House of Commons Hansard #149 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was gasoline.

Topics

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

11:25 a.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

In fact, Mr. Speaker, the hon. member identifies a real flaw in the Competition Act and the reason why we need to act to change it. As a provincial MPP in Ontario, he was part of a party and a government that supported some of the types of measures proposed by the previous Liberal government and in fact largely designed by the member for Pickering—Scarborough East. What the member identifies is an incapacity for the Competition Bureau to act under the current Competition Act. In fact, the decriminalization of some of these practices makes it possible for the Competition Bureau to take action.

The member raised some of the issues as well as the questions he is asked by consumers and constituents in the summer. If he wants to be able to answer those questions substantively, he ought to support this kind of motion and these kinds of measures. He would be able to tell constituents that in fact the policies he votes for and supports on the floor of the House of Commons will lead to a Competition Act and a Competition Bureau that--

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

11:30 a.m.

NDP

The Deputy Speaker NDP Bill Blaikie

Resuming debate.

Before I recognize the hon. member for Pickering—Scarborough East, I would say to the hon. member for Kings—Hants by way of speaking to the whole House that I cannot give members an indication of whether their time is expiring if they never look at the Chair. I know it can be tough, but nevertheless, I say that for members.

The hon. member for Pickering—Scarborough East.

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

11:30 a.m.

Liberal

Dan McTeague Liberal Pickering—Scarborough East, ON

Mr. Speaker, I will maintain my vigilance and keep a watchful eye every minute or so.

I would like first to thank those who moved this motion. It must be noted that this motion, which we heard yesterday, would simply allow the commissioner to conduct a review and to initiate investigations.

It must also be noted that he already has this power for civil law issues. However, in cases related to criminal law, the commissioner does not have that right, except for a group of six people or as a result of a departmental directive.

Therefore, what the Bloc has proposed would not have worked necessarily. It is, in part, already there.

What makes the motion acceptable from my party's perspective is the fact that it includes two very important provisions, which my party has worked on for almost ten years now, both in turning the pricing provisions of price discrimination and predatory pricing where they belong, under civil opprobrium as opposed criminal sanction.

I think hon. members in the House should be aware of the fact that where there are criminal sanctions, whether that be in price discrimination, predatory pricing, conspiracy or collusion, and I alluded a little earlier to the member for Oshawa, who is the parliamentary secretary, is it any wonder that over the years egregious examples of conspiracy, particularly in this industry, have never been proven.

I know most of us in this chamber have read section 45 of the Act, which deals with conspiracy. To get a conviction, one has to prove the tests of undueness. In every section undueness basically serves as a tremendous barrier of proof. One has to prove intent. One has to prove that the damage to the economy is so substantial or that the dominants are so substantial that it would bring about basically the failure of the Canadian economy.

I have said this tongue in cheek before, but the only way we would get a conviction in the oil industry, for instance, would be to have the chairman of Imperial Oil swear an affidavit before the Supreme Court of Canada that it was engaging in conspiracy. This is clearly not the case.

In your time here as a member of Parliament, Mr. Speaker, you have seen the number of refineries go from 44 down to 14 or 13 even. In fact, in Toronto region, we have absolutely no refineries left.

I heard the hon. parliamentary secretary talk about ample supply. I do not know where the parliamentary secretary for industry was, but for a month and a half Canadians paid on average 8¢ a litre more because of a refinery out at Nanticoke.

We are running our supply situation at such a fragile point today that we are experiencing difficulties which are having tremendous impacts on not only ordinary Canadian consumers, but also on the economy in general. Our interest rates did not go down this month. We would have expected that to happen, but it did not because of the cost of gasoline, which is artificially high in Canada.

It is clear to me, and I think to everyone here, that the way in which we wound up from so many players down to so few players was a combination of two factors: first, the creation of PetroCan years ago shut down a number of potential players in which independents could provide supply; and second, was stopping that policy, reversing it, throwing it back into the private sector only to have further mergers, such as the one we saw with Texaco having its assets taken up by Imperial Oil, Gulf and so on.

What this points to is a very dangerous oligopoly in the downstream, that is to say in the provision, the refining of product. That has happened under the watchful eye of a Competition Act, which I have tried to change several times.

The Competition Act, written in 1986 and which Peter C. Newman referred to as the only time in Canadian history when an act was written by the very people it was meant to police, has now seen an unfortunate outcome, but a very predictable one. It definitely needs amendment. That is one of the reasons I agree with the Bloc's motion. It agrees with what we have been trying to do for ten years.

A handful of players not only control the price, but they can also control supply and also control, to a large extent, the pump price we pay from region to region within one-tenth of a cent a litre.

I will give an illustration of this. Last week we heard that the price of crude had come down, but that refining costs had gone up. I had no problems with understanding the arguments. Even if I were to accept those, I would have to continue to ask myself why all last week throughout Canada Canadian consumers paid on average 5¢ to 6¢ a litre wholesale more than the United States. At the same time our hard-pressed refineries, under the previous agreements to share product with the United States, FTA, NAFTA, were selling gasoline 6¢ cheaper to the United States than they were receiving in Canada.

Those are the so-called mystery cents. Those are the facts that underlie and underscore the need to amend the Competition Act. It was not this member of Parliament, who was slightly before his own time. It was not the Liberal Party that sort of invented these things. The facts remain that the public policy forum, the Competition Bureau itself, among all the changes that need to take place, came up with three under formerly Bill C-19.

