It's looking pretty ominous for anyone who owns anything bigger than a 4cyl.
It looks like our cities will resemble London, Paris or Rome in about 5 years!!
Gas prices forecast to drive cars off highways
`Canada will feel the pain, but it's not going to be same as in the U.S.'
June 27, 2008
LAUREN KRUGEL
THE CANADIAN PRESS
CALGARY–Gas prices are becoming so high that one of Canada's top banks is predicting a "mass exodus" of vehicles from U.S. highways within four years, with a slightly less dramatic drop expected in Canada.
CIBC World Markets said in a report yesterday that gas prices in the United States will hit $7 (U.S.) a gallon – the equivalent of $1.86 (Cdn) a litre – two summers from now. That marks a 70 per cent increase over today's record levels.
As a result, there will be about 10 million fewer vehicles on U.S. roads by 2012 and average kilometres driven will drop 15 per cent, the report said.
"Over the next four years we are likely to witness the greatest mass exodus of vehicles off America's highways in history," chief economist Jeff Rubin wrote.
The average pump price in Canada yesterday was $1.38 a litre, nearly 30 cents higher than what it was a year ago, according to the price-tracking website Gasbuddy.com. Americans were paying $4.07 a gallon, the equivalent of $1.08 a litre.
Canada will only experience about 70 per cent of the U.S. decrease in driving, CIBC senior economist Benjamin Tal said.
"Canada will feel the pain, but it's not going to be the same as in the U.S.," Tal said in an interview, noting that there will be about 700,000 fewer cars on Canadian roads by 2012 and a 10 per cent decrease in average kilometres driven.
In the U.S. case, low-income families will account for the biggest change, whereas in Canada the greatest shift will come from the middle-income bracket, Tal said.
"In Canada more low-income Canadians have access to public transportation, therefore the adjustment will not come from them," he said. ``The adjustment will come from middle class families that will start giving up the second or third cars," he said, adding that much of the higher tax Canadians pay tends to be invested in urban transit systems.
Another report yesterday from Scotia Economics said record-high gas prices are prompting Americans and Canadians, to a lesser extent, to abandon their gas-guzzling SUVs and pickup trucks for small, more fuel-efficient vehicles.