VANCOUVER (NEWS 1130) – NEWS 1130 and CityNews Vancouver have teamed up with G&F Financial for Around The City, a series of town hall discussions that explores some of the hot button issues impacting our region.
It is an opportunity to join the conversation, as a panel of experts tackles the issue affordability. In the second Around The City, we looked at soaring gas prices, and how people around the region are dealing with fuel costs.
While prices continue to rise and fall throughout the Lower Mainland, Metro Vancouverites have seen some of the highest prices at the pump across the country in recent months.
Having to pay extreme prices can be a “pain in the gas,” and that’s why we ask, “How is Metro Vancouver dealing with soaring prices at the pump?”
Panelist Dr. Werner Antweiler, an economist by trade, is from UBC’s Sauder School of Business. His research areas include international trade and business, environmental economics and management, as well as energy and electricity economics — making him a go-to among many media outlets for his comment on things like the carbon tax.
When it comes to just what exactly is driving prices up around Metro Vancouver, Antweiler said there are a few factors at play.
“It’s a combination of multiple factors,” he said. “First of all, there is the price of crude oil that is the basis for what is getting refined, and that is quite volatile. On top of that, we have a refinery margin that is relatively high in our area because we are a peripheral market, unlike Alberta where oil is coming out of the ground.”
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He notes in B.C., very little oil is refined, and what is is mostly being shipped overseas.
“What’s left is the retail margin and here it’s the competition among the gas stations that matters,” Antweiler added. “Finally, there’s, of course, the tax on top of it all, and that is composed of a federal component, there is a provincial component, and a municipal component.”
All those factors, he said, mean people around the region are paying roughly 50 cents a litre in taxes, including GST.
The refinery margin here, Antweiler added, is extremely volatile as well, driven by supply and demand.
Last week, the federal government re-approved the Trans Mountain pipeline expansion project. So it if it built, will that help ease gas prices among Metro Vancouverites? Antweiler said unfortunately, it would do very little.
“There will be more capacity — most of this capacity will be leased by all companies to transport oil overseas,” he noted, adding it will, however, help resupply stock locally if there are any shortages.
While gas prices have dropped around Metro Vancouver in recent weeks, after it surged past the high $1.60s per litre of regular several weeks ago in many parts of the region, Antweiler believes seeing the price at the pump hit $2 per litre at some point in the future “isn’t out of the question.”
.@NEWS1130 is in #Burnaby for our 2nd #AroundTheCity townhall, “Pain in the Gas: How is #MetroVancouver dealing with soaring prices at the pump?” On our panel, reps from @UBCSauderSchool , @TransLink, @gffg as well as @RanRinBC pic.twitter.com/zNKc7pbElN
— Charmaine de Silva (@char_des) June 25, 2019
While taxes play a role in how much drivers pay at the pump, some of that money goes toward things like building infrastructure and maintaining transit systems.
Jeff Cross, the vice president of policy and planning at TransLink, and his team are responsible for developing the transit authority’s long-term strategy, and the blueprint for investment and management of the region’s transit system. His team also leads other policy initiatives, including mobility and pricing.
“For the TransLink tax — which is 17 cents a litre right now in this region — that actually goes toward actually paying for roads maintenance,” Cross explained. “TransLink funds, actually, that’s something people probably don’t know. With the municipalities, we pay for 2,600 kilometres of the major road network, some of the bridges.”
The 17 cents makes up about 20 per cent of TransLink’s budget of operating revenues per year, Cross added, making it an important source of funding to allow the transit authority to continue to provide people with options.
However, the transit system only goes so far. With the TransLink network not serving areas like the Fraser Valley, transit may not be an option for many people looking to cut down on fuel costs by taking the bus or SkyTrain to work if they live out in places like Abbotsford.
Population growth has been a challenge TransLink has struggled to keep up with.
“For many years we were stuck, we were kind of in I would say a low-growth or not-growing-at-all period while the region was growing rapidly,” Cross explained. “A lot of the growth was happening south of the Fraser, Maple Ridge, in the eastern suburbs, and we didn’t have an opportunity to keep up.”
