NDP leader promises gas price cap if elected
A few months back, when pump reads were really getting out of hand, MSN wondered if Canada should consider regulating its gas prices.
In effect: capping what the price of gas can max-out at if oil prices spike, though exposing Canadians to the risk of paying more than usual should oil prices sink.
It’s a radical ebb-and-flow strategy – it sounds great on the one hand, readers responded, but other commenters weren’t thrilled about paying a locked-in price if oil prices dropped – and at least one political leader is trying to make it reality.
NDP’s Ontario leader Andrea Horwath has come out and announced her plans to institute a weekly gas price cap should she be elected this fall.
“Filling up your car shouldn’t be like pulling the handle on a slot machine,” she said Thursday.
“We will give the Ontario Energy Board the power to set a weekly price cap for gasoline,” she continued. “The price of gasoline won’t go over that ceiling and drivers will know what they’re going to pay that week. No surprises. No shocks.”
While Horwath hasn’t discussed further details of her plan, the weekly cap limit isn’t the worst idea in the world. By being able to manipulate the gas price cap each week, you protect yourself against oil prices bottoming out and consumers paying too much more for gas than they normally would.
In fact, gas prices don’t move all that much week-to-week in Canada, excluding the precipitous, unusual fall over the last four months of 2008, when our nation’s average price fell from about $1.40 per litre in September to 73 cents per litre by New Year’s Eve (a dip of about four cents a week on average).
So Horwath may be onto something. And, it bears mentioning, Ontarians are notorious suckers for these kind of “direct results” promises. Ontario voters like when they can see a fast, immediate impact from the promises of politicians, like Dalton McGuinty’s Family Day creation in 2008 – a brilliant political move that no doubt helped the Liberal get re-elected.
Whether the gas price cap will be enough to land Horwath the Premier seat is another story, but mix this with the increased profile of Jack Layton from last month’s federal election and it’s a good start.
By Jason Buckland, MSN Money
*Follow Jason on Twitter here.
Posted by: Chip | Jun 11, 2021 1:54:50 AM
Maybe Horwath should cut the taxes on gasoline... PERIOD. Gas taxes are supposed to go towards infrastructure and road repairs etc. Have ya driven Ontario roads lately. It's like a game of hop, skip and jump. You'd think that after a century, some scientist would have come up with a formula to make asphalt more weather resistant and not buckle every 15 feet. So until that happens, if ya can;t fix the roads properly... leave us some extra money for shock, strut and tire replacements.
Posted by: James | Jun 11, 2021 10:24:59 PM
What a pile of crap! Another brainless politician.
Posted by: Dave Agnew | Jun 12, 2021 1:34:13 AM
The N.D.P. have just shot themselves in the foot. Ontarian s are sick of high gas prices and know it is a result of the governments shutting down the refineries. This caused a loss of 1,200 high tech jobs in Oak ville And we also lost the millions of gasoline and diesel fuel that was made there. I hope the conservatives will take advantage of Andreas dumb idea and encourage another refiner to build another refinery that can turn our heavy oil sands oil into fuels for us here in Ontario. Screw the Americans were it hurts most in their pocket books. CANADA has proven oil reserves for 50 or more years.
Posted by: D M Davis | Jun 12, 2021 4:08:28 AM
This from the man and wife who stole from the citizens of Toronto while on council, who as MPs, although living in Toronto, took from the citizens more than five times what the Prime Minister who lives in Calgary, for his expenses.This with his wife a terrible example of abusing position . How is it that they both are MPs , both grovelling at the trough. Please look into his personal history of charitable contributions to non-polical charities.
Posted by: Chinook Man | Jun 12, 2021 1:44:25 PM
The supply of gas in the world is dwindling... so... gas prices will go up... and up... and up!
The price can be reduced for the short time... if both the federal and provincial governments lowers the taxes on the gas... but that is too much common sense for the politicians. Instead, those morons come out with statements like putting a cap on gas... utterly, stunningly STUPID!
Posted by: Chazztbay | Jun 13, 2021 1:01:46 AM
Dave, if only that were the case. You and I, and some other people who take the time to learn and do research know why the price is so much higher for us than the Americans. It is for the same reason that when we cut down a tree and ship the wood to the US, they make it into furniture and then sell it back to us at 3x what we sold the wood for. Canada is a net exporter of raw materials and an importer of finished goods. Like Gas. Everyone says we have all this oil, why is gas so expensive ? Oil is NOT gas. Gas is a value added product of which oil is one piece. It is the only piece we have, because we have less refining capacity in our whole country than the US has in Texas or Louisiana alone. It still doesn't matter that we know this, since nobody in their right mind will build more refining capacity with the eco-terrorists we have in this country. As long as the possibility of Cap and Trade looms (not for at least 4 years thank goodness) it will not happen.
This doesn't even address the stupidity of people who say the government won't do anything because they get taxes from the gas. They seem to be ignorant of the fact that gas taxes for the most part are Excise taxes not a VAT and as such, the government actually would make more with lower prices since they sell more units.
It also doesn't address the fact that most pensions including both private and public ones (and especially the CPP) are heavily invested in Oil companies. That is to say, that everyone who cries about the big bad oil companies is in fact and owner of said companies and would be worse off if we took to punishing them. You can pay now, or have no pension in the future.
Lastly, I'm not sure if people are aware of this or not, but we are not Australia. Even if we were our own island physically, we still would not be from an economic standpoint. Ontario cannot supply its own oil or gas, so I don't know who the NDP thinks is going to sell it to them for less than the market rate elsewhere. Or does the cap just mean the government of Ontario is going to buy it and subsidize it which just means we all pay for it anyways, plus an added layer of bureaucracy ? No, I think what it means is that they will try to force gas stations to set an arbitrary price which will force other stations out of business and we can have gas lines like the old soviet union used to have bread lines.
