Order No. P.980730
IN THE MATTER of the Island Regulatory and Appeals Commission Act, Stats. P.E.I. 1991 Cap. 18; and the Petroleum Products Act, R.S.P.E.I. 1988, Cap. P-5.1;
- and -
IN THE MATTER of an application made by Jamie Fox of Borden-Carleton, P.E.I. for an initial petroleum products license in respect of split-serve motor fuels dispensing in conjunction with a proposed convenience store to be located at Gateway Village, Borden-Carleton, Prince Edward Island.
Thursday, the 30th day of July, A.D., 1998
BEFORE:
Wayne D. Cheverie, Q.C., Chair
Debbie MacLellan, Commissioner
Arthur Hudson, Commissioner
Decision and Order
TABLE OF CONTENTS
TITLE PAGE
TABLE OF CONTENTS
APPEARANCES AND WITNESSES
DECISION
I. INTRODUCTION
II. REVIEW OF EVIDENCE IN SUPPORT
III. REVIEW OF EVIDENCE IN OPPOSITION
IV. REASONS FOR DECISION
ORDER.
APPEARANCES AND WITNESSES
Participants in the hearing and the parties for whom they appeared were as follows:
FOR APPLICANT: JAMIE FOX, BORDEN-CARLETON – PRINCE EDWARD ISLAND
Counsel:
Lisa Goulden
Patterson Palmer Hunt MurphyWitnesses:
Kim Jay
John McEachern
David Bryenton
Dave Ketch
David Anderson
Randy Noye
Jamie D. FoxOTHERS IN SUPPORT:
Witnesses: Marilyn Thomas
INTERVENERS IN OPPPOSITION:
Northumberland Service Station – Douglas Howatt (representative - Lorne Sutherland
Witnesses:
Mary Howatt
David MullinsTerminal Service Station – Ivan J. Newrick
Witnesses: Ivan J. Newrick
Irving Oil Limited
Counsel: Eugene P. Rossiter, Q.C./Tracey L. Clements
Stewart McKelvey Stirling ScalesWitnesses: None
OTHERS IN OPPOSITION:
Witnesses:
Alan Vincent
Eric RogersonFOR THE COMMISSION:
H. Doris Pursey, Director - Petroleum Division
Harry MacDonald, Assistant to Director - Petroleum DivisionRECORDING SECRETARY: Faye Weeks, Secretary – Petroleum Division
Decision
I. INTRODUCTION
By application dated 15 January 1998 and completed on 26 March 1998, Jamie Fox of Borden-Carleton, Prince Edward Island (the "Applicant"), sought from the Commission an initial petroleum products license covering split-serve dispensing of motor fuels in conjunction with a convenience store proposed to be established at Gateway Village, Borden-Carleton, Prince Edward Island.
Notice of this application dated 26 March 1998 appeared in both the Guardian and the Journal-Pioneer, with interventions either in support of or in opposition to the granting of this license to be filed by 20 April 1998.
As a result of this Notice, written interventions and other submissions relating to this application were filed in support of this application, as follows:
1) James Hagen
2) Dale Johnston of Dale Johnston's Towing
3) Joseph P. Gallagher
4) John McEachern of Tim Horton's
Submissions in opposition to this application were filed by or on behalf of the existing motor fuels outlets located in the area as follows:
1) Ivan J. Newrick, Terminal Service Station, Borden-Carleton
2) Douglas Howatt, Northumberland Service Station, Borden-Carleton
3) Eugene P. Rossiter, Q.C., on behalf of Irving Oil LimitedIn addition, submissions in opposition to this application were filed by the following persons:
1) Mary Howatt
2) Chad & Nic Howatt
3) Nicolle Howatt
4) Richard Birch
5) Pauline Trainor
6) Mitch Mullins
7) Ralph and Sandra Coughlin of the Carleton Motel & Coffee Shop
8) Scott Campbell
9) Lorne Sutherland
10) Chris Gallant
11) Judy MacKenzie
12) David Mullins
13) Randy Ahearn
14) John BernardAt its meeting of 22 April 1998, the Commission fixed 9:00 a.m. on 4 June 1998 as the time and date for the commencement of a hearing into this application, and Notice of Hearing dated 27 April 1998 was published in the Guardian and Journal-Pioneer newspapers.
