Heather Scoffield and Jennifer MacMillan
Ottawa, Toronto — Globe and Mail Update Last updated on Wednesday, Jul. 22, 2009 08:16AM EDT
Thanks to his Ford Ranger, house painter Richard Gouveia has kept on trucking through the recession, relying on his pickup to get to work from his Toronto-area home and to haul gear from one job to another.
After a slump in business last year, Mr. Gouveia said he's now driving as much as he ever has.
Like many other Canadians, he hasn't cut back on the gas he uses, despite the recession, and in stark contrast to Americans who have changed their driving habits.
Gasoline consumption in Canada hit a record in April as consumers spent $1.839-billion, Statistics Canada said yesterday, using data adjusted to eliminate price changes and seasonal factors.
In the United States, in contrast, gasoline consumption dropped sharply late last year, and has since stabilized at a lower level, according to data from the U.S. Bureau of Economic Analysis. Mileage has also dropped sharply for American drivers.
Gasoline graphic
The Statscan numbers show consumption rose 3.6 per cent in April from a year earlier, although there's no specific data for 2009 to suggest Canadians are driving more or are returning to gas guzzlers.
But the fact that Canadians are doing better than Americans means they're not facing the same pressure to drive less, said Michael Ervin, president of refining and marketing consultancy MJ Ervin & Associates.
“People still have to get to work and pick up groceries,” he said from his Calgary office. “We haven't seen any discernible decline in demand.”
Mr. Ervin also pointed out that gas prices in April were lower than they were last year, despite being on the rise since the beginning of this year. But Canadians haven't been immune to the effects of the global recession and high gas prices.
Last summer, drivers cut back as the slump took hold in Canada and gasoline prices soared.
But consumption climbed again last fall and stabilized during the darkest days of the downturn. And when the labour market slowed its freefall this spring, gasoline consumption resumed its upward track.
Canadian gas use isn't higher across the board – sales of low-sulphur diesel, used by transport trucks, fell 7 per cent in the first four months of 2009 from last year. The drop was steeper in Ontario, which saw a 15-per-cent decline as manufacturers shuttered operations over the past year.
However, Philip Cross, chief economic analyst at Statistics Canada, said the latest gas use numbers are another sign that employment and incomes are not declining as much in Canada as in the U.S.
In Canada, auto sales have also picked up – in May, sales of new motor vehicles rose 1 per cent from April, mainly because of a 2.2-per-cent increase in sales of trucks, vans and buses. Over the past year, car sales have plunged 24 per cent, but truck sales have only fallen 4.6 per cent, Statscan said.
Many Canadians are still driving the compact cars they bought last year and earlier, when gasoline prices were rising, said Benjamin Tal, an economist at CIBC World Markets. However, with their more efficient cars, Canadians are also showing a tendency to drive more as they take advantage of their savings – a paradox of efficiency, he said.
“What you're seeing now is the ‘efficiency paradox' working beautifully,” he said. “You drive more miles because you think you're saving money.”
Fuel efficiency has improved so much that vehicles in Canada use 9.8 litres to travel 100 kilometres on average, the first time that number has fallen below 10 litres.
Auto industry analyst Dennis DesRosiers said he's skeptical that Canadians are spending more time on the road.
“Two-thirds to three-quarters of driving is related to work,” said Mr. DesRosiers, president of DesRosiers Automotive Consultants Inc. in Richmond Hill, Ont. “With these unemployment rates, the total amount of driving is down, absolutely down.”
Bob Bentley of the Freedom Ford dealership in Edmonton said he has seen a growing interest in fuel-efficient cars, but not from his truck-driving customers.
“In rural areas, people have always favoured trucks over cars and that trend hasn't changed,” Mr. Bentley said.
