Lamenting “price gouging at the pumps,” the Ontario NDP has reaffirmed its commitment to regulating gas prices.
This, despite a Ministry of Energy spokesperson and petroleum analyst asserting their plan would only increase the prices seen at the pumps.
“We have to do something about gas prices, and everyone in Sudbury knows that if you drive toward North Bay you’re going to save 10 cents,” Sudbury NDP MPP Jamie West told Sudbury.com.
“When the government tells me competitiveness keeps the prices down, I don’t see that and the people of Sudbury don’t see that either.”
The NDP retabled the Fairness in Petroleum Products Pricing Act this week, a bill previously brought forward in 2017 and 2018 but failed to reach the finish line either time.
Timmins NDP MPP Gilles Bisson is heading the effort, and told Sudbury.com last year that people in Northern Ontario are being charged more for gas “simply because they can” be.
The NDP’s bill would fix the maximum price of fuels so they are the same across the province, with changes made on a weekly basis by factoring crude oil value, the cost of refining, transportation and room for profit.
By having the Ontario Energy Board regulate the retail price and wholesale mark-up of petroleum products, Bisson said the price discrepancies Northern Ontarians experience on a regular basis would be eliminated.
Last year, when Bisson joined the NDP in announcing their intentions to re-table the bill, Ministry of Energy spokesperson Palmer Lockridge asserted the NDP’s plan would not work.
“Thanks to an analysis by Ontario’s independent regulator, the Ontario Energy Board, we know that gas regulation in other provinces, similar to what the NDP have proposed, causes higher prices than competitive, market-driven approaches like we have here in Ontario,” Lockridge wrote.
Further, Lockridge noted that the province moved to cut fuel prices by taking the cap-and-trade carbon tax off the price of fuels in 2018, which resulted in a savings of approximately 4.3 cents per litre of gas and five cents per litre of diesel.
“However, we know that our government’s work to lower gasoline prices has been offset by the federal government’s carbon tax,” he wrote. “While we accept the court’s ruling that the federal carbon tax is constitutional, the fact remains that it is adding nearly nine cents to every litre of gas Ontarians use today, and that the federal government intends for this extra tax to reach nearly 38 cents per litre this decade.”
West isn’t buying the province’s negative take on the NDP’s plan.
“I get a bit of a chuckle when the province says, ‘We’ve done nothing and nothing works,’” he said, adding that while the carbon tax remains important, industry “gouging” at the pumps can be prevented and greater price certainty can be achieved by establishing weekly price limits.
“People are seeing this in their pocketbooks and wondering what’s going on, and I don’t think they’re accepting when the province says, ‘There’s nothing we can do,’” West said.
Gas Buddy senior petroleum analyst Patrick De Haan is also of the opinion that fixing gas prices does not work. He uses the State of Hawaii as a cautionary story, where pre-tax wholesale gasoline prices were capped in 2005 – a decision they reversed the following year
Gasoline prices in Northern Ontario have been a longstanding point of contention, with an investigation probing allegations of gas price collusion launched in 2018 revealing no evidence of such.
A 24-pump Costco gas station is scheduled to break ground in the spring and be operational this summer near the existing Costco store on The Kingsway.
Around the time the project was announced in November, De Haan told Sudbury.com that he has yet to see a case where a new Costco gas station does not “dramatically undercut nearby stations” and remain aggressively priced into the long term.
West plans on sharing stories from area residents next week in Queen’s Park to help support the case for the NDP’s proposal. One of his stories is about someone who commutes to work from Manitoulin Island and spends $1,000 per month on gasoline.
Tyler Clarke covers city hall and political affairs for Sudbury.com.