Standing Committee on Industry, Science and Technology

HOUSE OF COMMONS CHAMBRE DES COMMUNES OTTAWA, CANADA K1A 0A6

Comité permanent de l'industrie, des sciences et de la technologie

For immediate release

Ottawa, November 7, 2003 — The House of Commons Standing Committee on Industry, Science and Technology tabled in Parliament today the Committee’s report on gasoline pricing. The report, entitled Gasoline Pricing in Canada, is the product of the Committee’s nine meetings held beginning in June 2003 and subsequent to the recent run up in prices that led to the highest gasoline prices ever in Canada. The Committee reviewed the data on gasoline prices — retail, rack and crude — in Canada over the past 10 months (the critical period when prices soared), as well as the longer term and in comparison to those in the United States and elsewhere. The Committee pursued all potential explanations, including both competitive and anticompetitive conduct, for the most recent increase in gasoline prices.

“The Committee has weighed the evidence and concludes that the recent increase in the price of gasoline was the result of industry participants’ competitive reactions to a series of international crises and the abnormally cold weather that gripped northeast North America last winter” said Mr. Walt Lastewka, M.P. (St. Catharines), Chair of the Committee.

“Some witnesses alleged anticompetitive conduct on the part of the industry as an explanation for the recent increase in price. However, no evidence was presented to the Committee of a conspiracy to raise and fix prices, nor was there evidence presented of abusive behaviour on the part of vertically integrated suppliers in the form of squeezing retail margins to eliminate or discipline independent retailers” said Mr. Lastewka.

In conducting its review, the Committee relied heavily on data collected and published by the industry, but would have preferred an independent source. No such data were readily available to the Committee. The Committee believes that the collection and dissemination of price data on gasoline by a federal government agency would have more credibility with the public. For this reason, the Committee recommended:

That the Government of Canada create and fund a Petroleum Monitoring Agency with a three-year mandate to collect and disseminate, on a timely basis, price data on crude oil, refined petroleum products, and retail gasoline for all relevant North American markets. That the Government of Canada, in consultation with stakeholders from the petroleum sector (the “majors,” the “independents,” and consumer groups), appoint a Director who would head this agency. That the agency report, on an annual basis, to Parliament on the competitive aspects of the petroleum sector in Canada and that, upon tabling the agency’s third report to Parliament, the House of Commons Standing Committee on Industry, Science and Technology review the agency’s performance and the need for an extension of its mandate.