of our economy. There can be major consequences; we need think only of the airlines and the trucking industries.

At present, the Government of Canada has more or less washed its hands of the situation. They tell us gas price data can be obtained from the private sector and that there is the Department of Energy, which does analyses., but there is insufficient transparency. The intent of this motion is to ensure that there is in fact transparency and that the committee can make recommendations to the House of Commons so that the appropriate changes may be made.

There is a major problem. Earlier the government member told us that the Competition Commissioner had said the problem is due to low inventories of gasoline in North America. This is the tip of the iceberg. Why are inventories low in North America? Because in recent years, refinery capacities have shrunk considerably. When a person has a well and a set of one or more strictly controlled taps, it is easy to set the pump price. Profits increase at the refinery stage and are out of step with the market, according to the way it should work. So, this situation needs to be analyzed and solutions found.

The G-7 release also refers to it. North American refining capacity must be increased. At the moment it is operating at the bare minimum. Whenever a refinery in Canada or the United States is experiencing difficulties, even technical ones, the price can go up. No market should be in this situation. In a typical capitalist market, some people perform better, businesses disappear and others appear. There are always people to meet the demand. In the current system, in terms of gasoline prices, refining capacity was reduced considerably. Now this gives those controlling the refining market a powerful hold. It has a negative effect on the whole economy.

Now that the G-7, the largest representation of politicians representing the largest economies in the world, wants this situation to be addressed, why does Canada not take a leadership role in all this? Why not set up this petroleum monitoring agency, not to control prices, but to collect and distribute, during a three-year mandate, data on the price of crude oil, refined petroleum products, and retail gasoline in all North American markets?

The director should be appointed by the federal government upon consultation with the oil industry, individuals and consumer groups. An annual report should also be prepared on the competitive aspects and there should be a parliamentary review of the report by the committee for the duration of the three-year mandate. We are not creating an eternal bureaucracy. We want this to be in place for the next few years in order to determine what steps to take to correct the situation.

The second part of the motion refers to the fact that the Competition Act is currently lacking teeth. The committee made recommendations to amend the legislation. The government kept only the sections regarding fines. It is positive, but a major portion was set aside and there is no solution.

The government may not want to do anything about the Competition Act, but it should at least agree to set up the petroleum monitoring agency. I think the two tools are important in ensuring better management of this market. It is not a matter of controlling prices, but of structuring the market in a way to prevent the current situation from happening again.

In addition to the overall economic impact, there is the personal, humanitarian impact. Renters are seeing heating oil prices increase dramatically. These are often people who need every penny and have not planned for such increases in their monthly budgets. There is no relief program in Canada to offset this reality.

The United States created a relief program to ensure that energy prices correspond to reality and, on the other hand, that a specific program creates a balance. There is no such program in Canada. There should be. Representatives of the energy industry, who appeared before the Standing Committee on Industry, Sciences and Technology, made this recommendation. It suggests not manipulating the rules governing energy prices, but rather ensuring that low-income earners can make ends meet. Ultimately, when these people can pay their bills, their money drives the economy. So I think that this is an appropriate initiative.

So I invite the members of the House to re-read the text of the motion itself. We must not simply argue about whether we are moving toward price control. We are not talking about that or trying to find a way to circumvent the issue. That is why I am asking the members of the House to vote in favour of the motion. This recommendation was made by the Standing Committee on Industry, Sciences and Technology and is now consistent with a desire by the G-7 countries to better monitor energy prices so as to minimize sudden economic change. That is what the Bloc Québécois is asking this House to do.

[Jerry Pickard, Liberal, Parliamentary Secretary to the Minister of Industry]

Mr. Speaker, I welcome this opportunity to address Motion No. 165 now before the House. It contains two distinct proposals. One concerns the establishment of a petroleum monitoring agency and the other concerns unspecified amendments to the Competition Act. I will address each proposal in turn.

The first proposal is not novel in any way. As everyone in this place recalls, the petroleum industry has been monitored many times over the last several years and we have found through that monitoring that there are high and low fluctuations.

Following studies of the gasoline price increases during the winter of 2003, the Standing Committee on Industry, Science and Technology recommended the establishment of a petroleum monitoring agency to be responsible for the collection and dissemination of data on gasoline pricing.