One was the general application for airlines. I will discuss that in just a moment. The second was turning pricing provisions from criminal to civil. The third one was about the need for an independent monitoring watchdog. Why do we need that? Simply put, Natural Resources Canada, which is the be all and end all in terms of pricing, relies on some companies like M.J. Ervin and Associates. Mr. Ervin is a great man. I met him before, but the companies he serves are in fact the oil industry. We have the proverbial fox monitoring the chicken coup.

I do not speak so disparagingly of a company trying to make business. I just do not believe it is fair for a country that has seen its consumers invest so heavily over the years in terms of providing energy self-sufficiency and building these refineries with taxpayer money to see these things suddenly decline and see prices in Canada, a nation blessed with an abundance of technology, of resources and ability, suddenly paying more than the United States when there is a crisis.

We talked about Hurricane Katrina. No wonder the Competition Bureau cannot find anti-competitive act if it hit it on the head. For seven, to nine, to ten weeks during that period of time, we were paying 10¢ a litre more in Canada than the United States, where the problem existed. I have no difficulty in telling people that we should be paying international prices for crude and for gasoline, but, for goodness sakes, 10¢ a litre more? Are we crazy?

The bureau thought so little of that and said that it did not matter that we paid the 10¢ because it found no question of anti-competitive behaviour. What it did not say is that it could not find the anti-competitive behaviour that allowed a handful of companies to charge those kind of prices, which would not be acceptable in any other industry across the country.

I have had many discussions on this. We have worked on this over the years. We know what the solutions are. The Bloc motion simply crystallizes the very minimum, with which even I think some members in the industry agree. However, in the public, people like Wanda Hollis in Hamilton, Ontario, are leading the gas boycott. There is a perception, a belief, that what they are doing is stopping the companies from taking advantage of consumers. I wish great power to them to do that, but until we get the Competition Act correct, we will wind up with investigations that are predictably useless and predictably unnecessary.

I am getting tired of hearing from the media and others, who do not want to look at this, say that we will constantly wind up in the same pickle we are in. We will have an inquiry, but we will not find conspiracy.

Let it be perfectly clear. The Liberal Party and the industry critic, the member for Kings—Hants, do not believe that conspiracy needs to exist in an environment where we have regional to regional monopolies, in which Imperial Oil in Toronto sets the price. The wholesale price for gasoline at 4 o'clock in Toronto was 66.7¢ a litre, down from 67.8¢ the day before. The other three major companies simply followed that same price.

There is no incentive to break that monopoly. In fact, that price is 3¢ a litre above wholesale prices for the same gasoline we sell to the United States. We are only doing it to ourselves. We need a transparent, objective body to look at these prices and say whether consumers are getting a fair break or not. It is very simple to do.

Platts, Bloomberg Oil Buyer's Guide knows what the Canadian dollar is exchanged for every day and looks at the wholesale prices of gas in the United in the New York market, for example. We have a fair idea about what we are talking.

On that price, yesterday at the wholesale, it cost 3¢ to 4¢ a litre for a refiner to turn crude into gasoline. In fact, yesterday the mark-up was about 21¢ a litre, which is never explained anywhere. The media also has to help us here too. I do not want to hear what the price of crude is. I do not put crude in my gas tank, but I do put gasoline in that tank. I want to know what the price is, whether that is ethanol or a new product that comes out.

The reality is the blueprint of the Competition Act. It was written in a way that is deliberately flawed, which enhances monopolies, which has destroyed a lot of the ability for us to have competitive pricing in Canada. Parliament must act decisively and quickly with no more name calling or pointing fingers saying “they should have” or “they should not have”. Let us deal with the specifics.

Today Canadians are being ripped off. They deserve an answer and they deserve a decisive response by the government and Parliament. I am prepared to support any initiative that goes in that direction.

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

11:40 a.m.

Oshawa Ontario

Conservative

Colin Carrie ConservativeParliamentary Secretary to the Minister of Industry

Mr. Speaker, my colleague from Pickering—Scarborough East indicated that under the conspiracy provision of the Competition Act, we needed to show damage to the economy and an abuse. I think he has his provisions confused. The conspiracy provision of the act requires the showing of an undue lessening of competition, not damage to the economy. The abuse provision is a completely separate section dealing with monopolization. I am glad I am able to clarify that.

I am curious to know where the member is getting his actual prices. He has said that we are paying a lot more in Canada. If we look at the retail price in Canada, excluding taxes, on April 17, we were 2¢ less than in the States. The same goes for a week later when we were less. In this past week we were up a little, but consistently we are very competitive.

Today's debate is basically about the gas prices. Could the member stand up and state the Liberal's policy on this? His leader has said that high prices are fine. I could quote his leader from numerous publications saying that high prices are a good thing. Where does the Liberal Party stand on this? Is it for higher prices or not?

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

11:40 a.m.

Liberal

Dan McTeague Liberal Pickering—Scarborough East, ON

Mr. Speaker, I do not know where he got his information from, but if he wishes to look at part V and part VI, they are both found under criminal provisions. Perhaps he would like to stop wordsmithing and understand the act. Maybe if he would read it, he would understand what he was saying, rather than asking questions that make no sense.

We have looked at all aspects of the criminal provisions in cases of conspiracy. It is very clear some are egregious and we should leave them criminal and some we ought to make civil. However, we have to find a better balance.

