New Brunswick may look at axing gas price regulations
New Brunswick Premier Susan Holt says she's thinking about scrapping the province's gas regulations, questioning whether they've made a difference for consumers and suggesting that more competition between gas stations would be better.
The regulations have been in place for 18 years and were the last act of Bernard Lord's Progressive Conservative government before it lost power in 2006.
"We want to look at whether it's serving New Brunswickers," the Liberal premier told reporters last week in the legislature. "Right now, the first glance at data that we have, it doesn't suggest it's keeping prices any lower and is any more beneficial to New Brunswickers than jurisdictions that have unregulated fuel prices, because competition drives that. "So, we want to understand if that's an option that will benefit New Brunswickers."
Holt made the comments after being peppered with questions about her new Liberal government's quick decision to introduce a bill to remove the carbon adjuster that the previous Progressive Conservative government had put in place.
It was a key Liberal campaign promise, a move that's supposed to save consumers about 4.5 cents a litre at the pumps.
Glen Savoie, the leader of the Official Opposition and Progressive Conservatives, has warned that the decision to remove the carbon adjuster could force mom and pop gas stations "to eat the price" dished down by refiners and wholesalers.
He said the extra cost could convince the retailers to rip out their pumps, since selling gas is already a money loser and mostly used to lure customers into their stores to buy other products. Smalltown New Brunswick could lose their only gas pumps because the small, independent retailers were getting so frustrated with selling fuel, Savoie warned.
"Because we have a regulated system, those costs are going to be passed on to the retailer," Savoie told reporters. "If you take away that cost of carbon adjuster piece, they're going to have to eat that."
But Holt said she too was concerned about what could happen to the mom-and-pop outfits and it might be time to simply get rid of the fuel regulations altogether, a decision that could benefit consumers and allow retailers to set their own prices.
As it stands, the province's independent regulator, the New Brunswick Energy and Utilities Board, nicknamed the EUB, sets a maximum and minimum price early each Friday morning for the week.
"Right now, everyone tends to adopt the maximum price that the EUB will allow and it takes away the competitive element," Holt said. "So, removing the regulation means that retailers start to compete for our business and that may see a drive for a lower price than we have today."
But getting rid of price regulations was not part of the Liberal election platform.
Half of the country's provinces have some form of price regulation on gasoline, and they're all in the Atlantic region. Besides New Brunswick, they include neighbouring Quebec, Prince Edward Island, Nova Scotia, and Newfoundland and Labrador.
When the regulations were put in place in New Brunswick in 2006, there had been years of debate about the wild swings in gas prices in the province, especially in the lead up to long weekends. New Brunswickers would often point to neighbouring P.E.I. and ask why Islanders were enjoying lower prices to fuel their vehicles.
The controversial carbon adjuster, which the Liberals and Greens called the "Higgs fuel tax," was created by former Tory premier Blaine Higgs in response to Ottawa's clean fuel regulations that came into effect last July.
It required fuel producers to gradually reduce the carbon intensity -or the amount of global warming pollution -from the fuels they produce and sell in Canada.
In New Brunswick, the Higgs government passed legislation that allowed the cost to be passed onto consumers, changing the price-setting formula for gasoline and other liquid fuels to include a "cost of carbon adjustor" in the province's Energy and Utilities Board formula.
It's a charge added to the price of gas on top of the carbon tax.
At times, the carbon adjuster added more than seven cents to the price of gas.
The former Tory government argued that it was forced to pass the price of the Trudeau Liberals' clean fuel regulations on to consumers given the region's unique gasoline retail system that sets a maximum price.
Green party Leader David Coon said the Liberals could easily protect small gas retailers by amending the law that governs the EUB, giving gas stations the power to protect their profit margins.
"This the legislature, they're the government, there's a way those retail gas stations can be kept whole," Coon said, adding that such a step should have been taken when the Liberals' legislation was introduced Wednesday.
Coon was less sure if regulations should be tossed altogether.
"Yeah, I don't know," he said, hesitating. "It was introduced to stop the prices from swinging wildly.
Is that such a problem? I don't know. We'd have to look at it."
