How Canada ranks: ‘Cheap gas and little pain at the pump’ (Don’t laugh)

These are stories Report on Business is following Wednesday, Feb. 13, 2013.

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Pain at the pump
Driving into work this morning, I noticed the price at the gas pump was $1.299 and thought, Ouch.

Then I took a look at a survey of 60 countries published today by Bloomberg and felt (a bit) better.

Canada is ranked in the Bloomberg survey at 44, in terms of most expensive at the pump, and 53 in terms of "pain at the pump," which looks at how much of average daily income it would take to buy one gallon of regular unleaded.

Bloomberg measured prices between Jan. 3 and Jan. 18, and translated them into the cost per gallon in U.S. dollars.

At $4.76 a gallon, Canada comes in just ahead of China, at $4.74 and ranked number 45. However, China is way up there, at No. 9, on the pain-at-the-pump measure.

"With an average daily income of $18, the share of a day's wages needed to buy a gallon of gas in China is 26 per cent," Bloomberg said.

"While the country's total consumption is formidable, the average person uses just 0.05 gallon a day."

Compare that to Canada, where oil abounds and there's "cheap gas and little pain at the pump," according to Bloomberg. (That "cheap gas" comment is theirs, not mine.)

"Canada is the second-biggest country by area, after Russia, and is thinly populated," Bloomberg said.

"That makes for long transportation routes, with additional costs that trickle through the economy. Canadians spend 3.1 per cent of their income, on average, fueling up. The average daily income is $143. The share of a day's wages needed to buy a gallon of gas is 3.3 per cent."

Topping the list is Turkey, where the cost is $9.89 and which ranks by pain at the pump as No. 7.

"The country has one of the highest gas taxes, which accounts for more than half of the cost to fuel up," Bloomberg said.

Least expensive, at just 6 cents (yes, 6 cents), is Venezuela, where gas is heavily subsidized and which also sits at the bottom in terms of pain at the pump.

"Venezuela is a poor country that burns through gas like a rich one," Bloomberg said, noting, too, the 1989 riots when the government moved to scale back subsidization.

"The cost of filling up the 39-gallon tank of a Chevrolet Suburban in Venezuela is $2.34, compared with $128.31 in the U.S. and $385.71 in Turkey," it added.

Bloomberg: Highest and cheapest gas prices by country

Obama proposes wage hike
President Barack Obama says his proposal to boost the U.S. federal minimum wage to $9 an hour would lift millions of Americans out of poverty without killing off jobs.

In his State of the Union Address last night, the president made an increase from the current $7.25, and indexed to inflation, one of the centrepieces of his economic program going forward.

He proposes hiking the minimum level in stages to reach his target by 2015, which the White House says would simply bring the inflation-adjusted minimum back to the 1981 level, which was $3.35.

"In the wealthiest nation on Earth, no one who works full time should have to live in poverty," The White House said.

"Raising the minimum wage and making sure it keeps pace with the cost of living means a raise for 15 million workers, the vast majority of whom are adults, and indirect increases for millions more, lifting many out of poverty," it said in a fact sheet that accompanied the address.

"A range of economic studies show that modestly raising the minimum wage increases earnings without reducing overall employment, and in fact employers may see a more stable work force due to reduced turnover and a customer base with more money to spend," it added.

Bank of Nova Scotia economist Derek Holt called it a "broad but unfocused" measure.

According to the U.S. Department of Labor, five states, largely in the south, have no minimum wage requirement. Minimum wages are lower than the federal level in four states, higher in 19 and the same in 22. The minimum is also linked to inflation in 10 states.

They range from a low of $5.15 in Georgia and Wyoming to a high of $9.19 in Washington.

In states whose minimums are below the federal level, the higher wage rules. Similarly, the highest level rules in states whose minimums are higher.

I support the president's proposal, but some see higher minimum wages as job-killers, which obviously the United States could ill afford, and something that actually hurts unskilled workers.

Well-known U.S. economist Justin Wolfers, however, notes that Australia's minimum wage is $15.96 (Australian), which translates to $16.50 (U.S.) and that the country boasts a jobless rate of just 5.4 per cent.

"It would help millions of people striving to enter the middle class and would strengthen the economy by increasing workers' purchasing power," added Neera Tanden, president of the research group Center for American Progress.

"Increasing the minimum wage would be especially helpful to women, who comprise more than 62 per cent of minimum-wage workers. This is a crucial step to ensure the economy works for all Americans and that we grow together, not grow apart."

This is actually a step backward for the president, whose original proposal during his first campaign was to bring the minimum to $9.50 by 2011. Nothing ever came of that.

(For a look at minimum wage across the OECD, see accompanying chart.)

Pressure on Canada

The decision by the United States and Europe to pursue one of the largest and most sweeping free trade agreements ever attempted ramps up pressure on Canada to finish its own deal with the European Union, The Globe and Mail's Bertrand Marotte and Barrie McKenna report.

After nearly three years of negotiations, Canada and the EU are very close to reaching a final deal. But a number of politically sensitive issues remain unresolved, including access to Europe for Canadian beef and cars, as well as how much duty-free cheese the Europeans will be able to sell here.

Experts said both sides have good reasons to get a deal quickly, before formal negotiations between the U.S. and EU begin, as expected, in June.

U.S.-EU trade initiative ramps up pressure on Canada

Juicing up
You may soon be able to get a real jolt with your morning coffee.
Tim Hortons Inc. today announced a pilot project that enables drivers of electric vehicles to charge up at an outlet in Oakville, Ont.

The pilot is with the Town of Oakville and Oakville Hydro, along with a plug-in thingy from Ford Motor Co. of Canada.

"The electric vehicle infrastructure is in its infancy and we see a potential opportunity for Tim Hortons to help make a true difference by expanding that infrastructure in Canada ," said the coffee-and-doughnut chain's senior director of international design and building standards, Paulo Ferreira.

"At this stage, the goal for us is to explore and understand the technology, to see how it can work at our restaurants and how we can, in turn, support our guests who choose to go electric."

And finally ...
Somehow you just knew this one was coming: The Financial Times reports today that one of the abattoirs at the heart of Europe's horsemeat-in-lasagna scandal is in Transylvania.

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