Order No. P.920211-2
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 Irving Oil Limited 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 (dissenting in part)
C.C. Hickey, Commissioner
Decision and Order
Table of Contents
Appearances and Witnesses
I. Introduction
II. Evidence
A. The Applicant
B. Other
C. The IntervenersIII. Decision
The Application
a) Record of Performance/Fitness
b) Cardlock Facility/I-24 System
c) Retail Gas & Diesel/Convenience Store
d) Traffic Flow/Patterns
e) Location/Physical Accessibility
f) Competition/Existing Licenses
g) Other IntervenersConclusion
IV. Order
Dissenting Opinion (Carr)
Appearances and Witnesses
Participants in the hearing and the parties for whom they appeared were as follows:
Applicant
Irving Oil Limited
Counsel:
Mr. Eugene P. Rossiter
Witnesses:
Mr. Don C. Mills
Dr. John B. L. Robinson
Mr. Gerry MooreInterveners
Mr. William E. Armstrong
Charlottetown Area Beautification Program
Arthur Newbury Society (Burnett)
Ms. M. Tara Lea
Basic Design Associates Ltd. (Sackville)
Mr. Ray Brow
P.E.I. Retail Gasoline Dealers Association
Witnesses:
Ms. Catherine Hennessey (CABP)
Mr. Dale H. Mader (PEIRGDA)
Mr. Robert Taylor (PEIRGDA)
Mr. Alan Mayne (PEIRGDA)
Mr. Ronald Peters (PEIRGDA)Other
Subpoenaed by Commission
Witness:
Mr. Michael Bailey, P.E.I. Dept. of Transportation & Public WorksCommission
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
On 17 April 1990, an application was filed by Gerry Moore on behalf of Irving Oil Limited for initial licensing under the Petroleum Products Act for a commercial diesel fuel cardlock dispensing facility and for retail split-serve gasoline and diesel fuel dispensing facilities associated with a convenience store proposed to be constructed on Riverside Drive, Charlottetown, P.E.I., both new operations to be constructed at or near the same location as a proposed new head office building and new loading facilities associated with the present bulk storage tanks. The required documentation relating to the various aspects of this major project were filed over the course of the next year. For instance, as two separate licenses are required with respect to the cardlock facility and the retail dispensing facilities associated with the convenience store, a separate application form was filed on 7 December 1990 with respect to the commercial cardlock facility.
Notice of these applications was then published in the local press and, in response, the Commission received seven letters of intervention, with various reasons for opposing the granting of the requested licensing being set out therein. A list of registered interveners appears in the "Appearances and Witnesses" section prefacing this Introduction.
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 these applications.
The hearing commenced at 9 a.m. on 6 August 1991 and continued on 7, 8, 9, 19, 20 and 21 August 1991. Three witnesses gave evidence for the Applicant, and a total of five witnesses gave evidence on behalf of two of the registered interveners. One intervention was formally withdrawn by letter prior to the commencement of the hearing and four others were not represented.
Prior to the commencement of the hearing, Counsel for the Applicant made the request that the hearing be conducted under the Petroleum Products Act, R.S.P.E.I. 1988, Cap. P-5 rather than the current legislation due to the fact that the applications had been filed prior to the proclamation of the revised legislation.
The Post-Hearing Brief on behalf of the Applicant was filed with the Commission on 7 October 1991, and Post-Hearing Brief Rebuttal was submitted on behalf of the Prince Edward Island Retail Gasoline Dealers Association on 11 October 1991.
II. Evidence
A. The Applicant
Irving Oil Limited presented three witnesses at the hearing, as follows: Mr. Don C. Mills, President of Corporate Research Associates Incorporated, Halifax, N.S.; Dr. John B. L. Robinson, of Atlantic Highway Engineering Corporation, Fredericton, New Brunswick and Mr. Gerry Moore, Area Supervisor for Irving Oil Limited in Prince Edward & Island. A total of eighty-four exhibits were entered at the hearing.
The first witness, Mr. Mills, filed as Exhibit No. 28 a document entitled "Riverside Drive Location Study, 1990" prepared for Irving Oil Limited by Corporate Research Associates Inc. In the Introduction Section of this document, it was stated as follows:
"The principal objective of this study was to assess the convenience of existing gas stations from a resident's perspective, and to evaluate whether the establishment of a new station on Riverside Drive would increase the convenience of purchasing gasoline to motorists using Riverside Drive, as well as determine the need for such a station based on likelihood of use. The study was also designed to provide key market information on the driving and gasoline purchase habits of residents who use Riverside Drive in Charlottetown on a regular basis."