The committee's report found that significant increases in prices had been as “the result of competitive reactions to a series of international crises and abnormally cold weather that gripped northeast North America last winter”. Furthermore, the report also found no evidence that prices were being fixed or that market participants were engaging in any anti-competitive business practices.

The purpose of this report and the committee's recommendation was to increase the awareness of consumers regarding the dynamics of gasoline pricing and the competitive nature of Canada's petroleum industry. Members on this side of the House would agree that it is important to make information about the setting of gasoline prices widely available to the public.

However, we do not believe that an independent petroleum monitoring agency is necessary to accomplish this objective. Establishing a government agency charged with monitoring gasoline pricing may create a perception that the federal government is regulating gasoline prices. Retail price regulation is by and large the jurisdiction of provincial governments.

Also, current government activities, coupled with the data on gasoline prices collected and disseminated by the private sector and provincial governments, represent the most practical and cost effective means of raising consumer awareness about the competitive nature of Canada's gasoline industry.

Moreover, the Competition Bureau already exists to promote and maintain fair competition in all sectors of the economy, including the petroleum industry, by educating businesses and consumers, promoting compliance with the Competition Act and taking enforcement action when necessary.

In the past 15 years, the Competition Bureau has conducted five major investigations into allegations of collusion in the gasoline industry. The most recent one concluded in March of this year. Each time it found no evidence to suggest that a rapid rise in retail gasoline prices resulted from a national conspiracy to fix prices.

Establishing a gasoline monitoring agency will not do anything to further the objective of inspiring public confidence in Canada's competition framework.

That being said, we think this Parliament can do more for consumers than simply create a petroleum monitoring agency. That is why in November 2004 we tabled Bill C-19, an act to amend the Competition Act in Canada.

This bill represents a necessary step in strengthening Canada's competition framework so that it can adapt and respond to the rapid pace of economic change in the 21st century. By strengthening Canada's Competition Act, we can ensure that consumers have confidence not only in the competitiveness of the petroleum industry but in all sectors of the economy.

Bill C-19 follows extensive consultations with the public, including large and small businesses, consumer advocacy groups and legal and economic experts. The proposed legislation would provide concrete measures to address their concerns. Bill C-19 would give the Commissioner of Competition the authority to seek restitution for losses of consumers resulting from false or misleading advertising.

It also would increase the level of administrative monetary penalties imposed for deceptive marketing practices and introduce administrative monetary penalties to address the abuse of dominance in any industry, including all sectors of the petroleum industry.

This legislation would repeal the criminal pricing provisions dealing with price discrimination, geographic price discrimination, predatory pricing and promotional allowances. These pricing behaviours would be addressed under the abuse of dominance provision with the administrative monetary penalties.

The bill would also return the Competition Act to a law of general application by repealing the airline specific provisions of the act which were adopted in response to Air Canada's merger with Canadian Airlines. These measures are necessary to ensure that as an economy grows and evolves the Competition Bureau has the necessary tools and remedies at its disposal to effectively address the anti-competitive business conduct of industries and markets, and to encourage compliance with the Competition Act.

The motion before us proposes the government bring forward amendments to strengthen the Competition Act. As described, we have taken concrete steps to do exactly that. The motion proposes measures to ensure that the competition commissioner has the power to launch investigations, summon witnesses and ensure confidentiality.

We believe that the motion is proposing that the commissioner of competition be granted additional authority to conduct inquiries into the competitive nature of the market sectors where there is no reason to believe that the Competition Act has been breached.

While some of the stakeholders support allowing these types of general or market inquiries in recent national consultations, many raise serious concerns regarding these proposals, such as the types of procedures that would be used, the length of time they would take and how much they would cost.

The Competition Bureau is carefully examining the concerns raised by stakeholders regarding these market inquiries. Similar initiatives have found some support in jurisdictions, such as the United States, the United Kingdom, among others. The Competition Bureau is looking into the approaches taken by these countries to determine if these types of inquiries should be incorporated into our competition framework, while addressing the concerns of Canadian stakeholders.

We urge the members of this House to allow the Competition Bureau to complete its work on the issue so that we can ensure all proposed amendments to the Competition Act are carefully considered and well measured.

