A propane shortage that has hit consumers and suppliers in Ontario and Quebec will continue until the end of the winter season, according to a preliminary report to the ministers of Natural Resources and Industry.

The ministries asked the National Energy Board and Competition Bureau to review issues in the propane market after supply tightened and prices increased rapidly.

"Given current production, storage, transportation and export trends, tight supply and high prices are expected to continue for the remainder of the high-demand winter season," according to the preliminary report made public Tuesday. "Consumers of propane, including households that cannot easily switch to other fuels, will continue to be significantly impacted."

The preliminary report details four main factors for the shortage:

  • colder-than-normal winter across eastern Canada and the U.S. caused an increased demand for propane, as well as challenges with transportation.
  • Propane was needed to dry an "exceptionally large" and wet corn harvest in the U.S. Midwest.
  • Propane inventory was already low before this year’s peak demand season.
  • The U.S. has a "rapidly growing" propane exports to overseas markets

Ministers Oliver and Moore welcome report

Minister of Natural Resources Joe Oliver and Minister of Industry James Moore issued a joint statement on the preliminary report Tuesday.

“Since the peak in January 2014, supplies and prices have improved considerably, and we understand that customers relying on propane for heating now have their needs met. However, given current storage, transportation and export trends, the NEB and Competition Bureau expect tight supply and above-normal prices to continue for the remainder of the winter season," the statement said.

“The National Energy Board and the Competition Bureau are continuing their analysis on other potential factors that could exacerbate the current market challenges or contribute to future propane shortages and related price increases."

 A more detailed final report is expected to be published by April 30.