High oil prices are troubling and may rise further, but they will not reach the heights forecast by some doomsayers, according to a web poll of 133 Canadian CEOs and other business leaders conducted by COMPAS Inc.
Most executives predict the price of oil will increase to about US$113 per barrel over the next two years — a far cry from the US$150 predicted by some analysts. (When business leaders were asked the same question last July, they predicted oil prices would rise to just US$79 per barrel.)
More executives are worried about the negative impact those high oil prices will have on industry, the economy and consumers, the poll revealed. Ultimately, it will be industry that will bear the brunt of the higher energy costs, according to the survey. “Oil companies [are paying] huge taxes,” wrote one respondent. “Governments have had as much benefit from that as the oil companies and, indirectly, so have taxpayers through more and better programs.”
The business leaders want government to cut taxes on fuel-efficient vehicles and increase subsidies to local transit systems. Increasing transit funding saw the largest bump in support with almost 64% of the respondents urging government to give more. That compares to just 41% who supported that option in May 2004. “Hardly any city in Canada has an efficacious public transit system [compared to] London or New York where…white collar workers walk and/or use public transit,” one respondent noted.
Respondents mostly rejected options such as cutting gas taxes or “doing nothing” and hoping the problem will go away. And while some worry government interference will ultimately make Canadians less energy efficient, others recommend that Ottawa step in. Wrote one: “The government can have a real impact by supporting those companies developing new technology used for building renewable energy sources.”