The member of Parliament is saying that the Competition Act works fine because we have had six inquiries, in which there is obvious need for change, as demonstrated by the bureau back in 2002. Perhaps there has been a change in leadership or perhaps it has been muzzled by the current leadership in the country. However, the reality for all of us is that the act no longer functions for the purpose in which it was intended.

We do not need more concentration. We need more competition. His constituents know that because I get a lot of calls from them and a lot of them have been hurt by the practices of this industry. We are in fact paying 3¢ more in taxes, on average 6¢ more, and the oil industry will recognize that.

Take the CPPI. It will say we have to pay more in Canada because it is worried about the Americans buying our gasoline products. Therefore, it is okay to charge Canadians an extra 20¢ a gallon. Rather than the hon. member asking cute questions, he should be focusing on how to protect his constituents and ensuring that small independents get a fair crack.

As to the question on the future, I thought I made it clear three times. Gasoline prices are the reflection of an act of a document that no longer works to serve the interests of Canadians. I explained to him, and I think made it very clear, that whether it is ethanol or any other product we could substitute, if the same structure exists, then we will continue to see higher prices in a nation that is blessed with an abundance of resources.

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

11:40 a.m.

Conservative

David Tilson Conservative Dufferin—Caledon, ON

Mr. Speaker, I know the member worked on this topic when he was on this side of the House, and I respect his knowledge.

It is my understanding that the Competition Bureau, through the powers given it in the Competition Act, can investigate all factors that make up the per litre price of gasoline and that includes refinery margins. If there is any evidence or suspicion of anti-competitive behaviour or collusion, it can investigate it. However, from my understanding, to date no evidence has been presented.

Since 1990, and this has been stated by other members in the House, the Competition Bureau has conducted six major investigations into allegations of collusion in the gasoline industry and has consistently found no evidence of a national conspiracy.

Looking at all this information, it would seem to me that the Competition Bureau already has the powers that are being suggested through this motion. Is this motion redundant?

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

11:45 a.m.

Liberal

Dan McTeague Liberal Pickering—Scarborough East, ON

Mr. Speaker, the hon. member will know, from his days in the provincial legislature, that Doug Galt and Joe Tascona, and many of his colleagues, supported four square the proposals I had made to make changes to the Competition Act and they were not surprised that the Competition Bureau was not able to find any questions of conspiracy.

The threshold of determination of evidence and to determine an anti-competitive act under the criminal provisions is too high. The member and his Conservative colleagues from the province of Ontario would agree with me. I am not interested in putting these people in jail. I am interested in stopping their practice of putting small independents out of business and continuing to shut down refineries and important critical strategic facilities, thus allowing them to raise prices in a hair trigger-fashion the moment there is talk of some disruption around the world.

We are more vulnerable in Canada than other places, as I explained, such as Katrina and so many other instances. Even today the wholesale price of gasoline is higher in Canada than the United States. When we strip away the same gasoline, we strip away the taxes.

The hon. member knows full well that the price of gasoline today is now controlled by a handful of people who do not compete against each other. I want to make it clear for the member. When the Prime Minister ran in 2004, he said he would drop the GST after 85¢ a litre. That means, in effect, a savings at $1.10 average across Canada of 5¢ a litre, not the one penny proposed under the GST.

We need to deal with this. The time for reform has passed. The fact that it did not happen means we are paying $1.10 today. That is unfair. The hon. member should be on board, as he was when he was the provincial member in Ontario.

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

11:45 a.m.

NDP

Brian Masse NDP Windsor West, ON

Mr. Speaker, it is a pleasure to talk about this issue and the Bloc motion, as amended. It is something I brought forth to the Bloc, with regard to having a watchdog agency, something which has been around since 1999, then reintroduced in 2003, the concept specifically through an industry committee report, a committee in which I participated.

This is very important. What we are talking about here is not necessarily the price of gasoline. It is about public policy and whether or not we should have public policy involved in this industry to some degree. That is something that is not foreign to this country nor to the United States and other countries abroad. There is some form of public policy that either protects consumers or works to advance the industry and protects consumers.

In Canada there are four provinces that have monitoring agencies that regulate the price of gasoline. They have decided to look for more stable markets in order that they do not have the wild fluctuations in prices. They would prefer as consumers to have some stability. Nothing is more frustrating to people than having to fill their gas tanks on the way to work and finding out that the price of gasoline has suddenly gone up 5% or 10%. There is nothing they can do about it. That type of speculation in that environment is something people want to have addressed to a certain capacity. That is why four provinces have chosen a model that includes public policy for that.

It is also not foreign to this debate here in the House of Commons. It is not even foreign to the federal government. The minister's own briefing book, of which I have a copy here, talks about the Competition Act and the challenges the Competition Bureau faces. The Minister of Industry received secret advice, something I have acquired through the Access to Information Act, that basically outlines the Competition Act and some of the challenges.

The government spokespeople today have been saying that there is nothing wrong with this, but that is not what the minister's advice has been. The minister's advice quite clearly identifies that the act is based upon an analysis done in 1969.

I asked a question in the House of Commons the other day. I noted that the Woodstock festival took place back in 1969. The Competition Act comes from an era of about 40 years ago which created the body and the logic and the analysis all based upon that. There have been some changes to the Competition Act since that time, but there are still problems with it. That has been identified in the advice to the minister and his own briefing book.

