GASPÉ – Despite the Competition Bureau’s reluctance to investigate gas prices in the Gaspé region, the Coalition avenir Quebec (CAQ) Members of the National Assembly from the region will rekindle their efforts with the federal agency in light of a letter that does not convince them.
In a letter responding to the one sent in September by the MNAs for Bonaventure, Catherine Blouin, and Gaspé, Stéphane Sainte-Croix, the bureau asked the elected officials for evidence of anti-competitive behaviour before launching an investigation.
“I must confess that I am surprised by this response. I consider that the role of an MNA is not to provide evidence, but to bring forward elements that seem relevant or worrying so that the authorities concerned can do their job,” said the MNA for Gaspé in reaction to the letter sent by Acting Deputy Commissioner Pierre-Yves Guay.
“We will communicate again with the stakeholders to express our surprise at this response, and we will continue to make representations because we still feel that we do not have the answers that will enable us to understand the cost discrepancies. We don’t think it’s any more acceptable today than it was yesterday,” says Stéphane Sainte-Croix.
The Acting Deputy Commissioner wrote of the concerns expressed by the elected officials that “these differences are not necessarily indicative of anti competitive behaviour,” explaining several reasons to justify his response, adding that maintaining competition in the gasoline sector is a priority for the bureau.
“We always come to the conclusion, after several years, that the Gaspé region is subject to cost differentials that appear questionable compared to the entire territory. This is still the case today. This situation has been going on for some time now,” analyzes Mr. Sainte-Croix.
“We’ve reported enough indicators in recent years that we found it rather strange. There are one or more things we don’t understand, and we’re going to ask for more work to be done,” continues the elected official.
In September, Catherine Blouin and Stéphane Sainte-Croix had enclosed with their letter to the Competition Bureau the 2019 Gaspé gasoline price surveillance report drawn up by the Régie de l’énergie.
In the document produced on December 19, 2019, the Régie wrote that the margin was 9.4 cents per litre in 2019 in the region, compared with 4.8 cents in Quebec.
The Régie also noted that between 2014 and 2019, the Gaspésie was, in 19% of cases, the region with the highest price in Quebec. For 2019, the percentage rose to 34%.
For the last six months of 2019, the price of gasoline in the Gaspésie region was the highest of all the regions of Quebec, except for Northern Quebec due to its special status.
In the document, the Régie noted that the cost of transporting fuel to the Gaspésie is higher than in the major centres, but the region benefits from a tax credit to offset this factor. Net, the estimated minimum price level for Gaspésie, “should be similar to that of the entire Quebec area”, noted the organization.
The Régie concluded its 35-page report by stating that “ it cannot conclude that higher gasoline prices in the Gaspésie region are caused by specific parametres establishing acquisition costs significantly higher than in the rest of the province”.
“Although the Bureau is not responsible for regulating gasoline prices – a provincial responsibility – it does oversee the application of the Competition Act,” continues Mr. Guay.
Since 1997, the Régie has had a mandate to establish a minimum price at which a retailer cannot sell gasoline lower than. This has been called the “estimated minimum price,” an exercise that the organization carries out every day on the basis of the price of crude oil.
The Régie calculates the cost of acquisition at the refinery, the cost of transportation and the various federal and provincial taxes to establish the daily indicator of the cost of acquisition, which becomes the estimated minimum price.
If a retailer sold below this estimated price, other retailers could take legal action against their competitors who were engaging in abusive practices.
More than 25 years later, it might be appropriate to review the mandate of the Régie.
“I think we could take this opportunity to review certain aspects of pricing. Too often we talk about the transport associated with the resource, but there are compensation mechanisms, so that shouldn’t be part of the equation. There are undoubtedly other reasons why the situation persists. It would be appropriate to review, if necessary, the mechanisms by which costs are set,” cautiously suggests Mr. Sainte-Croix.