House of Commons Hansard #31 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was prices.
Stockwell Day ConservativeMinister of Public Safety
Mr. Speaker, I have the honour to table today, in both official languages, the 2004 annual report issued pursuant to section 25.3 of the Criminal Code.
This report covers the RCMP's use of specified provisions within the law enforcement justification regime as set out in sections 25.1 to 25.4 of the Criminal Code. This report also documents the nature of the investigations in which these provisions were used.
Government Response to PetitionsRoutine Proceedings
Regina—Lumsden—Lake Centre Saskatchewan
Conservative
Tom Lukiwski ConservativeParliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform
Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's responses to eight petitions.
Bernard Patry Liberal Pierrefonds—Dollard, QC
Mr. Speaker, pursuant to Standing Order 34(1), I have the honour to present, in both official languages, the report of the parliamentary delegation of the Canadian Branch of the APF which took part in the Vietnam-Laos-Cambodia regional parliamentary seminar on budgetary control, held in Vientiane, Laos, from December 19 to 21, 2005.
Gary Schellenberger Conservative Perth—Wellington, ON
Mr. Speaker, I have the honour to present, in both official languages, the second, third and fourth report of the Standing Committee on Canadian Heritage.
The second report is on the certificate of nomination of Robert Sirman to the position of Director of the Canada Council for the Arts.
The third report is on Our Cultural Sovereignty: The Second Century of Broadcasting, presented during the 38th Parliament.
The fourth report is on The Feature Film Policy for the 21st Century, also presented during the last Parliament.
The committee requests a comprehensive response to the third and fourth reports.
Michel Guimond Bloc Montmorency—Charlevoix—Haute-Côte-Nord, QC
Mr. Speaker, consultations have taken place among the parties, and there is consent for the following motion. I move:
That, at the conclusion of today's debate on the opposition motion in the name of the member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, all questions necessary to dispose of the motion be deemed put, a recorded division deemed requested and deferred to the expiry of the time provided for government orders on Tuesday, June 6, 2006.
The Speaker Liberal Peter Milliken
Does the hon. member for Montmorency—Charlevoix—Haute-Côte-Nord have the unanimous consent of the House to move this motion?
The Speaker Liberal Peter Milliken
The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?
Mario Silva Liberal Davenport, ON
Mr. Speaker, I rise once again in the House to present a petition that calls upon Parliament and the government to immediately halt the deportation of undocumented workers and to find a humane and logical solution to their situation.
The minister and his ministry have written back to say that they have met with several stakeholders. However two of the major stakeholders, the Greater Toronto Home Builders' Association and the Canadian Home Builders' Association, have been quite involved in this issue from the beginning.
I would ask the minister to meet with those groups as it is important in dealing with this issue.
Questions on the Order PaperRoutine Proceedings
Regina—Lumsden—Lake Centre Saskatchewan
Conservative
Tom Lukiwski ConservativeParliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform
Mr. Speaker, I ask that all questions be allowed to stand.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
moved:
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.
Mr. Speaker, I am very pleased to put this issue before the House today.
We all know, in our everyday lives, that the rise in gasoline prices over the past few years has had a severe impact on the manufacturing sector. Particularly hard hit were all those who drive cars, often low-income earners, who have seen their buying power dwindle, while at the same time, oil companies were raking in staggering, excessive profits. For example, Esso Imperial's after-tax profits for 2002 were $1.214 billion. They then rose to $1.701 billion in 2003, $2.052 billion in 2004, and $2.6 billion in 2005, for a grand total of $7.567 billion.
When we look at that total amount and at the rise in profits, from $1.214 billion in 2002 to $2.6 billion in 2005, we can see why there are so many losers in our economy right now, despite the fact that the economy appears to be doing very well.
The losers are consumers who are earning minimum wage and who have no choice but to drive their cars to get to work.
In my riding, in La Pocatière, a lady told me about her situation. Because of gas price increases, she was losing money by going to work. That is reality, hard reality. On the one hand, oil companies are raking in enormous profits, and on the other hand, people are between a rock and a hard place. This is true of individuals, but it is also true of groups.
At present, with the rising dollar, there is undue pressure on the manufacturing sector in Quebec and Canada. This is caused in part by this enormous increase in the price of gas. When combined with the increase in energy costs, there is upward pressure on the dollar and thus there are higher costs for our businesses. This is not merely a matter of criticizing the government, it is a fact of our daily life, and it has to be dealt with one way or another.