Mr. Mills proceeded to explain this document and to give the results of this study, which were contained in a "Summary of Findings". The study offered conclusions on several points, including the convenience of existing outlets, the convenience of the proposed new location, and the likelihood of those travelling Riverside Drive to purchase at this location should it be established (forty-two per cent of 388 respondents). It was therefore concluded that "Given this likelihood of use, it appears that there is a need for a station along Riverside Drive" (p. 13).
John B. L. Robinson, PhD., P.Eng., was the second witness for the Applicant. Dr. Robinson filed as Exhibit No. 32 his Curriculum Vitae updated to February of 1991, and testified that he had been requested by Irving Oil Limited to carry out a "Site Impact Analysis" of its proposed site. He noted that he had reviewed the most recent site plan and had visited the site at approximately 8:30 p.m. the evening before the hearing. He expressed the view that the site plan of Irving was safe, efficient and well-thought out, and that there would be no problem with "on-site" traffic circulation. Mr. Robinson was also questioned with respect to the impact of the proposed project on the existing highway system, and responded to questions such as the number of vehicles which can be handled in a single lane per hour and the types of delays which would be encountered by motorists at both signalized and non-signalized intersections.
Mr. Gerry Moore was the third witness for the Applicant and gave detailed evidence with respect to the entire project proposed by Irving for this location. Mr. Moore described the lot and the planned placement of facilities thereon, the accessibility of the lot by the different participants who would use the site, the intended hours of operation and staffing requirements of the various components of the project, and gave details of the commercial cardlock facility and the split-serve gasoline and diesel dispensing facilities for which Irving is presently seeking initial licensing. Mr. Moore gave evidence relative to the gasoline and diesel volumes dispensed at existing outlets in the Greater Charlottetown Area, the anticipated increase in traffic on this route, projected volumes at the new location, and testified with respect to Exhibits 39 to 44, which were letters obtained in support of this project, particularly with regard to the commercial cardlock facility.
Mr. Moore also testified with respect to the volumes being generated at the only other commercial cardlock facility in the Province.
B. Other
During testimony given at this hearing, and especially that given by Mr. Moore, several references were made to statements purportedly made by Mr. Michael Bailey of the Department of Transportation and Public Works. As a result, the Commission subpoenaed Mr. Bailey to give evidence relating to these statements. During the questioning of Mr. Bailey, clarification was received with respect to the proposed construction of the perimeter road on which this outlet would be located. Mr. Bailey also testified with respect to the timing of the various phases of this new perimeter highway and the proposed route for its completion.
C. The Interveners
Letters of intervention were filed with the Commission prior to the hearing by Mr. William E. Armstrong, Ms. Catherine G. Hennessey for The Charlottetown Area Beautification Program, Mr. W. Robertson Burnett for a group provisionally known as The Arthur Newbury Society, Ms. M. Tara Lea, Mr. J. Sackville for Basic Design Associates Ltd., Mr. Ray Brow, and Mr. Dale H. Mader for the Prince Edward Island Retail Gasoline Dealers Association ("R.G.D.A.).
Ms. Lea's intervention was withdrawn prior to the opening of the hearing, and Ms. Hennessey and Mr. Mader appeared at the hearing to testify in support of their interventions. In addition, Mr. Mader called three additional witnesses, being Mr. Robert Taylor, Mr. Alan Mayne, and Mr. Ronald Peters, all members of the R.G.D.A. as well as being licensed gasoline retailers in the Greater Charlottetown Area. No one appeared on behalf of Mr. Armstrong, Mr. Burnett, Mr. Sackville or Mr. Brow.
Mr. William E. Armstrong, by letter of 21 May 1991, expressed concern with respect to the granting of licenses to additional outlets in the Charlottetown area, and presented the view that the area is already more than adequately served. He noted that 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 noted that it was his opinion that the proposed facility would add to traffic problems already existing.
Mr. W. Robertson Burnett, in his letter filed with the Commission on 22 May 1991, advised the Commission that he wished to intervene in this matter in order to be assured that the construction of the proposed facility would be consistent with initiatives previously announced by the provincial and municipal governments to improve entrances to the City of Charlottetown. Mr. Burnett, however, did not appear to give evidence with respect to his intervention.
