As the price of gas continues to fluctuate, drivers are feeling the pinch, and they're looking for someone to blame — be it the HST, the energy companies or political unrest in the Middle East. Many motorists are also calling for the government to step in and provide relief, prompting Ottawa to push for more transparency on how those skyrocketing prices are set. Meanwhile, the Ontario government claims that if it reduces prices at the pump through tax decreases, energy companies will just jump in and inflate prices to fill the gap.
According to energy experts, gas prices won't return to historic lows anytime soon. And those of us living in Ontario are even more vulnerable to price shifts because almost every drop of oil is imported; $13 billion leaves the province every year to bring in gasoline. Ontarians need long-term solutions to protect us from price hikes by reducing how much we pump — not just how much we pay.
Last year, in the wake of the BP disaster, Pembina conducted a study that identified five actions the Ontario government could take right now to reduce gasoline consumption by 25 per cent in the next 20 years.
Moving "the Big Move" forward
For starters, the full implementation of Metrolinx's transit plan — dubbed "the Big Move" — would save 5 million barrels of oil per year. For this to happen, we need a funding strategy to ensure the transit lines are actually built. Clear political commitments are also required to ensure that parts of the plan are not dismantled by municipal governments that oppose sensible things like light rail transit, or successive provincial governments that favour building highways — both of which would lock more of the region into ongoing dependence on cars and gasoline. Critical investment is needed from the federal government — preferably via a national public transit strategy — so cities can implement long-term transit plans with certainty, rather than dealing with project-by-project funding as is currently the case.
Moreover, if the complaints are true that higher gas prices mean bigger HST windfalls for the government, perhaps that revenue should be reinvested in Ontario's future by funding the Metrolinx plan.
More choices for commuters
Over the next decade, another 4 million barrels per year could be averted by introducing a suite of "commuter choice" policies in the Greater Toronto Area (GTA) — ranging from pay-as-you-drive insurance and live-where-you-work mortgages, to employer-driven programs such as buying back parking spaces. And the federal government could help by providing a tax exemption for employee workplace-based transit passes. In the U.S., for instance, a federal representative is proposing a "Commuter Relief Act" to expand tax credits for cycling, walking and carpooling as well as transit.
Where we live
It's not only about how we get to work, but also about how far we have to drive. A house with a big yard in the suburbs might seem like a money saver at the time because houses are often cheaper outside the city, but factor in gas prices and — just as important — the time wasted stuck in traffic, and those savings may not stack up against the overall hit to both finances and quality of life.
A good start to tackling this problem is the Ontario government's "Places to Grow" plan for the Greater Golden Horseshoe region, which aims to locate future growth in more compact community hubs and zones that are already developed. According to our modelling, if the government follows through on the plan without weakening it, the average driver in the region will spend less time behind the wheel 20 years from now than they do today.
But there's one big downside: the total amount of driving and gas consumption will increase substantially, because more than 3 million more people are expected to move to the region, adding almost 2 million more vehicles to the roads. The "Places to Grow" plan needs to be strengthened to reverse this trend and locate more future growth closer to transit and less in greenfields. Our modelling shows that very moderate improvements to the plan's targets could actually reduce total driving in 20 years and save 1.2 million barrels of oil per year.
What we drive
These longer-term solutions may not offer much comfort to commuters in the GTA, who drive on average 45 minutes to work and the same back every day, with few other viable options. So for those who have to drive, infrastructure and actions to encourage companies to manufacture more fuel-efficient and electric vehicles (and encourage Ontarians to purchase them) can go a long way — savings of 5 million barrels of oil by 2020. Incentives for fleets and taxis to go electric will get greater mileage than short-term relief.
The key to long-term relief
Instead of provincial and federal subsidies to energy companies and short-term bailouts of auto companies, consider the economic benefits of investing in sustainable transportation infrastructure, manufacturing and technology. For instance, our analysis of the federal government's infrastructure stimulus spending found that devoting 100 per cent of the money — $16 billion in total — to clean energy would have created more than 2.5 times the number of jobs (238,000 instead of the 84,000 the government created by investing just over eight per cent of the infrastructure funding in this area).
Temporarily reducing gas prices without addressing the bigger issues behind our growing thirst for fuel will keep us spinning our wheels. Pointing fingers at the enormous profits of the same energy companies Canada continues to subsidize is not the solution.
It's time for some serious "nozzle-gazing" by all levels of government — a look inward at the reasons why our transportation system makes us so vulnerable to wild prices at the pump, and the solutions that offer long-term relief by reducing our overall consumption.
