INST Committee Report

The House of Commons Standing Committee on Industry, Science and Technology conducted a study of “the possible causes of the recent increase in the price of gasoline, and the significant negative effects that the increase is having on the economy,” as requested. With the general understanding that an increase in the price of gasoline would also benefit Canadian oil and gas producers and thus have a positive economic impact on oil-producing regions of Canada — a consideration omitted from the request — the Committee pursued all potential explanations, including both competitive and anticompetitive conduct, for the most recent increase in gasoline prices. The Committee’s focus then shifted to informing the public about the economic factors that influence the retail price of gasoline, as well as to recommending corrective measures to government should any anticompetitive conduct be found. Such conduct would include a conspiracy to raise prices (crude, wholesale/rack or retail), resale price maintenance measures taken to raise retail or refining margins for reasons other than pro-competitive motivations, or the squeezing of retail margins by vertically integrated suppliers to discipline or eliminate independent retailers in a predatory fashion. Through this approach, the Committee avoided involving itself directly in issues of equity or inequity and concentrates on the economic implications — in particular, resource allocation — of the recent increase in the price of gasoline in Canada.

The Committee undertook its examination by organizing four meetings with representatives of the three vertically integrated producers (two multinationals and one national), a regional producer and l’Association québécoise des indépendants du pétrole, an industry consultant and expert charged with collecting price data, and consumer groups, including an advocate and a provincial taxi association. A wide range of views was heard and the Committee believes this report captures the essence of those views. The report’s sole recommendation that calls for the creation of an independent monitoring agency will help clarify to the public the many factors that influence the price of gasoline in the Canadian market while ensuring public oversight over all aspects of gasoline pricing.

On behalf of the Committee, I would like to thank the individuals and organizations that took part in this series of hearings, and express our appreciation for the helpful insights and analysis they provided. The Committee will continue to work hard to ensure that Canada’s petroleum sector, including its retail segment, provides competitive products and services to Canadian motorists while making a significant contribution to Canada’s economy.