It talks about the fact that there could be a leadership role to protect consumers if it was in their interest to do so. It also says there should be a pursuit of legislative initiatives related to identity theft, as well as other issues that consumers are raising. It also talked about the global economy and the bureau not having the proper resources to do the job.

That is the advice the minister was given over a year ago. He was told that the bureau does not have enough money, that the world is changing and that the bureau does not have the resources to pursue what it should be pursuing for consumers. It goes on in terms of noting some of the problems it faces and some of the things that can be changed. It is important that public policy be involved.

Mr. Speaker, before I go on to the next section, I would like to advise you that I will be splitting my time with the member for London—Fanshawe. I appreciate the pages who were so helpful in that matter with props. It looked like an old Bob Dylan commercial when they had the signs out there for me.

I want to return to this debate and public policy. The United States has what is called the petroleum reserve. The Americans have an agency that is dedicated toward preserving a certain number of barrels of oil for the actual market and for strategic reserves.

It is important to note that in 2006, the Americans put in money into the oil reserve, around $18.6 billion, to ensure that it functions properly for national security. President Bush has drawn on that to try to lower the price of gasoline. He has used that as an instrument to lower gasoline prices, something that has happened a number of times in recent years. He also rolled out a public policy for that.

The New Democratic Party has been calling for some form of public policy. That is why we believe the petroleum monitoring agency is the first step we could take to make sure there is accountability for consumers.

This industry has billions of dollars in profits. Recently the quarterly amounts came out with Imperial Oil at $774 million, Petro-Canada at $560 million and EnCana at $497 million.

We are asking whether or not Canadians are paying a fair price at the pump. A petroleum monitoring agency gives the independent analysis and voice that is necessary. MJ Ervin & Associates accumulates the data and basically is the voice for the industry. I am not here to say that it does a bad job, but I can say it has a different perspective in terms of analyzing the data, reporting it to the public and rolling out new initiatives on accounting for that. It is different from having an actual agency that does that. That was something we agreed to in 2003. The industry, science and technology committee almost had unanimous support for such an agency. To this date we have not seen that come forward. That is why we would like to see that part of the proponent brought forth.

It has been interesting that when we look at the high commodity prices that we have right now, people automatically assume we are going to see the higher price of gasoline and a reduction in use. That has not been the case in Canada. The most recent information from Statistics Canada is when it did a yearly review in 2006. It talked about retail gasoline consumption. It noted that with the price of gasoline going up “the only concession drivers made to higher prices was to switch from premium to regular grade gasoline in each year”.

Consumers have decided that they cannot afford some of the higher prices. That is why we have been talking about the prosperity gap in Canada. Ordinary citizens are watching their wallets being squeezed day in and day out, but at the same time they have not seen their income rise to levels that are appropriate for their daily needs.

We are supportive of reducing the dependency on gasoline as a product. It is a very important part of our public policy. For example, for a number of years I have been pushing for a green car strategy. At the same time we know there is a public vacuum and that with the increase in gasoline prices, consumers are going to abandon products that are cleaner and greener.

If we put them on the market but we over price them and allow the profit margin to continue to expand exponentially without questioning it, people will make choices that probably will not be very good. We will continue to have the growth of gasoline products at the lower end of the spectrum in emission standards and quality, at the expense of some of the higher brands, the ones we want to promote to citizens because they are cleaner and greener technologies. There cannot be this vacuum.

The member for Ajax—Pickering noted that the inflation rate is going up significantly. The consumer price index right now is skyrocketing. Consumers paid 2.3% more in March for their goods and services in the most recent data that is available. It was largely due to a strong increase in gasoline prices throughout the country. What ends up happening is that with the rise in inflation rates, people abandon the cleaner technologies that are available.

What is important in this motion is to create the needed elements for gas pricing that is going to be based around the Competition Bureau, making sure the refining margins are part of the public policy debate. The refining margins are very important. We have seen literally the dissolution of them over a number of years.

The most recent case is the Oakville refinery. This is an interesting case. Instead of Petro-Canada investing in this country in terms of the Oakville refinery, it decided to abandon it. When it was abandoned the company decided to import gasoline product from Esso. Recently there was a fire at its Sarnia refinery, and prices not only skyrocketed at Esso stations, but also at Petro-Canada because they are tied in with vertical integration. There is no competition. There does not have to be collusion; the fact is that this country has a lack of refining capacity and we depend upon a few key players in the market. With that type of a system we have to ask ourselves if we have the right public policy.

The industry, science and technology committee recently did a study on the manufacturing industry. We laid out recommendations to help the manufacturing industry. Gasoline prices have been hurting that industry. Energy prices have been putting us at a lower competitive level. There are rising export prices and the rise in the value of the Canadian dollar. Research and development in this country by the oil and gas industry is less than 1%. The industry is doing research and development everywhere else but here. That has to change.

The New Democratic Party is calling for a public inquiry. We will start by supporting the motion before us today. Hopefully we will see some fairness for consumers at the end of the day.

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

11:55 a.m.

Liberal

Dan McTeague Liberal Pickering—Scarborough East, ON

Mr. Speaker, the hon. member for Windsor West has shown commitment to this issue, one of the most fundamental issues for Canadian consumers. He certainly brings not only a wealth of experience on this particular file, but also an understanding of where we need to focus. I am glad to see that the New Democratic Party has taken this position.

