From: utzoo!watmath!watcgl!dmmartindale
Newsgroups: net.misc
Title: Re: Gas Prices in Canada
Article-I.D.: watcgl.161
Posted: Thu Feb  3 14:27:18 1983
Received: Fri Feb  4 00:10:31 1983
References: grkermit.290

My understanding of Canadian gasoline pricing goes something like this:
Once upon a time (before OPEC started jacking up prices) the cost of
fuel in Canada and the USA was pretty much the same.  Fuel for the Western
two-thirds or so of Canada came from Canadian sources, and fuel for the
rest came from imported oil, since it was cheaper to import it than
increase Western production and send it east.  When OPEC started raising
prices, taxes were juggled so that we paid more for Canadian-produced oil
and this was used to subsidize the price of foreign oil, evening things
out across the country.  Since Canada is much closer to being self-sufficient
in oil than the USA (we have one tenth the population) prices did not rise
here as much as they did in the States.  A few years ago, though, the
government decided that complete self-sufficiency would be a good idea,
and started a planned, continuous increase of oil prices to provide the
profit that was supposedly necessary to open up new sources - Arctic oil and
tar sands, for example.  There is also a tax on all oil which goes to help
finance the government's nationalized oil company, Petro-Canada.
Now, if OPEC prices had continued to rise, this probably would have been
a good plan even for the fairly short term.  But they didn't - they dropped,
and as long as we're committed to trying to become self-sufficient, we
can't take advantage of this drop in world prices to let our own fuel
prices drop.  Thus it's a fair bit more expensive here than in the U.S.,
at least for the moment.  Who knows what will be the case in 20 years?

Note that I haven't been following all this too closely, so there may be
errors in the above.  Also, the figure I gave several days ago of Canadian
prices being 50% higher than American ones is probably misleading because
it ignored the exchange rates.  If you are buying fuel in Canada but earn
your money in the US, it's 20-25% more expensive for you.
However, since salaries for similar jobs seem to be about the same in
Canadian dollars in Canada as they are in US dollars in the US, I probably
spend something like 50% more of my income on fuel than I would if I were
working at the same job in the US and using the same amount of fuel.
I'm glad I drive a 4-cylinder car.

Dave Martindale