[Jabberwalker]

martin14 martin14:

Poloz obviuosly decided to trash the dollar, rather than any kind of interest rate hike to save it.

Because raising rates would pop that nasty housing boil/bubble, which is going to create
a lot more damage than a shitty dollar will.

In their eyes of course.

Dollar is headed for 70 cents, even less.


In the meantime, everything in Canada will get more expensive, including gas.


Oh and btw, all those Toronto retards running around saying manufacturing in Ontario
would pick up the slack of falling oil ?
Ain't happening.


Oil will continue to drop. It won't end well.

The indebtedness of Canadians really sacres the Bank of Canada. They've said as much, over and over. I'm braced for it but most around me are convinced that the day of reconing will never come because it has been prophecized for so long.

[Alta_redneck]

That sucks, $0.85 here.

[Khar]

I think what Tricks mentioned (oil trading in USD) plays a partial role in deciding the gas price, in part because we trade most of the finished goods back up from the States at a price measured internationally in USD. I wouldn't be surprised if that played a part of it; I even mentioned that possibility in the fourth paragraph in an old post of mine. Likewise, I also pointed out a sizeable amount of the end-cost is either inelastic (transporting a good is transporting a good to some degree, so costs don't fluctuate that much; transporting across the mountains or to Quebec would remain high, for example) or is simply government tax. If I had to bet a reason why BC has such expensive gas, it's because the reduction we are all experiencing is larger for us because more of the cost for gas in a place like Alberta comes from the costs of crude (around 30% of the total). I'd not be surprised if the amount crude plays a role is much lower in BC, and the amount tax/transport/overhead/etc. plays a role is a fair bit higher.

In fact, here's a chart demonstrating as such (the various taxes added on top of the average cost in 2012 to get crude from the ground, turned into gasoline and into the average Canadian's pump, so transportation, refining, etc.):



~ Source. In short, between transit taxes and carbon taxes, it sucks to live in Vancouver, gas-wise.

Additionally, our gasoline prices are more closely tied to American economic output than Canada's. Hence, if the USA is doing particularly well, then oil and gas prices will go up, in part because we are all part of the same demand pool and Americans are experiencing higher demand. As a result, we get kind of screwed being the mouse next to the elephant who sets the price.

That said, gas stations are a great example of a pseudo-monopoly; people are only willing to drive so far to get gas, as we usually get it within a certain range of home, where we currently are, or when it is most convenient. I wouldn't be surprised if they did play a role, but as a paper below points out, probably not as big a role as taxation does in keeping prices high.

For reference, the old post with some irrelevant bits removed:

Actually, the government is also making a killing. Half of the pump price of gasoline, for example, is actually taxation from the government on a very inelastic good (people are willing to pay a lot for it); crude costs are around 30% of the end formula, and mark-up is at about 20% (Chacra, 2002). As said by Chacra, "As such, changes in federal and provincial taxes and crude oil prices strongly influence retail gasoline prices, since they jointly amount to 80 per cent of the price charged to consumers" (2002). This is because some level of the costs to produce it end up being covered by the government, but the government then comes back and charges a large amount of tax on the end good. If oil prices rose by 100% tomorrow, consumers would only pay 30% more at the pump. Indeed, this is supported by past trends as discussed by Chacra (2002).

Hence, if you want a change, part of the weight must also go towards the provincial and federal governments who tax people who use it. What remains in price changes typically comes from fluctuations in the gas prices internationally, as local tax rates are persistent and stable (Chacra, 2002). This is why estimates of what CPI-gas prices are going to be relative to international oil prices are so accurate. Personally, I oppose a change to lower taxation – it brings in a solid amount of government revenue that can go on to other uses.

Also keep in mind that Canadian production is tied heavily into the US and is heavily impacted by factors south of the border as well, like changes in demand. Ironically, because of this, changes to the US market and the price of gasoline prices in Canada tend to be accurate. (Elekdag et al., 2008).

Canadian companies do benefit from oil shock prices, but can also face issues when countries we typically export to take an economic nosedive as a result of oil price shocks (like the US does for us, since we are so tied) (Korhonen and Ledyaeva, 2010).

References:

Chacra, M 2002, 'Oil-Price Shocks and Retail Energy Prices in Canada', p. 41 pages, EconLit with Full Text, EBSCOhost, viewed 1 April 2011.

Elekdag, S, Lalonde, R, Laxton, D, Muir, D, & Pesenti, P 2008, 'Oil Price Movements and the Global Economy: A Model-Based Assessment', IMF Staff Papers, 55, 2, pp. 297-311, EconLit with Full Text, EBSCOhost, viewed 1 April 2011.

