The Current - How the energy crisis is hurting Canadians

Episode Date: April 15, 2026

From trucking, to farming, to filling up your tank. The blockade of the Strait of Hormuz has sent oil prices skyrocketing. Murray Mullen is the senior executive officer and chairman of Mullen Group, a logistics and trucking company based in Alberta. Plus, Reid Southwick, the Western Bureau Chief for the Financial Post, about the wider pinch this country is feeling.

Hi, Steve Patterson here, host of The Debaters. You know, the show where Canada's top comedians go head to head on topics like, should everyone join a book club? This is kind of like our own version of Canada reads, except there's more arguing by people who've read less books. And I'm clearly not, Ali Hassan. Anyway, book some time and listen to this week's episode of The Debaters, wherever you get your podcasts. If you can pry yourself away from that book you're reading. This is a CBC podcast. Hello, I'm Matt Galloway, and this is the current podcast. I was driving a diesel truck, and I had to get rid of it. I can't afford it. The cost of the lease on the truck and the insurance and then now the fuel, somewhere around $600 to $700 a month, you know, just so I can get to work, to make money, to pay,

so I can get to work, to make money to pay so I can get to work and make money. That is a familiar cycle for many Canadians these days. The blockade of the Strait of Hormuz continues, fueling the worldwide energy crisis started by the U.S.-Israel-Iran war. Gas and diesel prices have skyrocketed. British Columbia is seeing some of the highest prices in the country, over $2 a liter for gas in most places in that province. Our producer, Ann Penman, spoke with people at a gas station in Vancouver.

It's crazy. It's just like, my goodness me, diesel's worse than gas right now. I just paid $180 to fuel a little diesel pickup. Don't fill a tank anymore. I can't really afford to fuel the tank. So it's kind of pay as you go at the moment with these prices, but hopefully it comes down. Summer plans are going to have to be reassessed, I think. We are in very unusual times, and not in my lifetime. And I'm almost 80 years old, and I still, you know, I've seen nothing like this.

Yesterday, the Prime Minister, Mark Carney cut the federal fuel excise tax for five months, dropping the cost of a liter of gas by 10 cents and 4 cents for diesel. The International Monetary Fund has also said yesterday that the war has had abruptly darkening effects on the global economic outlook. We'll speak in about an hour with somebody who knows all about what that could mean, the former governor of the Bank of Canada, Stephen Polos, about what this might mean for our economy and how we might think about tackling it. Canadian businesses and households are feeling that pinch from the pumps to the grocery store and beyond, and we'll hear in just a moment about how that energy crisis is playing out across this country.

But first, we're joined by Murray Mullen. He is senior executive officer and chairman of the Mullen Group. It's a logistics and trucking company that is based in Alberta. Murray, good morning. Hey, Matt, how are you? I'm well, thanks. Diesel is up right across this country, over $2 a liter in just about every part of Canada. Your company has a fleet of, what, 3,000 trucks?

Yeah, you know, we've got right across the country. We've got through 44 companies. We operate a big fleet. They're not all company trucks. A lot of them are independent contractors, Matt, so they're feeling the bench, too. And, you know, it's a stressful time for sure right now. And, you know, we have to manage through it,

just like all the listeners on your line today. Everybody's got to manage through this situation because there's no easy fixes. When you take a look at your trucks, I'd read that fuel is something like 25 to 30, of your total costs. So what does that mean for the bottom line if the cost of fuel goes up? Well, it's the delta, right, man? I mean, it's increased by, you know, upwards of 30 cents a liter, sometimes a little bit more than that. So when you're operating on the margin and then just as

as the average individual is today, you're operating on the margin, any increase in anything is, you know, can break the camel's back and really cause problems. So now for us, I'll be honest with you, in our industry, and we've had a fuel surcharge for 25 years in our industry. So what we do is if the price of diesel, price of gasoline goes up, we notify our customers that we'll be implementing a fuel surcharge. You've seen the airlines and everybody else that does that to recoup that cost. That's always lagging. You can't put in a fuel surcharge in anticipation of higher costs. it's always in response to higher costs.

