British Columbia·Analysis

B.C. won't regulate gas prices or cap taxes, so what can the premier's demand for an inquiry really achieve?

Premier John Horgan has asked the B.C. Utilities Commission to investigate what's behind a recent spike in gas prices. It's not clear what will come from it since the province has already said capping taxes and regulating gas prices are not the answer.

Government suggests there may be a 'suite of options,' but offers no examples

The B.C. Utilities Commission has agreed to look into sky high gas prices, but it's not clear how that investigation would result in relief to drivers. Premier John Horgan has also told Ottawa that B.C. needs more refined fuel. (Mike McArthur/CBC)

Mounting pressure over record high gas prices has prompted the premier to put forward a solution: asking others to look into it — namely Prime Minister Justin Trudeau and the B.C. Utilities Commission.

It comes alongside growing calls from critics and the public for John Horgan to follow through on promises to consider providing relief at the pumps.

On Tuesday, he asked the BCUC to investigate B.C.'s "high and wildly fluctuating" gas prices and suggested calling on oil companies to explain their prices.

He's tasked the regulatory body with finding out why refining margins are so much higher in B.C. than anywhere else in Canada, pointing to data that shows the wholesale price of gasoline in Vancouver has shot up in the past two months.

The Utilities Commission has responded, agreeing to work on setting out the terms of reference.

What's not yet clear is how long this inquiry might take or what possible actions might come from it, other than finding what Horgan calls a common set of facts.

Premier John Horgan has commissioned an independent investigation into B.C.'s record high gas prices. He wants the BCUC to look into refining margins and is suggesting oil companies explain their prices to the public. (Miguel VillagranGetty Images)

"We need an independent arbiter to lay out how we got here," he told reporters Tuesday. "I'm hopeful that they'll take action in the short term and that we'll have more to talk about in the future."

But the premier has essentially taken two options off the table.

In his letter to the BCUC, he rules out capping provincial gas taxes. It's a suggestion Liberal Leader Andrew Wilkinson made last week, prompting criticism.

"Provincial taxes are not to blame," Horgan writes. "Cutting taxes would amount to the public subsidizing oil companies as there is nothing to stop companies from raising prices in response."

He also previously suggested that regulating gas prices isn't the answer, referencing an internal government report from last year.

Horgan has also blamed a shortage of oil refineries in B.C. and Alberta for the high price of gasoline. (Andy Clark/Reuters)

That report looked at provinces that currently regulate gas prices: Prince Edward Island, Newfoundland and Labrador, Nova Scotia, New Brunswick and Quebec.

Its conclusion: "While the regulation of gasoline prices provides some price stability, research does not show it leads to lower prices for consumers."

The same briefing note also doesn't align entirely with Horgan's past suggestions that oil companies may be price fixing.

"There is no sign that there are non-competitive or unfair business practices leading to the higher margins," reads the summary from the Energy Ministry.

So what is this independent investigation going to find aside from what the government already knows? 

'Provincial options are limited'

CBC asked to speak with the energy minister to provide further clarification. Instead, the government made Minister of Jobs, Trades and Technology Bruce Ralston available.

"I'm not going to anticipate what an expert body is going to do, but certainly [the BCUC] is looking into regulatory options and may come forward with a suite of options," Ralston said Wednesday.

Ralston wouldn't elaborate on what those options might be.

"I think the reality is that provincial options are limited," he said. "But to the degree that we can within provincial jurisdiction, we're going to investigate and try to come up with solutions if we can."

But what about the previous Energy Ministry's memo that found no sign of shady business practices leading to higher margins?

That was a year ago, Ralston noted. "The situation is very different this year so we'll see whether the outcome [of this investigation] will be different — I expect it may very well be different."

Is it simply trying deflect blame, as critics say? Ralston called that a cynical approach.

"We're using the premiere regulatory authority in the province, which has subpoena powers... I presume they'll use their powers to talk to industry, have industry come forward, make submissions and come up with solutions."

Horgan also spoke by phone with Trudeau this week, imploring the federal government — as owners of the TransMountain Pipeline — to consider pumping more refined fuel to B.C. to help ease supply issues.

About the Author

Provincial affairs reporter covering the B.C. Legislature. Anything political: tanya.fletcher@cbc.ca

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