A New Minimum

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8 February 2018 - 7:32, by , in Blog, Propane News, No comments

Here we are in the depths of winter. Well, one week it’s winter, the next week it’s spring, and the next week it’s winter again. Give me winter starting sometime in November and keep it winter until March. This up and down stuff just creates a ton of headaches. I know many of you would prefer summer all year long, but that would hardly be Canadian, now would it?

Propane prices continued to rise in January, and looking ahead I wouldn’t expect any kind of relief in February, as the long term weather is indicating more cold temperatures.

One of the things that happens when we get these cold, warm, cold weather cycles is usually lots of snow and strong winds. When this happens quite often lake effect snow falls creating very hazardous driving conditions and road closures to the East of Lake Huron and South of Sarnia. The majority of propane used in Ontario comes from Sarnia, and is transported mostly by truck. The main access route for trucking is Hwy 402, which runs pretty much North-South from Hwy 401 to Sarnia. With these recent lake effect snow squalls, Hwy 402 has been closed several times in December and January. When this highway closes, the propane supply chain is disrupted, and any local onsite storage is depleted. This means all the propane suppliers, both big and small, are faced with propane supply shortages. You can’t imagine the stress and anxiety inflicted on Ontario’s propane supply network when this situation occurs. We, your propane supply company, have to first pray the highway opens quickly, then look at those we supply with propane and decide if we have to limit supply to some markets, like winter construction for instance. Then we look at essential services like home heating. In some cases, we have to short fill your propane tank so that you can continue to heat your home, and we can spread out the limited supply to keep everyone warm. When this condition occurs, your propane supplier must make multiple deliveries to the same customers with smaller amounts as supply is available. You can imagine this puts all kinds of pressure on delivery drivers and dispatchers as the amount of deliveries they have to make is doubled or tripled over the same period of time. Not to mention it drives up all the related costs to accomplish these deliveries. When the closed highways reopen, the lineups for all these tanker trucks trying to now pick up propane at the terminal in Sarnia is long and slow, bearing in mind all the peripheral storage has been drawn down and it takes time and many truck loads to bring their levels back up. Sure glad this doesn’t happen too often, or last too long when it does happen.

Lots of talk about the minimum wage going up and possible consequences related to these increases. Now, to all businesses of any size with staff that are hired at the minimum wage level, it’s not just the cost of the wage that increases. On that wage increase the individual recipient will pay some of it out to income tax, CPP contributions, unemployment insurance, and if it’s a union environment, to union dues. So, that reduces the amount that the individual actually receives. Consider on that same increase the employer pays a higher portion of CPP, unemployment insurance, and worker’s compensation. So, on the wage increase the employee gets less, and the employer pays all of the increase, plus the extra costs associated with it. So who benefits? Well, the employee will get a little more in their pay, the government will certainly gain from more income taxes and related benefit costs, and the employer…well, they get to shoulder the load. Oh, how about the questions, or at least thoughts, from other employees that go “if his or her wages have gone up, what about me?” Now, if the employer currently pays for a health benefit package, uniforms and boots, a Christmas party and other social employee attended events, are the employers scoundrels if they look at other ways to offset some of those costs imposed upon them by this government mandated action? Keep in mind, all business has to be profitable to remain viable.

Remember your first part time job, or your second, and so on? How about your first full time job? In any and all your previous employment opportunities, firstly someone had to give you that chance. The job may have been wonderful, or it may have been awful. In every employment opportunity, you would have networked with others, learned skills, or maybe just learned that this type of employment is definitely not for you. At least you had exposure to some of life’s lessons and employment circumstances. You carry these experiences with you for your whole life, and some of those individuals you came in contact with, you may also be associated with for the rest of your life. I’m well versed in the costs of running a small business, having been doing it since 1968. I also know that, for many small businesses, the level of profitability at the end of the year can be pretty thin, and in a lot of cases a business is not profitable at all. My biggest fear in all of this is that a great many of those part time and entry level full time jobs will disappear as businesses look to control costs and automate their processes, reducing the need for more entry level help. I know in one of my businesses we are doing just that. Should my thoughts on this topic be realized, can you imagine what kinds of problems we might face? An over supply of out of work youth. Hope I’m wrong on this. I’m not too sure about our provincial government’s strategy on this effort.

Man, too much negative stuff here. On the positive side, my granddaughter has been taking horseback riding lessons and is doing very well. The grandson has been taking piano lessons, and at eight years old, still seems to like it. The tunes he plays now are quite recognizable, much to everyone’s delight.

Ever notice how easy it is to give advice, but how hard it is to take it?

Yikes, just remembered the dreaded Valentine’s Day is fast approaching. What can I dream up this year? Stay tuned in March when I reveal the Valentine’s surprise.

Peter Rivers

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