He added that trucks have also been insulated from big fluctuations in sales because of the built-in demand from people who need them for work, such as Mr. Gouveia back in Ontario. With files from reporter
Greg Keenan in Toronto
Ottawa, Toronto — Globe and Mail Update Last updated on Wednesday, Jul. 22, 2009 08:16AM EDT
Thanks to his Ford Ranger, house painter Richard Gouveia has kept on trucking through the recession, relying on his pickup to get to work from his Toronto-area home and to haul gear from one job to another.
After a slump in business last year, Mr. Gouveia said he's now driving as much as he ever has.
Like many other Canadians, he hasn't cut back on the gas he uses, despite the recession, and in stark contrast to Americans who have changed their driving habits.
Gasoline consumption in Canada hit a record in April as consumers spent $1.839-billion, Statistics Canada said yesterday, using data adjusted to eliminate price changes and seasonal factors.
In the United States, in contrast, gasoline consumption dropped sharply late last year, and has since stabilized at a lower level, according to data from the U.S. Bureau of Economic Analysis. Mileage has also dropped sharply for American drivers.
Gasoline graphic
The Statscan numbers show consumption rose 3.6 per cent in April from a year earlier, although there's no specific data for 2009 to suggest Canadians are driving more or are returning to gas guzzlers.
But the fact that Canadians are doing better than Americans means they're not facing the same pressure to drive less, said Michael Ervin, president of refining and marketing consultancy MJ Ervin & Associates.
“People still have to get to work and pick up groceries,” he said from his Calgary office. “We haven't seen any discernible decline in demand.”
Mr. Ervin also pointed out that gas prices in April were lower than they were last year, despite being on the rise since the beginning of this year. But Canadians haven't been immune to the effects of the global recession and high gas prices.
Last summer, drivers cut back as the slump took hold in Canada and gasoline prices soared.
But consumption climbed again last fall and stabilized during the darkest days of the downturn. And when the labour market slowed its freefall this spring, gasoline consumption resumed its upward track.
Canadian gas use isn't higher across the board – sales of low-sulphur diesel, used by transport trucks, fell 7 per cent in the first four months of 2009 from last year. The drop was steeper in Ontario, which saw a 15-per-cent decline as manufacturers shuttered operations over the past year.
However, Philip Cross, chief economic analyst at Statistics Canada, said the latest gas use numbers are another sign that employment and incomes are not declining as much in Canada as in the U.S.
In Canada, auto sales have also picked up – in May, sales of new motor vehicles rose 1 per cent from April, mainly because of a 2.2-per-cent increase in sales of trucks, vans and buses. Over the past year, car sales have plunged 24 per cent, but truck sales have only fallen 4.6 per cent, Statscan said.
Many Canadians are still driving the compact cars they bought last year and earlier, when gasoline prices were rising, said Benjamin Tal, an economist at CIBC World Markets. However, with their more efficient cars, Canadians are also showing a tendency to drive more as they take advantage of their savings – a paradox of efficiency, he said.
“What you're seeing now is the ‘efficiency paradox' working beautifully,” he said. “You drive more miles because you think you're saving money.”
Fuel efficiency has improved so much that vehicles in Canada use 9.8 litres to travel 100 kilometres on average, the first time that number has fallen below 10 litres.
Auto industry analyst Dennis DesRosiers said he's skeptical that Canadians are spending more time on the road.
“Two-thirds to three-quarters of driving is related to work,” said Mr. DesRosiers, president of DesRosiers Automotive Consultants Inc. in Richmond Hill, Ont. “With these unemployment rates, the total amount of driving is down, absolutely down.”
Bob Bentley of the Freedom Ford dealership in Edmonton said he has seen a growing interest in fuel-efficient cars, but not from his truck-driving customers.
“In rural areas, people have always favoured trucks over cars and that trend hasn't changed,” Mr. Bentley said.
He added that trucks have also been insulated from big fluctuations in sales because of the built-in demand from people who need them for work, such as Mr. Gouveia back in Ontario. With files from reporter
Greg Keenan in Toronto
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