Order P.920211-1 - Petroleum - Ellis-Birt Ltd. - Application for Initial Licensing (Feb. 11/92)

Order No. P.920211-1

IN THE MATTER of Section 38 of the Petroleum Products Act, Stats. P.E.I. 1990, c.43;

- and -

IN THE MATTER of application by Ellis-Birt Ltd. for initial licensing under the Petroleum Products Act, supra;

Tuesday, the 11th day of February, A.D., 1992

BEFORE

Linda Webber, Chairman
Anna C. Carr, Commissioner
C.C. Hickey, Commissioner

Decision and Order

Table of Contents

Appearances and Witnesses

I. Introduction

II. Evidence

A. The Applicant
B. The Interveners

III. Decision

The Application

a) Record of Performance/Fitness
b) Location/Physical Accessibility
c) Market Assessment
d) Volume of Sales
e) Brand
f) Other

Conclusion

IV. Order

Appearances and Witnesses

Participants in the hearing and the parties for whom they appeared were as follows:

Applicant
Ellis-Birt Ltd.
Counsel:
    Mr. David W. Hooley
    Ms. Nancy E. Birt
Witnesses:
    Mr. Roger Birt
    Mr. A. Robert McLure
    Mr. Richard Thorne
    Ms. Linda Dyer
    Mr. L. Philippe LaMarche
    Mr. Richard Graham
    Mr. Douglas Gaudet

Interveners
Marial Jenkins, Dean Brillinger & J.M. MacKay
J. Frank McAulay, Mayor - Town of Parkdale
Allan and Joan Bartlett
P.E.I. Retail Gasoline Dealers Association
Mr. William E. Armstrong
Karen and Graham Gaudet

Witnesses:
    Mayor J. Frank McAulay, Parkdale
    Mr. Dean Brillinger
    Mr. J.M. MacKay
    Mr. Alan Bartlett
    Mrs. Joan Bartlett
    Mr. Dale H. Mader (PEIRGDA)

Commission
Counsel:
    Mr. Douglas R. Drysdale
Staff:
    (Mrs.) H. Doris Pursey, Director - Petroleum Division
    Mr. Harry MacDonald, Assistant to Director - Petroleum Division
    (Mrs.) Faye Weeks, Recording Secretary

I.    Introduction

An application of Ellis-Birt Ltd. of 161 St. Peters Road, Sherwood dated 17 July 1989 for initial licensing under the Petroleum Products Act covering retail split-serve gasoline dispensing facilities proposed to be associated with its "Quik Pik Foods" convenience store located at the intersection of Mt. Edward Road and Belvedere Avenue, Parkdale, P.E.I. was completed on 2 April 1991 with the filing of the necessary building permit.

Notice of this application was then published in the local press and, in response, the Commission received several letters of intervention opposing the granting of the requested licensing. These letters were received from the Interveners noted in the "Appearances and Witnesses" section of this document.

Subsequent to the receipt of these letters of intervention, the Commission caused to be published in the local press a Notice of Hearing which set forth the details with respect to the time, date and location of the public hearing into this matter.

The hearing commenced at 9 a.m. on 3 September 1991 and continued on 4, 5 and 6 September 1991. At the adjournment of the hearing on 6 September 1991, it was agreed that a brief would be filed by the Applicant with respect to Exhibit No. 23 for rebuttal, if any, to be made by the Intervener, the P.E.I. Retail Gasoline Dealers Association ("R.G.D.A."), within ten days. The Applicant's written brief was filed on 27 September 1991 and amended on 1 October 1991.A response respecting this brief was received from Mr. Mader of the R.G.D.A. on 8 October 1991. The hearing reconvened on 13 November 1991 and continued on 14 and 15 November 1991 at which time it was again adjourned to a date to be fixed, with written information to be filed in the meantime. The hearing reconvened on 25 November 1991 and was concluded on that date, with the Applicant to provide certain further information in writing to the Commission and the P.E.I. Retail Gasoline Dealers Association. Seven witnesses appeared for the Applicant, and six for the interveners.