But we have that mechanism. The issue that you've got is, you know, we raise the prices and then that goes through the system and then it finally gets through to the, you know, to the consumer. At what point can you not pass those costs along? At what point do you have to think about whether consumers, and it's not to say that you can't eat that, but that they can't eat it either,

that they won't pay the addition. cost because they simply can't stomach it. Yeah, yeah. I mean, that's the, that's the issue that we're all, we're all contemplating that is that I can't, you know, we're operating on the margin now, all of our operators and everybody. It's a very competitive world today. And, you know, so we have to, we pass them on. If the customer can't take it and then if the end consumer can't take it, then that's going to slow economic growth. And then, of course, our trucks don't move.

But, you know, and then just the ripple effect from that. But, you know, we should be, you know, put this in perspective. It's not the first time that fuel prices have spiked up. They're actually higher in 2022 than they are today. So, but the issue that we have today is everybody's on, you know, I don't want to say life support, but, you know, it's difficult on people. Everybody stretched a little bit and, you know, costs and inflation have caught up throughout the whole system. So it's just, this one hurts.

This one stings a little bit more than previous increases that typically happen when the economy is strong and there's strong demand for oil. In this case, it's a supply response, not a demand response. And that means the economy is probably vulnerable. We saw this yesterday, this announcement coming from the federal. government that the federal excise tax on gas and diesel for five months will be suspended. What is that going to do to, again, those fuel costs that are, as I said, 25 to 30 percent of your total costs? Yeah, so that will mean that we do not have to either eat that additional cost or that we don't,

our fuel surcharge would not be as high. What that is really designed for, I think, Matt, to be honestly, is really for the average individual for the average consumer that's kind of on, you know, struggling today. And I think that, you know, I think you've got to lower taxes so that you put more more money into people's pockets and those kind of things until this, hopefully this gets resolved. But, you know, that's another issue. I don't, could take a while. What else do you want to see from the government right now? And it's not just the federal government is provincial governments as well. You know, man, I honestly, I don't think that there's much.

I think that was the appropriate kind of response to help out the average Canadian today that's struggling a bit. And, you know, this is, you know, this is just an issue, the global issue that has to get resolved. And, you know, Canadians, but a lot of people in the world are, you know, are hurt by this. And you've mentioned that early on in your call here. And I don't know if there's much they can do. I think it's up to individuals. You've got to probably slow down a little bit. Conserve your fuel.

We're doing that with all of our drivers, Matt. We ask you to slow down a bit. Take your foot off the pedal a bit. Let's conserve. Let's get the best fuel mileage we can. Let's make sure we don't idle the trucks as much. We just got to be more practical and spot on these days than what we have been because this one stings. But one of the things you said, I have to let you go.

But one of the things you said is that you worry that there are downstream effects to this, right? That if people pull back a little bit, they think that things are going to be more expensive, that they'll pull back. Then perhaps that's not good for your industry, that people will be shipping fewer goods, and then the industry itself takes ahead. That's the biggest medium to long-term impact that we're afraid of, is that, you know, there's a short-term quick response, which is high fuel prices, but the longer one is this one, you know, this one hurts the economy more at a time that the economy is somewhat fragile anyhow.

Just I say to you, this is the timing of this one stinks more than the other ones. Murray, best of luck. Good to speak with you. Thank you very much. Thanks, man. Have a great day. And you, Murray Mullen is the senior executive officer and chairman of the Mullen group. He was in Calgary. Hi, Steve Patterson here, host of The Debaters. You know, the show where Canada's top comedians go head to head on topics like, should everyone join a book club? This is kind of like our own version of Canada reads,

except there's more arguing by people who've read less books, and I'm clearly not, Ali Hassan. Anyway, book some time and listen to this week's episode of The Debaters, wherever you get your podcasts. If you can pry yourself away from that book, you're reading. We're announcing today the Canada's new government will temporarily suspend the federal fuel excise tax from next Monday until Labor Day.