He notes, however, that TransLink is working on it, and has a number of initiatives in the works to help keep up with the growing demand, especially as gas prices continue to hit families’ budgets.
Budgeting and planning
A key point made by panelists throughout the town hall discussion was the importance of planning and budgeting.
Tyler MacLean is the manager of Wealth Management Partnerships at G&F Financial Group. He has a decade of experience in the financial services industry, and has helped a number of individuals meet their unique financial goals.
He noted budgeting for something that fluctuates as much as gas prices can be difficult.
“Depending on how much of a fixed income you are on,” MacLean said. “A lot of the individuals and members that I deal with are fixed-income pension earners, so they may not have the flexibility to earn more income.”
Many people, he added, have been forced to make tough decisions like moving further away from where they once lived in an effort to find a more affordable lifestyle. However, moving to the suburbs can likely mean you’ll incur extra commuting costs, which adds another element to your family’s budget.
“The way to solve the annual amount to come up with that I find is maybe start to think about it on an annual amount. Think about what your driving is — if you’re commuting everyday to work, or if you’re thinking of an annual vacation that you’re going on — if you can break that down to 12 payments so you can do it month-to-month, it might make it a little easier to kind of stomach the annual cost.”
You’ll also want to always keep in mind that you’ll likely always be paying more for gas than other regions in Metro Vancouver, to help put away a little extra, if you can.
Other tips for planning include finding out where the cheaper prices are, and filling up at certain times of the day and week. (Don’t forget, NEWS 1130’s Gas Tracker is also another resource for you to find out where prices are at throughout the day!)
Tips to save? MacLean stresses the importance of budgeting and planning. How soon could the majority of people drive EVs? Rinaldo says within the next several years. #AroundTheCity
— Hana Mae Nassar (@HanaMaeNassar) June 25, 2019
“In the very short term, of course, the gas stations know when they get the most traffic passing by,” Antweiler explained. “So there are certain times of day when prices will be high, because people find it convenient to stop for gas and when it’s getting late in the evening, prices often go lower because the gas stations would like to have more traffic and people not only buy gas but other goods and services at these stations.”
If you’re in an area that works, then you can also rely on transit as part of your budgeting for certain trips or commutes, the panel suggested.
If you can afford it, Randy Rinaldo with the Electric Vehicle Association, said you may want to get into the low-emission vehicle market.
Rinaldo has been a leader in promoting electric vehicle-use, even convincing former B.C. Premier Christy Clark’s government to allow the non-polluting vehicles to drive in HOV lanes even when they only have one occupant. His B.C. Liberal Party affiliation and relationship with SENSE BC was also crucial in bringing in the “Keep Right Except to Pass” legislation which made lane discipline enforceable.
On misconceptions in BC re: EVs released by @bchydro a couple of weeks ago, Rinaldo says it depends on a person's situation when it comes to whether ppl should be concerned. But he notes there are new models coming out that can go the distance. BG story: https://t.co/YQetxTT0wc https://t.co/7L73AnSk4y
— Hana Mae Nassar (@HanaMaeNassar) June 25, 2019
Just this past weekend, the B.C. government announced it was opening more funding for electric vehicle rebates, but yet, the province actually lowered the rebate from $5,000 to $3,000.
For Rinaldo, this move is the result of unexpected demand for electric vehicles.
“Up until a little while ago, they didn’t have to refill the pot until every year, but now it’s happening over a few weeks with the federal $5,000 incentive which started May 1st, things have just been going crazy,” Rinaldo said. “So now they’re realizing they got balanced budget pressures coming up at the end of the year and other expenses and it’s a little too successful. They want to stretch it out a bit.”
He noted there has been some feedback after the change, but believes despite this fact, that the future is in electric vehicles.
Rinaldo has gone as far as to say he thinks the majority of British Columbian drivers — 60 per cent — will be in an electric vehicle within the next several years.
His family currently has more than one vehicle. Rinaldo said his switch to an electric vehicle has been “nothing short of a miracle.”