At the conclusion of the hearing, the Chairman directed that written summations be filed within two weeks, with exchanges of summations to take place and a further ten days permitted for the filing of rebuttal briefs.

A Post-Hearing Brief was submitted by David Hooley and Nancy Birt on behalf-of the Applicant on 10 December 1991.

II.    Evidence

A.    The Applicant

Mr. David W. Hooley and Ms. Nancy E. Birt of the firm of Ross, Hooley appeared as Counsel for Ellis-Birt Ltd., and presented six witnesses at the hearing on behalf of the Applicant, as follows: Mr. Roger Birt, President of Ellis-Birt Ltd.; Mr. A. Robert McLure, M.Eng., P.Eng. of SMA Engineering Ltd. , Riverview, New Brunswick; Mr. Richard Thorne, Service Manager of Confederation-Mercury; Ms. Linda Dyer of Baseline Market Research Ltd., Fredericton, N.B.; Mr. Philippe LaMarche, Senior Financial and Retail Market Analyst - Eastern Region, for Petro-Canada; and Mr. Richard Graham, P.E.I. Territory Manager for Petro-Canada.

Mr. Roger Birt gave testimony with respect to the history of the specific site involved as well as to the proposed construction and installation of underground storage and dispensing equipment thereon. He noted that it was proposed to have four self-serve and four full-serve nozzles at this location for the dispensing of gasoline, to install an air hose, to construct a canopy and to install a console in an area which would also house the gasoline attendants. He also described the interior and exterior renovations which are proposed for the existing facilities, and the proposed addition of a coffee shop. He noted that his hours of operation would be from 7 a.m. to 1 a.m. and that in addition to gasoline, he would also sell other automotive-related products (see Exhibit No. 30). Mr. Birt filed several coloured photos of the intersection and of surrounding commercial enterprises, and noted that it was proposed that the two entrances/exits on Belvedere Avenue would be moved somewhat further west towards Mt. Edward Road and that some trees and shrubbery would be added to enhance the appearance of the site. Mr. Birt referred to a type of petition which had been signed by customers of his convenience store indicating support for his proposal to add gasoline dispensing. He noted that the positive response he has received to his proposal leads him to believe that his outlet would be viable. The petition referred to was not produced as an exhibit. He projected an annual volume of 3.2 million litres and described his trading area to include both local and pass-by traffic. Mr. Birt provided evidence with respect to his present customer count and expressed the view that many of these customers would also purchase gasoline if it was available. He also responded to questioning relative to the location of the properties of the interveners who had filed in opposition to this application, and noted that his proposal to raise the roof of the existing establishment and to add trees would assist in cutting down the noise level.

The next witness for the Applicant, Mr. A. Robert McLure, entered as Exhibit No. 36 his qualifications and also filed as Exhibit No. 37 a document prepared by SMA Engineering Ltd. entitled "Traffic Impact Assessment Proposed Petro Canada -Corner of Belvedere Avenue and Mt. Edward Road". He testified as to the average annual daily traffic, daily peak hour volume, the estimated gasoline volume of the outlet, and the impact that the placement of the proposed new facilities at the site would have on the level of service to motorists using the intersection. He testified that he had visited the area on 22 August 1991 at approximately 11 a.m. and had observed actual traffic patterns for a period of approximately one-half hour. The on-site circulation of traffic was not assessed by Mr. McLure, as he had not been aware of the proposal to add a coffee shop to this location prior to conducting his traffic impact assessment, and he was unaware at that time of the proposal to move the Belvedere Avenue entrances/exits closer to Mt. Edward Road.

Mr. Richard Thorne is Service Manager for Confederation-Mercury, a local car dealer, and testified with respect to the specialized service requirements of today's vehicles.

Ms. Linda Dyer filed as Exhibit No. 40 a pamphlet describing the firm which she represented, "Baseline Market Research Ltd.". She then filed as Exhibit No. 41 a document entitled "Charlottetown Market Study" commissioned by Ross, Hooley on behalf of the Applicant. Ms. Dyer then testified with respect to the study and gave a definitive summary of the research findings. She stated that it would certainly appear from this study that there is a market opportunity at the proposed location.