We're also removing the fuel excise tax on aviation fuels. This will remove up to 10 cents per liter on gasoline and 4 cents per liter on diesel fuel. Combined with our earlier elimination of the consumer carbon tax, our government will have reduced fuel prices on gas by up to 28 cents per liter. That's real relief for you and your family at the end of the day. It's the Prime Minister announcing his government's relief

efforts removing that fuel excise tax temporarily on gas and diesel. Reid Southwick is the Western Bureau chief for the Financial Post. He's in Calgary as well. Reid, good morning to you. Hey, good morning, Matt. You just put out this piece on the global energy crisis and how it's impacting Canadians from coast to coast to coast. Walk us through some of that.

Where are we seeing price increases already? Yeah, I mean, just easily the clearest, most visible way. are the higher fuel cost like you've been talking about with your previous guests. And as you say most visible, you drive or you walk past it, you see the price going up on the sign outside the gas station. Yeah, yeah, and you feel it, right? And so, and this is cutting across, you know, across the country. So, you know, we talked to this 20-something in New Brunswick, driving less, you know, thinking about maybe selling his SUV because it's really, it's so tough on gas. We also talked to a Calgarian on a fixed income who, you know, drives a friend to work most

days. And so, you know, he's having to cut back on his, on his grocery budget. You know, he's not eating the kind of food that he loves the most now, just because these fuel costs are having a real effect already. And so, you know, very often during these crises, it's many Canadians cannot afford these higher costs. And they tend to hurt, you know, these demographics the most, you know, young people, folks on fixed incomes, that sort of thing. And so, you know, it's, it's it's going to have a different effect depending on where you live. I mean, there is, it might be tempting to think, like, you know, spiking energy prices, great for oil and gas, bad for everybody else. But the truth is a little more complicated than that. I mean, look, no doubt high oil

prices are going to bring a windfall to the oil patch. We certainly saw that in, and during the last prices, and that when Russia invaded Ukraine, a huge amount of corporate. profits, record profits in the industry. But this is why that story is a little bit more complicated. So, you know, I talk to a heavy equipment operator in the oil sands in Alberta. And look, if there's any pocket of Canada that's bracing for an economic liftoff from high fuel prices, it's the oil sands, right? But, you know, this is the growth engine of the industry. But, you know, this dozer operator I talked to, she says, you know, this run-up in prices, it's been humbling for folks like her up in Fort Mac, right? They're having to look at their own expenses.

maybe they're not traveling as much this summer. This woman, she plans to stick it out in Alberta. And then, you know, one of my colleagues talked to a number of oil patch CEOs, and some of them said, look, you know, we actually prefer to have oil prices supported by strong demand. Because if prices shoot high and stay high, like you talked about with your previous guest, Mr. Mullen, the trucker, I mean, it's not necessarily good for business, right? People stop buying if there is this. supply shock without a sustained amount of demand. So I think it's fair to say there is a concern about

the economic impact of this crisis, really from the person at the pump to the people in charge of production. It's interesting. Just reading this morning, CBC is reporting that at least four major food suppliers are adding fuel surcharges to their delivery. So you'll see that in everything from poultry to fruits and vegetables that might be delivered to your grocery store. Amazon, as a Friday is adding a fuel surcharge as well. That ripple effect is going to be felt far and wide through the economy, right? For sure. And look, man, as a father of two young girls, that sucks. But it's also like as a business reporter, as somebody who covers these markets, it just, it makes sense. Like, and like you talked about with Mr. Mullen, there are, the fuel surcharges

are going up throughout the economy. Like, we talked to a tow truck. driver who's also imposing a fuel surcharge and they feel bad doing it. They say, look, it's an uncomfortable conversation when they have that conversation with their customers, but it's the reality, you know, they're just, they're out there just trying to make a living. And so, you know, it is a major concern. And I imagine you're going to talk about this with Mr. Polos later on. But like, you know, the last time we had a shock like this, we were coming out of the pandemic, right? And it was at a time of high demand. There was a lot of people looking to burn some money after getting out of their COVID cocoons, so to speak, and they had a bit of money to burn for the