Mr. J. Sackville on behalf of Basic Design Associates Ltd., the firm which completed a project in 1989 for the Charlottetown Area Development Corporation entitled "First Impressions", also filed a letter of intervention. Mr. Sackville pointed out that the route upon which this new outlet is proposed is the most important entry route into the region, a route that for many visitors will establish a lasting "First Impression". As a result, Mr. Sackville suggested that commercial development along this route (Confederation Parkway) may not be compatible with this concept, and suggested that every effort be made to find an alternative location for the proposed Irving Oil facility. Mr. Sackville did not appear, however, in support of his letter of intervention.
Mr. Ray Brow, while agreeing that the location is a good one for Irving Oil Limited with respect to the establishment of a service station, expressed similar concerns to those of Mr. Sackville with respect to what would constitute suitable development along the new Riverside Drive Bypass Road. Although Mr. Brow indicated in his letter that he would appreciate an opportunity to discuss his concerns at a public meeting, he did not appear at the hearing.
Ms. Hennessey did appear on behalf of The Charlottetown Area Beautification Society to testify in support of her letter dated 22 May 1991. This letter pointed out that her group was not directly opposed to the application but did have very grave concerns for future plans and direction of Riverside Drive, which arterial road would become a major Confederation Roadway into the City of Charlottetown. Ms. Hennessey filed a copy of the "First Impressions" study referred to above with her letter of intervention, which letter and study were entered as Exhibit 20 in this hearing. She also filed Exhibit No. 70 in the hearing, being the Riverside Drive Linear Park Plan dated March 1991.
Mr. Dale H. Mader, in his letter of 13 May 1991, stated that the Prince Edward Island Retail Gasoline Dealers Association 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. 84 in the hearing. In this document, the Association submitted that the license applied for cannot be justified when measured against the test of "public interest, convenience and necessity" (Section 20 of the present legislation), nor indeed under the test of "public convenience and necessity" (Section 11 of the previous legislation), and Mr. Mader quoted from various sources in support of this contention. Following the hearing, the documents from which these quotes were taken were provided to the Commission and Counsel for the Applicant by Mr. Mader.
Mr. Robert Taylor, operator of the Imperial Service Station located at the intersection of Euston Street and University Avenue, gave evidence in support of the Association's intervention. Mr. Taylor testified that gasoline sales volumes have been remaining relatively stable even though he is offering more services at present. He noted that each service is designed to pay its own way, and that a variety of services are necessary in order to keep the outlet viable. He supported the view that the area is already more than adequately served.
Mr. Alan Mayne, operator of the Railway Service Station located on Grafton Street East and supplied by Ultramar, testified in opposition to the application. Mr. Mayne's outlet is in close proximity to the proposed new outlet, and he noted that he offers various services in addition to gasoline sales in an attempt to stay in business.
Mr. Ronald Peters, operator of the Southport Service Station supplied by Imperial Oil Limited, was the third dealer to speak in support of the Association's intervention. His outlet is located on the south side of the Hillsborough Bridge, and he said his outlet would be detrimentally affected by the licensing of the proposed new outlet on Riverside Drive. He noted that he has a lot of "dead" time in his business, and that the volume trend is presently down due to such things as the state of the economy and fewer tourists.
III. Decision
The Application
The legislative test to be applied is that set out in Section 20 of the Petroleum Products Act, R.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.
Counsel for the Applicant has asked that the Commission review this application as one governed by the test of public convenience and necessity as described by the former Petroleum Products Act, rather than the new test of public interest, convenience and necessity. This request was based on the timing of the filing of the application. Since the Commission has determined that the result in this application does not differ from the use of either test, it will present a review of the evidence on the basis of the new test in the hopes that the findings can be of more assistance in future cases.
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 any one factor. Factors such as demand interconnect with many others and so cannot be itemized separately.
a) Record of Performance/Fitness
The Commission accepts that the Applicant, Irving Oil Limited, is qualified to operate a retail gasoline dispensing facility. We expect and require that the actual operators would be properly trained and guided by that Company.
