Here in Canada we have more Oil and Wheat than we can use...why are we paying high prices?

Question

We have prairie provinces which grow mor wheat than we can use. We even sell wheat to other countires cuz we got too much. Same thing with oli, we got too much and we kindly sell it to other nations. If we have too much than why are Canadians paying high prices at the pumps and why has bread gone up in price? I keep hearing on the news about turmoil in these backwards countries like nigeria and other nations over there, buy since we have our own oil and wheat That termoil doesnt effect us in canada, as we are self sufficent. What Gives?

Answer 1

big money gaming the system to get even richer

Edit: If that is the way commondities work then why do they pay less than a dollar a gallon for gas in Saudi Arabia?  There is alot of corruption in the global market and as a result free market concepts suffer.

Answer 2

Our wheat and oil is sold around the world to meet global demand.

It is true that we produce more oil and wheat than we use, but it doesn't lower prices for us since we allow our commodities to be exported. This decreases the supply for us - hence raising prices.

There are different ways that the government could potentially lower the prices of wheat and oil for us without causing us a shortage.. here are two of them that are popular in some places:

In some countries, export controls are put on these commodities (taxes or quotas on how much can be exported) by governments. This increases the supply of these commodities within the nations' borders, thereby lowering their prices.

In other countries, the production and/or distribution of these commodities are owned by the government. The government can then sell these to the nations' citizens at a lower (subsidized) prices. Here in Canada, Petro-Canada used to be owned by our government to sell us fuel at a lower cost.

Now however, our government believes in a little less government intervention in the economy, so probably won't take these actions - but who knows. If NAFTA stays in effect, doing either of these would probably be deemed illegal.

I hope this helps!

Answer 3

Because everything is traded in US dollars.  Saddam proposed selling oil in Euros and wound up swinging for it.  He was the worlds lever against OPEC, w. weapons inspectors swarming all over Iraq he was cuckolded and had to sell for the price he was told.  America threw that all away in a bid to take over the whole Middle East by propaganda and force, only over the long term will we find out how badly that decision will affect the whole world.

Answer 4

Wheat and Oil are commodities, bought and sold on a global market.

Your wheat producers will sell their wheat on the open market to the highest bidder.  Because wheat is scarce in other parts of the world, and because countries like China have more money, they are willing to pay more for the wheat.  Thus, if the Chinese are willing to pay more for wheat, it drives the price up for everyone.

This same thing happens with oil, which is why prices are high and most people don't get it.  China is booming and imports 1/3 of it's oil.  If they're willing to pay $120 a barrel, then the producers will sell it to the highest bidder.  That means that the rest of us will have to pay $120 a barrel, too.

The only way to avoid this is through State-owned oil and wheat industries, having reserves and so forth.  Neither Canada nor the USA have these types of programs.