The idea of collusion and conspiracy is an issue that has long since left us. We need to deal now with the dominant situation from region to region.

In terms of impact on his community, I wonder how he has been able to manage some of the issues that have surrounded the proposal of an independent petroleum monitoring agency, which I believe he made, and one which we made many years before. Would he do as the Ontario government and the Canadian government have done which is to compare Toronto with Buffalo where there is no refinery, or compare it just along the canal or along the border? Would he want to see something more extensive?

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

11:55 a.m.

NDP

Brian Masse NDP Windsor West, ON

Mr. Speaker, absolutely we would want to see something more extensive.

We need not only a short term analysis and monitoring, but also a long term analysis and monitoring. The monitoring agency could have the capacity to make some recommendations in terms of what we needed to do to bring better stability. That is the goal.

There are issues that we have not gone into in terms of speculation in this industry on the Chicago and New York stock markets. The member was quite right to note that there is often public discussion about the price of a barrel of crude oil, but not the actual refining aspect of it to any degree. We should start looking at that.

Most important, we need an extensive model and one that is going to report annually back to Parliament. People want that. It would also be helpful to the industry. It would know that the public was watching to make sure it was accountable. That would include everything on what the industry was doing, as well as what other markets were doing, such as in the United States and Europe.

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

Noon

Oshawa Ontario

Conservative

Colin Carrie ConservativeParliamentary Secretary to the Minister of Industry

Mr. Speaker, I listen to the Liberals, the NDP and the Bloc saying that they want lower prices for consumers and they want some stability. They are all standing together to support Bill C-288, which we know is going to raise the price of gasoline at least 60¢ per litre. Those members are saying they are really for consumers and they want to keep prices low, but the leader of the Liberal Party has been saying that Canadians and many of his own colleagues might cringe when they see the price at the pumps these days, but high gas prices are actually good for Canada in the medium and long term.

Does my NDP colleague agree with the leader of the Liberal Party? They seem to agree on a lot of things, such as Bill C-288. Does he agree that high gas prices are good for Canada in the medium and long term?

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

Noon

NDP

Brian Masse NDP Windsor West, ON

Mr. Speaker, the parliamentary secretary is trying to twist the argument.

This is what the current Prime Minister said in the House when he was in opposition:

Mr. Speaker, the Prime Minister will know that across the country Canadians are struggling with record gas prices. Canadian businesses are being hurt. Canadian consumers are burdened with the difficulties this is causing, but the government itself is rolling in record gas tax revenue.

Members of the Conservative Party accused the then Liberal government of the day of being the real beneficiaries of high gasoline prices. That is why they promised to freeze the price at 85¢. The Conservatives never delivered on their promise. If we are going to hear that message day in and day out from members of the Conservative Party, they should remember that they were the ones who said they would freeze it at 85¢.

There is a phone book full of promises that the Conservatives made as they questioned the Liberal government of the day. The Conservatives never acted on their promises. They are the ones rolling in cash right now. If the Conservatives are really interested in returning money to consumers, why do they not give it up and let them have it back today? The government could do that though an order in council. The Conservatives do not have to stand up and say the same things that the Liberals said in the past. If they wanted to, they could actually deliver on the promises they made to Canadians.

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

Noon

NDP

Irene Mathyssen NDP London—Fanshawe, ON

Mr. Speaker, I would like to thank the member for Windsor West for sharing his time with me.

The rising price of gasoline is causing great concern to hard-working Canadians. New Democrats believe ordinary Canadians are being cheated at the gas pump every time they fill up their cars. It is unfair for working and middle-class families to be gouged at the pump while big oil companies continue to reap record profits. Many people have no choice but to drive to work. The record prices we are seeing today have become a significant pay cut to their families.

An independent watchdog needs to be set up to monitor prices and help protect against future gouging.

Today, Canadians find themselves trying to cope with uncontrolled rising gas prices because the Liberals and Conservatives consistently refused to act when gas prices spiked in the past.

For instance, a motion tabled in the House April 2005 would have created a petroleum monitoring agency. This motion was defeated when Conservatives and Liberals voted against the NDP and Bloc's efforts to implement the agency.

Federal legislation was also put forth by my colleague, the member for Windsor West, to create a petroleum monitoring agency. A similar bill was brought forward by NDP MLA John Horgan to regulate prices on a provincial level in B.C.

The Conservatives and Liberals have consistently supported the big corporations, whether they are banks, polluters or, in this case, oil companies. It is time to put fairness back into the way we behave so that there is money in the pocketbooks of consumers.

While consumers are paying sky-high prices, oil companies are making sky-high profits. As my colleague mentioned, the first quarter profits include the following: Imperial Oil/Esso, $774 million; Petro-Canada, $580 million; Encana, $497 million. All the while, gas prices continue to rise all across the country. They spiked earlier this week, with a high of $1.23 per litre in British Columbia.

Just like the phone and cable companies, oil companies and energy producers should have to justify and defend cost increases.

The Competition Bureau has already held hearings and nothing happened. In total, the Competition Bureau has held six major investigations into gas prices since 1990 and found that nothing that violated the Competition Act was present in any of those investigations.

This motion today calls for an inquiry which actually would help consumers and would limit what is happening.

The Competition Bureau has limited powers to investigate and compel evidence to be brought forward and in fact the bureau, by its own mandate, must keep major portions of the findings secret. We want Canadians to hear from the people who sell us gas and working families want to know why gas prices spike and what the industry thinks we can do about it.