All factors taken into account, there is no evidence that a petroleum monitoring agency is needed or even desirable.

Furthermore, as the motion does not address the serious issues, such as jurisdiction of the provinces over gasoline pricing, and as we have already tabled Bill C-19, I urge all members of the House not to support the bill.

[Marc Boulianne, Bloc, Mégantic—L'Érable, QC]

Mr. Speaker, it is with great interest that I speak in support of my colleague's motion calling on the government to take action.

Mr. Speaker, you called out the name of my riding, Mégantic—L'Érable. Érable is French for maple. Well, this bill seeks to protect maple syrup producers. The increased prices have had a major impact on their industry.

Many sugar bush owners in my riding use petroleum products for heating and preparing their maple products. If prices are not monitored, then we are looking at monumental bankruptcies in the future. The higher prices affect these people directly. We must defend their interests. They deserve it.

The same is true in other sectors, such as agriculture. Again it is the farmers—

[The Acting Speaker (Mr. Marcel Proulx)]

The hon. member for Abitibi—Baie-James—Nunavik—Eeyou, who proposed the motion, has five minutes to end the debate.

[Yvon Lévesque, Bloc, Nunavik—Eeyou, QC]

Mr. Speaker, I would like to thank my colleagues on both sides of this House for the quality of their debates on this motion which I have the honour to sponsor.

I did, however, have an opportunity to hear a few inaccuracies, and I feel it is important to react to that so that my colleagues across the way and next to us here can be fully informed before they vote.

For example, an honourable colleague from the Conservative party suggested on February 11 that the price of gas, before taxes, had gone up 50%, while there had been a 67% hike in the taxes. Nothing could be further from the truth, as in fact the portion of the gas price that is tax has gone up from 32¢ to 37¢ a litre between February 1999 and February 2005, which is 15%. On the other hand, the price before taxes went from 14¢ in February 1999 to 45¢ in 2005, which is not far off 325%.

Can you imagine that a company like Petro-Canada, once purchased at a high price by Canadians in order to control the market price, took the liberty of increasing its profits between 1998 and 2004 by 3,857%? Profits were $1.89 billion in 2004 compared to $49 million in 1998.

If we consider that a 10¢ hike in gas prices slows down the economy by 0.5%, imagine how much harm that company, which at that time was still government-owned, did to the Canadian economy?

In addition to that, I would point out that the 5¢ increase in taxes is not due to an increased tax rate but to the increase in gas prices before taxes, since the tax rate is fixed but is calculated on a higher amount.

Still on the subject of taxes, I must also point out that, in February 1995, this government inaugurated a 1.5¢ per litre surtax to help defeat the deficit. That deficit was eliminated in 1998 but the surtax is still in place. What is this government, which has surpluses up to its eyeballs, waiting for before it abolishes that pointless and costly tax?

This same colleague from the Conservative Party also stated, and I quote, “the regulation of gasoline prices in Canada can be done at the provincial level” and that “provincial governments are free to regulate gasoline prices”. Nothing, in fact, could be further from the truth, because the component of gasoline prices under provincial jurisdiction is the retailers' profit margin. This provincial jurisdiction has an impact only after the petroleum has been refined and after market speculation on the Nymex. The causes of fluctuations on the Nymex, however, are a matter of federal jurisdiction. Currently, there is no federal agency or other body overseeing the causes of fluctuations in the prices of petroleum products.

The member for Ottawa South cited the 2003 report of the Standing Committee on Industry, Science and Technology, according to which the current “Competition Bureau [had] sufficient powers, personnel and resources devoted to overseeing competitive aspects of the petroleum industry”

The Competition Commissioner, Mr. von Finckenstein himself, before this same committee on May 5, 2003, pointed to gaps in the current Competition Act, including the lack of investigative authority if he were to do an industry study and the inability to summon witnesses and ensure their confidentiality. I think we must listen to the Competition Commissioner, because he is saying himself that he lacks the power to conduct real studies.

I think that it is also time to put an end to the various myths circulated by the oil companies. It is not the cold temperatures that cause refinery margins to rise, nor is it taxes, nor the situation in the Middle East. These increases have more to do with refining capacity not being adequate for the demand. Some claim that it was limited on purpose in order to raise prices.

