Motorists who battle Toronto traffic will probably not see a reduction in gridlock this summer due to the high cost of Canadian gas, officials say.
By
msnbc.com contributor
updated 5/22/2001 7:21:36 AM ET 2001-05-22T11:21:36

While some tourist promoters worry the high price of gas could dampen the number of summer visitors, officials at Toronto Tourism say the more it costs to fill up a tank, the better their business.

Hittin' the road
“I THINK it will keep (Canadian) travelers in Canada, and more will come to Toronto instead of driving to the U.S.,” said Toronto Tourism spokeswoman Ellen Flowers. “And the weak Canadian dollar will bring Americans and Europeans to Canada.”

Indeed, while the price of gas in Toronto is about 80 Canadian cents per liter, which works out to just under 2 U.S. dollars per gallon — no great bargain — the American buck still goes a long way in Canada. That’s because, with the current exchange rate, the U.S. dollar is worth about $1.50 Canadian. And, with Canadian prices roughly equal to those in the U.S., the greenback stretches a long way past the gas pump in Canada.

Toronto is Canada’s number one tourist destination, with its vast array of multicultural festivals and restaurants and summer events including two jazz festivals, a comedy festival, a fringe theatre festival, the West Indian Caribana festival, authors festival and street fairs. More than 16 million people visit the city every year, Flowers said. And of those, more than 3.5 million are from south of the border.

Along with its big-city attractions, Toronto also boasts such a low crime rate and clean streets that actor Peter Ustinov once quipped that Toronto seemed like “New York run by the Swiss.”

Indeed, the very thought that high gas prices might impact on tourism came as a surprise to many Toronto tourist sites.

“I haven’t really thought about it,” said Francisco Alvarez, manager of media relations for Toronto’s Royal Ontario Museum. “In fact, we’re expecting a pretty good summer. The first quarter of this year has been better than the first quarter of 2000, so we’re relatively optimistic.”

Pain at the pump may be easing

Over on Canada’s east coast, which has some of the country’s highest gas prices, Cheryl Mouran, marketing administrator for Cape Breton Island Tourism in Nova Scotia, said gas prices might have some effect on travel to the island, but it may also deter Cape Bretoners from traveling to other parts of the Canadian Maritimes.

The price of gas on the island is about $2 a gallon (U.S. dollars), she explained, but in neighboring New Brunswick with its higher taxes, gas prices were topping $2.20 a gallon.

Mouran said the unseasonably long winter, which delayed the opening of many of the island’s resorts and golf courses, would have more of an effect on local businesses than the price of gas.

While Toronto expects gasoline’s topping off price to bring U.S. visitors north, in bordering New York State, the expectation is a good year for tourism even if there are fewer Canadians in the mix.

InsertArt(1025630)Eric Scheffel, the state’s tourism spokesman, said they have seen six consecutive years of increases in tourist traffic and the jobs that service them.

“We have world class destinations, so I don’t see why that would change,” he said.

Indeed, from 1995-1999, the last year for which the state has available figures, tourist traffic to New York State has jumped from 103.5 million to 126.4 million.

“We get a lot of visitors from neighboring states, and the U.S. northeast is a densely populated area so visiting from there doesn’t involve a lot of travel,” he explained.

The falling value of the Canadian dollar compared to the U.S. buck has dampened some Canadian travel, though. In 1996, more than 2.6 million Canadians visited the Empire State, but since then that number has dipped to about 2.2 million.

However, Scheffel said with gateways to New York running from Niagara Falls to the state’s border with Quebec, “I don’t see any major change” in the number of Canadians visiting New York.

As in the U.S., where gas prices vary from state to state, and even municipality to municipality, Canadian gas prices fluctuate based on local taxes and competition.

Europe’s tolerant motorists

In Canada, gas prices include two national taxes - an excise tax on all fuels and an 8 percent sales tax - as well as a specific gas consumption tax levied by all provinces and territories which varies from a low of less than one U.S. cent per gallon in the northern Yukon Territories to about 3 cents a gallon in Newfoundland.

Additionally, some cities like Vancouver, Victoria and Montreal, add on a local transit tax, and the province of Quebec adds its sales tax onto the price.

“Overall, Canadian consumers are paying a reasonable price for gas which, exclusive of taxes which make up an average 42 percent of the price, are as low or lower than any in the world,” said Peter Dyne of the Consumers Association of Canada.

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Because of lower taxes, Alberta, the Texas of Canada, “consistently has the lowest gas prices in the country,” said Michael Ervin of M.J. Ervin Consulting Company.

While some people claim there is more competition in gas pricing in the U.S., while others say Canadian prices are more flexible, Canadian cities like Toronto are generally viewed as more likely to compete in penny pricing wars than rural areas.

“Canadians are very concerned with price and will change outlets for as little as 2/10s of a cent difference in price,” he explained.

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