On average, a public inquiry runs on a budget of about $10 million. But after six investigations by the Competition Bureau, we still have no solid answers to the very real problem of rising gasoline prices. Ordinary Canadians expect more. Every month or two prices spike, sometimes to totally unreasonable levels. Consumers are seeing patterns, and we need to get to the bottom of this.

The House of Commons Standing Committee on Industry, Science and Technology has already held hearings and recommended, in November 2003, that a petroleum gas price monitoring agency be established.

That is just what New Democrats are calling for today. We need a gas price monitoring agency. That is the reason the NDP proposed to amend the Bloc motion to include the creation of a petroleum monitoring agency.

The oil and gas sector in Canada is dominated by big business. Due to rising oil and gas prices, the industry has become one of the most profitable sectors in the economy, with record profits for each of the last four years. With those record profits, we see an increase in power and influence. Even with these record profits, the industry has one of the worst records with regard to investment in research and development, with among the lowest as a percentage of revenue or as a percentage of profits of any industry.

Still, the industry receives special tax breaks for capital cost allowances that the Conservatives would phase out over the next eight years. That would be eight years of more tax breaks at the expense of Canadians. The industry receives close to $2 billion a year in subsidies from the federal government.

The $2 billion could be used to fund an affordable housing program in this country. It could relieve poverty among Inuit communities across the north. The $2 billion could be used to create a department for Status of Women Canada. The $2 billion could create enough affordable child care spaces in Ontario. The $2 billion dollars could be used to create a better stand of living for our seniors by initiating a national home care plan which would allow seniors to stay in their homes and communities and out of long term care facilities.

I am sorry I have digressed, but the scope of this misspending is just breathtaking.

As many in the House know, the oil and gas industry grew as part of government policy. At a time of low oil prices, extremely low royalty rates were established for the highest cost production in the oil sands, the much higher oil prices that led to enormous investment and development in production on a scale unseen in this sector. It has also led to an enormous environmental degradation and the generation of pollution.

The oil sands sector is the largest greenhouse gas emission source in the country and it also consumes vast amounts of clean water.

The time has come to eliminate the absurd royalty regime and establish what is fair. It is time to eliminate subsidies for this profitable industry. It is time to create the incentives for the industry to reduce its emissions and invest in greener technology and fuels of the future.

Rising gas prices hurt hard-working Canadians and their pocketbooks. It is unfair for big oil companies to continue to make record profits while they squeeze consumers at the pumps.

Some people may ask: are not high gas prices an incentive to use public transit? Why would environmentalists want to make gas cheaper and increase consumption?

Transit is the key to reducing gas consumption. We are in favour of increased funding and infrastructure for public transit, but we will not take the approach that increased profits for big oil and gas companies are acceptable. It punishes working and rural families who sometimes do not have any other option but to use a car. These companies should be focusing on providing efficient fuels instead of gouging consumers.

The Conservatives and the Liberals are not protecting consumers. Rather they are letting the big oil companies reap a profit off the backs of hard-working Canadians. Big oil and gas get a billion dollar subsidy from government and all the time they are making record profits. It is simply not acceptable.

I would like to point out that when in opposition the Conservatives called on the federal government to cut taxes on gasoline. Yet, now they are in government and they flip-flop and refuse to implement their own suggestion.

It is very clear that what is necessary is an independent watchdog on gas prices to help protect against future gouging by the big gas and oil companies.

As I mentioned, the NDP proposed such legislation in 2004 and reintroduced it last spring. We could have had an independent watchdog already. This can work. Gas prices in P.E.I. are regulated by the provincial government and are generally lower than in the rest of Canada. Prices change only once a month.

In addition to introducing positive choices for Canadian consumers, the NDP wants to provide incentives for auto manufacturers to produce fuel efficient vehicles and for consumers to buy environmentally friendly cars.

Tax incentives should also be given to researchers to fund new fuel technologies and reduce our dependence on fossil fuels like gasoline. We need to do this as well as provide incentives for manufacturers to produce, and consumers to buy, more fuel efficient cars.

This is the approach that we should and can take. Someone should be on the side of the environment and someone should be on the side of hard-working Canadians.

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

12:10 p.m.

Oshawa Ontario

Conservative

Colin Carrie ConservativeParliamentary Secretary to the Minister of Industry

Mr. Speaker, again I find it unbelievable that we see the NDP members actually standing up saying they want to fight for consumers, that they want to fight for lower gas prices.

The member stated throughout her speech that the NDP appears to have lost confidence in the Canadian market economy. We know that the NDP is on the record supporting the Liberal bill, Bill C-288, which we know, and the economists have put forward, will raise gasoline prices by about 60%.

Therefore, in Canada right now today we are looking at increased prices that could be close to $2 per litre. If we did what the NDP wants today, that is what Canadian consumers would be up against. It is surprising to me because I wonder who actually does the NDP think it is fooling. I would like the member to clarify where the NDP long term approach is going to be.

The leader of the Liberal Party said, “High gas prices are actually good for Canada in the medium and long term”. He said that in the Calgary Herald, August 24, 2005. We know that the NDP is standing with the Liberal Party and supporting Bill C-288 which we know is going to raise gas prices even further.

I want the member to clarify because I asked her NDP colleague this question previously. Does the member agree with her friend, the leader of the Liberal Party, that higher gas prices are good for Canada in the medium and long term? Could she state that on the record?

