Budget might bring gasoline tax relief: MacKay

Written By: onijdes
Date: 2006-04-19 10:44:00
<a href="/article/94443212-budget-might-bring-gasoline-tax-relief-mackay">Article Link</a>

Foreign Affairs Minister Peter MacKay says gas price relief might make it into the Conservatives' first budget. (Canadian Press)

"There [are] discussions about that right now and we have a budget coming and we're getting all kinds of submissions ... on what to cut and what not to cut," said MacKay, the member of Parliament for Central Nova.

The federal cabinet will discuss fuel prices during next week's meeting, he added.

MacKay would not say whether the Conservative government plans to follow through on a suggestion his party made just before the June 2004 election.

Leader Stephen Harper proposed in May of that year that Ottawa stop charging federal tax on the increase when the price of gasoline goes above 85 cents a litre.

FROM CBC MAY 17, 2004: Harper proposes GST break on high gas prices

"The main thing is that Canadians know the government is not trying to gouge them at the same time they are having trouble filling their tank," Harper said at the time. "We want to do what we can to bring taxes down."

Gasoline prices have been fluctuating wildly across the country for the past several weeks.

A survey by MJ Ervin and Associates found the average cost of a litre of regular gasoline was almost $1.08 this week, the highest the group has found in any April price survey.

FROM CBC APRIL 18, 2006: Gas pains: pump prices rise again

Analysts say the cost of filling up is likely to remain expensive through the summer driving season, given that consumption has so far not been affected by the higher prices.

[Proofreader's note: this article was edited for spelling and typos on April 19, 2006]

"Tax gas even more and put that money into research or public transportation."

A typically short sighted approach that on the surface looks good.

Taxation will NEVER replace education as a force for change. They've taxed alcohol and cigarettes massively and people still purchase both in huge volumes.

Besides, when have governments EVER used taxes for their intended purposes for more than a frighteningly short time?

Do you really expect this to change if your suggestion is implemented?

My guess is that any increase will end up in General revenue, just like every penny before it.

You have to win the hearts and minds of the people first, and taxing them is no way to accomplish that.

You can educate the people, or you can bleed them dry financially.

Which one of the above would you personally prefer to have inflicted on yourself?

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"and the knowledge they fear is a weapon to be used against them"

"The Weapon" - Rush

I agree absolutely. Notwithstanding that taxation is just another kind of theft, raising the price of gasoline isn't going to stop people from driving. What else are they supposed to do? I don't know what it's like where other contributors live but public transport in this city (Regina) is a joke. It takes an hour on a bus to get somewhere that a car can manage in ten or fifteen minutes. Electrics and hybrids are a small step in the right direction but as long as cities are organized with residential areas on the outskirts while work occurs at the centre then I don't know what we're supposed to do?

