Feature June 1, 2008 by
Jim Anderton, Technical Editor
Fuel Price Fears
Just ust minutes before sitting down to pen (that is word process) this column, I paid $1.38 a litre for a tank of gas. "So what" you say? I also paid a stiff fuel surcharge on a courier shipment and ...
Just ust minutes before sitting down to pen (that is word process) this column, I paid $1.38 a litre for a tank of gas. “So what” you say? I also paid a stiff fuel surcharge on a courier shipment and another for an airline ticket, and I’m seriously thinking about how far I want to drive my better half’s shiny Silverado on a camping trip I’m planning. Right now I miss my Sidekick: great engine, super off-road and absolutely horrible in every other respect…except for good gas mileage. My point is this: I’m rethinking my behaviour based on high fuel prices, and if I’m pulling in my horns, I know that lots of Canadians are too. The potential for higher prices rippling through the economy and driving us into recession is real. As I write this, first-quarter economic results are in and if we get one more like it we’re officially in recession.
We’ve been through recessions before, but I think this one’s different. With traditional highly-paid manufacturing jobs disappearing and $10-an-hour service jobs taking over, there isn’t much disposable income left for many Canadians after the oil spike works its way through the economy.
While this may look like good times for the repair aftermarket, here in Central Canada, the auto sector is still the major driver in the economy, and job losses never translate into more work in the bays. Neither does fewer kilometres driven, which is another effect of high oil prices and one showing up in national stats already. And if you think fuel prices are out of sight now, consider this: Canadian refinery capacity is stretched to the limit. Any interruption, meaning breakdown, and gasoline prices could top $1.50 a litre, or higher. The whole package looks ominous: no direct pipeline between oil producing regions of the country and the major oil consuming province, no strategic oil reserve and not enough refinery capacity. How did we get into this mess? Years of zero planning and a succession of federal and provincial governments led by political parties, both right and left, that treat drivers as criminals and simply don’t care about the average Canadian’s pocketbook. I’ve said it before on these pages and I’ll say it again: why do Canadians, as oil exporters, pay so much for fuel? Why is it a given that Canadian consumers should have to pay world prices when we produce the stuff ourselves?
Don’t look to the parties for answers. The current Conservatives think reasonably priced motor fuel will somehow collapse the province of Alberta, while the Liberals have just adopted a carbon tax proposal that would burden us even more with questionable environmental benefits by driving even more manufacturing offshore, where there are no controls at all. And the NDP? It’s hard for SSGM readers to make a living repairing bicycles and resoling shoes.
So what do we do? I’d start by removing the many taxes at the pump and replacing them with an export tax on crude oil, but that’s just one idea. There’s an election coming, so now’s your chance to ask tough questions of your candidates, including how their platforms will work for our industry. If we don’t speak up, we just may deserve what we get.