Korhonen, Iikka, and Svetlana Ledyaeva. "Trade Linkages and Macroeconomic Effects of the Price of Oil." Energy Economics 32.4 (2010): 848-856. EconLit with Full Text. EBSCO. Web. 1 Apr. 2011.

Shiell, L, & Loney, S 2007, 'Global Warming Damages and Canada's Oil Sands', Canadian Public Policy, 33, 4, pp. 419-440, EconLit with Full Text, EBSCOhost, viewed 1 April 2011.

andyt andyt:

Thanos Thanos:

And, no, the Canadian and provincial governments absolutely cannot enter into any partnerships with industry to build more refineries in Canada because something something Ayn Rand something something Milton Friedman something something invisible hand something something all boats rising something something the fraternity brothers from the class of 1985 said no. What are you people? A bunch of fucking communists?

According to Khar, what you wrote is the truth. It's been studied and is a no go.

Actually, Khar literally posted the exact opposite, in a way that connects directly to what I said above. "I'd love to see pipelines or refining. I don't think it'll stop us being dependent on energy, but it would make our industry less dependent on the whims of the USA. It would also become a more national project, something that stops Canadians from othering each other, as Mulcair tried to other Alberta in that situation." You were in that thread a week ago, Andy.

According to Khar, it didn't and in his opinion wouldn't help the diversification of the Albertan economy. Secondly, I said we already tried to diversify it, and failed (with some mild success from one method that was a bit too "Albertan" for your initial stance in the last thread); I did not base my response just on your vague term of "studies," but on rather recent history and my analysis of it. I try to explain everything I source or write as I see it. Nor did I expect you to shut up and take it; I provide and explain my sources so everyone can scrutinize them and see where I got information from, why I have the opinions I do and so forth. You have prescribed to me a stance I have never taken in this thread for a reason I cannot fathom. I didn't appreciate it.

[Thanos]

The technically correct part that the free marketeers have in their corner against the government getting involved in building refineries or upgraders is that the Alberta government has a pathetic and scandal-ridden track record when it comes to attempts to diversify. From the Al-Pac pulp mill to Nortel to the utility deregulation it's all been a disaster that cost Albertans tens of billions of lost dollars. The obscene part comes in when one realizes that the type of crony capitalists that benefitted the most from Albertans losing their shirt are also the same kind of 'titans of business' that free marketeers tend to worship. Don't get the government involved and diversification won't happen vs. have the government as a major partner and Albertans will get screwed to the wall by all the graft, bad leadership, and wasteful & unaccountable spending that will surely result in such a mega-project. Either way Albertans end up losing because when it comes to this kind of business the provincial government simply cannot be trusted.

[andyt]

@Khar. So what is it - I recall you saying the govt getting involved in the economy has been studied and was a no go. Now you're advocating the govt doing partnerships with industry to build refineries? (Pipelines seem to be taking care of themselves).

AS for Thaons, how does utility deregulation fit as an example of govt/industry partnerships?

Khar are you proposing the national govt get involved in these partnerships? (if i read you right). Watch Thanos's (and all Albertan's) head explode. That sounds like some sort of national energy program. After all, if federal funds go into it, any profits can't just be for Alberta.

There was a guy on the radio making a strong case why Alberta should join the US. It would solve their problems with energy, according to him, and they are the most culturally close to the US. He said this would cause Saskatchewan to go next, and Canada would either have to join or form some sort of super NAFTA with the US. I didn't catch all his arguments, but he basically sees the US rising as the single superpower again, and Canada being hooped unless we join.

Seems to me if we want to prevent that sort of thing, we need a stronger sense of Canada, vs just being a collection of provinces that pull in different directions. So projects for the national good, like the federal govt getting involved in the oil industry.

We have a federal govt that admires the US, sees Canada as a second rate socialist country. Seems we are being pushed in the direction of closer and closer ties with the elephant down south. Maybe the only way to stand up to them is to have more government (federal) in our economy - ie more socialism.

[Khar]

Andyt, asking me "so what is it" ignores that you have already misconstrued my stance and are trying to force it upon me again. Setting me up with a false dichotomy isn't going to change anything I wrote. The simple reality is that what you "recall" is me describing both recent history and studies and pointing out how the strategies you have been prescribing for Alberta's health have failed in the past, with one potential exception in the Alberta Advantage, and that all had to do with economic diversification, not growth. In a thread where you are talking about growing the energy economy (and hence reducing diversification, which is contrary to your arguments in the last thread), it's clear what I was talking about in growing other industries isn't going to be relevant here. Especially since there is a rather large and obvious difference between setting up a company or two, and setting up a massive piece of infrastructure that will impact trade flows across the country.