That is why it is high time for an independent study, so the public can see the whole question. A monitoring agency would be designed for this purpose and permit better oversight of the industry, which generates profits on the backs of consumers.

In the name of all Canadians, I call on my parliamentary colleagues to support—

[The Acting Speaker (Mr. Marcel Proulx)]

I regret to interrupt the member, but it being 7:04 p.m., the time provided for debate has now expired.

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Mr. Marcel Proulx)]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker (Mr. Marcel Proulx)]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker (Mr. Marcel Proulx)]

In my opinion the yeas have it.

And more than five members having risen:

[The Acting Speaker (Mr. Marcel Proulx)]

Pursuant to Standing Order 93, the division stands deferred until Wednesday, April 20, 2005, immediately before the time provided for private members' business.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[James Bezan, Conservative, Selkirk—Interlake, MB]

Mr. Speaker, I want to return to a question that I raised in the House on February 4 regarding the Devils Lake diversion in North Dakota which is going to be drained into Manitoba. This is a big international issue which requires involvement and leadership from the Government of Canada. I would like to bring the House up to date on what is happening.

Currently the Devils Lake diversion is in the North Dakota supreme court. The hearings started yesterday. I was glad to see that Justice Carol Kapsner, one of the four members of the supreme court of North Dakota started to take a hard look at this. The judge wondered why this project was not a U.S. federal project where there would be better controls than a state project with no controls on environmental issues.

A suit has been brought forward by the governments of Manitoba and Minnesota. It also includes the People To Save The Sheyenne and the Peterson Coulee Outlet Association. They have hired Bill Delmore as the lead counsel on their case to make their arguments.

They are claiming that there is a significant difference in the quality of the water in Devils Lake which is going to be drained into the Sheyenne which then enters the Red River, which then flows north into Manitoba and goes into Lake Winnipeg. Parts of the Red River and Lake Winnipeg are in my riding. That lake supports a large commercial fishery and a sports fishery. It has many beautiful beaches. It supports a very viable tourism industry. It is also the main aquifer recharge zone for Manitoba. It is important that we keep this watershed healthy. Now we are talking about interbasin transfers of water.

What they are saying in the argument brought forward yesterday and today is that there are at least two different parasites, or biota, in the water in Devils Lake versus what is normally in the watershed in the Red River Basin. The big issue is that there are at least three times the levels of harmful pollutants in Devils Lake. That is why it is called Devils Lake. It is a bad lake and it has some issues.

We want to make sure that the government is being a full participant in this issue. The government of Manitoba, to its credit, has fought very strongly and has been a great adversary for protecting the Red River Basin and making sure that the waters in Manitoba are protected. However, this is a federal responsibility. We are talking about the environment. We are talking about the Department of Fisheries and Oceans which has a very significant lead role to play in this issue rather than to just sit back and watch what the province is doing in collaboration with the state of Minnesota and other organizations.

We have between the U.S. and Canada the International Joint Commission on the international water treaty which goes back to early 1900s. If we do not take a very aggressive and proactive role, I fear that the whole International Joint Commission will fall apart. This water treaty and many other treaties between the two countries would become null and void because it is not doing its job and not functioning or working--

[The Acting Speaker (Mr. Marcel Proulx)]

The hon. Parliamentary Secretary to the Minister of Natural Resources.

[Larry Bagnell, Liberal, Parliamentary Secretary to the Minister of Natural Resources]

Mr. Speaker, I am pleased to have this opportunity to outline some of the significant efforts that the government is making on this issue and to respond to the hon. member's concerns about the Devils Lake outlet project and its potential impact on water quality in Manitoba. The member did a good job in outlining this issue.

The issue is not whether or not the government will conduct its own review of the potential impact of the Devils Lake diversion on water quality in Manitoba.

The facts are that the government has been very clear in voicing its concerns that the Devils Lake outlet could transfer invasive species and poor water quality into Manitoba. We have worked very closely with Manitoba in opposing the North Dakota water diversions with potential impact on waters in Manitoba.

We have made sure that the United States and North Dakota governments are fully aware of these concerns. On this point there is no question. The government is very concerned that North Dakota has nearly completed the Devils Lake outlet without any federal oversight, environmental assessment or safeguards against invasive species or water pollution.

