Despite pleas from the motoring public, it is clear that the federal government will not budge on the fuel excise tax and most provincial governments are unlikely to lower fuel (i.e., gasoline and diesel) taxes either, as both levels of government rely too heavily on these taxes to give them up. As an alternative, Peter McKenna proposes that Canadian provinces adopt a version of PEI's regulatory programme, and "face down the oil companies resistance" (What PEI can teach the rest of Canada about the price of gas, 19 August).
Given the world trade in both crude oil and refined petroleum products (such as gasoline), the response from oil companies may be to ship less crude oil to Canada and export gasoline refined in Canada to other markets. This is already happening in, surprisingly, China, where the price of petroleum products is kept artificially low by the central government, resulting in supply shortages for motorists as refiners either do not import or simply export some of what they refine.
Hard as it may be for many Canadians to accept, the days of cheap oil are behind us, meaning that it will be necessary to adapt to these new conditions; for example, taking less discretionary trips, using more fuel efficient vehicles, or adopting other modes of transportation.
Sent to Globe and Mail: 19 August 2005. Unpublished