Thanos was discussing utility deregulation because it was done in terms of privatizing an industry so there would be more competition on the market, and more diversification in our economy. At least, so I suspect. I also suspect he was talking about why it failed, in part due to how new industries were structured by the government and who was put in charge (crony capitalism was an important stance to you, too, or so I understand).

Especially when you decide to do it on the basis of "conservatism must be this" and "Albertan's heads will explode"! Alberta has a majority which votes Conservative (big C, not little c) because it's in their best interest given the record of other parties in dealing with Albertan issues in the view of the electorate. It's because of this simplification of what an Albertan is that you scoff at what you think are contradictions; Albertans are fine with National Energy Policies, as long as those policies aren't built around fucking over Alberta, a rather obvious difference that most Albertans can (and Canadians in general should) very easily grasp. Nor do I expect Albertans (or economists in general) expect Alberta to reap all the benefits from it. Hell, even now the benefits of the oil industry are spread across the country in remittances, various transfer payments, and the exodus of the old to nicer places in Canada. Us paying for risk management elsewhere isn't a bad idea. Mind, the rest of Canada should perhaps remember that if it's good for Albertans, it's also good for at least some fellow Canadians; this continued othering of Alberta is tiring. What probably rankles Albertans more is that when others bring up the spectre of the NEP they try and connect it to the current pipeline construction, even though the stances haven't changed. The old NEP screwed Albertans over in their view; the current blockage of any national energy infrastructure is doing the exact same thing.

Being Albertan does not mean we have the social leanings and the economic interests of a colder Texas or however people are viewing us from time to time. Hell, most of the Edmontonians on this board are fairly centrist in Canadian terms. I'd say your guy on the radio is making similar assumptions. We fall far closer in line to Canadian expectations and interests on most major social issues than with the States, have a shared history and culture, and identify more strongly as Canadian. Alberta separatist parties in recent history have attracted a very small percentage of the votes, and in the past have been more over protest of actions taken that have harmed Alberta.

If you want national unity, stop the sort of discourse you have where Albertans are perceived as flat as our Prairie. There is depth in our electorate (I did live in an NDP riding both provincially and federally until recently) that people ignore, a nuance to our stance that is forgotten and value in not continuing to alienate the West but talking about how we're more American than Canadian. I support national involvement in getting pipelines involved and seeing refining; instead of blaming me for a stance I don't have, and blaming Albertans for being something they aren't, maybe you can get on board with some national unity and stop othering Albertans with all the others who are pretending we're something we aren't?

What we need is more reality. When a prior program has failed, we don't ignore the Alberta experience and try, try again. When we have experts who are discussing the issue, we shouldn't ignore it on the basis of "it doesn't fit my economic ideology" and then shrink back into a partisan shroud. Sadly, this is what has dominated the discussion on the Albertan economy, both in diversification and in response to oil industry interests. So much of Alberta has been conflated with our politics or a talking point on other issues that I feel we tend to avoid discussing how policy should actually react.

The fact I have written some of the longest posts I ever have on why income inequality is bad (so had boots) is a sign you should stop viewing Albertans (or people's stances in general) as a single entity, andyt, or at least not in the way we have been characterized. I'm capable of melding aspects of various philosophies because of what has worked and what has not, and because being economically liberal on one thing doesn't mean I'm some shade of economically liberal (or socialist) on all things. I won't fit nicely into a strawman with partisan talking points. It'd be nice if we stopped treating Alberta the same way, and talked about how to make things work. Maybe then we'll get the national unity we want. So long as we have politicians who work on playing region against region, however, I doubt you will see that change.

[andyt]

If you could control yourself in how much you write, our discussion would go a lot better. You seem to be arguing all over the place, against govt involvement one minute, for it another. And you and Thanos, I'm sure are talking about different governments. He's certainly talking about the Alberta government doing partnerships with industry. You never make clear which government you are talking about, but for it to become a national reconciliation project would obviously have to involve the feds. Read what Thanos has written about the Libs and Dems - his head would explode if one of those hated parties were to be in power and involved in a fed gov partnership with industry.

And I certainly hope you're not just suggesting that the fed shovel some money at it the way they do with Bombadier or the car companies. That doesn't seem to work out well. Seems to me if the govt puts in money, it should own a piece of the project.