Mr. Philippe LaMarche and Mr. Richard Graham of Petro-Canada, the proposed supplier for the Applicant's site, were then presented as a panel to give evidence respecting this proposed project. Mr. LaMarche filed as Exhibit 42 his resume and identified himself as the principal analyst for Petro-Canada for the Eastern Region (which encompasses five Provinces), and noted that he is involved with financial, market and strategic planning. One of his function's is to seek out new outlets and those which are due for redevelopment. He stated that he both initiates these tasks and responds to proposals of others. Mr. Graham indicated that he is presently the P.E.I. Territory Manager for Petro-Canada, having previously been employed for over four years with a competitive oil company. He noted that his experience in the industry covers approximately five years.

Mr. LaMarche and Mr. Graham testified chiefly with respect to the items covered in composite Exhibit No. 43, and filed several supporting maps and graphs as further exhibits in this hearing. A principal exhibit (No. 44) was a Universal Transverse Mercator map upon which a trading area of a radius of approximately 2 kms. had been selected by means of longitudinal and latitudinal co-ordinates. This trading area contains twenty-five sites which are already licensed under the Petroleum Products Act to retail motor fuels--these outlets averaging gasoline sales of approximately 1.8 million litres in 1990. Mr. LaMarche testified that he had used the services of Compusearch, which he described as being a commercial spin-off of Statistics Canada, in developing many of the documents presented in this hearing. He described the model used, and went on to outline for the Commission the determinations made as a result of his research. He noted that this research indicates that the Charlottetown Area outlets enjoy the second highest throughput of the several cities and provinces in Canada to which its volumes were compared. As a result, he sees room for new development in this area. With respect to volume predictions, Mr. LaMarche noted that the two sites which would be impacted the most should this proposed new outlet be established would be the Belvedere Esso and the Parkdale Irving, although the Pickard outlet (Petro-Canada) would feel the largest impact on a percentage of existing volume basis. He described the site in question to be the best "unused" site in the area.

Mr. LaMarche had been assisted in obtaining local data by Mr. Graham, who gave evidence with respect to the gathering of data on thirty-one Charlottetown and area outlets. Mr. Graham also testified with respect to the leasing arrangements which would result should the Applicant receive the approval of the Commission. He also gave evidence with respect to the factors necessary to make an outlet viable, and expressed the view that those factors existed in this instance. Mr. Graham gave evidence with respect to the gasoline volumes of existing outlets and market shares in the area, as well as to the anticipated volume of this outlet. Mr. Graham also referred to the types of assistance to be provided by Petro-Canada in the establishment of facilities at this and other independent sites as well as the on-going operation thereof. He noted that the trend in the petroleum industry is away from bay service due to the highly technical ability required to deal with today's automobiles.

The Applicant called Mr. Douglas Gaudet, Traffic Technician with the Department of Transportation and Public Works, as its final witness. Mr. Gaudet testified as to how to interpret provincial government computer-generated traffic flow data sheets, and described the various means utilized in arriving at these traffic counts. As Mr. Gaudet indicated in his evidence that more recent data was available than some of that previously filed by the Applicant, the Applicant was asked to file this updated information following the conclusion of the hearing.

B.    The Interveners

Mr. Frank B. McAulay, Mayor of the Town of Parkdale, filed with the Commission a letter dated 22 May 1991 wherein he noted that while the Town had issued a building permit with respect to the proposal of Ellis-Birt Ltd., a number of residents had expressed concern, and the Town was uncomfortable with the permit primarily because of concerns about potential pollution of the Town's water supply. Mayor McAulay appeared at the hearing and testified with respect to these concerns, and noted that the chief concerns of the residents who had approached the Town had been related to fear of water contamination, accidents which might result from self-serve gasoline dispensing, and traffic congestion.

Karen and Graham Gaudet of 13 Parkview Drive addressed concerns to the Commission in a letter dated 18 May 1991. These concerns revolved around the extra traffic that would be created if this application is approved, and the possibility of fumes interfering with the enjoyment of their property, which is located close to the site. Neither of the Gaudets appeared at the hearing to give testimony.