The Bloc introduced this motion because at present, the government’s failure to act in this regard is very bad. We do not detect any desire on the part of the federal government to face up to this problem and take proactive measures.
This week, again, the Standing Committee on Industry, Science and Technology was told that at present, economic activity in Canada was on a roll because of energy prices and raw material exports.
However, when things slow down in that respect in a few years, we will have been short-sighted and imprudent by failing to ensure that the rest of the economy is sound, and we will have a less than satisfactory outcome. It is this government that will be responsible for that outcome. I reiterate this so that it is clear in the minds of my colleagues and the public as a whole.
I will give another example: Suncor Energy. In 2002, its after-tax profits came to $749 million. And then things got better. For the period from 2002 to 2005, the total was $4.169 billion. Those rising profits are the concrete example that shows how one sector of the economy has taken the rest of the economy hostage.
People were spending part of their purchasing power on energy, on gasoline and heating oil. Their money is now inflating the profits of these companies, and nothing is being given in return to ensure that the wealth is spread around.
I would stress that there are different aspects to the Bloc motion. It talks about a plan to counteract the negative effects of repeated increases in gas prices. We must first identify the negative effects. As I said, we can all see the negative impact of price increases, particularly when there are sudden fluctuations in the price of a product that is so important to the economy.
We have to find a way of averting these sudden and unexpected increases, these yo-yo prices. We have to find ways to regulate the situation. We are not talking about price controls, but about studying the market, understanding how it works, and trying to implement measures and do things that would enable us to take the appropriate corrective action.
In terms of an action plan, the Bloc is open to suggestions, but it hopes that any plan will include a surtax on the big oil companies’ profits, in particular. In the short term, a portion of those excessive profits absolutely must go back to the people who have been the victims of these sudden increases.
We should even begin developing a long-term solution minimizing our dependence on oil. We must invest in technologies that will improve our environment and enable us to exploit new resources. It would only be fair for some of the funding for these programs to come directly from oil companies. But I doubt we will get this kind of result on a voluntary basis.
Again this morning, Yves Séguin, a well-known economist who was Quebec's Minister of Finance, said that at least one company had stated clearly that it was not increasing its refining capacity, but was selling as much as possible. The current refining capacity can yield such huge profits, and the company is cashing in as soon as possible. Even if the company fails to make appropriate investments later on, it will have netted maximum profits, as it is doing now.
It seems to us that this kind of situation could be balanced by a surtax on oil company profits.
We have also been suggesting other solutions for a while now, including the creation of petroleum monitoring agency. This idea came up two or three years ago during hearings before the Standing Committee on Industry that the Bloc Québécois had asked for. Oil company representatives testified, telling us that they themselves would agree to such an agency being established. This is not about controlling prices, but about having a tool that would enable us to use independent statistics to evaluate how the market works.
Yesterday, Natural Resources Canada held a briefing session. The statistics they provided came from a private company that specializes in that kind of information. I have nothing against the company, but it completely lacks the transparency we need in order to rely on these statistics.
So, we have proposed the creation of a petroleum monitoring agency. This way, the market could be monitored and its operation studied. For three years, recommendations would be made in this House regarding changes in the market in order to determine the measures to be put in place. I am not talking about creating a permanent bureaucracy, in fact we want it to have a time frame, but rather a watchdog that would let the petroleum industry know that the government and elected representatives were aware that something was not working in the market. The oil companies are entitled to profits, but not unreasonable profits as they are currently making, especially if they are harming the economy. So we will put relevant solutions in place.
Such an agency would help determine, for example, whether it might not be beneficial in the future to prevent the integration of products, that is, the extraction of oil, its refining, its transportation and its retailing. Might it be possible to come up with solutions similar to those tried out in certain American states? For example, it might be proposed that a company be restricted in the degree to which it is incorporative, that is, it would not be able to act at all levels this way and would have to provide many more details on profits at each stage. This is the sort of recommendation we would like a newly created petroleum monitoring agency to be able to propose.
