Mr. Speaker, I am very pleased to rise today to address the motion by the Bloc Québécois.
The motion reads as follows:
That, in the opinion of the House, the government should establish a plan to counteract the negative effects of repeated increases in gas prices, specifically including: a surtax on the profits of major oil companies, the creation of a petroleum monitoring agency, and the strengthening of the Competition Act.
Let me start by saying that I believe the motion represents a pretty negative view. What the motion is suggesting is that the market systems are failing us and that it is time that we want to regulate or put surtaxes on one of the most productive sectors of our economy.
I would respectfully submit that the member wants command and control. Or does he believe in market driven forces? Does he believe the markets are going to find out where this should settle? Do we promote success or do we want to penalize it?
I listened to the hon. member and I am not quite sure where the motivation for the Bloc motion is coming from. There were comments in his recent answers to questions that we do not want Parliament to become just a board of directors for oil companies or that possibly we could help through this motion to distribute the equalization of wealth. That is something I fundamentally disagree with. If the members want to have that debate, we could have that debate on another day.
I am trying to square the circle on how the Bloc has come up with this motion. I think it is fraught with problems. That said, we have seen the price of crude oil go from about $47 U.S. a barrel just over a year ago to $70 U.S. a barrel in the last few weeks. This amounts to roughly a 50% increase. Depending on which side of the equation one is on, obviously it presents challenges, but it also presents opportunities. I think there is an optimistic side to this. It is creating opportunities here in Canada. As the international community has challenges in ensuring an adequate energy supply that is secure, we can look at the environmental challenges and also at prosperity as well, and Canada has an opportunity to play a leading role.
The overall high commodity prices are generally good for Canada. The Canadian dollar is now sitting at 90¢ due to the strength of the Canadian economy, particularly the resource sector. Energy is one component of that. If we look at where we are benefiting from the oil and gas sector in Canada right now, we can see that it is creating literally hundreds of thousands of jobs. Tens of billions of dollars are being invested in Canada.
In Alberta alone, in the oil sands it is expected that $100 billion will be invested in the next 10 years. That is very good for the economy. It promotes research and innovation. We are making enormous gains in technology. This has been very good for the economy.
I think the hon. member's motion that suggests putting a surtax on profits is fundamentally the wrong way to go. The party opposite wants to start raising taxes, but the Conservative Party believes in reducing taxes. As members know, in the most recent budget we brought in 26 separate tax reductions for the Canadian people, from the GST reduction to a reduction in personal income taxes. We reduced taxes right across the board, including those for small businesses. We have also helped Canadians in their investments, as we have seen, for various pension funds, portfolios and investments. This has been good news for them as well.
There is no question that the oil and gas sector is in a very strong position right now. The price of crude oil is very strong. There are a lot of very positive aspects, but the motion suggests creating a surtax when the sector is doing so well. I am not sure what is driving this motion. If it is to try to distribute wealth, if that is what the Bloc believes, so more money will go into the federal government and there will be more money in the federal coffers, again I think that is fundamentally the wrong approach. One has to believe in either a market driven system or in command and control, in the government regulating and controlling everything. Again, I think that is fundamentally wrong.
I know the motion has been made as a result of higher prices of gasoline at the pumps. There are things this government is doing. I am very proud to be part of this government and the announcement in recent weeks that we want to see a 5% biofuel content by 2010. That is a way to have a positive impact on the prices at the pumps and on the environment. It also provides benefits for the farming industry across Canada, which is looking for new opportunities. It was a very positive meeting.
Again, I think there are other ways to address these higher fuel costs. I do not think we can just look at the price at the pump and say that the price of gasoline is high. I want to see stable lower prices as much as every other member does, but the issue is much larger than that. It is about the price of energy. That is why our government is investing in looking at other areas. We are working with industry to promote science and technology. We are looking at ways to become more efficient. Those are ways in which the government can ensure that we have a secure energy supply. We want to ensure that the energy is affordable.
There is no question that the people this hits the hardest are the poorest in our economy, the ones who struggle, but again, I do not see how squaring the circle through putting a surtax on the oil companies is going to solve any of that. It is something that we in the new Conservative government fundamentally disagree with.
Let us talk about the specific matter of gasoline prices. There are four principal components that make up the pump price. Of course, one of those components is crude oil, the raw material. As we have seen, the price of crude is at record levels, but that accounts for about 42% of the retail price.
The next components are the taxes, federal, provincial and municipal, which average about 32%.
The third component is the refining margin, which is the oil companies' cost of refining the crude into the product that we see at the pumps, which is about 20%.
The final component is the retail or the marketer margin, which is, in essence, the difference between the wholesale price and the retail price of the gasoline which has typically been around 5¢ per litre for the last three years. Since around 70% of the retailers in Canada are independent they have total discretion to set the price at the pumps and therefore the price does fluctuate.
I hear members opposite from the Liberal Party engaging in this discussion while I have the floor. I do not know whether they want to go back to a national energy program that was implemented by Pierre Trudeau, whether they think we should overly regulate or maybe they want us to come down with this big club. We have been there before and it was an unmitigated disaster. Those things simply do not work.
The government's approach is to work with the oil and gas sector, with which I have had some very productive meetings, to work with our provincial counterparts and invest in research, science and technology. We are encouraging the industry, as it is in a very strong market, to have greater participation in the research so technology can move forward, we can see greater efficiencies and we can do far better on the environmental side.
While we are in this strong market, the opportunities to make significant gains in this area are enormous. Let me give one example on CO2 capture and storage, an area in which we are making significant progress. Both the government and the industry are participating in this research. We now have the ability to capture 100% of CO2 emissions from the large final emitters in the oil and gas sector and pump that back down into the ground. I believe that is where we should be pushing the industry to make major investments. I believe there is a lot of room for improvement there through technology which would have enormous benefits for the environment.
Those are some of the things the government believes in and where we want to go.
One of the issues raised in the original motion was whether there was any kind of collusion for the major oil companies--