Why does the federal government not regulate natural gas prices?
From 1975-1984 Canadian natural gas prices were set by a series of federal-provincial agreements. However, because natural gas demand can rise or fall so rapidly, it was difficult for regulators to determine the appropriate price for natural gas, that would balance the supply of gas with the amount of gas consumers demand. Price regulation tends to produce either gas shortages or unnecessarily high gas prices (or swing between the two). This is not in the best interests of consumers or the natural gas industry. The 1985 Agreement on Natural Gas Prices and Markets between the Federal government and Alberta, British Columbia and Saskatchewan deregulated natural gas commodity prices in Canada. The immediate result was a dramatic drop in gas prices, indicating that regulated prices had been set too high. The US went through a similar deregulation process at the same time. The result was an open and integrated North American market for natural gas. This structure was reinforced by the Canad