Last fall, it will be recalled, following a second offensive by the Bloc, the Liberals agreed to assign half the mandate sought to the petroleum monitoring agency. Yesterday, during the briefing, I learned that the new Minister of Industry, who has a very market oriented approach, does not want the government to intervene in any way. According to him, things would be even better if there were no government intervention. I do not understand why he got elected in a government if he does not want government to intervene. The minister has decided to study the matter of the petroleum monitoring agency and to let its creation drag on, despite the increase in prices we have faced and continue to face. According to recent newspaper articles, another major hike is in the works. Summer is coming. With the approach of summer, people will be getting ready to travel. We will see the impact of this on the price of gasoline.
The stakeholders in this industrial sector are entitled to the same conduct as other players in other industrial sectors. However, there is one distinguishing feature: try using firewood to make your car run and see how well that works. The automotive sector, which is the foundation of our industry, offers products that run only on gas. It is the only fuel that can be used. There is no other product to compete and the oil companies are not really making an effort to find one, either. For example, they are in no hurry to move forward with products such as ethanol.
If there were a surtax on petroleum products, it could be arranged to have a portion of the revenue go towards accelerating and catalyzing the development of renewable energies and making their use more widespread. We could thus reduce our dependency on petroleum products.
We can see that many outcomes are possible, if the government assumes its responsibilities. That is the goal of this motion: first that the government assume responsibility in this area.
The other feature addressed specifically in this motion involves strengthening the Competition Act. Also, last fall, if you remember, under pressure from what the Bloc had initiated and given the urgency of the situation,we succeeded in getting hearings with the Standing Committee on Industry, Natural Resources, Science and Technology before Parliament resumed its work. The government tabled some amendments to the Competition Act to grant authority to conduct general investigations and market surveys. An enormous problem had arisen with the Competition Bureau because that agency acts as a quasi-judicial body. It must be able to supply proof of collusion.
Proof of collusion means legal proof. It requires, for example, written evidence, copies of faxes sent to service stations, to four different locations at the same time. Such documents are required. That type of thing was not found. They probably do not exist, although it is not necessary to have that.
For a number of years, the whole issue of refining has been controlled. The number of refineries in North America and around the world has been systematically reduced. As a result, today the number is down to a bare minimum. Every time a crisis occurs—a storm in Africa, a flood somewhere else, hurricane Katrina last summer—the price goes up suddenly.
If we had been smart enough to develop additional refining capacity, when hurricane Katrina struck, there would have been one or two more refineries in the northern United States, Canada or Quebec that could have augmented the capacity of existing refineries, as they are trying to do in the Lévis area. We would have had the tools we needed. But no, the refineries rake in profits and, at the same time, get huge tax cuts from the federal government.
Since 2002, the tail has been wagging the dog. We have seen the profits that the oil companies make, yet the federal government gives them tax breaks, huge tax cuts. This is clearly undesirable and inappropriate in the current situation. What we need is increased contributions from oil companies in the form of taxes or a surtax, as we are proposing.
We know that the factors contributing to the increase in the price of gas are the price of crude oil, the cost of refining, taxes and the retail profit margin. The price of crude oil is set in international negotiations. We have no day-to-day control over it, but we should certainly be concerned about it. The President of the United States has been, as have the G-7 leaders. This concern needs to grow so that fluctuations are minimized, because they have a major impact on the economy.
Then there are taxes. We know that taxes did not cause the price fluctuations. But governments need to look at what can be done about taxes. We have already talked about the excise tax on gasoline, which has been fixed for a long time. It was put in place to help reduce the deficit.
The major item that we could work on in the short term is the refining cost. Refining is the process of taking crude oil and transforming it into gasoline. At present, profits on this refining process are excessive. The additional increase of 10 or 12 cents per litre of gas hurts and is due directly to the excessive profit at that stage. In terms of cost, there is no justification for such an increase.
This week at the Standing Committee on Industry, Science and Technology, one of my Bloc colleagues indicated that, generally, when the cost of raw materials increases in an industrial sector, somewhere in the chain, a competitor usually tries to save energy and cut costs, so that at the end of the day it can remain competitive on the consumer market. The gasoline market is rather unique. When there is an increase at any stage it is passed on directly to the consumer. Everyone operates the same way and, ultimately, it is always the consumer who pays the price.
It is this type of situation that the petroleum monitoring agency could look into, examine in depth and determine if there any measures that could be implemented to correct the problem.
The retailer's margin is more a provincial responsibility and some provinces have taken action.
