Energy watchdog confirms taxes not part of B.C. gas-price probe

B.C.’s independent energy watchdog has confirmed that it won’t be able to investigate the role of provincial taxes on high gasoline prices, due to restrictions set by the provincial government.

B.C. Utilities Commission chairman and CEO Dave Morton said Monday that his organization is not allowed to examine how taxes, including the rising carbon tax, might play a role in gas prices that are the most expensive in North America.

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“I would agree with that interpretation,” he said when asked if taxes and government policies are off the table. “And it wouldn’t be within the scope of the inquiry to compare the carbon tax here or the carbon tax in Ontario or Alberta.”

Another item that likely won’t be examined is the proposed expansion of the Trans Mountain pipeline.

Whether a twinned pipeline could provide more refined gasoline from Alberta to B.C. is a question Premier John Horgan has asked Prime Minister Trudeau as B.C. continues to oppose the federal project in court.

“I wouldn’t categorically say no. But at this point, it’s my feeling this is largely a backward-looking inquiry and looking at what prices have been, what have spreads been between B.C. prices and prices in other provinces, and historically why has that been the case, and in recent history why has that been the case,” Morton said.

“I’m not sure we’d be looking forward and saying you’ve got to increase the pipeline capacity.”

Horgan asked the commission on May 7 to conduct an inquiry into why B.C.’s gasoline prices are so much higher than in the rest of Canada.

The price at the pump in Metro Vancouver reached $1.79 a litre last month, though it currently hovers at the mid $1.50 to $1.60 range. Prices in the capital region were typically $159.9 on Monday, with a low of $153.9 reported by gasbuddy.com at the Costco gas station in Langford.

The Opposition Liberals have accused the NDP government of handcuffing the commission on the important issue of taxes.

Federal, provincial and municipal taxes make up 52.5 cents per litre on the price of gasoline in Metro Vancouver.

Public anger at high gas prices, as well as a B.C. Liberal campaign to blame Horgan by erecting billboards along Lower Mainland highways, created enough political pressure that Horgan asked the commission to create an inquiry.

The commission agreed to hold the inquiry before knowing the terms of reference, Morton said.

Horgan’s cabinet released terms May 21 that focused on refining and retail margins for gas, B.C.’s access to crude oil supply, refinery capacity and other factors, while explicitly saying the commission “may not inquire into the effects of provincial enactments or policy on gasoline and diesel prices.”

Although that restriction has tied the commission’s hands, Morton said he’s fine with continuing.

“I’m not disappointed with the terms of reference,” he said. “They are consistent with what’s in the letter [from the premier] and what we agreed to. And I’m happy to proceed.”

The commission has powers to compel witnesses and make them testify under oath. So far, everyone asked has agreed to co-operate voluntarily, including officials from the Husky refinery in Prince George and the Parkland refinery in Burnaby, Morton said.

Oral hearings will be held July 17 to 19 in Vancouver and will be open to the public, with full transcripts posted online.

Despite Horgan’s repeated allegations of “price gouging” among gas companies, that phrase will not be contained in the commission’s final report, Morton said.

“I’m hopeful we’ll be able to shed some light on what makes up the price of gasoline,” he said. “It’s up to the public to judge whether that constitutes price gouging or not.”

The commission report is due Aug. 30. Morton said it is a short timeline, but he’s confident it can be done.

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