The real question is, what is the government doing about the Devils Lake project? I can assure the member that the government is seized of this matter and is vigorously pursuing constructive solutions.

Under the boundary waters treaty, Canada and the United States have obligations not to pollute shared lakes and rivers in a manner that injures health or property in the other country. Our government and the government of the United States both agree that the diversion of waters from Devils Lake into the Red River Basin must be done in a manner consistent with the obligations under the boundary waters treaty.

The government considers the boundary waters treaty to be fundamental to managing and protecting boundary and transboundary waters. This is why our government, with the support of Manitoba, has vigorously pursued the United States government to agree to a reference under the boundary waters treaty on Devils Lake.

A Devils Lake reference would authorize the International Joint Commission to undertake an independent scientific analysis of the risks and potential environmental impact of the Devils Lake water diversion project.

A reference would enable the International Joint Commission to make recommendations to the governments in Canada and the United States on how best to ensure the protection of the waters of the Red River and Lake Winnipeg. This is the resolution we are seeking to the very important environmental issues concerning the Devils Lake project.

[James Bezan, Conservative, Selkirk—Interlake, MB]

Mr. Speaker, while I appreciate the comments by the Parliamentary Secretary to the Minister of Natural Resources, I want to make sure that we do everything we can to protect the Red River and Lake Winnipeg, to protect our tourism, and to protect our fishery.

I would encourage the government to conduct its own study on the water quality issue to make sure that we have that knowledge base when we take this forward to the International Joint Commission, if we get a referral from the North Dakota supreme court. We need that referral. That is why I would like to have seen a larger role played in the North Dakota lawsuit that is going forward right now.

I want to get a commitment as to the government's game plan. Is it going to get some of its own research done? What is our recourse if this does not move ahead?

One thing we have to keep in mind is that the project is running ahead of schedule. It was estimated that the groundwork would be done in July but it will be done by mid-June. It is under budget and ahead of schedule. This is coming before us rapidly. We have to move before North Dakota starts pumping water into the Red River Basin.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, as I said earlier, a scientific study will be done by the International Joint Commission. We can get our reference through it. It is very important to us. We have been fighting for that reference.

The Minister of Foreign Affairs raised the issue of Devils Lake in discussions with U.S. Secretary of State Condoleezza Rice. I can assure the hon. member that we are working together. Our officials will continue to raise our concerns with the Devils Lake project at every opportunity. We will continue to work at every level to press the U.S. government to agree to a reference to the International Joint Commission.

I am in full agreement with the hon. member. We want to ensure that Manitoba waters are protected and that fishing, recreation and economic activities in areas such as Lake Winnipeg are not impaired by Devils Lake. This is why we are actively pursuing a reference to the International Joint Commission as a resolution to this issue. The Prime Minister has raised this issue with the President of the United States.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, we in the official opposition take very seriously the concerns of the disabled in this country. For persons with disabilities, normal activities bring extraordinary cost not by choice of the disabled.

On behalf of disabled Canadians and the additional challenges they face on a day to day basis, I rise again to ask the Minister of National Revenue why his department continues to harass the disabled and their families by forcing them to remit payroll deductions on tax-free government grants?

When I presented this question to the minister on February 23, he responded that the issue in terms of tax collection is that the law has to be obeyed.

Obviously, as a self-styled former economist-banker, the minister fails to comprehend that it is the tax laws that are the problem. Currently there are no measures in place to protect disabled people or their parents from being potentially ruled as employers by the Canada Revenue Agency.

When determining if an employer-employee relationship exists, CRA bases its decision on the results of several tests that are applied to all cases. The problem is that these tests do not recognize the special circumstances involved when disabled people have a professional caregiver come over to their home to assist in their care. This flaw in the system has resulted in disabled individuals and the families of disabled children receiving grants for the purpose of assistance with the care of their disabled children being deemed employers by the CRA.

Families are being forced to make payroll remittance payments out of their own pockets and are being burdened with the responsibilities of an employer at a time when their number one concern should be the care and development of their disabled child.

The government's 2005 budget states that a fair tax system evolves over time to reflect changes in the economy and society.

