Soaring Gas Prices Requires New Direction in Energy Policy, CAW President says
February 28, 2011, 12:50 PM EST
This weekend's surge in gasoline prices across Canada is further proof that Canada needs a fundamental change in its energy policy, said Ken Lewenza, CAW National President.
He also called on the government of Stephen Harper to reverse corporate tax cuts that will disproportionately benefit the oil industry.
"It is outrageous that the oil companies should be rewarded twice: once for gouging Canadians at the gas pump, and then again with a fat tax gift from Ottawa," Lewenza said. "The more they extract from Canadian consumers, the bigger will be their tax savings under Harper's plan."
Gasoline prices spiked to $1.20 per litre in many Canadian cities over the weekend. Prices are up 10 cents per litre in just a few days. Apart from the short-lived price bubble of 2008, gasoline prices are now the highest level in Canadian history.
The petroleum industry booked before-tax profits of $50 billion in 2008 (considering both upstream and downstream operations), and could earn that much again this year given escalating oil prices. The industry is poised to capture as much as one-quarter of the total savings delivered by the Harper government's latest corporate tax cut.
Lewenza asked why Canadians are paying dramatically higher oil and gasoline prices as a result of geopolitical events on the other side of the world. "Most of the gasoline we buy is refined from our own oil. It's no more expensive to produce than it was last year. Yet thanks to globalization, speculation, and greed, Canadians are being gouged again. There is nothing inevitable about this thievery; it reflects a deliberate policy choice by our governments."
Lewenza called on Ottawa to begin discussions toward a new Canadian energy policy. "We need a policy that would oversee the more gradual and steady development of Canadian resources, control exports and foreign ownership, and ensure that Canadians pay a fair, sustainable price." He warned of renewed economic recession if oil and gasoline prices are allowed to soar freely.
"Canada's manufacturing industry is another casualty of the madness of our energy markets," Lewenza added. "Sky-high energy prices, and a sky-high currency, are destroying the real foundations of our economy. It's not inevitable, and it's not tolerable."