Thursday, 28 November 2024

'No true benefit' to regulating gas prices, Liberal minister says

 

'No true benefit' to regulating gas prices, Liberal minister says

John Herron says nixing price-setting rules would bring 4.6¢-per-litre carbon cost 'closer to the zero number'

The Holt government's natural resources minister has come out strongly in favour of completely eliminating gasoline price-setting rules — while defending his own role in establishing the formula for the controversial carbon-cost adjustor Liberals plan to eliminate.

John Herron has no official responsibility for gasoline regulations, but Premier Susan Holt said he's playing a key role in discussions thanks to his former job as a member of the Energy and Utilities Board.

At the EUB, Herron was part of the panel that decided how to calculate the carbon adjustor, which adds 4.6 cents to the price of a litre of gasoline this week.

It's a cost that Holt promised to eliminate as part of a package of campaign commitments to make life more affordable for New Brunswickers.

But it looks increasingly likely that the Liberals will get rid of the EUB price-setting system altogether.

"There is no true benefit in my perspective of having a regulated regime in New Brunswick but there is a cost," Herron told CBC News in an interview.

"We don't benefit from the opportunity for the market to compete down profit margins and compete down costs." 

WATCH | 'I trust the market forces,' says Liberal minister on gas rules:
 

What N.B. gas regulation changes could mean at the pumps

Carbon costs would likely be ‘closer to a zero’ if the province were to stop setting gas prices, says John Herron, minister of natural resources.

Eliminating the price-setting mechanism completely would allow gas producers and distributors to reintroduce the carbon cost back into the supply chain and pass it down to customers.

"It's a cost of doing business in Canada, and that cost has to be included in the price," said Carol Montreuil, the vice-president for Eastern Canada with the Canadian Fuels Association, an industry group.

"One way or another, in all provinces in the country, that cost — coming from the federal policy on clean fuel standards — is being applied across the country. New Brunswick is no different."

A man in a suit and glasses poses for a photo Carol Montreuil, the vice-president for Eastern Canada with the Canadian Fuels Association, says the carbon cost is simply part of doing business in Canada. (Jacques Poitras/Zoom)

Holt argued last week that eliminating price regulation will create more competition among gas retailers, potentially driving prices down. Herron said he agrees with that position.

"If we were in a non-regulated market, not only do you have a chance to compete down margins, you're actually able to compete down costs, including that of the adjustor," Herron said during Question Period on Wednesday.

But Montreuil said there's no way competition will push prices down far enough to completely eliminate the carbon cost.

"No, not that full amount, because that number is real. It exists elsewhere in the country," he said.

The Higgs government created the carbon cost adjustor in 2022 to allow gasoline refiners and distributors to pass on their costs from federal clean fuel regulations, designed to push gasoline producers to lower the greenhouse gas emissions from their products.

It was left to the EUB to figure out how to calculate the cost, and a consultant hired by the board came up with a formula using the California Low Carbon Fuel Standard as what it called "a reasonable proxy," at least temporarily.

Glen Savoie, leader of the Progressive Conservative Opposition, suggested Wednesday that Herron was flip-flopping, given the Holt government plans to repeal the mechanism he helped craft as a board member.

Glen Savoie speaks to reporters Opposition leader Glen Savoie said Herron was flip-flopping, since he once helped craft the price-setting mechanism with the EUB. (Jacques Poitras/CBC News)

"How did he get from agreeing with the EUB's direction to agreeing with the government's direction?"

Herron said the board was required to implement whatever legislation was adopted at the time.

But he also suggested the formula has led to a higher price than warranted.

"At that time, the EUB had made it very clear that they were working with the best available evidence it had before it," he said.

"We knew it was not the most optimal evidence that was put before the board at that time."

The minister told reporters that given no refiners, wholesales or distributors have asked for a higher carbon cost adjustor since it took effect, it's more likely that it's too high than too low.

He predicted that if price regulation is eliminated and the carbon cost is put back onto the price, "I think it's more apt to be closer to the zero number than 4.6."

Herron said he trusts the free market — which determines prices outside the four Atlantic provinces that all have regulatory price-setting — to "ensure the actual number reflects what that number should be." 

But Savoie told reporters that with no publicly available price-setting formula, no one will be able to say for sure.

"Deregulating is not necessarily going to lower prices for people, and it's going to be difficult to track where the cost-of-fuel adjustor actually gets paid," he said.

ABOUT THE AUTHOR


Jacques Poitras

Provincial Affairs reporter

Jacques Poitras has been CBC's provincial affairs reporter in New Brunswick since 2000. He grew up in Moncton and covered Parliament in Ottawa for the New Brunswick Telegraph-Journal. He has reported on every New Brunswick election since 1995 and won awards from the Radio Television Digital News Association, the National Newspaper Awards and Amnesty International. He is also the author of five non-fiction books about New Brunswick politics and history.

 
 
 
141 Comments
 
 
 
David Amos  

I wonder if anyone remembers why I ran against Herron 20 years ago 
 
 
 
David Amos
I have no doubt that everybody knows why I enjoyed this nonsense 
 
 
David Amos 
 
"Opposition leader Glen Savoie said Herron was flip-flopping, since he once helped craft the price-setting mechanism with the EUB." 
 
