Monday, October 17, 2005

CTF Makes Wall Street Journal

October 17, 2005 3:36 a.m. EDT
Canadians: Govt Not Doing Enough To Curb Gas Prices: Poll
October 17, 2005 3:36 a.m.
The Wall Street Journal

NEW YORK (AP)--A vast majority of Canadians believe the government could act to limit increases in gasoline prices, an AP-Ipsos poll found, underscoring frustration with taxes that have pushed prices in the oil-rich country to over US$6 per gallon.
While 21% said the government is helpless to act in the face of crude oil prices at over US$60 per barrel, 77% said Ottawa could take action to limit such price increases at the pump, the poll found.

Gasoline prices in Canada - the ninth largest producer of oil in the world - have risen steadily over the past few months, boosted by hurricane damage to Gulf of Mexico offshore oil facilities.
As winter approaches, refiners also typically shift their production away from gasoline to accommodate demand for heating oil. The increases have galvanized public sentiment against what many have argued is an unfair continuation of government gasoline taxes initially imposed to help close a budget gap.

Consumers question the need for the price spikes at a time when Canada boasts recoverable crude oil reserves of over 185 billion barrels, including bitumen deposits whose development has been fueled by the surge in crude oil prices.

John Williamson, director of the Canadian Taxpayers Federation, the country's largest advocacy group for taxpayers, has blamed the government and its tax policy for inflating prices. Taxes account for roughly one-third of the retail price of gasoline.

While the taxes aimed to curb consumption, gasoline sales climbed just 1% annually between 1985 and 2003 while gasoline taxes grew more than five times higher between 1985 and 1995 and then by another 18% the following decade, Williamson said
. Canada now has a budget surplus of US$1.4 billion for this fiscal year - the eighth consecutive surplus, he said.

Of the 1,000 people polled between Sept. 27-29, 56% said a fair price for a gasoline would be between US$2-3 per gallon, roughly one-third to one half of the current price. 23% described a price between US$3-4 per gallon as fair - with the average US$2.72. The poll had a margin of sampling error of plus or minus 3 percentage points.

The surge in prices has prompted the premier of Ontario to urge federal officials to investigate huge price swings at the pumps. But Premier Dalton McGuinty also dismissed opposition calls to impose a 90-day freeze on gasoline prices.

Consumers have been quick to target cheaper gas stations, often leading to traffic jams as cars wait in line for fuel.

Those concerns were echoed in the poll, with 65% saying they expect the increases in gasoline prices to cause them or their families financial hardship while 35% believed it would have no impact.

"Canada is a very big country," said Darrell Bricker, president of public affairs for Ipsos-Reid in Canada. "A significant increase in gas prices, therefore, has a very personal impact."

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