This hearing commenced as scheduled and was reconvened for the hearing of further evidence on 5 and 15 June 1998. Sixty-one documents relating to the application were entered as exhibits during the hearing. A total of thirteen witnesses testified at the hearing either in support of or in opposition to the application. A listing of those appearing can be found on pages 3 and 4 of this Decision entitled "Appearances and Witnesses".
Closing summations were given orally in this hearing by Mr. Rossiter on behalf of Irving Oil Limited and by Ms. Goulden on behalf of the Applicant. In addition, Mr. Rossiter filed with the Commission on 18 June 1998 a post-hearing brief, which brief indicated that Ms. Goulden had also been provided with a copy. At the adjournment of the hearing, the Chair indicated that the matter would be taken under advisement by the Commission following the filing of the above-noted brief, and the parties notified of its Decision in due course.
II. REVIEW OF EVIDENCE IN SUPPORT
The first witness for the Applicant was Kim Jay, presently Senior Policy Advisor for the Atlantic Canada Opportunities Agency ("ACOA"). Ms. Jay, in her previous position with Enterprise P.E.I. as Executive Director – Special Projects (Phase I – Gateway Village), testified that she was the contact person in relation to the proposed establishment of various types of facilities, including the subject motor fuels outlet in Gateway Village, Borden-Carleton. Ms. Jay testified that there is a population in the Borden-Carleton area of approximately 1,000 persons, and that approximately 690,000 persons used Marine Atlantic in 1996. She further testified that approximately 1.2 million visitors came to P.E.I. in 1997—of which statistics indicated that 3% arrived by air and 88% by private vehicle. She noted that the Gateway Village is located on a 29-acre teardrop-shaped parcel of land, and it was agreed that one acre would be turned over by Gateway Village Development Inc. to Mr. Fox for nominal consideration for the purpose of establishing an initial motor fuels outlet. Although Ms. Jay noted that there is no firm evidence of the number of visitors who stopped at Gateway Village since the opening of the bridge, it is indicated that the number is in the vicinity of one-half million. In cross-examination, Ms. Jay stated that it was her opinion that 2.7 persons per vehicle was the factor used to determine the number of persons crossing the bridge. Ms. Jay said that no studies were conducted by Enterprise PEI specifically in relation to the demand for an additional motor fuels outlet in the area, but that her banking experience of fifteen years led her to conclude that the due diligence exercised by Imperial should be sufficient in this respect. Ms. Jay outlined the number and type of other businesses presently known to her which will eventually form part of the Gateway Village development, and increase the number of year-round operations.
Ms. Jay commented on Exhibit 8 which was a letter dated 3 December 1997 from her to Mr. Fox. This letter covered monthly traffic counts supplied by the Department of Transportation and Public Works and provided average per day numbers as it relates to the main traffic flow and also the flow into Gateway Village for the period 17 June 1997 to 30 November 1997. She noted that this information was available as a result of automatic counters installed at these locations, and the significant numbers indicated were factored into her decision to support this application.
The second witness for the Applicant was Mr. John McEachern, Director – Real Estate – Atlantic Region for Tim Horton’s. This firm proposes to operate a "drive-thru" coffee shop in conjunction with the motor fuels outlet proposed by the Applicant, and would be leasing a portion of the "backcourt" of this outlet for this purpose. Mr. McEachern testified that the cross-traffic component of the two types of business has been proven in other locations to be a benefit to both. Mr. McEachern described the business conducted by Tim Horton’s during the bridge construction, and stated that whether or not they locate in the proposed motor fuels facility, Tim Horton’s proposes to have a presence in the Borden-Carleton area. He indicated in his testimony that a suitable site in the area had been purchased for this purpose approximately five years ago. During cross-examination, Mr. McEachern indicated that a suitable barrier would be installed for the safety of pedestrians on the site.