Peak oil folks, get used to it. It's going to be with us for a while. Before when oil was plentiful there were swing producers who could step in and increase production to assist in alleviating bottlenecks or cuts in production due to regional wars, natural disasters etc. After the OPEC embargo in the 70s, the North Sea oil fields and others were developed so that OPEC didn't have such a stranglehold on supply. Now the North Sea is in decline and pretty well all other non OPEC oil producers are as well and world production is approaching the ultimate one time peak (or is there already according to some). For all intents and purposes the easiest oil to find and the cheapest to pump out of the ground has already been discovered there is no more spare capacity in the system so any international events or disasters that affect supply or that can potentially affect supply starts to affect the price. If you think tar sands oil is going to make the difference and in a few years after the tar sands are developed we'll be back to the easy motoring, cheap oil, North American lifestyle we all know and love, it's not quite that straightforward as EROEI (Energy Returned On Energy Invested) enters the picture. See for example: <a href="http://resourceinsights.blogspot.com/2004/10/tar-baby-oil-sands-and-peak-oil.html"> Tar baby: Oil sands and peak oil</a>) You know it's getting serious when even the corporate media has to admit to the consuming public that the cheap oil, cheap energy merry go round can't go round and round forever. The Price of Our Addiction for years to come, we'll be paying for our oil in both treasure and blood, as we fight and parley to keep ever-tighter supplies flowing our way. April 24, 2006 issue - The U.S. lives in an energy trap. We fell into it gladly, dug it deeper and sit fat and happy, with blinders on. We're fed daily meals of imported oil, from countries we pay in IOUs and think we can push around. But now we're starting to see the costs and risks of our dependency—and I don't only mean gasoline averaging $2.74 a gallon at the pump. For years to come, we'll be in the hands of some of the most dysfunctional governments in the world. Oil prices will rise and economic growth will slow—not this year, but almost certainly a few years out. We'll be paying in both treasure and blood, as we fight and parley to keep ever-tighter supplies of world oil flowing our way. What has changed in the world? We're running out of the capacity to produce surpluses of oil. Demand for crude is expected to rise much faster than new supplies. Developing nations, such as China and India, are glugging barrels at astounding rates. Meanwhile, most producer nations can't find enough new oil, or drill out more from their reserves, to replace what we're using up. Production from most of the large, older fields is in irreversible decline. About three years from now, the non-OPEC world will start pumping at slowly diminishing rates, says energy analyst Charles Maxwell of Weeden & Co. Most of the extra barrels needed to feed our economic growth will then have to come from OPEC nations—putting them in the driver's seat. Saudi Arabia is stepping up drilling and development, but the volatile market price suggests that it still won't have much capacity to spare. Within 10 or 15 years, it too may not pump enough to meet increased demand. That puts the oil-dependent countries in a serious bind. We're all jockeying for control of oilfields, in a vast game that runs the risk of turning mean. China and Japan are running warships near disputed oil and natural-gas deposits in the East China Sea. China is doing deals in Sudan, Venezuela and Iran (our "bad guys"). Russia looks less friendly as we continue to invest in the oil countries around the Caspian Sea—Azerbaijan, Kazakhstan, Turkmenistan. <a href="http://www.msnbc.msn.com/id/12333796/site/newsweek/">The Price of Our Addiction</a>

You seem very pessimistic. So what are you doing to educate the public? If you do look at alcahol and especially cigarette consumption in Canada you can see that consumption goes down with the price that one pays. I sure don't see a lot of people smoking. In developing countries it is the same thing. People may like to smoke but often only buy single cigarettes because it is too expensive to buy packs. This cuts down on their smoking.

I don't feel like I am being bled by taxation. Canada does not have very high taxation anyway. No wonder that our social programs are going down. Well, I guess if we just educated people on the importance on being healthy and then we would not have to tax people to use the hospitals.

It seems that you agree with Peter Mackay. He wants to lower the amount of tax on the gas. That is very kind of him to steal less from us.

Tell you what, you take every tax that you pay the government, income, sales, various surcharges then calculate the grand total of all of them.

I pay better than 30% income tax on my take home pay alone, and there's no way in hell I'm going to get my wallet raped just so some politician somewhere can get a photo op at my expense.

Your tax on gasoline is also descriminatory. Like many who want working class people to pay more taxes I don't see you suggesting that big corporations also pay their share.

I'd like to see how you react to an across the board fuel tax increase on diesel, aviation fuel, coal etc. then you can sit back and watch as the price of everything from the food you eat, the electricity you use, the car you drive, the transit you may/may not use all goes skyrocketing in price.

Course, if you feel that strongly about the low amount of tax you pay you can always move to Sweden where I understand 80%+ is deemed reasonable.

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"and the knowledge they fear is a weapon to be used against them"

"The Weapon" - Rush

I saw a program where a refinery takes in garbage at one end, and has usable petroleum coming out the other.

Besides if need be we can manufacture petroluem from hydrogen, oxygen, and carbon. All three exist on earth in huge quantities.

Maybe it's time recycling kicked into overdrive.

