Why is NRCan's fuel price report suspended during election?

Want to know why pump prices are still high when the cost of crude is so low? It has a lot to do with refinery margins, something Natural Resources Canada was documenting regularly until the election began, Neil Macdonald points out.

Want to know why pump prices are still high? It has to do with refinery margins

Pump prices in the U.S. dropped noticeably over the Labour Day weekend, and started to come down in Canada about two weeks later, at the end of the summer driving season. (St. Paul Pioneer Press/Associated Press)

They strive for facelessness, but for seekers of impartial facts, the people who make up Canada's professional public service comprise a national treasure.

Ultimately, serious research at some point usually leads to their door.

Anyone who knows where to look knows that the government's thousands of experts regularly produce data vital to understanding our economy and governance, and that they try, at least, to do it without fear or favour.

Where would an economist be without access to the Bank of Canada's archives?

Today, though, the Canadian public service is generally regarded as muzzled, more so than at any time in the modern era.

The current government seems to consider information a political tool, easily weaponized, and has ordered bureaucrats largely to refrain from communication with the general public they are supposed to serve. With particular emphasis, of course, on the media.

Naturally, that can become creeping self-censorship, as a matter of career self-interest.

How else to explain the suppression, at the outset of this election, of Natural Resources Canada's Fuel Focus Report?

The biweekly report, published on the NRCan website, is a rich collection of statistics on gasoline prices, a subject of interest to just about every consumer.

It provides comparisons with U.S. prices, and, probably most interesting, a rolling average of margins — the amount of the price of a litre of gas that goes into the pockets of the refiner and the retailer.

That sort of data is particularly valuable at a time when prices at the pump seem disjointed from the price of crude oil, which has cratered majestically over the past year.

But once the election was called that data was pulled offline, shutting down an impartial source of information to anyone who might want a serious discussion of fuel prices during the long weeks of campaigning.

Refineries raking it in

The connection between crude prices and pump prices is murky; energy companies offer all sorts of explanations.

Suffice it to say that pump prices seem to respond a lot quicker when the cost of a barrel of oil goes up than they do when it drops.

An answer, of sorts, could be found in NRCan's fuel report, at least until it was suppressed in late July. 

In the text version of Figure 5, the report charted a steady rise in margins from January of this year until July.

On Jan. 6, the four-week rolling average margin for the retailer was 9.4 cents a litre. The refinery took 12.5 cents.

As the year progressed, the average retail margin held fairly steady, at one point even dropping to 7.5 cents. Not the refiner's margin, though.

By July 24, refiners had upped their average margin to 28.6 cents a litre. (Margins do normally tend to widen during driving season, but these figures represent a multi-year high.)

Simply put, as oil prices crashed, Canadian refiners increased their take by more than 100 per cent.

Whether that practice has continued is unclear. Whatever Natural Resources Canada knows, it isn't saying.

Asked why the report disappeared July 24, departmental spokeswoman Caitlin Workman replied by email: "During the election period, Natural Resources Canada is ‎minimizing the posting of new information online. For this reason, the posting of the department's market commentary has been temporarily suspended." ‎

She declined to say whether the directive came from the department's managers or from the political level, or why the fuel report was deemed sensitive enough to suspend.

She did note that the report was also suspended during the 2011 election (a period during which gasoline prices spiked).

The 2011 reports were published retroactively at a later date, she said, and that will happen again after Oct. 19.

'In the public interest'

But, said Workman, "NRCan is continuing to publish all the data on a weekly basis related to fuel prices and gasoline markets" on another part of the department's website.

That, says economist Robyn Allan, is simply not true.

Allan, who had a long career in public service and is a frequent critic of both the energy companies and current government policy, says Ottawa has deliberately "cut off a flow of vital facts, hoping Canadians won't notice."

After the election was called, says Allan, the department "began to provide different pricing data. They make it so that you cannot see the price gouging."

Allan calls the information now on the government website a "Kafkaesque maze." Nonetheless, she has attempted to extrapolate it, and says that "while margins continued to widen in August, they abated somewhat in September."

Still, she says: "Is big oil taking advantage of Canadian consumers? Absolutely it is."

To give NRCan the benefit of the doubt, it is true that the public service must during elections abide by something called the "caretaker convention," which is laid out on the Privy Council's website.

When he delayed his budget until April 21 because of falling oil prices, Finance Minister Joe Oliver said consumers and businesses would benefit by lower energy costs. But there hasn't been much of a discount at the pumps. (Justin Tang/Canadian Press)

It stipulates that the government is expected to exercise restraint in governing during an election period.

"In short," says the policy, "during an election, a government should restrict itself — in matters of policy, expenditure and appointments — to activity that is: (a) routine, or (b) non-controversial, or (c) urgent and in the public interest.

Which raises the question of how a dry, fact-based biweekly analysis of fuel prices and industry margins could be considered anything but routine or non-controversial, except perhaps by the people whose widening margins are being laid out in excruciating detail, and a government that has aligned itself closely with that very sector.

It also raises the question of why Statistics Canada and the Department of Finance have continued to publish data and analysis during the election — in particular, the declaration of a budget surplus in fiscal 2014-15 that the Conservatives have attempted to use to their advantage.

Are Big Oil's margins a rip-off, as Robyn Allan claims? Different economists have different views on that. And the same trend has taken place in the U.S.

Certainly, the integrated giants have made up for some of their losses in crude prices at the refinery stage and the pump.

What's unquestionably true is that one Canadian government department has decided to make it more difficult for voters to make an informed decision.


Neil Macdonald is a former foreign correspondent and columnist for CBC News who has also worked in newspapers. He speaks English and French fluently, as well as some Arabic.