 
 
 
 
 

Amen

 
 
Don Corey 
Herron, a former Red Tory MP, was given a 10 year appointment to the EUB back in 2013 by the Alward PC government. He is probably more familiar with NB's largest employer than any other current Liberal MLA.

Now he's our new Natural Resources Minister.

We'll be watching.....

 
 
Don Corey  
It’s difficult to object to such an historic event as a Liberal government saying “let the free market prevail” and scrapping a regulation that imposes yet another gas tax on consumers. 
 
 
 
james bolt
No true benefit is the subtitle of all politics  
 
David Amos 
Reply to james bolt
Well put  
 
Don Corey   
Must have been too well put. I see it's been zapped. 
Reply to David Amos 

David Amos 
Reply to Don Corey 
Yup it all went the way of the Dodo Bird so I gave up  
 
 
 
Steve Morningstar 
There is No Minimum so competition is there if the retailers want. I'm having buyers remorse already.. :(
 
David Amos 
Reply to Steve Morningstar
As well you should
 
Denis Reagan
Reply to Steve Morningstar
Competition? gas, oil, banks, etc.? Pfft! Good one.
 
Steve Morningstar
Reply to Denis Reagan 
so you thinking removing a max price is a good idea?
 
Denis Reagan
Reply to Steve Morningstar
No, but maximum price always will be there without competition, which doesn't seem to want to exist. How many global corporations would lower their prices without being forced to by the opposition who would never lower their prices unless being forced to by the opposition? We get bits and pieces of that but overall, the reduced prices by all are simply less than the high prices of yesterday which will return shortly. Fools the public who can't do anything about it and at times actually believe they are getting bargains. 


 
ralph jacobs 
A Liberal speaking on gas prices? This has to be a joke when the carbon tax has created the biggest increase in a while.
 
David Amos

Reply to ralph jacobs 
Welcome back to the circus  
 
Denis Reagan 
Reply to ralph jacobs 
The carbon tax? The sensible tax? The tax with a purpose? Why don't we try to make it work by cutting back on burning fossil fuels that we don't need to burn?
 
Loran Hayden  
Reply to ralph jacobs  
false 

ralph jacobs   
Reply to Denis Reagan  
Most people cut back before the carbon tax when gas itself was too expensive. false  
 
Ralph Linwood 
Reply to ralph jacobs 
People have cut back how? I still see dozens of vehicles idling every day in front of every school I pass on the way to work even in the summer. Add to that all the idling vehicles in the drive throughs and in parking lots everywhere.... Gas is simply not expensive enough for people to try to save it apparently.
 
ralph jacobs   
Reply to Ralph Linwood 
I guess I shouldn't speak for others but I know I have cut back on my driving an lowered my thermostat and that was before the carbon tax. 
 
Don Corey 
Reply to ralph jacobs
I haven't; worked for more than 40 years and figure I'm entitled to catch up on all that lost time for more hunting and fishing and travelling to my camp.

And, the older I get, the more I want to stay warm.

Don Corey 
Reply to Denis Reagan
The carbon tax is the joke, on us, and a very expensive and ineffective one. 
 
Don Corey 
Reply to Denis Reagan
You've never been to NB huh? Are you thinking about our non-existent province wide totally electric public transit system? 
 
Ralph Linwood 
Reply to Don Corey 
As long as you realize it is a choice and don't blame the government for your decisions.
 
Ralph Linwood 
Reply to ralph jacobs
Grew up poor and never want that to happen again. I drive when I need to and combine as many errands or tasks into one trip as possible. We've always lowered our thermostat at night but with the programmable one we have now, it also lowers the temp during the day when everyone is at work / school. It's not that hard to save money with a little thought.  
 
 
 
Jack Bell  
"Herron said he trusts the free market"

This guys is a liberal right?
 
Ralph Skavinsky 
Reply to Jack Bell 
Umm..he is now so let's see what infolds. It might not be pretty..?
 
David Amos

Reply to Ralph Skavinsky 
It never was pretty
 
Don Corey 
Reply to Jack Bell 
Wonders will never cease.



John Charlton 
If Canada won't regulate the:

bank profits,

Grocery store profits,

oil and gasoline profits,

rental corporate profits,

Pharmaceuticals profits...

there is little use for natural gas regulations.

David Amos 
Reply to John Charlton 
Oh So True 
 
 
 
Alex MacLeod  
Methinks Irving has a friend 
 
David Amos 
Reply to Alex MacLeod 
C'est Vrai  
 
 
 
David Webb
Think about this for a moment. Where is and who owns the largest refinery in Canada? Where is the nearest refinery to NB other than the obvious? Why is fuel so much lower in price in Maine? Who sends 80% of their production to the US? Why did the US stop further expansion of the company into the US? 

Al Clark
Reply to David Webb 
Why not state "nearest refinery to NB other than the obvious" ??

It's Levis, in the place that cor doesn't like ;-) 

Les Cooper
Reply to David Webb
Nb pays some of the highest taxes in Canada

David Amos 
Reply to Al Clark
Welcome back to the you know what
 
 
 
 
 
 

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