Short version is most people are too ignorant of the facts to see why this is a stupid idea and won't work. It was a stupid idea as a federal one, and it is even more idiotic as a provincial one.
Posted by: DrVex007 | Jun 13, 2021 2:41:42 AM
While we all scream for cheaper gas prices, we don't really mean it. Do you really NEED an SUV? No you want one, so to me the answer is not to cap the gas prices which would work anyway, the answer is to tax vehicles at the dealerships according to size and gas consumption. Sure we already have the gas guzzler tax. Well it should be higher. Plus, I would offer incentives to people who buy true Hybrid vehicles. Semi Hybrids should get half as much and full electrics should receive the most. Now in Ontario we already have such a program, but it should be higher. Also, run the diamond lanes right down to the bottom of the DVP and all the way accross the 401 for people who car pool. The program works but it stops short of the areas where it would have the most impact. However I would add Hybrids and Electrics to that lane as well. You can drive alone, but it must be a Hybrid or full electric.
By doing these things, we encourage people to buy smarter, smaller and much MUCH more efficiently. A BMW X5 for example is a HUGE gas guzzler and not one that anyone could say is a necessary vehicle. So as an example, whatever the guzzler tax is on that vehicle, it should be tripled.
As for this article, it seems a little lazy to me that the author wouldn;t take the time to even look for another country/province that has a cap system and discuss the benefits or costs that they have seen. I would guess that either the author was too lazy to do that, or the numbers looked pretty bad, so it doesn't help the nature of the story.
Posted by: MarkC5 | Jun 13, 2021 4:48:00 AM
About taxes & roads, I have on numerous accasions suggested they put bitumen in the road cracks to keep water out so you don't keep getting the same big holes poping back out & to stop the roads from heaving. This would be cheap maintenance relativity speaking but it seems to fall on deaf ears. They are currently replacing a smallbridge nearby but there is nothing wrong with it! No cracks, metal in concrete is still rust free. They aren't making it wider or other obvious modification, it's just a make work rogram!
Posted by: Western Guy | Jun 13, 2021 9:28:07 PM
Couple items.
Dave Agnew & Chazzboy last time I checked Ontairo doesn't have any heavy oil sands. I find it laughable that you consider a solution to this issue that instead of Alberta exporting our oil to Texas to get gas back we should instead export it to Ontairo. How is this any different for Albertans who actually own the oil? Are you missing the NEP (that is what built your wonderful refinery in the first place).
Instead if there are going to be any refinerys built they are going to be in Alberta and Saskatchewan. If you deplore Canada being exploited by the U.S. you can only agree that neither should Alberta be exploited by Ontairo. Your days as an economic power on our back are over and we are going to build our own manufacturing so I suggest moving west before you starve.
Secondly DrVex007 while you might be right about Toronto (I wouldn't know I have absolutely zero desire to live there) but in rural Alberta you are totally wrong. Much of rural Alberta is frequently subjected to blizzards, floods, mud, suicidal large animals, and generally rough roads (we don't pave everything). Vehicles without 4X4 are unable to negotiate these roads when they get like that.
Think of it this way: would your car seem so much better than an SUV when you have to drive down a road that has a foot of snow, you are out of cell service, its -30, and you there won't be another vehicle down the road for 12 hours. A little extra gas is a small price to pay and its a price I happily pay.
Has nobody seen the real flaw of this proposal. Lets say you lock the price at $1.00 a litre and the world price then climbs to 1.25 an the cost of gas hits 1.01 to sell. Guess what. Nobody will sell gas. Now you have shortages. Think paying 1.25 is inconvienant?. Try wanting gas and there being none available. Which seems worse to you? It is proven economic fact that capping a price is either ineffective (with the true price under the cap price) or it leads to shortages. Neither situation is ideal.
Posted by: Chazztbay | Jun 14, 2021 10:19:56 PM
Western Guy you misunderstand me. I did not mean Alberta couldn't or shouldn't build plants. My point was, as you can see if you read the post again is that our whole country lacks refining capacity. Our country as a whole exports oil and imports gas back. The price across the country is higher than in the US for this reason, not just Ontario. But the rest of my point still stands. You won't get refineries anymore than we will because nobody will pay the cost, nor face the wrath of the eco-groups.
Ontario is not, and will not be a have-not despite the title that has been bestowed. Ontario sends $6 Billion a year more than it recieves from transfers. If it stopped doing so, it would still be the richest province. The city of Toronto GDP is over $250 billion per year. Almost as much as Alberta and Saskatchewan combined.
Posted by: doug | Jun 15, 2021 12:06:34 PM
The only way a politician can even come close to determining the price of gasoline is by altering the tax on it. They can't control to any degree the cost of the actual product. That is a function of the market. If refiners have to pay more for stock material (oil in this case) they have to receive more for the finished product (gasoline, diesel, heating oil etc..) to stay in business. That is unless the government subsidizes them which is not going to happen. So what controls the price of the raw ingredient (oil) - the market buying it through bidding on it. Currently if the price is $100/bl refiners have to buy it at that price or pay that price in the near future. They therefore have to ask sufficient for their finished product to remain in business and if that price is whatever is at the pumps so be it. There is nothing we the consumer can do about it except lower our demand because the bidding on raw material is based on supply and demand like any other commodity. Unless we, the consumer, lower our consumption of motive fuel whatever it may be the price won't come down - once again unless the government lowers taxes on it. Do you think that will happen? We can't complain because we the consumer are driving the price higher by our increased consumption.