I think our work here in the House of Commons should be more focused on the effort to examine competition and refinery profit margins.
That is where the Bloc Québécois insists the government focus its energy, as well as agreeing to have a plan and admitting in this House that there is a specific situation in our economy that can be attributed to the increase in the price of gas. It should also admit that people and the economy are being severely punished. If we do not look at this issue in greater detail then we are in for a rude awakening in the short term, economically speaking, joining the people already going through tough times right now.
As part of the solution, we must discipline the industry and send it a clear message that the government is worried about this issue and, furthermore, it is very important that the Competition Act have some teeth.
The former competition commissioner, Konrad von Finckenstein, said that:
—while the [Competition] Bureau's mandate includes the very important role of being an investigator and advocate for competition, the current legislation does not provide the Bureau with the authority to conduct an industry study.
The commissioner thus acknowledged that this authority did not exist in the legislation. It took two years to get the Liberal government to table amendments that responded to this requirement. They unfortunately were not voted on before the election. However, the commissioner who succeeded Mr. von Finckenstein reiterated, when the amendments were tabled, that it would be an important mandate to entrust to the competition commissioner. She added that this authority existed for other competition commissioners in developed countries throughout the world, and that it was an additional tool she would like to have.
There is no reason the current federal government could not go ahead and table such a motion.
I hope the Liberal Party of Canada will support our motion, which resumes in part the amendments to the Competition Act that we suggested to them and that they agreed, as a government, to advance during the last increases in summer 2005. We also need to have the other mandate for the petroleum monitoring agency because there are matters to be looked at from that angle that are not related to competition but deserve our attention.
I would like to conclude on an important point. A fair society is important to our fellow citizens. They see the gifts given to the oil companies over the last few years. They might have been able to understand this in hard times when these gifts might have helped the companies turn a profit. But in the current situation, for example, corporate income tax is being reduced to 19% by 2010. Faster repeal of the capital tax has been suggested, and a reduction in income taxes for the shareholders of large corporations. All these measures are being discussed of course. It is not a matter in economics of focusing in order to change the balance of our entire tax system, but in view of the situation created by all this, that is to say a fabulous increase in profits, our motion contains concrete action, namely the imposition of a surtax on oil company profits.
This would be a way for the government to show all the people of Quebec and Canada that we are assuming our responsibility to distribute the wealth, that we are not just a company board of directors but a Parliament and a government that is concerned about these things. We hope very much that the federal government will take this kind of action.
I hope that we will ultimately find a long-term solution that makes us less dependent on the oil industry and able to use renewable resources. Most of all I hope that today's debate will show people that there are some members who have a sense of fairness, a sense of responsibility, and who are aware of the severe negative effects that rising gas prices are having these days in our society. I also hope that this desire, as expressed by the Bloc Québécois, will tonight become the House’s desire and that the government will act as quickly as possible. If not, it will have to answer for what it does in the next election. This is the kind of decision, actually, that will have an effect on the economy—which seems to be doing well today—not just next week but in six months, in a year and in two years from now. The people will remember who defended them.
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
Mr. Speaker, no one in this House is more upset about the high gas prices across the country than the residents in my riding, but we have a difference of opinion on how we approach that. When there are four gas stations on a corner and the price goes from 98¢ to $1.05 within five minutes of each other, I would have to agree that there certainly seems to be collusion of some type. I have never been happy with some of the reviews by the Competition Bureau.
At the same time I think that the members across the way have been perhaps sitting a little too close to the Liberals and the NDP. It bothers me that when there is a problem, they would just add another tax. That has always been the Liberal way. That does not solve everything. I have a very large rural riding, and for agriculture and truckers nothing affects the industry as much as gas prices.
I have a question for my colleague. How many oil companies are based in Quebec, if any, and how does he think they would take to adding another tax to fix the problem? There are other ways of addressing this issue. I agree that the issue needs to be addressed, but certainly not in this manner.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, I thank my colleague for his comments. I have understood that he will probably vote in favour of our motion. He seems to be saying that there is indeed a major problem at the outset. So I would like to explain the logic behind this motion.
I will respond more specifically to his question.