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"and the knowledge they fear is a weapon to be used against them"

"The Weapon" - Rush

I saw a program where a refinery takes in garbage at one end, and has usable petroleum coming out the other. Sounds like you are referring to <a href="http://en.wikipedia.org/wiki/Thermal_depolymerization">thermal depolymerization</a> which takes in organic waste products and turns them into oil. A test plant is running right now converting left over turkey wastes from turkey processing into oil. The drawback to this process as a replacement for conventional hydrocarbons is that much of the waste material was created using high quality conventional oil and other energy sources in the first place. Consider how much oil went into growing the crops and manufacturing and shipping the turkey feed that the turkey's were fattened on, or how much natural gas might have been used to heat the turkey barns, or to generate electricity to operate ventiliation equipment or other farm machinery on the turkey farm while the turkeys were being raised. According to physics and the laws of thermodynamics whenever you have a transaction involving changing energy from one form to another some of the original energy will be lost and become unavailable for use. You always end up with less energy than what you started with. So when the turkey innards are turned back into oil, you will never get as much energy back as what went into creating the turkey innards in the first place (from all the different energy inputs listed above). Therefore the process would not be sustainable without inputs of oil/energy from other sources. I could see the thermal depolymerization process might help in the long run to decrease the shock of Peak Oil and make the overall decline in production less steep once it occurs, but it won't in and of itself be a "cure" for Peak Oil. Besides if need be we can manufacture petroluem from hydrogen, oxygen, and carbon. All three exist on earth in huge quantities. The problem with this approach is that up to now our lifestyles and our economies have evolved to operate on the assumption that energy is plentiful and energy is cheap. That energy has mostly come from oil and hydrocarbons. One of the main attributes of traditional, conventional oil and hydrocarbon energy that made it so attractive to us and to our economies was that it had a very high EROEI (Energy Returned on Energy Invested). Conventional oil from a land based Middle Eastern type oil well had an EROEI of roughly 30 to 1. So for every barrel of oil worth of energy you invested in finding and pumping oil you got 30 barrels worth of oil energy back. You could then set aside one barrel of that energy to go find another 30 barrels worth of energy from a new oil well and you still had lots of oil left over (29 barrels worth) to make into jet fuel, diesel, gasoline, kerosine, lubricants etc. to fuel our jet planes for trips to the tropics each winter, or to drive the camper van cross country on a Summer vacation etc. As the oilfields hit peak and start to decline EROEI drops and different secondary and tertiary recovery methods are used to force the oil out of the ground. These all require greater and greater inputs of energy to keep the oil flowing. At some point before the oil is all gone, they would reach the point where it cost a barrel of oil to produce a barrel of oil at which point continued production becomes a loosing proposition. When you start talking about manufacturing oil out of its componenet elements, I imagine it's likely going to end up being significantly more energy intensive to manufacture than to obtain it the traditional way by drilling a hole in the ground and sticking a pipe down the hole to suck out the light sweet crude that nature kindly manufactured for us and stored in a large convenient reservoir at no cost to ourselves over some millions of years. I freely admit I am no chemical engineer so I stand to be corrected on this point. However, if manufacturing oil out of the component elements was such a no-brainer and an efficient method of obtaining oil I'd think we would be doing it already. So whatever the energy required to produce oil this way, it's probably a safe bet to assume that it's going to be more energy intensive than traditional oil production. The more energy is expended in creating the oil, the lower the EROEI will be compared to traditional, conventional oil. To get a grasp on how EROEI affects the viability of alternative energy sources as a replacement for conventional oil check out energy economics at www.abelard.org: energy return on energy invested, or EROEI When an energy source that has an EROEI ratio of 4:1 is replaced with another, alternative, energy source which has an EROEI ratio of 2:1, twice as much gross energy has to be produced in order to reap the same net quantity of resulting usable energy. This can be worse than it looks. Consider that I inherited one barrel of oil, and the EROEI was 4:1. I could use my one barrel and end up with four barrels. Now consider that the EROEI was 2:1, and I still wanted four barrels. Well, I can use my one barrel to extract two barrels, then I have to use those two barrels to extract the four barrels that I want. Thus with an EROEI of 2:1, it has cost me three barrels to gain four; whereas with an EROEI of 4:1, it only cost me one barrel. This means that when a society moves to using energy sources that have lower EROEIs, the actual amount of energy available to use (for manufacturing, transport, heating etc.) inevitably will diminish. <a href="http://www.abelard.org/briefings/energy-economics.asp#eroei">Energy Economics</a> More on EROEI here: <a href="http://www.fromthewilderness.com/free/ww3/052703_9_questions.html">9 Critical Questions to Ask About Alternative Energy</a>