The evidence indicates the Applicant has clear title to the site on which it proposes to build its new facility. Subsequent to the hearing, a copy of a building permit issued by the City of Charlottetown (No. 7793, dated December 4, 1991) was filed with the Commission.
b) Cardlock Facility/I-24 System
The evidence with regard to the cardlock facility indicates that it is a commercial fleet system with self-serve pumps dispensing diesel fuel only. The system is activated by a card similar to a credit card, issued when a company signs a contract with Irving Oil Limited. The pumps are high speed units with large nozzles for use by large commercial vehicles. Part of the special service provided with the I-24 system are statements itemizing such things as the time, odometer readings and km/litre.
There are presently no Irving cardlock facilities on Prince Edward Island, and the only other facility of this type, an Ultramar outlet, is located in West Royalty. Mr. Moore testified with respect to the volumes being generated at the existing cardlock site; however, this testimony was found to be inconsistent with information on file with the Commission.
No serious opposition was raised with respect to the application to operate this facility. Mr. Mader indicated that an argument could be made that there is a need for such a facility, but expressed the concern that it not be used by smaller vehicles.
The Commission has previously established conditions for the operation of cardlock facilities generally prohibiting the dispensing of fuel from cardlock facilities to vehicles with smaller than 180 litre fuel capacity. This should address Mr. Mader's concern.
Overall the Commission finds that the test of public interest, convenience and necessity has been met with respect to this facility. Competition will be enhanced, the location is separate from the only other cardlock facility on the Island, the evidence indicates that there is a significant increase in truck traffic with the demise of CN rail, and the normal traffic flow in front of the proposed site would not appear to be adversely affected by this operation because this aspect of the facility is most likely to be used at off-peak hours.
We have one area of concern. The Applicant stated that normally the cardlock facility would be monitored through closed-circuit television by those working in the convenience store. However, that store is to be leased and will be run independently from the cardlock dispensing facilities, said Mr. Moore. This issue of how proper monitoring will take place will have to be resolved to the Commission's satisfaction before the final issuance of the license for this facility.
c) Retail Gas and Diesel/Convenience Store
The evidence indicates Irving plans to dispense diesel as well as three grades of gasoline from blender pumps. In addition there will be a standard convenience store described by Mr. Moore as selling hardware, fruits and vegetables, canned goods, dry goods, auto supplies, frozen foods, snack food, soup and sandwiches. There will also be a banking machine. These services will be offered 24 hours a day.
Mr. Moore testified that this will be the only outlet in the Grafton Street/East End area providing 24-hour service and "will be the nicest site on Riverside Drive".
The people he expects to use the facility would be local residents using the route daily or weekly, commercial traffic and tourist traffic. His evidence stressed the importance of the location on the developing perimeter road and the changing traffic patterns towards use of this perimeter road.
The Applicant expects to pump four million litres annually, based on present traffic volumes. Most of this would come from the greater Charlottetown area.
The Applicant provided extensive statistics on volume sales of petroleum products and testified that since 1984 sales on Prince Edward Island have been increasing overall. However, the Commission's own statistics support the position taken by the Intervener Retail Gasoline Dealers' Association that sales in 1990 were approximately equivalent to sales in 1979. From a high of 162.2 million litres in 1979, sales dropped to a low of 139.0 million litres in 1982. Since then they have been gradually rising to return to 1979 levels. On the basis of product sales alone, no need for additional dispensing can be shown.
This may even be a cause for greater concern if it is viewed along with the evidence of ferry traffic increases (Exhibit 55 Revised). Tractor-trailers showed the greatest increase of all types of vehicles overall for 1984-1990-- over a 50% increase--during the same period that rail car traffic decreased to zero. The implication is that the growth of petroleum product sales in that period was primarily a result of the tractor-trailers replacing the rail cars. This would suggest little growth is likely in the future in the Province as a whole.
Population statistics (Exhibit 59) suggest little real growth in any relevant area for the last five years.
Three other significant areas on which evidence was given during the hearing related to traffic flow and patterns, the location and physical accessibility of the site and the issue of competition and impact on existing retailers. We will deal with each of these separately.
d) Traffic Flow/Patterns
Many documents and exhibits were filed to show that considerable traffic passes by the proposed site and that traffic has been increasing on Riverside Drive because of the proposed perimeter road and developments to date that enable traffic to bypass the Charlottetown core by using Riverside Drive.
No one disputed that a perimeter road is planned and partially constructed and that use of Riverside Drive has increased as work has progressed on this road. There was also sufficient evidence to indicate that the traffic passing the proposed site would likely support an outlet at this location.
