Canada column for Sunday, Sept. 3/17
THE CANADIAN REPORT
(c) By Jim Fox
Speculators, not Hurricane Harvey or oil shortages, are being blamed for Canadian gasoline prices soaring.
Prices jumped nearly 10 cents a liter (38 cents a U.S. gallon) since Harvey roared ashore in Texas and more big jumps are happening this weekend.
Gas prices jumped to $1.23 a liter in Ontario and will rise another 9 cents this weekend, said Dan McTeague of Gasbuddy.com.
Montreal drivers will be paying as much as $1.42 per liter ($5.39 a U.S. gallon), he added.
Price watchers say things will remain high until refineries on the U.S. Gulf Coast return to normal operation as flood waters recede and damage is assessed.
With inventories declining and wholesale prices rising, there will be a bigger impact in Eastern Canada more than in the west because that is farther from the problems.
Canadians have had to pay about 75 cents more a U.S. gallon than a week ago in Toronto while the typical increase in affected states is only about 20 cents, McTeague said.
“We don’t have enough supply in Canada . . . we’re just not in a position where we can sell spare capacity,” he said.
Canada is pushing for a deal by the end of the year in the North American Free Trade Agreement talks.
Prime Minister Justin Trudeau and U.S. President Donald Trump both agreed on that during a phone conversation made by Canada’s leader to discuss the devastation from the hurricane.
The second round of NAFTA negotiations began Friday in Mexico for the three-country agreement for which the U.S. is demanding a better deal.
“President Trump thanked Prime Minister Trudeau and the people of Canada for their offer of assistance (in Texas and Louisiana) and underscored the close ties between our two nations,” said the White House statement about the call.
News in brief:
- Canada's economy has expanded at its fastest annualized rate in six years, leading to speculation of another Bank of Canada interest rate increase by year’s end. Statistics Canada reported an annualized rate of expansion of 4.5 percent, with the Canadian dollar topping 80 cents U.S., the best for the year. The bank’s key rate rose 0.25 percent in July to 0.75, the first increase in nearly seven years.
- The Toronto-Dominion Bank reported a $2.77-billion profit for its third-quarter, up 17 percent from a year ago. The bank cited strong performance at its retail operations in Canada and the United States. T-D is the last of Canada’s big banks to report earnings, with all six outperforming expectations and having a strong performance in their Canadian operations.
Facts and figures:
Canada’s dollar is higher at 80.67 cents U.S. while the U.S. dollar returns $1.239 in Canadian funds before exchange fees.
The Bank of Canada’s key interest rate is steady at 0.75 percent while the prime-lending rate is 2.95 percent.
Stock markets are higher, with the Toronto exchange index at 15,191 points while the TSX Venture index is 778 points.
The average price for gas in Canada is higher at $1.195 a liter or $4.54 (Canadian) for a U.S. gallon.
Lotto 6/49: (Aug. 30) 21, 23, 31, 33, 36 and 38; bonus 9. (Aug. 26) 5, 7, 32, 38, 40 and 46; bonus 47. Lotto Max (Aug. 25) 18, 19, 23, 34, 39, 43 and 46; bonus 1.
- Ontario Premier Kathleen Wynne is rejecting a call to raise the sales tax by 1 percent to 14 percent when combined with the federal levy. The Association of Municipalities of Ontario wants the “harmonized” sales tax to rise to pay for infrastructure improvements such as roads, sewers and arenas. Facing re-election next year, Wynne said cities should instead find new sources of revenue to make up for any gaps.
- The National Energy Board has approved Trans Mountain pipeline’s project to expand its Westridge Marine Terminal in Burnaby, British Columbia. It will allow the loading of three tankers at once and is part of a $7.4-billion project to triple the capacity of an Alberta-to-B.C. pipeline and increase tanker traffic in the Vancouver area.
Jim Fox can be reached at firstname.lastname@example.org