Marial Jenkins and Dean Brillinger of 176 Belvedere Avenue and J. M. MacKay of 180 Belvedere Avenue forwarded a letter dated 18 May 1991 wherein they expressed strong opposition to the proposal. The main thrust of their written objection revolved around the already heavily congested intersection at which this project is proposed. Mr. Dean Brillinger appeared at the hearing and gave evidence in support of these concerns, as well as concerns relating to the loss of enjoyment of their properties by residents in the area. Mr. MacKay was also present at the hearing and basically testified that he concurred with the statements made by Mr. Brillinger and that his main concern revolved around the corresponding increase in traffic which would result from such an outlet.

Allan and Joan Bartlett, residential owners of the property known as 29 Parkview Drive, Parkdale, for eleven years, filed a letter with the Commission on 21 May 1991 and also appeared at the hearing in support of their intervention. The concerns of the Bartletts were indicated as follows: 1) decreased safety from increased traffic and associated congestion; 2) increased noise from increased traffic; 3) increased air pollution from increased traffic; and 4) increased air pollution from fumes from the gas pumps. The Bartletts maintained that all of the above factors would result in loss of enjoyment of residential property owners in the area as a result of the further development of commercial interests. They also expressed concern about further undesirable development once the present project receives approval.

Mr. William E. Armstrong, by letter dated 21 May 1991, expressed to the Commission his concerns with respect to the licensing of further gasoline outlets in the Charlottetown area, and expressed the view that the area is already more than adequately served. He noted that it was his feeling that the addition of more outlets would increase the difficulty of existing stations to operate a viable business and that service would likely deteriorate as a result. He also expressed concern relative to "corner lot" locations for these types of outlets as a result of motorists "shortcutting" across lots of this nature, and added that he felt that this outlet would add to traffic problems already existing in the area. Mr. Armstrong, however, did not appear at the hearing in support of his written intervention.

Mr. Dale H. Mader, in his letter of 13 May 1991, noted that the Prince Edward Island Retail Gasoline Dealers Association ("R.G.D.A.") feels that it would not be in the public interest to license further gasoline outlets in the Charlottetown area due to the detrimental effect that additional outlets would have on the ability of existing retailers to provide quality service to the motorist. He noted that the existing outlets are all under-utilized in terms of their capacity to handle additional sales, and that the introduction of additional outlets could only mean reduced sales for existing outlets and ultimately less service to the motorist.

Mr. Mader, in giving testimony, filed a written submission which was entered as Exhibit No. 52 in the hearing. In this document, the R.G.D.A. submitted that the license applied for cannot be justified when measured against the test of public interest, convenience and necessity as required by Section 20 of the Petroleum Products Act. Various examples were given, and Mr. Mader quoted from various sources in support of this contention.

III. Decision

The Application

The application here is for a license to operate a split-serve gasoline dispensing facility (8 nozzles, 4 self-serve and 4 full-serve) along with an existing but redesigned convenience store and a new coffee shop/donut shop at the intersection of Mt. Edward Road and Belvedere Avenue at a site referred to as the Quik Pik corner. It would be open from 7 a.m. to 1 a.m. daily.

There is a proposed 20-year supply agreement with Petro-Canada for this operation (ten years firm plus a renewal option) and there would be a cross-lease arrangement between the Applicant and Petro-Canada.

In assessing an application for a new retail license, the legislative test to be applied is that set out in Section 20 of the Petroleum, Products Act, S.P.E.I. 1990, Cap. 43, which reads as follows:

When issuing a license with respect to the operation of an outlet operated by a retailer, the Commission shall consider the public interest, convenience and necessity by applying such criteria as the Commission may from time to time consider advisable including but not restricted to the demand for the proposed service, the location of the outlet, traffic flows and the applicant's record of performance.