The Riverside Drive Location Study, 1990 (Exhibit 28), prepared by Corporate Research Associates Inc., was submitted to support the proposition that this traffic flow indicates that public interest, convenience and necessity would be served by the location of the proposed outlet at this site. Don Mills, President, gave evidence with respect to the study. He concluded from this study that a significant number of people who use Riverside Drive say there is a need and they would use an outlet if it were there. Specifically, four out of every ten people interviewed indicated they would be likely to purchase gasoline from this station if it were built.
The first paragraph of the executive summary reads as follows:
"The results of the Riverside Drive Location Study indicate that the establishment of a new gas station on Riverside Drive would increase the convenience of purchasing gasoline for a significant number of motorists who use that route on a regular basis. Furthermore, if use is a measure of need, there is little doubt that a significant number of those surveyed would use a gas station located on Riverside Drive." (p. 3)
The survey did not ask "Is there a need for a gasoline outlet on Riverside Drive?". Mr. Mills explained that he felt it was not the best question, that there certainly are enough outlets already from the point of view of supply volume, but that people who say they will use something are giving a certain indication of need.
On balance, looking at all of the evidence presented on this issue, the Commission finds that the evidence of changing traffic patterns is significant and public convenience would be enhanced by an outlet at this location for this reason. Given that we are not looking for an absolute indication of need as would be shown by a total absence of service, the surveyed frequency of use also supports this application.
e) Location/Physical Accessibility
The Applicant's primary witness on this issue was Dr. John B. L. Robinson of Fredericton, New Brunswick, a Professor of Civil Engineering at U.N.B. Dr. Robinson's expertise is in the area of highway design and traffic engineering, including site locations, site impact analyses and intersection impact analyses.
Overall Dr. Robinson concluded that the site is well-designed, with well-defined access and egress areas and plenty of room for the movement, parking and storage of vehicles. He called it safe, efficient and well thought out.
The site impact analysis done by Dr. Robinson was described as involving a study of internal circulation and safety manoeuvers, the relationship of access and egress to the surrounding road system, and what traffic volume is expected to be created by activity at the site.
The plans as originally filed with the Commission were redesigned by the Applicant prior to the hearing in response to concerns expressed by the Commission about the site's design. The Commission found the new design a considerable improvement. While the Commission even then continued to have some concerns about the large numbers of activities planned for the site, given Dr. Robinson's evidence, we are satisfied that our concerns have been addressed.
The issue of traffic flow and potential problems from turning vehicles is a separate matter. The convenience and interests of the motoring public could be adversely affected by such a development.
However, on this point Dr. Robinson's opinion was that the site presented no problem for the Grafton Street intersection. He also stated that left-hand turn access into the site by large vehicles would not create an unreasonable delay or congestion. Exiting vehicles require good visibility turning left, he stated, and there is no visibility problem at the site. From the point of view of overall traffic flow Dr. Robinson testified that the capacity of Riverside Drive is 1,200 vehicles per hour per lane, and at peak hours now, less than 700 vehicles per hour per lane travel the road.
While Dr. Robinson admitted he did not do a traffic simulation analysis, he stated that such would not normally be done for a development of this type.
The Commission's awareness of existing traffic flow problems at the Grafton Street intersection caused us to look closely at this evidence. Comments by Dr. Robinson that whatever traffic/turning problems might develop would be resolved by the "proposed" four-lane development for this area, and that he would not anticipate a problem for five years at least, also caused us some concern. For this and other reasons, we called Michael Bailey, Director of Planning for the Department of Transportation and Pubic Works, to testify.
Mr. Bailey confirmed that the entrances and exits are acceptable to the Department and that the road immediately opposite Park Street is capable of being developed into four lanes.
While Mr. Bailey did not support the application, and as an engineer stated a preference for no access on the perimeter road, he said the design of the site met the requirements agreed upon between Irving Oil Limited and the Government of Prince Edward Island, as these were described to him, and that if a development is to be put there, the design and location create no special problems.
Mr. Bailey did express some concern about the width of the island between the two accesses, indicating that he would prefer that it were wider to allow traffic to exit the site perpendicularly rather than at an angle. Counsel for the Applicant indicated that the plan would be changed to meet that concern.