There are refineries in Quebec, such as Ultramar in the Quebec City region. There are also some in the Montreal region, which refine petroleum for a good part of Ontario. The problem is not the existing refineries, but the lack of refineries in North America. There has in fact been a major systematic decline in the number of refineries over the last 15 years. That is the result of choices made by companies. I am not saying there has been collusion. I am saying it is due to the choices made by companies. Because of those choices, however, the entire market, including consumers and industry, is being penalized, as we can see from the situation we are facing.
For that reason, we are proposing a petroleum monitoring agency, so that we are able to see how the market is working. It is therefore necessary for the Competition Act to permit research into the market, so that ultimately we can propose corrections.
We can no longer go on telling our citizens that it is sad, that the price of a litre of gas is terrible and it is really costing us. We are elected officials. We are not spectators. We are players in political life. We have to propose measures and actions.
It is not my sitting too close to the Liberals and the NDP that leads me to speak of a surtax on petroleum products. The idea actually comes from people I have met in my riding. They told me that the action plan proposed by the Bloc last year was necessary to help people who live alone, who must travel to their work, those in the regions, farmers and forestry workers. We also need money to further upgrade public transit.
All of these measures require government funding. No petroleum company is going to spontaneously give the woman in La Pocatière $20 to help cover the loss she incurred because of rising costs. That responsibility for redistributing wealth lies with the government, and it is a responsibility I hope it will assume.
Christian Ouellet Bloc Brome—Missisquoi, QC
Mr. Speaker, I would like to congratulate my colleague for his excellent presentation on the price of oil.
I would like to add that it is a moral duty for all governments to determine how oil companies are making such enormous profits. This is nothing new. It is not something we are asking of the government and that has never been done. In 1960, OPEC began looking after the interests of its member countries. This is not a recent event. Black gold is synonymous with very large profits for certain companies.
Do the profits of companies established in Canada remain in Canada? I would like my colleague to answer this question. Unfortunately, I am pretty certain that most of the profits do not remain in Canada and do not benefit Canadians. If these profits contributed to development, to the overall Canadian economy, they could still be acceptable. But that is not even the case.
It is vital that we examine how the government could limit these huge profits so that wealth could be redistributed, particularly among the most disadvantaged in our society who must pay. I understand that there is a world price for oil, but we must at least benefit in some way. What are my colleague's thoughts on how we could keep part of these huge oil profits in Canada?
Opposition Motion—Gasoline PricesBusiness of SupplyGovernment Orders
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, I thank my colleague for his question.
Clearly we cannot ask an industry to invest in its competitors.
We have to come up with long-term solutions. Our society is enormously dependent on the oil industry. The money that we pay and that makes the profits of the large oil companies could be used to create an energy network much more in tune with sustainable development.
It is very hard to ask an oil company to invest willingly in any particular sector. The government has to play a regulatory role. So we have to make sure the companies pay enough taxes, which will then be distributed according to the common good and common sense, so that the final result is acceptable.
This in no way means denying the right to make a profit or preventing a company from being profitable. The market is very special, the product is unique and the organization of the refining market requires us to alter our approach. The President of the United States, whom I do not see eye to eye with on a great many topics, has himself realized the need for action in this sector.
Mr. Dodge, the Governor of the Bank of Canada, recently spoke to the Standing Committee on Industry, Science and Technology about the value of the dollar. According to him, the rise in the price of gas and oil has an impact on the rise in the value of the dollar.
This is the type of situation that it is essential the government try to harness, instead of letting the market operate freely. The current consequence is that a two-speed economy is developing. The energy economy, which is going well, and the manufacturing economy in Quebec and Ontario, which is going very badly. Jobs are being created in the west to study energy, but it is not the people who had jobs in Quebec and Ontario who are benefiting. You do not move someone 45 years of age from Montmagny to Edmonton in the blink of an eye. You do not turn him into an oil industry worker. There are choices of which territory to occupy and choices of which economy to develop right across Canada.
These choices require that the government play a responsible role, that it have the means to intervene, that it promote the point of view of our fellow citizens, and that the benefits of economic successes be felt across the country. I am not saying that there are not any effects right now, but in my opinion there are not enough. This is why the government should look at the suggestions we made so that this market can be controlled and really put to the use of the economy and the citizens of Canada and Quebec.
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, the motion calls for the consideration of a surtax on the profit of major oil companies. It does raise the debate and the question about whether or not this will be an effective matter, simply from the standpoint that the increase in taxes would be passed on to the consumer in any event. All we would be really doing is passing on another level of taxation to the consumer.