Having reviewed numerous board decisions and court cases dealing with public interest, convenience and necessity, and with public convenience and necessity (including Re Allison MacLeod Ltd. (1958), 14 D.L.R. (2d) 500 (P.E.I.S.C.); Nova Enterprises Limited v. Nova Scotia (Attorney General), (unreported N.S.S.C.A.D., October 23, 1987); Simeon Carlos,(N.S.P.U.B., December 31, 1934); In re Irving Oil (1986] 2 P.E.I.R. B-8 (A.D.); Canadian Tire Corporation Ltd., (N.S.P.U.B., October 3, 1990, including dissent by Harris), the Commission has determined that the issue to be considered when applying the public interest, convenience and necessity test is not whether existing outlets are capable of fulfilling existing requirements in the global sense, but rather whether there is a need or convenience requirement of the public that is not being served--either by location, service offerings, price or some other aspect of business. If so, it would be in the interests of the motoring public to be served in that area for the new outlet to be approved, unless such new outlet would likely have an overall negative impact on this group.

The legislation requires us to consider a variety of factors, such as the' demand for the proposed service. Some of these factors are set out herein as subheadings, but it should be noted that these subheadings are used only to assist the reader and should not be interpreted as giving particular weight to one factor. Factors such as demand interconnect with many others and so cannot be itemized separately.

We wish to note here that the Applicant was advised prior to Mr. Thorne giving his evidence that the lack of bay service at the proposed location would not in and of itself decide the issue. The commission recognizes that the needs and desires of the motoring public change over time and that many automotive services today can only be provided by specialists. In some circumstances bay service may be needed at an outlet before a license will be approved, but at the present time in the Charlottetown area generally, this would not normally be seen to be an issue. It is not an issue in the application before us now.

Similarly, the "FIFO" issue raised in the Applicant's filing dated 27 September 1991 (and amended 1 October 1991) is not an issue here. The Commission did not deal with the applications before it on a "first come, first served" basis. Each was dealt with solely on the basis of its own merits.

a) Record of Performance/Fitness

The site is owned by the Applicant who has no previous experience with the dispensing of petroleum products. However, there is a proposed supply agreement and cross-lease arrangement with Petro-Canada. The Commission accepts that Petro-Canada is experienced in the operation of retail gasoline facilities. Rick Graham testified that he would be responsible for staff training and that there are manuals to cover emergency procedures, service quality standards and inventory control procedures for Petro-Canada that would apply at this retail facility.

b) Location/Physical Accessibility

The proposed site is said by the Applicant to be one of the busiest in the Charlottetown area. It was first argued to be the third busiest intersection, with Philippe LaMarche providing a chart (which formed part of Exhibit 43) with traffic counts to prove this.

This chart is one example of many problems the Commission found with the evidence of Mr. LaMarche. Facts were often found to be inaccurate, conclusions exaggerated and information upon which he based his conclusions lacking.

In this instance the facts were that the chart was not created with the latest available information, was inaccurately calculated, and could not be a review of "Charlottetown's 10 Busiest Intersections" because it was based upon provincial traffic statistics which "did not include intersections within the geographical boundaries of the City of Charlottetown for which traffic counts were not available" (The Applicant's post-hearing brief at p. 15).

We also point out that when Mr. LaMarche was asked to explain why some intersections were on his list and others were not, his answer was that if there was no service station on the intersection, it was not included. This answer conflicts with the answer provided by legal counsel and cited above, and we noted at the time of the hearing that the intersection of University Avenue and Euston Street, with outlets on two of the four corners, was not included.

The revised exhibit filed on this point (Exhibit 62) puts the site intersection as fourth rather than third, and reduces the traffic count from the original 37,426 to 19,213. This exhibit in fact was not revised until after Mr. Gaudet explained how to interpret the documents which Mr. LaMarche had earlier in the hearing said he relied upon, but could not explain. The correct interpretation of the data explained by Mr. Gaudet produced results considerably different from the results used by Mr. LaMarche, as he described these at the hearing.

We further note that potentially busy intersections that are not listed on either exhibit include the corner of University Avenue and Euston Street, the corner of North River Road and Brighton Road, and the intersection of Belvedere Avenue and North River Road. Overall, given these problems, we find the exhibit and accompanying discussions of relative values of intersections in the area of little assistance in our decision-making.