On balance, we feel that the concerns expressed by Mr. Mader, and our own concerns, are reasonably well answered by the evidence of Dr. Robinson and Mr. Bailey. The specific issue of traffic flow and site impact should be more directly a responsibility of the City of Charlottetown when zoning areas for development, and the Province when designating arterial roads. Since both the City and the Province have given their approvals, and Dr. Robinson and Mr. Bailey cite no problems, we find insufficient evidence of traffic problems for the motoring public to create a concern for us in this application.
f) Competition/Existing Licensees
The final issue to be considered is what impact the proposed development is likely to have on the existing licensees and the market as a whole.
There is evidence before us that if this application is approved, a number of existing outlets will be severely impacted, with potential sales losses from 10%-35%.
Mr. Mader stated that total gasoline sales volumes on the Island were down slightly in 1990 from 1989--and the recession, GST, and low tourist traffic were some reasons given for predicted lower sales in 1991--and then only about the same as 1979. He also expressed his view that existing outlets are capable of providing all required services.
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 a new outlet would likely have an overall negative impact on this group.
If such a proposed operation would have such a negative effect upon existing retailers that there would be an overall decline of availability of service to the overall detriment of the motoring public in the area, then those negative effects would override the benefits. The evidence presented does not support a contention that negative effects of this magnitude will result in this case.
Mr. Mader noted that over the last 4-5 years two outlets have ceased providing 24-hour service, but there was no public indication that this has created any real problem.
Robert Taylor, operator of Taylor's Esso on the corner of University Avenue and Euston Street for the last 15 years, expressed the concern that he would lose 10% of his sales to the new outlet and might have to lay off staff, slowing down his service to the public.
Ronald Peters, operator of Southport Esso for the last 20 years, said he is selling the same amount of gas now as in 1979, and expects he could lose 25-30% of his sales if the new outlet opens up. It could put him out of business.
Alan Mayne, operator of the Ultramar outlet on Grafton Street since June of 1990, said he is only operating at 45-50% capacity and could lose 30-35% of his business if the new outlet opens up. He is the third or fourth operator at that location in the last few years and is trying to make it profitable by providing extra services. He said that a change in dealer disrupts a customer who may have an established line of credit, expects work done in a certain way, and must start again to deal with a new dealer who may have a different set of standards.
We would agree that if sufficient evidence were provided to convince us that the opening of a new outlet was likely to result in the closure of another, we must then be convinced that there is a good reason for putting customers through that inevitable disruption. That reason could be that a public need is being met, service is more convenient, and overall the public interest is better served by the new outlet. If that can be found, the resulting closure of another outlet may simply be inevitable--perhaps an indication that the needs of the public have changed, traffic patterns have changed, an outlet has outlived its useful life.
While the Commission strongly sympathizes with these witnesses, the fact that they may lose business to the new outlet is not the deciding factor. None of their evidence showed that in any overall sense the public would be less well served if the application is approved. Rather, the indication is that the loss of sales would occur because the new outlet has a more convenient location, and that perhaps there are more outlets than the area needs for serving the public.
There is one other aspect of the competition issue that must be considered, and that is the market share of the Applicant. Mr. Mader suggests in his evidence that Irving Oil Limited could be getting a "stranglehold" on the City and has a disproportionate share of the market. The testimony of the Applicant, though, was that its sales in the market area have been declining and it is concerned it will be left out of the whole market of the perimeter road development if this outlet is not allowed. On that road, said Mr. Moore, Irving Oil Limited has no outlet west of Charlottetown to Bonshaw or East of Charlottetown to Mount Albion.
The Commission does not believe that this outlet would give Irving Oil Limited a ""stranglehold"" on the City. At the same time, the Commission does not agree that Irving Oil Limited's sales in the market area have been declining significantly. Exhibit 51 Revised shows a decline but the great majority of this is related to Parkdale Irving where there was substantial construction going on for the year in question. Also, Mr. Taylor suggested that if Irvings' sales are down, perhaps it is because the Company's prices are usually higher than those of other companies. This is a possibility.
As for market share as a whole, Irving Oil Limited does have a substantial amount. However, at the moment the market area seems reasonably well-balanced among Ultramar, Imperial, and Irving. Shell and Petro-Canada have significantly smaller market shares. On balance, this is not a matter of concern for the Commission with this application.
g) Other Interveners
The only other intervener who appeared at the hearing and participated was Catherine Hennessey for the Charlottetown Area Beautification Program. Unfortunately, her concerns are not considered to be within the jurisdiction of the Commission in dealing with this application. We note the comments of the Prince Edward Island Supreme Court in Re Allison MacLeod Ltd., supra, at p.503:
Some of the objections raised by the Charlottetown City Council, and certain other objections by residential owners, such as additional burden on already heavy traffic, and other matters not concerned with the distribution of petroleum products, are therefore irrelevant to the consideration of an application for a license. (Re Allison MacLeod, supra, p. 503)
While we feel that the recent addition of the phrase "public interest" to the Petroleum Products Act broadens the range of issues which might be considered by the Commission, these issues still must be more closely connected to the concerns of the motoring public to be served in the area than were the concerns expressed by Mrs. Hennessey.
