Back page: Blame government, not Big Oil, for high gas prices

Back page: Blame government, not Big Oil, for high gas prices
Canadians have been paying too much for gas," the Canadian Centre for Policy Alternatives declared this May. The hard-left think-tank released a report with the scholarly title "Gas Price Gouge." You know it''s a scientific study because it''s jammed with technical jargon like "outrageous," "ridiculous," and "exploiting fear."

We get the picture: gas prices are too high, and Big Oil - another scientific term that shows up again and again on the CCPA web site - is to blame.


But the same CCPA put out another study a few years ago with a different point of view. In a study appropriately called "Shifting Ground," the CCPA proposes a carbon tax "on all fuels produced in Canada - coal, natural gas, oil, propane, gasoline, and diesel." The purpose of the tax isn't just to raise money for the government. It is to "reduce fossil fuel use" by making gas significantly more expensive.


"This would more than likely result in a loss of jobs," the CCPA concedes, but that's the price of saving the earth. And as for those who squawk about high gas prices? "Given the present hysteria in Canada, the U.S., and Europe over record-high gasoline prices," the CCPA warns, "public opposition is potentially the largest impediment to the application of a carbon tax." We must ignore anti-gas-price hysteria.


Same lobby group, same issue, and two opposing views. High gas prices that occur naturally in the marketplace because of supply and demand are "gouging" and immoral. High prices that occur artificially due to government taxes - taxes specifically designed to make driving unattractive - are moral, and any opposition is merely hysterical.


This contradiction actually can be reconciled. The CCPA isn't against high gas prices, per se. It's just against high gas prices that are paid to industry, instead of government. The well-being of drivers isn't their concern, that's just their opportunistic angle of the day to call for more state regulation of the economy.


The CCPA's board of directors includes representatives from the Canadian Auto Workers and the Communications, Energy & Paperworkers' Union - two groups of workers that would suffer if cars and energy were taxed into disuse. Perhaps those sisters and brothers are just the unfortunate casualties in the CCPA's bigger war: smearing Big Oil as rapacious industrialists right out of a Charles Dickens novel.


Anti-corporate ideology might be an explanation for the CCPA's schizophrenia on high gas prices. What about politicians, who constantly beat the gas-price drum, too? According to the Canadian Petroleum Products Institute - the same source of data the CCPA uses - taxes make up 35 per cent of the price of a litre of gas sold in Canada. That dwarfs the 12 per cent that goes to the refinery, or the five per cent that goes to the retailer. Only the price of crude oil is a larger component than taxes.


In fact, the lower cost of marketing in the Canadian industry means we would actually pay less for a litre of gas than Americans do, were it not for our higher taxes - federal, provincial, and even municipal taxes in Vancouver and Montreal.


It's one thing for the CCPA to rail against oil companies. That's its job, apparently. But it's a bit rich for politicians to take the lion's share at the pump - three times what the poor gas station operator makes - and then blame industry for the high prices.



The government is the senior partner in the oil patch, from environmental regulation to royalty taxes to taxes at the pump. Other than cigarettes and liquor, there is no industry more regulated or taxed than gasoline.



Still, when gas prices go up, expect to see MPs like Dan McTeague popping up to express shock. McTeague himself chaired such a commission in the 1990s, and he couldn't find any industry wrongdoing. Nor could the Competition Bureau of Canada, which completed its own investigation just last year.


Complaining about gas prices is the economic equivalent of complaining about the weather: it's a conversation-starter, a chance to grumble about something slightly confusing. However, with SUV and small-truck sales booming, it's clear that Canadians aren't serious about their complaints. There is no conspiracy to gouge Canadians, and no cabal of fat cat executives pulling the strings at a thousand gas stations across the country - just a mix of anti-oil activists and headline-hunting politicians.

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