The same argument has been used with regard to amendments to the provincial or federal taxes, the GST, et cetera. I ask the member whether or not he has some rationale why a surtax on the profits may in fact squarely hit the target which he intends?
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, if the motion only called for the surtax, then we would have to be very careful about the impact mentioned by my colleague. However, our motion also calls for the creation of a petroleum monitoring agency. We must be able to look closely at how the industry works to see whether this surtax is passed on to consumers. In strengthening the act, we must ensure that the Competition Bureau can do a market study. That was one proposal that the Liberals agreed to when amendments to Bill C-19 were tabled last fall.
With these extra tools, it is clear that, in the short term, a surtax would be effective in allowing distribution of the profits that companies have been accumulating shamelessly for the last two years and a return on investment. This whole action plan, including the three proposals that are in the motion and others that could be added, would enable the government to play its role in an appropriate way and, most of all, to express the political will to take action in this area.
Opposition Motion—Gasoline PricesBusiness of SupplyGovernment Orders
Saanich—Gulf Islands B.C.
Conservative
Gary Lunn ConservativeMinister of Natural Resources
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--
Opposition Motion—Gasoline PricesBusiness of SupplyGovernment Orders
An hon. member
Price-fixing.
Gary Lunn Conservative Saanich—Gulf Islands, BC
Price-fixing, as the member yelled out. I think we should look at the facts on this.
They talked about the creation of a petroleum monitoring agency. The facts are that the Competition Bureau has investigated this six separate times since 1990 alone. Each and every time it found no collusion and no price fixing. The Conference Board of Canada recently investigated whether there was price fixing at the pumps or collusion and each and every time it found that there was none. Both of those agencies are independent.
Members from all sides of the House and from every party who sat on the House of Commons Standing Committee on Industry investigated this, not once but twice, and they found no price fixing and no collusion.
If the members opposite or anyone else in Canada want to bring forward a complaint they should bring forward evidence where they believe there is collusion or price-fixing and the Competition Bureau will investigate it because that is its job. Creating another level of bureaucracy, another monitoring agency, would only result in spending millions of dollars more of taxpayer money. How is that efficient?
I would remind members that all these investigations happened when the Liberal government was in power. It was under the Liberals' regime when there was no collusion. It was not a biased or partisan investigation.
There is no question that as consumers we will face challenges as the demand for gasoline and energy around the world increases but with those demands also come opportunities. Canada exports an enormous amount of energy and crude oil. The tax benefits that the government derives from this sector are what allow us to deliver our social programs and to have a strong economy.
Alberta alone exports something in the magnitude of $71 billion a year in energy. Most people do not realize that more tax dollars from the oil sands in Alberta, which is an important part of our economy right now, come to Ottawa than go to Edmonton. Those are facts and every Canadian right across Canada benefits from that.
What can we do as a government? We will do everything we can to try to stabilize it but at the end of the day the price of crude oil will be driven by global market forces. We either believe in free enterprise and a market-driven system or we do not. If the members opposite want to go back to a Pierre Trudeau national energy program because they think that would be good for the country, we fundamentally disagree. That is not where this government is going.
Other forces, which we do not have control over, also have an impact on the price at the pumps. We all saw it last year when Hurricane Katrina, a natural disaster, had a significant impact on the refinery capacity. The market fluctuates but Canada also had opportunities to pick up the diminished capacity. Those are the forces we must deal with.
We believe that putting a surtax on major oil companies is fundamentally the wrong way to go. We do not move toward command and control. We believe in the market-driven system. We want to work with industry and with our provincial counterparts to invest in these sectors with technology to ensure all Canadians can benefit.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, it is the first time in my life that I hear that a refining margin represents a cost. The minister said that the refining portion of the price of gas is the cost. It is not the cost; there is the cost and the profit included in the refining margin. He told us that the only place where there is indeed a reasonable margin is in retail sales. Could he not recognize that, currently, refining margins are disproportionate and represent unacceptable profit margins? We must be able to monitor the market in order to find ways to address this situation.
I have a second question. I have figures here. Between 2002 and 2005, after-tax profits for the five Canadian oil companies went from $4.287 billion to $9.653 billion on $27 billion for one of Canada's natural resources. Could the minister behave as the natural resources minister of Canada and not as the natural resources minister of Alberta?