You know I would actually be willing to pay more for the things I buy. Make fuel more expensive by putting a tax on it. This way at least our government makes money off the gas and not only the big oil companies.

We pay too little for what we buy here. It leads us to waste. An example is consumer products such as DVD machines or VCRs which are recommended to be thrown away instead of getting fixed because it is cheaper. People keep upgrading their X-box, computer or even car every couple of years. Why? Because it is so cheap.

"MacKay said there is little the federal government can do to ease the international tensions blamed for the latest price spike."

Really? Why can Canada not demand to be paid in Euro for the massive sales of oil and gas to the US?

The price of oil (in US$) is going up, but the price (in Euro) is not going up. Canada should support stability.

McKay and the conservatives just don’t get it.

Spanky does.

Cheap oil is gone forever. Lowering taxes will do nothing.
Demand is simply starting to outstrip supply.
It’s hard to believe that the people leading this country are so completely ignorant of the most important issue of our time. (Or they pretend to be.)

I suggest that people look around the room that they are sitting in, and try to find any objects around you that don’t have a fossil fuel component, either in physical makeup or the manufacturing process. Don’t forget food. Food is massively dependent on fossil fuels.
Let’s not forget what fossil fuels are doing to our environment either.

Quite simply if this situation isn’t realized and acted upon by our politicians, economies will fall.

For politicians not to recognize this is outright ignorance or criminal, take your pick.

Mike
Winnipeg

Price of gas in war-torn Iraq - 10 cents a gallon - not litre. Price of gas in Venezuela - about the same. Price on the corner where I live - $1.12 a litre! 
<a href="http://money.cnn.com/pf/features/lists/global_gasprices/">http://money.cnn.com/pf/features/lists/global_gasprices/</a> 
 
Domestic pricing is a must. Every other oil producing country outside the West does it, and so should we. 
 
Of course don't make it too cheap or there will be little incentive to conserve. Around 65 cents is fair imho. So my Canada-first Green friendly solution - domestic pricing coupled with a phased in 5 year plan to have all vehicles sold in Canada meet much higher fuel efficiency standards, with a 10 to 15 year plan to have all new vehicles in Canada be true hybrids or non-gas using.--- If there was ever a time for Canadians to become pushy - now is the time - for time is running out on this nation called Canada.

I make my many of my fellow Greens yellow when I say this, but my own investigations on this matter show that what we are seeing is more stock market speculation and not peak-oil induced price increases. Every time Bush threatens Iran and Iran threatens Israel etc, the price per barrel increases immediately. Throw in unrest in Nigeria and Chavez's claim that a minimum of $50 a barrel is fair and you have the stock market takers taking all they can while they can.

Peak oil is coming, there is no doubt about that, but it is still a few years away at current world consumption. We have pretty much found all easy access large oil deposits around the world, and most are being heavily tapped, but again, the crunch time is not here yet.

I have read and do agree that oil companies are enjoying world problems around oil and gas - namely Nigeria, Venezuela , Iraq and Iran - because while they can't ship as much oil, they do get a higher return on what they can send. Their profit margins over the last few years certainly back that up. They really do win either way.

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If there was ever a time for Canadians to become pushy - now is the time - for time is running out on this nation called Canada.

Well said, Roy.

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"I think it's important to always carry enough technology to restart civilization, should it be necessary." Mark Tilden