Mr. David Bryenton, Manager of the Research Section for Enterprise P.E.I., also appeared on behalf of the Applicant to give evidence related to the statistical information used to support the contention that the application was an appropriate one, and the methodology used by consultants on behalf of Enterprise P.E.I. in acquiring these statistics. He indicated that the information is considered valid, and is obtained at key exit points.
Mr. Dave Ketch, Senior Territory Manager for Imperial Oil, Fredericton, New Brunswick, appeared in support of the application as supplier thereto. Mr. Ketch provided the Commission with generalized details as to the proposed agreements to be signed between the Applicant and Imperial. Mr. Ketch indicated that initial and ongoing training and support would be offered the Applicant with respect to the operation of the equipment to ensure compliance with all existing laws. He further testified that although he was not the person in charge at the time the decision was made by Imperial Oil Limited with regard to supporting this application, he was in agreement with the decision. He felt that with the plans to "twin" the highway between Fredericton and Moncton, some existing petroleum outlets would no longer be available to the motoring public on that route, and that this would result in more business for an outlet on this side of the Confederation Bridge. He indicated that a potential volume of one million litres was satisfactory for an independent outlet with a branded food partner. However, Mr. Ketch was quite clear that if Imperial were constructing a new outlet, it would be larger and at three times the cost.
Mr. David Anderson, a business partner of Jamie Fox in the automotive repair service known as Anderson Automotive located in the Summerside area, gave evidence in support of the application. Mr. Anderson’s testimony related mainly to the expertise of Mr. Fox in handling the business affairs of the existing company in which he is involved. With regard to Mr. Fox’s present proposal, Mr. Anderson testified that he has portable equipment capable of being called into service by a stranded motorist who might contact the proposed outlet for assistance.
Mr. Randy Noye, President and General Manager of Noye Enterprises Inc., gave evidence that his company would be involved in the total construction of the site, including the installation of the double-walled fiberglass underground petroleum product storage with total containment, the Omniflex double-walled lines, etc. He outlined the experience of his company in constructing motor fuels outlets to meet all existing requirements.
Mr. Jamie D. Fox, the Applicant, gave evidence relating to his proposal. Mr. Fox testified that he is presently the Chief of Police of Borden-Carleton, and is also involved (since the summer of 1995) with Mr. David Anderson in the business enterprise "Anderson Automotive". He indicated that he has recently set up a company known as J. D. Fox Inc. He stated that this action was necessary in dealing with the contracts required in the establishment of his proposed new business.
Mr. Fox stated that he proposes to sell Imperial gasolines and diesel fuel in conjunction with the operation of a small C-store offering mainly Esso automotive-related products as well as snack items. He stated as well that these services would be available on a twenty-four hour basis to the motoring public. The Applicant testified with respect to the General Business Plan which was filed (with the exception of Item 10 thereof) as Exhibit No. 2 in the hearing. Mr. Fox gave generalized testimony relating to the cost and financing of the total installation, and noted that these expenses could and would be met by him. Counsel for the Applicant, Ms. Goulden, agreed to file with the Commission, in confidence, Item 10 of the above-noted plan, which contained a detailed financial plan relating to the proposal. This item was filed as agreed on 12 June 1998.
Mr. Fox testified that he was prompted to make this application based on his desire to put he and other family members in a position of self-employment, and noted that he had received the verbal support of several members of the community prior to making application. He stated that the proposed facility would add substantially to the convenience of the many people travelling to and from the Confederation Bridge, and also to those persons working and/or residing in and around the Borden-Carleton area. He indicated as well that he felt a twenty-four hour motor fuels service was necessary at a location such as the one proposed. He referred to the occasions when the bridge was closed to truckers due to wind conditions, and indicated that the facilities proposed to be offered would be required in circumstances such as this.
Mr. Fox further testified that it is his intention to lease a portion of the outlet to Tim Horton’s for the operation of a "drive-thru" coffee shop. Plans were available for review with respect to the total facility, which would contain two washrooms—one for male use and the second for females and/or handicapped persons. He noted that it had previously been proposed that a canopy would be installed over the pump islands—this proposal has now been abandoned due to the design requirements of structures located in Gateway Village.