Since this exhibit and the traffic counts from it are very important to much of Mr. LaMarche's testimony as to the need/convenience/viability of the proposed outlet, we have difficulty relying upon most of the propositions put forward by Mr. LaMarche.

His cavalier attitude towards accuracy also causes us to look with skepticism upon the M.P.S.I. report he so heavily relied upon. We do not challenge the validity of the model. However, the reliability of any computer program depends on the accuracy and type of data used. The adage "garbage in, garbage out" still remains true.

When Mr. LaMarche was questioned about traffic count inaccuracies, his response was to say that for M.P.S.I. reports traffic counts (Part of Exhibit 43) can vary by plus or minus 5,000 so the errors we were looking at didn't really matter. We are troubled by this response, and the indication it gives about Mr. LaMarche's overall lack of concern with the accuracy and reliability of the data he used. At that point, the evidence was so confused we cannot be sure of the magnitude of the errors that may have been involved in his testimony. This confusion was due to Mr. LaMarche's inability to identify the sources of his information and explain the discrepancies noted throughout his testimony. Mr. LaMarche could not seem to accept our view that when dealing with an intersection with a traffic count of 10,000 to 20,000 vehicles per day, variations of 5,000 leave much more room for a distorted result than if he is dealing with an intersection with a traffic count of 100,000 plus vehicles per day. If there is a way in which use of numbers such as this could be shown to be insignificant for our purposes, Mr. LaMarche was unable to explain this to the Commission.

This problem of unreliable information arose in other parts of Mr. LaMarche's evidence, such as when he purported to show how very profitable business is for existing Charlottetown gasoline retailers. Cross-examination revealed that he did not use the best data available for Prince Edward Island--which is Commission data--but rather used industry reports (Octane magazine) whose accuracy is questionable simply because in all markets except Nova Scotia there was no regulation and so no reporting of sales to any central agency. The accurate figures were shown to be considerably different from the ones he used. His explanation that he thought it was best to compare data from the same source does not solve the problem of its inaccuracy.

As well, we cannot agree with the position taken in the Applicant's brief that Mr. LaMarche's exhibits showed either that the Charlottetown trade area sales are above Canadian norms or that growth in the market demand can be expected to increase from 1990 to 2005. These exhibits were purportedly supported by the comparisons made by Mr. LaMarche of Charlottetown with other areas. In addition to suffering from the inaccuracy problems already mentioned, these were attempts to compare average sales in the Charlottetown area with 1) those of other provinces and 2) those of cities of not necessarily comparable size. The comparisons are of the apple/orange type and so of little value. Mr. LaMarche stated that he used the comparison of Charlottetown area average sales with Ontario and Alberta provincial sales to come to the conclusion that there is more room for entrants into the market in the Charlottetown area. Again, this is an unreasonable comparison and does not support the point being made.

Another witness for the Applicant who commented upon traffic at this site was Robert McLure, an engineer. He looked at current and proposed traffic volumes at the site, and viewed the site, and concluded that even if there are delay problems for traffic at the site now, the small increase in traffic flow that this new operation would create would not make a significant difference.

The traffic at this intersection is of concern to the Commission because we consider it to be part of our consideration of public interest, convenience and necessity. What concerns us most about Mr. McLure's testimony is more what he did not do than what he did. He admitted that the most significant impact on traffic flow is created by entrances and exits. However, he did not study these to see if they were a problem. His comment was to the effect that if the entrances and exits are not a problem now they should not be in the future with the small amount of increased traffic expected. His visual sighting of them, he testified, "seemed okay" but he was not aware when he viewed the site of proposed changes to those entrances.

This evidence is of limited assistance to the Commission because it fails to deal with the most crucial aspect of the intersection--how much delay is now caused by the turns in and out of the site and what impact, if any, relocating the entrances and exits will have on that delay. We also note that we did have residents testify as to the busyness of the intersection and how they thought traffic congestion there is a problem now and will only be made worse by the proposed development.