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

12:10 p.m.

NDP

Irene Mathyssen NDP London—Fanshawe, ON

Mr. Speaker, I find it quite astounding that we hear all of this bafflegab. The Conservatives know full well that they could lower gas prices right now by simply dropping the GST.

In terms of where the New Democrats stand, we stand with Canadians. We stand with Canadian families, hard-working consumers, and we want to narrow the affordability gap.

Just last week we heard that Canadians are being squeezed, that 600,000 families in Ontario cannot manage and are struggling. We have a government that is not listening to Canadian families. It is certainly listening to the oil companies and their friends in the oil patch, but not listening to Canadians who are trying to manage and raise families in light of these incredible and ridiculous gas prices.

I would like to remind the member what his leader said on May 12, 2004. It is so long ago and yet it is strange how it only feels like a couple of years. He said:

Mr. Speaker, the Prime Minister will know that across the country Canadians are struggling with record gas prices. Canadian businesses are being hurt. Canadian consumers are burdened with the difficulties this is causing, but the government itself is rolling in record gas tax revenue.

The member has talked about hurting the Canadian economy. Other than the absolute irreconcilable cost of energy, what could hurt Canadians and the economy more?

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

12:15 p.m.

Liberal

Ken Boshcoff Liberal Thunder Bay—Rainy River, ON

Mr. Speaker, the Prime Minister is on record as stating that after 85¢ a litre the GST would be dropped. That came out loud and clear many times during the campaign. Many candidates in this chamber and members of Parliament said it often and in fact threw it in people's faces.

The other campaign promise which the Prime Minister is known to have misled Canadians very seriously on is the double taxation on the excise portion. Does the hon. member recall any of these statements by the Prime Minister and whether she believes he was saying them in jest, in campaign irony or was he serious in the very least?

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

12:15 p.m.

NDP

Irene Mathyssen NDP London—Fanshawe, ON

Mr. Speaker, in fact, I recall the promise that after 85¢ per litre there would be no more GST. I just heard some members in the Conservative caucus say that they did not get elected on that promise. That is weaseling out. I am sorry, I cannot accept that.

We heard a lot of promises from the Conservatives. They promised to support women and communities. They promised to provide child care and a lot of other things. We have seen none of that and clearly consumers in Canada are paying the price for that.

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

12:15 p.m.

Bloc

Michel Guimond Bloc Montmorency—Charlevoix—Haute-Côte-Nord, QC

Mr. Speaker, I would like to say first of all that I will be splitting my time with the hon. member for Shefford, who is the Bloc’s deputy critic for industry. I want to thank him for letting me speak first because we had planned it the other way around.

It is my pleasure to rise today on this Bloc motion regarding a matter of vital concern to our economy: the surge in the price of gasoline. I can say, and it is probably true for all of us, that when we attend events on the weekend in our ridings or happen to bump into people in shopping centres or variety stores or even when getting a fill-up, we are often recognized by our constituents.

I do not know whether others have noticed, although it can hardly be missed these days and has been going on for far too long, but people are complaining about the sharp increase in the price of petroleum products. The government seems to take it for granted that absolutely nothing can be done and the free market should simply be allowed to work the way the oil companies want.

We are going to have a holiday in May. In Quebec, the holiday on the third Monday in May is called the Fête nationale des patriotes. Elsewhere in Canada it is Victoria Day, and it used to be called the Fête de Dollard. The third Monday in May is a holiday, and today I would like to make a prediction: just before this long weekend starts, the price of gasoline will go up.

In Quebec, construction workers have a holiday the last two weeks of July. Many working people, and not just in construction, take their holidays at this time.

The weather is usually nice, although there are no assurances, and people take their holidays. They go all over Quebec and sometimes even drive to other Canadian provinces or the United States. People also take advantage of this period to go camping. So there is a lot of travel. Why, then, just before big vacation periods like this or the big summer holidays, does the price of gasoline always go up?

The government is trying to tell us that it is just chance or the free market. This is not the first time, however, that the government has shown its strong attachment or affection for the oil companies. Who benefits and who pays? In the end, it is honest citizens who pay for this, ordinary people who often have to use their cars to travel.

There is always public transit, of course, in the major centres. Unfortunately, in my riding in the Côte-de-Beaupré area, there is some public transit but the schedule does not necessarily suit everyone. It is the same story in Charlevoix and the upper north shore, where there is no public transit. People have to use their cars, therefore, in order to travel.

People in the regions have an additional problem. Major hospital centres offer specialized medical services, but to see a doctor in Quebec City, people from Forestville, in my riding, or La Malbaie have to travel. The same is true in other regions such as the Lower St. Lawrence, the Gaspé peninsula and Abitibi, where people need a vehicle to get around and to travel to larger centres for treatment, services or specialized medical consultations. They have no choice.

Another group affected by rising gas prices includes people who need a car for work. I am thinking about people who work hard and put in long hours for a miserable wage, sometimes earning $1.22 an hour. I am also thinking about taxi drivers and employees of small private trucking companies who have had to cope with the huge increase in the price of diesel. It used to be that there was always a large gap between the cost of diesel and the cost of regular or super gas, but now that difference is much smaller. In fact, the prices are almost the same.