I call on the Minister of National Revenue to recognize that the time has come for his department to evolve on this issue. I refer the minister to his government's own report entitled “Advancing the Inclusion of Persons with Disabilities”. It found that while 80% of Canadians believe there has been some progress in including people with disabilities in Canadian society over the past decade, only one in ten believe these individuals are fully included today.

Why does the CRA continue to enforce hard and fast rules when dealing with the disabled and their families?

I draw to the minister's attention recent decisions by the Federal Court of Appeal and the Tax Court of Canada that give the disabled and their families new hope. In the precedent setting Poulin case, a disabled Quebec man won his case against Revenue Canada when the Federal Court of Appeal ruled that he was not an employer.

The court ruled that it is the intention of the parties that should be considered when determining the relationship between them as their perception of the relationship may be linked to the compassionate motive of the services rendered to the disabled individual. In this case the caregivers considered themselves to be self-employed and the disabled man never intended to act as an employer.

Disabled Canadians and their families should not be forced to fight for years in tax court to avoid CRA harassment when they receive a grant to allow for full participation as active members in society, rather than being institutionalized. It is time the minister and the government acted to remove the department's imposed barriers to societal inclusion and stop this attack on the disabled and their families.

[Dominic LeBlanc, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I thank the member for raising this important issue. The government is very sensitive to the concerns of families caring for persons with disabilities. Many Canadian families face additional costs related to the care of a dependant relative such as an elderly parent or an adult child with a disability.

In budget 2004, the government modified the income tax rolls to allow caregivers to claim up to $5,000 of the medical and disability related expenses they incur on behalf of their dependant relative. Building on that measure, in budget 2005 we proposed that the maximum amount of medical and disability related expenses that can be claimed by caregivers be doubled to $10,000 from $5,000, beginning with the 2005 taxation year. This measure alone is estimated to increase tax assistance by $15 million in 2005 and 2006, growing to $20 million by 2009-10.

This measure represents but the first step in the government's broadly based commitment to increasing support for caregivers. The government is working with the provinces and territories to develop a comprehensive caregiver strategy involving a range of different supports for spouses, for children, for close relatives, for friends who care for seniors and for persons with disabilities.

One of the Canada Revenue Agency's responsibilities is to rule on whether or not an employer-employee relationship exists that would qualify workers for benefits under legislation such as the Employment Insurance Act or the Canada Pension Plan. These benefits include such things as job security during maternity leave, employment insurance benefits if they lose a job or disability payments if they are unable to work.

Anyone who is an employer must remit EI premiums and CPP contributions based on the insurable and pensionable earnings of the employee. We can understand why the administrative and financial responsibilities involved with employer status might be of concern to a family with limited resources relying on a grant to engage a caregiver, but that cannot justify denying hard-working employees the benefits of Canada's EI and CPP programs to which they are entitled in law.

When a ruling is required on the employment status of a worker, the Canada Revenue Agency applies the common law principles established by the courts to reach such a determination. The ruling on employment status can be appealed and is subject to an independent review within the agency. If the ruling is confirmed, it can be appealed further to the Tax Court of Canada.

In conclusion, let me say that I think it is important to highlight the remarkable work done by the Minister of National Revenue with respect to this issue. I have had the chance to get to know the Minister of National Revenue as a colleague. In fact, we sat together on the other side of the House when we were elected in 2000. He is a man of great compassion. He is very sensitive to these important issues. He is making enormous efforts to sensitize his department and the employees to the very important needs of these caregivers.

After all, these people are looking after some of the most vulnerable people in society. They need the government to be sensitive to their needs. Many of these people, including those in my own constituency, are not wealthy people, and the Canada Revenue Agency needs to continue to do what it can to make policies and apply the legislation in a way that is sensitive to the special needs of these people while at the same time respecting the application of the law.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, the Liberal government's actions speak louder than words. While its report may state that access to needed disability supports is the key in allowing the disabled to form foundations for full participation in the community, the reality is that the national revenue department is acting to harass families in receipt of grants for the specific purpose of giving their loved ones the disability support they require.

As society evolves, so too must the policy that governs it. While in the past the trend was to institutionalize the disabled, society now recognizes that, where possible, the home is the best environment. The current policy used by the CRA to determine the relationship between a disabled person and his or her caregiver is outdated and useless. The minister must act now to modernize the CRA's policy and protect disabled persons.