Canadian Labour Congress

Canadian Labour Congress

September 09, 2005 14:29 ET

Oil & Gas Prices: Canada Needs a Plan

Attention: Assignment Editor, Business/Financial Editor, City Editor, News Editor, Government/Political Affairs Editor OTTAWA--(CCNMatthews - Sept. 9, 2005) - The Canadian Labour Congress calls on the federal government to develop a clear action plan to provide working families with relief from the impacts of higher energy prices - and sustain economic growth in the country.

"Canadians need a plan because they are hurting and they don't want the economy to slow down sharply over the rest of the year," says Ken Georgetti, president of the Canadian Labour Congress who also expressed disappointment that the Bank of Canada hiked interest rates Wednesday.

Georgetti proposes that the federal government introduce a temporary excess profits tax on the oil and gas industry for one year, with proceeds directed to a cut in federal taxes on consumer energy purchases; an increase in GST credits for low- income families; and higher investment in public transit and renewable energy programs.

Energy prices affecting consumers were soaring even before the impacts of Hurricane Katrina were felt, up 9% in July, 2005 compared to a year earlier. The impact of Hurricane Katrina on gasoline, natural gas and fuel oil prices has been dramatic, and nobody expects a quick return to the prices of just last month. On top of sky-high gasoline prices, families will face much higher natural gas and fuel prices this coming Winter. Natural gas prices could very easily be double the level of one year ago, increasing home heating costs dramatically.

"It is clear that there will be a major negative impact on the living standards of Canadian working families and retirees over the coming months, especially those on limited incomes," says Georgetti. "This will in turn have a depressing impact on many sectors of the economy, such as tourism and retail trade."

Higher energy prices will also increase costs for the hard-pressed Canadian manufacturing sector, which is also being forced to adjust to an even higher Canadian dollar.

Meanwhile, soaring energy prices have given a massive boost to the oil and gas industry. Even before Hurricane Katrina, operating profits had almost doubled to about $12 Billion per year since mid 2002. Energy stocks as measured by the energy component of the S&P/TSX index have jumped by 50% this year.

"It is time to share the pain and the gain from the dramatic surge in energy prices," says Georgetti.

The Canadian Labour Congress, the national voice of the labour movement, represents 3 million Canadian workers. The CLC brings together Canada's national and international unions along with the provincial and territorial federations of labour and 137 district labour councils. Web site: www.canadianlabour.ca /For further information: Jean Wolff, 613-526-7431 and 613-878-6040/ IN: ECONOMY, FINANCE, LABOUR, POLITICS, SOCIAL

Contact Information

  • Jeff Atkinson, Canadian Labour Congress
    Primary Phone: 613-526-7425
    Secondary Phone: 613-863-1413
    E-mail: communications@clc-ctc.ca