Mr. Fox indicated that the suggested initial annual sales of approximately one million litres would make his proposed venture a viable business, and one which would secure his future and that of his family. He stated that the amount of volume projected for the first year is conservative, and that higher volumes would follow. His testimony was that he felt that while some of his volume would most likely come from the three existing outlets in the immediate market area, the majority of it would more likely come from motorists travelling the bridge to and from New Brunswick. He referred as well to the proposed twinning of the highway between Moncton and Fredericton, which he felt in all probability would result in the loss of some presently existing services. As a result, Mr. Fox indicated that he did not feel that this outlet would have a significant detrimental impact on any one particular existing outlet.
As for entrances and exits, Mr. Fox noted that he had at first proposed having three entrances/exits to the site, but that this had now been reduced to two following discussions with the Community of Borden-Carleton. The outlet would be located on Abegweit Boulevard (a 50-km speed zone) which is off Borden Avenue (a 40-km speed zone).
Regarding product supply, Mr. Fox testified that he first collaborated regarding product supply with Jeffrey C. Zettler, Territory Manager for Imperial Oil Limited in Prince Edward Island, and when Mr. Zettler was transferred, he dealt with Dave Ketch, Senior Territory Manager of Imperial Oil Products and Chemicals Division, in this respect. Mr. Ketch had confirmed earlier in cross-examination that Imperial was prepared to enter into a five-year head lease/cross-lease and supply arrangement with the Applicant, and would be supplying appropriate signage.
Exhibit 47 was a type of petition purportedly signed by 103 persons, mainly residents of the area, filed in support of the application. Mr. Fox advised that he did not initiate this document, but became aware of it while it was in progress and prior to it being filed with the Commission. As a result of cross-examination of Mr. Fox on this document, one of the persons responsible for the creation of this exhibit, Ms. Marilyn Thomas, was called to give evidence with respect to the document. She agreed that in certain cases, one spouse might have signed for both husband and wife, or a signature was placed on the document by someone other than the person identified at their request.
III. REVIEW OF EVIDENCE IN OPPOSITION
Mr. Ivan Newrick testified on his own behalf with regard to his letter in opposition to the application, which letter was entered as Exhibit No. 29 in this matter. Mr. Newrick owns and has operated the Terminal Service Station since 1962, and testified that he feels that the three existing motor fuels outlets in the area are more than sufficient. He noted that in his opinion, the approval of this application will impact negatively on his Petro-Canada operation as well as the other two outlets which presently operate in the Borden-Carleton area. He testified that during the four-month tourist season, sales are up, and that this period assists in making the outlets viable for the other eight months of the year. He expressed the opinion, however, that the additional traffic experienced during the tourist season is insufficient to warrant the licensing of a further outlet. He expressed concern over traffic safety as a result of the construction of a new outlet at the proposed location. He stated that there is a population in the area of approximately 1,100 people. He further stated that the area has lost the business of at least some of the 650 people who were previously employed with Marine Atlantic and most of the up to 2,300 persons employed by Strait Crossing in the construction of the Confederation Bridge. He indicated that he felt that if another motor fuels outlet is licensed, at least one of the presently licensed "service station" outlets would most likely have to close—resulting in a loss of automotive bay services in the area. Mr. Newrick did confirm under cross-examination, however, that his particular outlet has been up for sale for some time. He further testified that if approval is granted, he would have to look into other options to make up for the loss of business which he feels he would experience, especially with regard to gasoline volume. He advised that the three outlets in the area had reached an agreement to alternate for the purpose of providing 24-hour service to the motoring public during the month of July in order to test the viability of such an action.
