Canadians just keep on trucking

MADELAINE DROHAN

GLOBE AND MAIL UPDATE

AUGUST 15, 2008 AT 6:47 AM EDT

OTTAWA — According to the headlines, Canada is in the grip of an energy price crisis that is radically altering consumer behaviour as people strive to reduce their energy bills. It's a helluva story. But is it true?

It seems to be happening in the United States. A Wall Street Journal article this month produced a wealth of evidence, some of it anecdotal, showing that Americans were driving less and in smaller cars, buying more energy efficient appliances, and hopping on the bus instead of taking the car for their daily commute. Demand for gasoline was actually falling, the item said, as Americans curbed their thirst for oil.

Yet when you cast your eyes northwards, the picture changes. Canadians are not making the same lifestyle changes as their counterparts to the south, despite widespread media coverage to the contrary. What changes have been made are modest. This has implications for our energy use and environmental policies.

A Statistics Canada study released Thursday indicates that despite all the public griping, private behaviour is stuck in the same old rut. Gas prices have been rising since 2002, it noted, yet Canadian drivers have not cut back on their consumption. Last year we posted our largest annual increase in gas consumption. And in the first five months of 2008, consumption continued to rise, albeit at a modest rate of 0.5 per cent.

As those figures would suggest, we are also driving farther. Mileage per person, which was 10,118 kilometres in 2000, dropped to 9,888 kilometres in 2003. But despite the continuing increase in the price of gasoline, it rose again, to 10,076 kilometres in 2007.

By the end of 2007, heavier, less fuel efficient SUVs, minivans and cross-over vehicles made up 50 per cent of new vehicles sold in Canada, compared with lighter passenger cars. That has changed in the first few months of 2008, with the percentage slipping to 46.2 per cent, which Statscan says, “may reflect the first move by drivers to boost fuel efficiency in response to higher prices.” Americans, in comparison, began making this switch several years ago.

More Canadians are hopping on public transit, but much of the increase is due to population growth rather than drivers deciding to leave the car at home.

The overall picture painted by the study is of a nation largely unmoved by high energy prices. Or, as Philip Cross, chief of economic analysis andco-author of the Statscan study, puts it: “We may stink at the Olympics, but we're world class when it comes to energy consumption.”

The reasons go beyond mere stubbornness to do things differently. The study did not look at consumer attitudes, so it is impossible to say whether being told repeatedly by the federal government that Canada is an “energy superpower” has lulled people into thinking there is no need to change.

In the U.S., which imports more energy than it exports, energy is a matter of national security. This gives consumers a compelling reason to cut their consumption, beyond the effect it will have on their pocketbook.

Structural changes in the Canadian economy play a part. The commodity boom, which began in 2002, has prompted a population increase in rural areas, where the oil, gas and minerals are found. People living in those areas generally don't have access to public transit. They have to drive to work and often require sturdier vehicles to navigate rough country roads.

Drivers in Alberta, Saskatchewan and Newfoundland continue to buy more SUVs, minivans and cross-over vehicles than passenger cars, even as

drivers in Ontario and Quebec are leaning in the other direction. With the three resource-rich provinces currently driving new vehicle sales, this boosts the overall number of heavier vehicles on the road.

There are of course other constraints on reducing energy consumption, such as the vast geography of our country, the inbred car culture, the sprawling nature of our cities, and the hostile winter climate. But other countries, facing similar challenges, have managed to make more progress than Canada in cutting energy use.

It may well be that in this, as in so many other areas, Canadians are just late adopters and the trickle of adjustments now being made will eventually turn into a flood. A dropping dollar may add extra encouragement, as the cushion the higher currency provided against world energy prices, is removed.

The study does undermine the argument – used by those opposed to a national carbon tax – that higher prices will force Canadians to reduce energy use and that there is no need to add a new tax to accomplish this goal. Canadians, unlike Americans, have proved impervious to the last five years of increases. If energy use is to drop, something more is needed.