We note, however, that Counsel for the Applicant stated repeatedly that the Applicant was prepared to work with Mrs. Hennessey to respond to her concerns. Mr. Moore also stated this. We therefore expect this to be done.
Conclusion
The evidence presented indicates that the proposed new gasoline dispensing facilities in conjunction with a convenience store on Riverside Drive would provide convenient service to a large number of motorists now using that route regularly. The evidence is that such an outlet would be used and that a need will be met. As well, any impact upon existing outlets or competition would not create any overall negative effect on services available to this potential customer group.
For the reasons set out above, the Commission also finds that the test of public interest, convenience and necessity has been met with respect to the proposed diesel cardlock facility.
Subject to the comments made in this decision, the applications are approved.
IV. Order
The Commission therefore Orders that:
1) The application of Irving Oil Limited dated 17 April 1990 to install retail split-serve gasoline and diesel fuel dispensing facilities in conjunction with a proposed convenience store to be constructed on Riverside Drive is hereby approved.
2) The application of Irving Oil Limited dated 7 December 1990 to install a commercial cardlock facility for the dispensing of diesel fuel on Riverside Drive is hereby approved, on the condition that the dispensing of diesel fuel is restricted to vehicles with a capacity of no less than 180 litres and conditional upon the Applicant addressing to the satisfaction of the Commission the concerns set out on Pages 17 and 18 of the Decision accompanying this Order.
3) The above-noted outlets are to be constructed in accordance with the most recent plans submitted (with amendment as noted on page 23 of the Decision accompanying this Order).
4) Licenses under the Petroleum Products Act will be issued upon completion of these outlets and final inspection has determined that all requirements have been met.
5) The above-noted outlets are to be operated in accordance with the filed applications and testimony given at the hearing by Company representatives.
6) Having regard to the timing of this Decision, the approvals contained in this Order are valid for a period of six months from the date of issuance thereof rather than the standard four months.
DATED at Charlottetown this 5th day of February, A.D., 1992.
BY THE COMMISSION:
Chairman
Commissioner
CARR, Commissioner (dissenting): I dissent in part from the findings in the majority's Decision and Order, and my reasons for this follow.
There were two applications by Irving Oil Limited for initial licensing under the Petroleum Products Act before the Commission--one for a commercial diesel fuel cardlock dispensing facility and one for retail split-serve gasoline and diesel fuel dispensing facilities associated with a convenience store. Both outlets are proposed to be constructed on the same site as a new head office building and loading facilities associated with the existing bulk storage tanks on Riverside Drive.
For the reasons outlined in the majority Decision, I support the Commission's findings with regard to the approval of the application dealing with the commercial diesel fuel cardlock dispensing facility. However, I do not concur with the decision of the majority to approve the licensing of retail split-serve gasoline and diesel fuel dispensing facilities associated with a convenience store at this location.
Section 20 of the Petroleum Products Act, R.S.P.E.I. 1990, Cap. 43 directs the Commission to consider, among other things, the demand for the proposed service. The Applicant, Irving Oil Limited, supported its evidence of demand by Exhibits 39-44, letters from various businesses located in the Charlottetown area and by Exhibit 78, a petition reported as being available for signature at the counter of its existing head office located at the intersection of Riverside Drive and Grafton Street East.
No individuals appeared in person to expand, give evidence or be cross-examined on Exhibits 39-44. None of those who signed the petition, Exhibit 78, were present. The introductory sentence to the petition refers only to the cardlock and convenience store at the new site. When asked by Mr. Mader, representing the R.G.D.A., if consumers knew that passenger vehicles could not be fueled at cardlock facilities, Mr. Moore, representing the Applicant, indicated that they did not try to separate the two.
