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CCMA commends Competitions Bureau’s move to examine gas price hikes

TORONTO, Ont. -- The Canadian Courier and Messenger Association (CCMA) applauds the Federal Competition Bureau's ex...

TORONTO, Ont. — The Canadian Courier and Messenger Association (CCMA) applauds the Federal Competition Bureau’s examination of the oil sector to determine if recent gas price hikes are legal.

Government must be diligent in insuring price increases do not result from conspiracy to fix or coordinate prices or other anti-competitive practices by dominant firms in the industry. However, in view of the time this examination may take, consumers and industry groups need help now.

"Volatile fuel prices have great influence on our economic well being, inflation and North American competitiveness, for this reason the CCMA recommends government must act swiftly in other areas on fuel," says Phil Cahley, Executive Director of the CCMA.

Specifically the CCMA recommends the following actions: The creation of an office to monitor the oil sector in order to restrain sudden price changes. Even though a parliamentary committee last fall recommended such a move, the government failed to act on the recommendation; Ottawa and the provinces must move to cut their tax levies on fuel: each litre of gas carries with it a 10 cent federal tax, each province adds its own tax (14.7 cents in Ontario) and then Ottawa charges GST which unlike the basic federal and provincial fuel taxes, rises along with pump prices.; Government tax cuts (if they take place) must be backed up by a regulatory policy/regime to ensure that oil companies do not raise prices equivalent to current taxed levels to increase profits.

There have been a number of studies regarding gasoline prices over the years but action on the matter is still forthcoming. Statements made in the fall of 2000 by Paul Martin as Finance Minister, indicated a willingness to consider federal tax cuts but not before the provinces in turn cut their taxes on fuel. Something has to be done to move the log jam between federal and provincial governments on this issue.

"Does the current government have the will at all to improve the situation? If so, it must act now to reduce taxes in providing relief to Canadians while waiting for the Competition Bureau report and acting on other recommendations such as an oil monitoring agency," says Cahley.

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