Mrs. Mary Howatt testified on behalf of the family-owned and primarily family-operated motor fuels outlet known as the Northumberland Service Station. Her evidence was in addition to letters written by her and her husband, Douglas Howatt in opposition to the Fox application. These letters were entered as Exhibits 24, 31 and 32 in this matter. Other family members had also submitted letters in opposition to the application which were exhibits in the hearing as well. Mrs. Howatt indicated that her chief concern was that if the gasoline volume at their outlet dropped to under a million litres, it would be more difficult to negotiate the renewal of the agreement with Shell Canada Products Limited, the present supplier of this outlet. In her direct testimony, she alluded to the fact that her operation would cease if the present application was granted, and that would not be fair. However, when later pressed on this suggestion, she indicated that her business could lose gasoline volume of up to 300,000 litres, but that they would still continue to operate if they were able to obtain product supply.
Mrs. Howatt testified with respect to the hours of operation of the outlet and the costs related to the operation of the single service bay (leased to Dave Mullins) and the other various facets of the business—C-store, magazines/coffee, fishing/hunting licenses, videos, etc. She referred as well to a tourist cottage business operated by her family in the area. She also testified as to the number of customers believed to frequent the Northumberland Service Station outlet which had signed the petition in support of the Fox application.
Mr. Alan Vincent testified on his own behalf as operator of the Irving-owned Borden Service Station. Mr. Vincent noted that he has been involved with this operation for twenty-three years, and that it consists of split-serve dispensing in conjunction with a two-bay service station and C-store. Mr. Vincent stated that he also has videos and a propane exchange centre. He noted that the bridge traffic does not go by his outlet as did the former ferry traffic. He also testified that employees of Strait Crossing used Irving credit cards with respect to the operation of vehicles involved in the bridge construction, and that since the construction concluded, a further loss of volume at this site has been experienced. Mr. Vincent also testified as to the number of customers believed to frequent the Irving outlet operated by him which had signed the petition in support of the Fox application, and noted that if these customers were lost, he would lose further volumes and might in fact have to close. When questioned further in this regard, Mr. Vincent indicated that it was his feeling that the biggest reason for the drop in volume at his site is its location in relation to the recent change in the main traffic flow.
Mr. Eric Rogerson, operator of the Middleton Grocery for approximately ten years, which outlet offers full-serve dispensing of Irving gasolines and propane, also testified in opposition to the application. He indicated that he presently pumps in excess of 1.2 million litres, and referred to one million as being the "magic" number when it comes to required sales volumes at an outlet of this nature. He indicated that if the Fox application is approved, he might have to operate on a 24-hour basis in order to remain competitive. He further commented that with the Sobey’s and the Atlantic SuperStore open 24-hours, that you could not rely on sales from the convenience store to keep your outlet viable without significant gasoline sales.
Mr. David Mullins testified that he is an unlicensed self-employed mechanic who was formerly employed by Marine Atlantic, and presently leases the single automotive service bay at the Northumberland Service Station operated by the Howatts. He noted that it was not financially feasible to start up a new business on his own, and that if he did not operate from this location, would probably go to Summerside. He repairs mostly older cars, and testified that if nothing changes, he would remain there. He indicated that he felt that his business would not necessarily be supported entirely by Shell customers, but also by those who also purchase gasoline from other sites.
Mr. Rossiter declined the opportunity to call witnesses in support of the intervention filed by Irving Oil Limited (Exhibit No. 42), which document outlined generally the reasons for its opposition. Mr. Rossiter summed up the evidence for the opposition orally, and filed a written brief with the Commission on 18 June 1998 containing copies of twenty-two previous decisions of the Public Utilities Commission and/or the Island Regulatory and Appeals Commission in relation to initial applications for licensing under the Petroleum Products Act of this Province.
Ms. Goulden also summarized orally the case of the Applicant prior to the conclusion of the hearing.
IV. REASONS FOR DECISION
The primary statutory provision guiding the Commission in this matter is s.20 of the Petroleum Products Act, R.S.P.E.I. 1988, Cap. P-5.1:
s.20...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.
