Victoria Spring 2011 - Canadian Gas Prices · Saturday May 14, 2011 by colin newell
I have spoken on this issue in the past – about gas price fixing in Canadian markets.
Which I am now preparing to reject. No, not preparing… It’s done.
Let me clarify: I do not believe that the markets are fixed in Canada.
For Gas. Or Coffee. Or Chocolate. Or anything for that matter.
And you’re wondering… “Who are you? Who took our Colin away?”
Here is the thing – 1st year University economics at work. We live in a free market system. That means that the markets set themselves. There are no wage and price controls at work in Canada or the U.S.
As a result, the market moves around to suit the vendors, the suppliers, the executives, shareholders etc. It is the system we have embraced.
And we vote for governments that support the open market agenda.
Actually, all the governments that are available to be elected are all for open markets – there are no socialist parties or active communist parties in Canada (or America). And the ones that are professing to be socialist are dreaming – or digging for votes.
We live in an open market society. Everything is up for grabs. Everything is for sale. And this includes petrol, oil, gas, coffee, water, pork bellies, all manner of food stuffs – anything that can be bought and solid for a profit.
Our governments negotiate and sign trade agreements with other countries that are not as developed as our own – that gives manufacturers the upper hand in maximizing profit for executives, owners, shareholders, etc. It is in the best interest of the free market system to get products made as cheaply as possible to get the most payback for the vested interests.
Gas is no different. The raw materials come out of the ground and are processed and distributed for profit. Yes, I know the raw materials are free – it comes out of the ground after all. But there needs to be an infrastructure for it to end up in your tank as high octane gasoline. That costs money.
And sure, oil companies like banks make obscene amounts of profit – so what. It is a free market system. Is this profit wrong? No. It is a free market system. We live in this system, support it and vote for governments that have a pro-business agenda.
We totally get what we pay for folks.
Coffee (a subject that I know a little bit about) is one of those highly traded commodities.
Imagine every coffee bean produced in a year – Got that picture? Good.
Well, that mountain of coffee changes hands anywhere from 50 to 100 times a year. And most of those folks that profit from coffee, big time, have never even seen a coffee bean or a coffee farmer. Is this wrong? Technically no – I mean, coffee brokers are not in the business of knowing how Juan Valdez is doing with his family in Nicaragua – or whether he and his family have education or health care. Brokers and traders are in the business of flipping product for profit.
Back to gas. Any government that says they are going to “look into high gas prices” are being utterly cynical. This has been happening in the U.S. lately. Obama has stated that high fuel prices need to be looked into. Additionally, one of the most stupid men in America, Donald Trump, uttered some shallow platitudes about taking Saudi by the short and curly and giving them what-for. Actually, considering that Trump is playing a joke on all of us with his Presidential run, he is actually being more honest than Obama.
When we consider that the fuel that goes into our cars comes from a finite supply, and that it is considerably more expensive in Europe – it is likely that the price in Canada and the U.S. is too low. I know, I hate paying $50 to fill my Honda Civic with this stuff – but I am not alone. And if I was in Holland it would be twice that much.
Summary: We live in a free market system where anything goes. Our new Conservative government in Canada plans on throwing Foreign ownership rules to the wind (which I strongly disagree with – but who am I.) Which means that more Canadian stuff is going to be on the vending block – which will increase the cost of living to average Canadian.
And as much as I would love to live in socialist utopia where I did not have to worry about food security, the integrity and safety of my water supply and the roof over my head… I am now ready to face the facts… that this is the society in which we live: A society where everything is for sale and speculation. It is what the majority of Canadian’s appear to want – so we get the results.
Victoria Spring 2011 - Reading with Grant Lawrence at Bolen Books