There's a case to be made for the feds getting involved in refineries, IMO. It's not just about job creation, but national security. We are nuts to ship our resources south to be refined and then buy them back as finished product. What if they turn off the taps? Do we want to be like Ukraine? Typical Canadian, we do what's easy and makes us a short term buck, never think about the big picture. We really are a kind of banana republic.

As for you and boots writing about income inequality, I have no idea what that has to do with this discussion. Guess you're trying to say not all Albertans are the same. Well duh! That doesn't mean that generalizations aren't possible, from humans to countries to the people on your block. Doesn't mean there can't be huge variability in that population. You should know this, economics depends on it.

[Thanos]

I'd greatly appreciate it if you'd quit using my name in your posts, if for no other reason that you're wildly over-estimating how much I care about any of this shit anymore.

[andyt]

I thought you had me on ignore and wasn't talking to you. If you don't care, that's what you should do.

And then there's you referring to me without using my name - you think that's better?

[Thanos]

Unfortunately the system doesn't keep your posts blocked when I'm not logged in so I end up seeing them. Like I said, please quit using my name in your screeds. I'm not interesting in anything you have to say anymore so I'd appreciate it if you left me out of it.

I have one more thing to say. Despite your pitilessness I actually find you to be a pitiable person. You can't help being what you are. You're trapped by your own nature as much as anyone else in the world is. You political leanings don't by default mean that you have a greater heart when the evidence of your activities here indicate that you really have no heart at all. Whatever party you're doing the shilling for can't give you one either, no matter how much you think you're playing Robin Hood around here. You've either got one or you don't. It's just one of those many things in life that simply is what it is.

Have a great life from atop that pedestal you've put yourself on, tinman. Hopefully you have a great view from up there.

[andyt]

Whether you read my posts or not is up to you. Just because they appear on your screen doesn't mean you have to read them. Up to you, no pity there.

Seems pretty SOR to talk about other people on this forum. As I've pointed out you do it as well, even if you don't use the name.

With all the shit you've flung at me, you want me to feel pity for you? Unbelievable. You're not the only one who's gone thru hard times. Looking for pity on an internet forum, allowing you to project stuff on me, while asking I lay off you is just not going to give you much comfort. You may just have to let go of the expectations you have on yourself and realize life goes on. There's always Tim Horton's. If you choose to sink lower than that, well your choice. I think you have some things going on in your life, maybe you should reach out to real people for real help, not think this forum will be your savior. Basically the guys here you take comfort from, would be the first to dump on you if they didn't know you, - gotta stand on your own two feet and all. You'd just be a loser to them, while they gloat about how well they're doing.

You don't need pity, pity puts you one down. You need compassion, and not the kind that makes excuses. Yep, your economic life sounds like is going downhill. Many people have had to deal with that. Many made the best of it, some choose to wallow. Up to you. Quitting the booze might also be a good idea.

[Freakinoldguy]

N_Fiddledog N_Fiddledog:

Took the words right out of my mouth.

Has anybody anywhere ever offered an explanation for why some of us are still paying 1.25 a litre during record lows of the price of oil, BTW?

http://www.bcgasprices.com/

They've offered some explanations, none of which were plausible. They ranged from the standard, one of our refineries is broken to, one of our refineries is having labour troubles and or course my all time favorite. We're changing over to summer gas from home heating oil which, would be believable except for the continued ice age back east and the refineries in question being on the west coast.

All of which are the standard mantra for. "fuck you guys, you'll pay what we want or you'll walk". If anyone ever saw the Documentary Enron the Smartest Guys in the Room, you'd know that it's a fairly common practice for big corporations to lie through their teeth to extract every dollar they can from the public so their CEO's don't end up living in a cardboard box, poor buggers.

[Jabberwalker]

The explanation that I have heard is that the oil industry has deleberate!ly idled refining capacity to bring the selling price of distilled petroleum products back up. It's a win-win for them. They can ask more per unit for their gas and at the same time save on refinery labor by laying shifts off.

[bootlegga]

Thanos Thanos:

And, no, the Canadian and provincial governments absolutely cannot enter into any partnerships with industry to build more refineries in Canada because something something Ayn Rand something something Milton Friedman something something invisible hand something something all boats rising something something the fraternity brothers from the class of 1985 said no. What are you people? A bunch of fucking communists?

Seriously rep worthy!

[herbie]

I'd like to know why when the Cdn dollar goes down half a cent and oil drops $2 a barrel the gas prices try to leap up 10c litre the same day?
Especially when it's Canadian oil refined in Prince George.