There are numerous factors that the Commission considers when deciding applications and the weight given to each varies with the circumstances of the case. The Commission understands that each license is applied for out of reasons particular to that applicant, location and community. The proposal might consist of a combination of service offerings which may be unique to the area and meet a special need. Mr. Rossiter, Counsel for the Intervener Irving Oil Limited, suggested a lack of consistency in Commission decision-making, and indicated that in the past, the Commission has been guilty of "cherry picking" in arriving at its decisions relating to initial retail licensing. The Commission took this statement seriously and reviewed all of the previous decisions submitted by Mr. Rossiter. As a result of that review, the Commission concludes that, on balance, those previous decisions reflect the application of the statutory requirements to the particular facts and circumstances of the applications before the Commission at those times. Each case must be decided on its own particular facts, and the Commission believes that the various decisions referred to reflect the result of prior panels attempting to give proper weight to evidence depending upon the particular circumstances of the location involved. While there are general principles to which it must adhere in arriving at these conclusions, there is no checklist of criteria which can be applied equally, but rather consideration of all factors relating to the issues of public interest, convenience and necessity must be given in order to arrive at an appropriate decision in each case.
. In other words, specific issues apply in varying degrees in assessing all applications for initial licensing under the Petroleum Products Act. Clearly, the purpose of the legislation with regard to the issuance of initial licenses is to ensure a reasonable network of facilities which provide the motoring public, insofar as possible, with basic if not equivalent services. Applications must be assessed in terms of each one's specific location in addressing the test of public interest, convenience and necessity. Outlets may be, and have been, approved in close proximity to each other because of competitive offerings and customers’ stated needs. In other areas, approval might result in the non-viability of the existing outlet or outlets, and customers might well find themselves with reduced or no service. Thus, the factors considered are carefully weighed in relation to the specific application.
It should be pointed out that the Act does not require a hearing before an initial license may be granted. In the proper circumstances, the documents filed with the application may be sufficient to convince the Commission the public interest, convenience and necessity test has been met. The significant public interest expressed as a result of the initial advertising of the application, however, resulted in the holding of a public hearing in this case.
The market area related to this location is somewhat difficult to define. It clearly includes the bridge traffic in addition to the local populace, as indicated by the "petition" and the various letters written both in support of and in opposition to the application. While there were slight discrepancies in the population numbers quoted covering Borden-Carleton, it would appear that there are over 1,000 residents on a year-round basis, with a further number occupying the area on a seasonal basis. Some of its population was lost when the bridge construction concluded and the Marine Atlantic ferries ceased to operate—however traffic is up, especially during the tourist season. There are three existing motor fuels outlets in the immediate area of the proposed new site—however, one outlet no longer enjoys the opportunity of being on the direct route of the primary traffic operating between Prince Edward Island and New Brunswick. The Petro-Canada outlet is certainly visible to this traffic, and is most readily accessible to traffic leaving the Province. The Shell outlet is more readily accessible to traffic entering the Province. For traffic leaving the Province, it is necessary to negotiate a left-hand turn in a 90 km speed zone in order to enter that particular outlet. It is therefore apparent that the most significant benefit to the potentially patronizing public in the establishment of the proposed new outlet would be that traffic entering Prince Edward Island or that traffic which accesses the site prior to or following a visit to the Gateway Village. Any loss of volume resulting from the establishment of this new outlet would most likely be shared amongst not only the three outlets already located in the immediate market area, but also from any outlet operating within a reasonable radius of the Confederation Bridge—located both within and outside of the Province. The twinning of the highway between Moncton and Fredericton could result in loss of availability of some service along this route, which could increase demand for product in this Province. Although there was testimony relating to closures of previously existing motor fuels outlets in the area, the time frame involved is so far removed as to render its applicability as rather insignificant in assessing this application.