Residence locations of some of the people who signed the petition, Exhibit 78, included Bedford, Kingston, Canoe Cove, Mt. Stewart, Roseneath, Cornwall, Montague, Lake Verde, Vernon River, Georgetown, Village Green and Morell. Such diverse and far-reaching locations begs the question "What do consumers understand by the word convenient?". Interestingly, 94% of motorists surveyed for the Riverside Drive Location Study, 1990 (Exhibit 28) said that existing outlets are very or somewhat convenient.
Intervener William E. Armstrong in his letter of 21 May 1991 did have three areas of concern:
1. the area is already more than adequately served;
2. deterioration of existing services; and
3. additional traffic problems.Although Mr. Armstrong did not appear before the Commission, the first area of his concern was supported by the brief, supporting statements and exhibits filed by Mr. Dale Mader on behalf of the R.D.G.A. Some of his submissions are summarized as follows:
- market demand for retail gasoline on Prince Edward Island is at the same level as it was in 1979
- Charlottetown area outlets sold less gasoline in 1990 than in 1989
- Prince Edward Island has the highest density of retail gasoline outlets and the lowest average volume of gasoline sales of any province in Canada
- twenty-six outlets presently serve the Charlottetown area and offer a wide variety of services and hours of operation.Three gasoline dealers operating in this market area (all members of the R.G.D.A.), appeared, gave evidence to support the position of the Association and addressed the likelihood of deterioration of service if the application was approved.
It is my belief that the motoring public is not handicapped by the absence of the proposed facility, neither is it substantially inconvenienced. However, the motoring public could well be handicapped and inconvenienced if existing services are withdrawn from the network through closures of existing outlets brought about by loss of gasoline sales as a result of the licensing of additional gasoline outlets.
Evidence of demand was, in my opinion, weak and did not satisfy the requirements of the legislation. In my opinion, the majority perceived evidence of a demand as a result of letters, a petition and the location study filed as Exhibits by the Applicant. However, no oral evidence was given at this hearing by the signators of these documents.
Section 20 of the Petroleum Products Act, S.P.E.I., 1990, Cap. 43 also directs the Commission to consider as one of the criteria traffic flows.
John B. L. Robinson, Ph.D., P. Eng., as witness for the Applicant indicated that he personally had not considered the arterial traffic. He did suggest a conflict zone exists on highways where two lanes of traffic need to be crossed in order to access a site. This would be the case if and when the section of Riverside Drive immediately in front of the site is redesigned to accommodate four lanes of traffic, and left-turning traffic approaching from the direction of the Queen Elizabeth Hospital desires to enter the site. He also said he did not look at long-term (5-10 years) traffic projections or have any accurate projections of what traffic could be on completion of the arterial. Mr. Robinson also suggested that there would be good separation of on-site traffic, except at the entrances, but could see no problem with the capacity of the entrances. In my opinion, this suggests that the entrances and exits would be inadequate insofar as separation of the various types and amount of projected traffic is concerned.
In my opinion, a bulk storage depot and cardlock facilities for commercial accounts along with retail split-serve gasoline and diesel fuel dispensing facilities associated with a convenience store at one location with no separation of entry and exit is inappropriate. Competition for either entry into or exit out of the site between a 21-23 meter tractor tanker/trailer combination unit and a compact passenger vehicle will undoubtedly lead to problems. I am not prepared to support the possibility of an accident waiting to happen.
Any argument that safety to the motoring public is not an issue to be considered as far as it relates to the travelling aspect is not acceptable. It is my view that safety is a component of public interest in this and any other application for retail gasoline dispensing outlets. In my opinion, the motoring public will be at risk when this combination megaproject is completed.
It appears the benefit to be derived by the motoring public but not offered by existing outlets is location and location alone. This is insufficient to meet the requirements of the Petroleum Products Act whether the issue is "public convenience and necessity", as in the previous Act, or "public interest, convenience and necessity", as in the current legislation.
Frequently, I have been reminded that the duty of the Commission is not to protect the existing network of retail gasoline outlets and I do not disagree with this. However, when one contemplates deterioration of services to motorists, one must be realistic and question how far a situation can continue before serious concerns are dealt with. It will be too late when motorists are able to purchase gasoline in the Charlottetown area at outlets which are little more than gas bars.
Evidence to support the requirements for licensing as set out in Section 20 of the Petroleum Products Act was, in my opinion, insufficient to warrant the licensing of retail split-serve gasoline and diesel fuel dispensing facilities in conjunction with a proposed convenience store at the Irving site on Riverside Drive, and I thus register my dissent.
Commissioner
