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Rationalization in the Canadian Retail Gasoline Industry: The Role of Environmental Regulations


  • Eckert, Heather

    () (University of Alberta, Department of Economics)

  • Eckert, Andrew

    () (University of Alberta, Department of Economics)


The number of gasoline stations in Canada fell by 40 percent between 1989 and 2000. Many demand and competition related explanations have been offered for this rationalization, while industry sources cite stiffer environmental regulations as a factor in station closures. In the late 1980s and early 1990s most Canadian provinces adopted regulations requiring that unprotected petroleum storage tanks be upgraded or replaced according to a schedule based on the age of the tank and that nearby unprotected tanks also be upgraded or removed. In this paper, we exploit provincial differences in the timing of these regulations to examine the role of upgrade and removal regulations on the timing and degree of station shutdown in 12 cities across the country.

Suggested Citation

  • Eckert, Heather & Eckert, Andrew, 2011. "Rationalization in the Canadian Retail Gasoline Industry: The Role of Environmental Regulations," Working Papers 2011-7, University of Alberta, Department of Economics.
  • Handle: RePEc:ris:albaec:2011_007

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    petroleum storage; rationalization; retail gasoline; underground storage tanks; environmental regulations;

    JEL classification:

    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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