When trucking costs go up, producers and processors tend to pass the higher gas prices on to consumers. There is a common thread running through all the examples I have given: ordinary Canadians are still paying the tab and the big oil companies are still profiting from these gas price increases.

Before, we were told that there was instability in this or that oil producing country or that such increases were expected. Apparently, the gas people put in their cars on their way home today was processed over 60 days ago. So how is it that this morning, prices rose almost instantly even though refiners paid for today's gas 60 days ago?

These examples are proof of a major con job on the part of the oil companies. I want to be clear: when I say these things about oil companies, I am not blaming retailers or the people who operate stations for big companies, such as Petro-Canada, Shell and Esso. When people fill up, they might tell the attendant that this is crazy and ask why the price of gas just went up 10¢, but the price increase does not mean that the retailer is making more money. Some gas stations that also have mechanic shops have decided to get rid of their gas pumps because there is no money in it.

Rising profits do not trickle down to gas station owners; they line the pockets of big oil companies, which rake in huge profits on refining. Apparently, refining margins were supposed to be on the order of five to seven cents, but we have seen profits as high as 23¢. It seems to me that I read somewhere that big oil companies have been making as much as 27¢ a litre on refining.

I see that I have less than a minute remaining, so I will conclude by saying that this government, which takes so much pride in saying that it listens to taxpayers, must accept its responsibilities. I urge citizens living in Conservative ridings to ask their members of Parliament how they plan to vote on the Bloc Québécois' opposition motion and what they really intend to do to stop oil companies from getting rich at the expense of taxpayers who have had enough of rising gas prices.

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

12:25 p.m.

Oshawa Ontario

Conservative

Colin Carrie ConservativeParliamentary Secretary to the Minister of Industry

Mr. Speaker, at the end of the member's speech we heard the grandstanding and the feigned outrage at gas prices.

I would like to ask the member to actually come clean with the people of Quebec and the people of Canada about what his real purpose is here today. What we are doing today is debating an irresponsible motion. If the Bloc had done its homework on this motion, it would have seen that the Competition Bureau already has the power to do what the motion asks.

We could be spending time in this House debating more important things, things that Canadians want to hear about, but no. The Bloc Québécois has brought forth a motion that the Competition Bureau already has the power to enforce.

What is the Bloc's agenda here? Let us look at the Bloc Québécois proposal for dealing with soaring oil prices, in its own words from its platform. It actually says that the Bloc would levy a surtax on oil company profits and increase the corporate income tax paid by oil companies by $500 million. Where does the hon. member think that will go? If that tax is put in, the consumers will be paying more taxes.

On top of that, on the environment the Bloc Québécois believes what the leader of the Liberal Party says. I want the member to come clean on the record on whether he agrees with the leader of the Liberal Party that high gas prices are actually good for Canada in the medium and long term because that is what he is saying today in the House. If he could come clean with the Canadian public, I would really appreciate it.

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

12:25 p.m.

Bloc

Michel Guimond Bloc Montmorency—Charlevoix—Haute-Côte-Nord, QC

Mr. Speaker, I know that the tactic or strategy of the Conservatives consists in constantly saying that the Competition Bureau does investigations. This week, answering a question asked by the Bloc, the Minister of Natural Resources said that there had been many investigations to check if there was collusion between oil companies.

Mr. Speaker, please explain something for me. There are very busy commercial streets in your riding. At some intersections, it is not rare to see four gas stations: one Esso, one Petro-Canada, one Shell and one from another company. How come when one station raises its price by 5¢ a litre, it only takes a few minutes for the other three to do the same? Is this real competition?

The guy who sells refrigerators or furniture in your area does not raise its prices when his competitor does. If he wants to remain in business, he must keep his prices as low as possible to convince you to buy in his store. Why do the four gas stations raise their prices at the same time? That shows that there is collusion. Those companies all sleep together. In fact, refining is done by only one company for a whole region. In Quebec, one company does the refining, in the Maritimes it is another one and in Ontario, there are others too.

So, to give a specific answer to the hon. member, I will say that we need a real petroleum monitoring agency that has teeth and is able to take action.

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

12:30 p.m.

Conservative

The Acting Speaker Conservative Royal Galipeau

I want to mention to the hon. member for Pickering—Scarborough-East that there are 30 seconds left for the question and 30 seconds left for the answer.

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

12:30 p.m.

Liberal

Dan McTeague Liberal Pickering—Scarborough East, ON

Mr. Speaker, I know the member is quite aware of the situation, but instead of saying “collusion”, perhaps he might explain specifically to this House the importance of the amendment that we proposed to the Bloc Québécois to make prices subject to civil penalties. What positive impact would this have on creating other competitive advantages at the refinery level? Does he expect that more people would join this industry to provide oil to our country?

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

12:30 p.m.

Conservative

The Acting Speaker Conservative Royal Galipeau

The hon. member for Montmorency—Charlevoix—Haute-Côte-Nord has only 20 seconds to answer.

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

12:30 p.m.

Bloc

Michel Guimond Bloc Montmorency—Charlevoix—Haute-Côte-Nord, QC

Mr. Speaker, I know that my colleague from Pickering—Scarborough East has been interested in this issue for a number of years. However, when he was in government, it was difficult to know which side his bread was buttered on. It was difficult to—

Opposition motion—Gasoline PricesBusiness of SupplyGovernment Orders

12:30 p.m.

Conservative

The Acting Speaker Conservative Royal Galipeau

The hon. member for Shefford.