most part. But we're in a very different outlook right now. So it's, this is, yeah, it's going to be painful. You looked at forecasting from the group that administers pension funds in Alberta. What did you learn about what might happen to pension plans and investments if these oil prices stay high. Right. Yeah. And so I think that's that's also a very similar to the kind of theme that we're talking about here. And that is that if there is a sustained increase in these fuel costs, that the, that and this Latin prices stay high for longer, that's going to have a very similar effect on, that's going to have a horrible effect on. on the economy and it's going to slow things down to the point where it's going to outweigh

any gains from on their energy stocks. So clearly this is a lift for for energy companies and for the oil patch in general, but their view, their view from, at least from AIMCO, the pension fund that operates in Alberta is that look, if there is this sustained increase in prices, it's going to outweigh anything that happens in energy. We were just in Calgary last week. And in speaking with executives from the oil and gas industry, one of the things they said is, and it's not to diminish the pain that you're talking about, but they see this as an opportunity in some ways. And you can see that in provinces like Alberta and Saskatchewan, in Newfoundland and Labrador as well. There is the chance, I mean, through revenue certainly, but also they see this as an opportunity

to accelerate their industry. What have you learned about that? Yeah, for sure. And that is the one opening here, which is that. look, I think, like, for a very long time, the choke point at the Strait of Hormuz was looked at as this theoretical risk, but now we're seeing it in real time as a very real risk. And so for Canada's oil patch, we can say to our, the oil patch can say to its customers, look, there's never going to be a war here that's going to disrupt the flow of oil from our shores. And so that that is, that I think from the industry's perspective opens up a new conversation to say, look, you know what? We have this, we have a massive resource.

We, and there is ongoing conversations to perhaps increase the amount of exports that we're capable of. And so this is a way for the industry to certainly potentially accelerate its exports and, you know, and build partnerships with customers. in Asia, certainly on the LNG side. I was going to say about the LNG parts, we're all now experts in shipping, but one of the things we have learned in this is that 20% of the world's liquefied natural gas goes through the Strait of Humboos, right? That's right. And there has been some damage to some major facilities, and the reporting out of that region

suggests that perhaps it could take years for some of this, for some of that infrastructure to come back online. And so, again, there are a number of projects along the BC Coast right now that are waiting for a final investment decision. And so there does appear to be some optimism in that part of the industry that says, you know what, this might push those projects over the edge that perhaps there might be that market that they were hoping for and that they could fill that gap. As you mentioned, I'm going to let you go, but we'll be speaking with the former governor of the Bank of Canada, Stephen Polo, is coming up a little bit later on in the program.

And one of the things that I'm interested in from him is what it is that governments and central banks can do to help ease some of the pain. You're suggesting that people are already making changes to decisions that they might be considering when it comes to spending money, but also just how they are spending their money right now. What is your sense as to how effective a policy like removing temporarily the fuel excise tax is, in addressing the shock that's being felt across this country. Well, okay, I did some back of the napkin math just for myself. Okay, I got two small kids, as I said, we got a minivan. And so it's about, yeah, give or take about 50 liters in the tank.

So that's about five bucks off, right, to fill it up. But you also got to consider where prices have gone, right? So average prices, you know, is going to be different in different cities. But on average, it's up about 40. cents per liter in gasoline. So that's like an extra 20 bucks, give or take. So come Monday, it'll be an extra 15 bucks, all things being equal. So, you know, that's still a hit. And we fill up quite a bit. Calgary is a, is a driver city. So, you know, it's a pinch, right? And then when you look at diesel, for instance, they're looking at that excise tax is four cents a liter. Well, I mean,

that is kind of a drop in the bucket considering where prices have gone. I'm not suggesting in any way that the government should be spending more money. I'm just saying that these measures are not necessarily going to erase the effects of this crisis. We'll talk more about that with Stephen Polos coming up. In the meantime, Reid, thank you very much for this. All right, take care. Reid Southwick is the Western Bureau Chief for the Financial Post. He was in Calgary. You've been listening to the current podcast. My name is Matt Galloway. Thanks for listening. I'll talk to you soon. For more CBC podcasts, go to cBC.ca.ca slash podcasts.