Even the layout of the site was not totally clear during the hearing. How the building will be designed, where the bulk unloading facility will be, ease of access--all remain questionable at this point.

c) Market Assessment

Also in support of the viability of the proposed outlet the Applicant put forward as evidence a market survey performed by Baseline Market Research Ltd. Linda Dyer testified about this study.

Like many studies of this type it is interesting but the results depend upon the questions asked. While Table 10 of Exhibit 41 appears to address the question of public perception of need, there are problems with its interpretation and its description on Page 11 of the Exhibit. The Table is entitled "Perceived Need for Addition of Pumps at Belvedere and Mount Edward Road". However, the question asked can be found on Page 3 of the questionnaire at the back of the report:

Q.8 Plans call for the Quik Pik and adjacent stores at Belvedere and Mount Edward Road to be renovated and available services expanded to include gasoline pumps and a donut shop ... is there a great deal, some, little or no need for this expanded service in this area? (emphasis added).

The response to this was 7% saw a great need, 28% saw somewhat of a need, and 18% saw little need. There was much discussion about whether "little need" is a positive or a negative comment. If considered positive you could consider that 53% responded at least somewhat positively. if considered negative, then 65% responded at least somewhat negatively to this idea.

If the category of "little need" is left out entirely, then the response was more negative than positive.

The real question, however, is what were they supporting or opposing--a gasoline dispensing facility or a donut shop? We do not know. The answer is inconclusive.

Of greater interest to the Commission was the fact that only 1.5 out of every 10 people who responded said that they would use the facility for a gasoline purchase. Since it is normally accepted that people exaggerate their likelihood of use on surveys like this, that seems to us to be a low response level.

As well, we have the testimony of Mayor MacAulay of-the Town of Parkdale, Dean Brillinger, James MacKay and Allan and Joan Bartlett that there is no need for a new gasoline outlet, gasoline is easily available nearby, and there is a problem with traffic at that intersection that will be made worse by this proposal.

d) Volume of Sales

Roger Birt testified that he expected to sell 3.2 million litres of gasoline annually. This number is apparently based upon traffic flow information related to the site. Given the numerous problems we found with the evidence, we have many doubts about the reliability of this figure.

e) Brand

The witnesses for Petro-Canada emphasized that competition in the market area would be enhanced by the approval of the application because it would improve Petro-Canada's market share.

It was acknowledged that Petro-Canada had recently become the suppliers for an outlet quite close--the Pickard property at the corner of University Avenue and Belvedere Avenue, but they stated that although the impact on that outlet would likely be large on a percentage basis, the Petro-Canada witnesses did not consider the actual litreage significant. They stated that they did not attempt to do similar studies in connection with that outlet because it was a dealer takeover situation and required little investment by Petro-Canada.

f) Other

The Commission is concerned that it appears to be seen as a "court of last resort" by people who have problems with development. Our concerns stem from the fact that we only have the power given to us by the Legislature and in this situation that power is connected to our authority and obligation to supervise the sale and distribution of petroleum products on Prince Edward Island. We are not the arbitrators of noise problems, traffic problems, pollution problems, quality of life or zoning problems--unless these can somehow be shown to be relevant to the best interests of the motoring public to be served in the area. While in a very broad sense all these matters have some effect upon motorists, only the traffic problem seems clearly within our jurisdiction in this case.

We are particularly concerned that the Mayor of Parkdale felt he had to appear here after his own Town had approved a building permit for the development- -and this is the second time he has appeared before the Commission to oppose this development! Surely if the Town has serious concerns about pollution problems that are not being addressed by present environmental regulations, it could attempt to draft rules to cover this or rezone the area in a way that would protect the water supply.

The concerns of residents expressed to us and to Mr. MacAulay about not wanting more commercial development in the area would seem to be concerns more properly addressed through the Town Council's zoning process. However, an additional problem brought to our attention was the fact that some residents find themselves unable to oppose development across the street because that area is technically in another community. Unfortunately, this is also a matter not within our power to resolve. Such matters need to be addressed by provincial planners' and politicians who can correct the situation.