The history of service in the Borden-Carleton area is that motor fuels dispensing combined jointly with automotive repair services and C-stores has been available for many years, and two outlets of this type continue to operate—the Shell and the Irving. The Petro-Canada outlet is classed as a service station only. This results in a good mix of services being available in the area, although it would appear from the testimony given that the availability of automotive-related services is somewhat lacking, especially other than during weekdays from 8 or 9 a.m. to 5 or 6 p.m. While consumers are presently reasonably well served, it would appear that extended hours of operation are needed. The significant change is that while the ferry services did not operate on a 24-hour basis—the Confederation Bridge does. The Applicant has testified that if a license is granted, his outlet would operate on a seven-day a week 24-hour basis—thus providing essential services which are not necessarily presently available. The immediate area is comprised of residential properties and establishments of a commercial nature, with a number of persons already presently employed in these establishments. An expansion of the Gateway Village is presently underway, with plans for even further expansion in the future. Obviously, then, this outlet would be a definite addition with respect to convenience to area residents as well as motorists of a transient nature. In short, Imperial’s representative believes that the proposal now under consideration by the Commission will be a viable operation and testified to that effect.
The next issue to be considered is whether or not granting a license in this case would likely result in a loss of services in the area that would be an overall detriment to the motoring public.
While representatives of existing licensees suggested that the approval of this application would result in detriment to these outlets due to decreased volume, none were prepared to state that the approval of this license would definitely result in the closure of any of them. They did indicate that such approval could result in lower incomes and the resultant effect on staff. The Commission, however, must consider the effect of the possibility of a volume shortfall at existing outlets as well as the potential loss of other services while attempting to balance the need and convenience issues of the motoring public travelling on this major link to and from the mainland. All existing outlets have been in business for many years and have obviously already established a firm customer base among the area residents. If, however, this application was approved and one of the existing outlets closed for one reason or another, it would seem unlikely that consumers would be seriously detrimentally affected. This is not to say that the Commission is not concerned about the impact on existing outlets—it is—but our statutory mandate relates primarily of the motoring public. It is only when the evidence clearly indicates that a new license will result in the closure of an existing outlet which in turn diminishes service to the motoring public that this detrimental effect takes a greater significance. In this case, the evidence given relating to any anticipated detrimental effect to existing outlets was insufficient to warrant declining the application on that basis alone.
The Commission notes with interest Exhibit No. 19, being a letter dated 9 April 1998 from Jamie D. Fox addressed to the Commission outlining details of meetings Mr. Fox apparently attended on 3 and 9 April 1998 with representatives of Irving Oil Limited. Mr. Fox advised that these representatives expressed interest in supplying product to the outlet should the Applicant be successful in obtaining licensing. The Commission further notes that this information was tendered unchallenged.
With respect to demand, there has been considerable growth in the sales of product in the general area over the last five years, as indicated by Exhibit 46, which exhibit includes sales at the four outlets operating within a 10 km radius of Borden-Carleton. While there was a slight drop in gasoline sales and a slight increase in diesel sales for the year 1997 as compared to sales of these products in 1996, the overall increase in sales from 1993 to 1997 was 1,151,280 litres. Evidence given indicated that the population of the area will probably remain somewhat static—however, it is anticipated that traffic flows in the area will increase significantly over time. This increased flow of traffic may be as a result of increased tourist visitation and/or the fact that more and more products are being brought into the Province for direct delivery rather than in larger quantities (e.g. by vessel) and warehoused therein. In addition, the evidence given relating to existing traffic counts would indicate sufficient vehicular traffic to support such an outlet. While the application was also supported by the document referred to as a "petition" (Exhibit No. 47), this document was the subject of considerable interest at the hearing. In view of the evidence given with respect to it, the Commission is of the view that the document ought not to garner a great deal of weight in this case. However, there were also some individual letters filed in support of the application.
The evidence given relating to definitive plans and specifications, as well as that relating to entrance/exit locations, was reviewed, and changes to the plans entered as exhibits were noted. If this proposal is granted approval in principle, amended plans would be required to be filed for the prior approval of the Commission in order that such things as the equipment layout, the traffic flow on and off the lot, the proposed pedestrian barrier, etc. could be assessed from the standpoint of safety, which is always a primary concern. All outlets must be constructed in accordance with all municipal and provincial requirements including those of the Fire Prevention Act and the Petroleum Products Act.
