Last night I was astounded and thought, “What a difference six months makes”, when I filled up my van with 50 litres of gasoline and it cost me $41.00 . Six months ago that exact same amount would have cost me over $60.00 . The dramatic drop in the price of gasoline in the past few weeks has been astounding and now I wonder whether this is the anomaly or whether what happened in the past year with the price spike is the anomaly. My guess is gasoline prices are going to be manipulated a great deal over the next 10 years and we will all be paying for it.
Remember to check gas prices in Ottawa at Ottawa Gas Prices.
I am not sure what the price of fuel is in Toronto, however, if I make a round trip there, these prices could mean a savings of over $70.00, which is significant, and shocking.
I am now very curious to see what the Consumer Price Index will reflect with this price drop, in the next month or two. What will this deflationary drop of a major consumable do to prices? What will it do to all of those new projects in the Resource Industries, now that gas is cheap? What was the break even price for extracting gas from the tar sands again?
It was Oil Prices All Along
More interestingly there was an article this week that blames sky rocketing oil prices for the economic collapse (in the Financial Post). Jeffrey Rubin from a Chief Economist at the CIBC stated:
“By any benchmark the economic cost of the recent rise in oil prices is nothing short of staggering, a lot more staggering than the impact of plunging housing prices on housing starts and construction jobs. And those energy costs, unlike the massive asset writedowns associated with the housing market crash, were borne largely by Main Street, not Wall Street, in both America and throughout the world.”
Other economists disagree like Frank Atkins from the University of Calgary who said:
“The inconsistency in his story is that he had oil prices going to US$200 and the TSX going over 15,000,” Mr. Atkins said. “He did not have in his original speech oil prices destroying the economy.”
I think I agree with Mr. Rubin somewhat, but I think the housing collapse in the U.S. helped out as much as oil prices to create a “Perfect Economic Apocalyptic Melt Down”.
Congrats President Obama
Interesting results in the Presidential race in America the question most Canadians are going to ask is, is he really going to re-open the North American Free Trade Agreement (NAFTA)? I really hope not, unless it would be to make trade even fee-er. In these interesting economic times, I would think the last thing anyone wants to do is restrict trade in any direction, but then again, if it somehow appears to create American jobs, that may be exactly what happens.
Quebec Election Cometh
Just when you get bored with politics, Quebec his about to announce another election, and will the Separatism Leviathan appear to scare the rest of Canada? Who knows, but if Quebec politics is one thing, it is most certainly not boring! Stay tuned this could get interesting again folks.
Ontario a Have Not Province
For the first time ever Ontario will be receiving equalization payments from the Federal Government and everyone is having a good laugh about it. The more interesting part of the equation is that Newfoundland and Labrador are now a “Have” province, and will be paying into the system more. This certainly is a changing financial landscape here in Canada.