We have sympathy for nearby residents and for everyone's concerns about pollution but there are separate laws and boards to deal with those matters. Unless the Petroleum Products Act is amended to give us broad power to consider all possible interests of the public at large--which would be giving us the power to establish more strict guidelines for noise and pollution, etc. than already exist--we are not able to deal with these matters except as they relate to the motoring public.

Conclusion

There is no doubt that Roger Birt sincerely wants this gasoline outlet and believes it would be viable. As Petro-Canada noted, Mr. Birt is willing to put in his own money and this is certainly an indication of his commitment.

The problem, however, is that there is very little evidence that a consideration of public interest, convenience and necessity should result in the issuance of this license.

The market survey is not very helpful to the Applicant because at best it indicates lukewarm support for the concept. We cannot equate "market opportunity" with public interest, convenience and necessity.

Common sense tells us that some people would find it convenient to purchase gasoline at the site, but that is not sufficient. This does not give us any indication of the requirements of the motoring public in a broader sense. We do not interpret the convenience of a few as meeting the test of the legislation.

One point stressed by the Applicant was that there is no outlet located along Mt. Edward Road. This is true, but of itself does not indicate need. It is in a similar category to the fact that the intersection involved is considered to be the fourth busiest in the Charlottetown area. Even if true, this does not of itself establish that there is a need. No persons in the area who use this intersection came forward to testify that an outlet at this site is necessary. Several people came forward to say it is unnecessary.

Considerable reliance was also placed by the Applicant on the projected growth figures of Mr. LaMarche. The commission's own statistics--available publicly through its annual report--show that gasoline sales in 1990 were at 1979 levels. Testimony of the Intervener P.E.I. Retail Gasoline Dealers' Association show sales in the market area to have declined in 1990 from 1989 and indications at the time of the hearing were that 1991 sales were hurt because of the recession, GST and low tourist traffic volumes. We therefore find the suggestion that there is a need based upon growth of sales in the area to be unsupported.

The argument that the public interest would be better served if Petro-Canada had more market share has some merit. However, we cannot ignore the fact that recently an outlet with this brand was opened nearby and it would seem likely that a second one in the vicinity would diminish the volume capable of being sold by the first. Additionally, we have the problems already mentioned with the analyses done to show likely volume of sales and have little confidence in the figures presented.

We also note, although we do not feel that in the circumstances the question needs to be answered at this time, that it is questionable whether an increase in market share of a wholesaler, by itself, is enough to support a finding that the public interest, convenience and necessity requirement has been met.

As well, we must consider the concerns about traffic congestion at this intersection raised by members of the public who attended and spoke against the application. These concerns are not eased by the witness for the Applicant who commented that this was a better site than the Pickard site at University Avenue and Belvedere Avenue for ease of access.

The law clearly states that an applicant's desire to serve the public is, by itself, insufficient to meet the test of public interest, convenience and necessity. As well, it must be remembered that the onus of proof is on the Applicant to prove that he has met this test:

It is for the applicant for a certificate to make an affirmative showing that convenience and necessity require the service which it is offering to render. Mere desire on the part of the applicant to serve, or on the part of certain customers or patrons to be served, is not enough. (Simeon Carlos, supra, p. 13, citing Re San Joaquin L & P Co. P.U.R. (1921) A. 613.)

The Applicant believes strongly that there is market potential for gasoline sales in the area because it is a busy intersection and there is no other outlet on Mount Edward Road. The Commission does not equate market potential--the possibility of selling some gas--with meeting a need of the motoring public or adding significantly to the convenience of the motoring public.

For all the reasons cited above, we find insufficient evidence to prove that a consideration of public interest, convenience and necessity supports the location of a retail gasoline facility at this site. This application is therefore denied.

IV. Order

The Commission therefore Orders that:

1) The application of Ellis-Birt Ltd. dated 17 July 1989 for initial licensing covering the installation of retail split-serve gasoline dispensing facilities in conjunction with the existing "Quik Pik Foods" convenience store located at the intersection of Mt. Edward Road and Belvedere Avenue in Parkdale be and is hereby denied.

DATED at Charlottetown this 5th day of February, A.D., 1992.

BY THE COMMISSION:

Chairman

Commissioner

Commissioner