It was suggested that the Applicant has no previous experience in the motor fuels dispensing business. However, the Commission feels that there was sufficient testimony relating to the fitness of the Applicant to properly conduct such a business, and notes that Imperial Oil Limited, his proposed supplier, has committed to provide the necessary training in this regard, as attested to by Mr. Ketch. The Commission acknowledges that the testimony of Mr. Ketch with respect to historical and regulatory matters was weak, and views as unfortunate that a change of personnel in the Company took place following the filing of the application. Nonetheless, the Commission requires performance to certain standards—otherwise a license can be suspended or revoked, and concludes that the Applicant will be a responsible licensee, especially in view of his training and experience in policing matters as well as his involvement with the operation of Anderson Automotive. There was no evidence offered to the contrary. We therefore do not feel his lack of previous involvement in the operation of a retail petroleum outlet should hinder his entrance into the industry.
The Commission's knowledge of this industry indicates that the average annual sales volumes at the outlets referred to in Exhibit 46 relate closely to the present Provincial average. In light of the location of this proposed new outlet, it is anticipated that only a slight loss of sales will be felt by these outlets, but the impact will most likely be spread over several outlets located both within and outside the Province. The Commission therefore feels that the convenience to the motoring public, especially in view of the fact that the outlet will provide service around the clock, overrides any detrimental affect that such an approval might have on existing outlets. While some negative impact on sales might be anticipated, in the circumstances, we do not believe it would be significant.
The Commission considered the evidence submitted with respect to the anticipated financial viability of the proposed outlet, and concludes that there is no evidence to suggest that the Applicant would be unable to obtain financing for the operation nor that there would be insufficient operating capital available. The history of the Applicant is such that we believe in his ability to successfully deal with the financial aspects of running such a business, and there is no evidence of financial incompetence.
As Irving's Counsel noted during his closing arguments, there are numerous factors that the Commission considers at these hearings and the weight given to each varies depending upon the circumstances of the case. As previously stated, each license is applied for out of reasons particular to that applicant, location and community. In this case, the Commission reviewed the evidence with respect to the requirements of the statute, and is satisfied that the requirements have been met in this case.
The application is therefore approved in accordance with the Order appended hereto.
Order
THE COMMISSION HEREBY ORDERS:
1) That the application of Jamie Fox dated the 15th day of January, 1998 for an initial petroleum products dealer's license with respect to split-serve motor fuels dispensing in conjunction with a general merchant outlet to be established on Abegweit Boulevard in the Gateway Village, Borden-Carleton, Prince Edward Island be approved, conditional on the outlet being constructed and operated in accordance with the application and verbal evidence given at the public hearing, and conditional on all operating requirements being met prior to the issuance of a Petroleum Products License.
2) That any changes to the previously filed plans which were proposed during the hearing be submitted for the approval of the Commission prior to the commencement of construction, including the provision of a pedestrian barrier and also details regarding the parking layout for vehicles on the lot to ensure a clear line of vision to motor vehicle operators entering and existing the outlet.
3) That pump nozzle fees be paid prior to the issuance of the license.
4) That the outlet operate on a 24-hour seven days a week basis unless otherwise ordered or authorized by the Commission.
5) That the approval contained in this Order is valid for four months from the date of issue.
DATED at CHARLOTTETOWN this 30th day of JULY, A.D., 1998.
BY THE COMMISSION:
Chair
Commissioner
Commissioner
Notice
Section 58 of the Petroleum Products Act reads as follows:
58. Where any person has the status of a party or is an intervenor in any hearing before the Commission, he is entitled
(a) to appeal the decision of the Commission to the Appeal Division; and
(b) to participate as a party in the hearing of an appeal
and an appeal shall be on a question of law or jurisdiction only and be governed by section 13 of the Island Regulatory and Appeals Commission Act.
Sections 13.(1) and (2) of the Island Regulatory and Appeals Commission Act provide as follows:
13.(1) An appeal lies from a decision or order of the Commission to the Appeal Division of the Supreme Court upon a question of law or jurisdiction.
(2) The appeal shall be made by filing a notice of appeal in the Supreme Court within twenty days after the decision or order appealed from and the Civil Procedure Rules respecting appeals apply with the necessary changes.
