Why gas stations are in decline in Canada

As the number of gas stations plummets, they’re gradually being replaced with charging stations for electric cars—and a new way to think about ‘filling up’

Lyons-Kirby/FPG/Hulton Archive/Getty Images

Lyons-Kirby/FPG/Hulton Archive/Getty Images

In 2007, the Joy gas station in Toronto—renowned for its château-style architecture—was lifted off its moorings, moved across the street from its lakeside location and restored. Then last year, in Calgary, retro full-service station Eamon’s Bungalow Camp was declared worth saving by city council after a grassroots campaign earned the endorsement of heartthrob Corey Hart, who filmed a music video in front of the station’s iconic sign in 1986. Who’d have thought that gas stations, of all places, would one day have sentimental value? “When I was a kid, we always used to hang out by the gas station, drink Cokes, your friends would come in to fill up, and it’d be a great place for young boys to get their first job,” says John O’Dell, a senior editor for U.S. automotive guide Edmunds.com. “There were lots of them around.”

That time has passed. A May survey by consulting firm MJ Ervin & Associates found there are fewer than 11,850 gas stations in Canada, down from more than 20,000 in 1989. (A similar decline has taken place in the U.S., where the number of fuelling stations has dropped by more than a quarter since the mid-1990s.) The reasons for the fall are manifold. Petroleum producers are leaving the business of selling gas to the likes of Wal-Mart, Costco and Canadian Tire, while profit margins have grown razor-thin. At the same time, demand has dropped due to improvements in fuel efficiency and a decline, since the recession, in how much people drive. “It’s a pretty dire situation, especially in rural areas,” says Alex Scholten, president of the Canadian Convenience Store Association.

But as gas stations disappear, Canada is seeing the rise of alternative-fuel vehicles, in particular, the electric car. Last year, roughly 3,100 were sold in Canada, a 58 per cent jump from 2012, according to Green Car Reports. That’s still little more than 0.1 per cent of all vehicle sales, but Navigant Research predicts that, by 2023, annual sales will near 100,000, and that by 2020, there will be 50,000 charging stations available for public use in Canada. It’s estimated there will be more than 11 million stations worldwide by 2020.

Two things have been holding electric cars back: charge speed and range anxiety. Tesla’s proprietary super-chargers, for instance, are the fastest available, but even they require 45 minutes for a full charge; Nissan is developing a quick-charge station for its Leaf car that would deliver 80 per cent of a tank in 20 minutes, but that won’t be available in Canada until later this year at the earliest, and there is no rollout plan yet. While most purely electric vehicles boast a range of around 200 km—good for in-city driving—the fear of running out of fuel before you find a charging station is high. It’s especially tricky in Canada, with its vast expanses and cold temperatures, which research has shown can affect the range. It’s the classic chicken-and-egg problem, and it’s hampered the electric-car industry for years. “People were blaming everyone under the sun,” says Kent Rathwell, founder of Sun Country Highway, “but the common denominator for why it fails is simply because there’s no infrastructure, so why would anyone buy one? If you can’t drive anywhere, why would you even look at one?”

Theo Civitello/Tesla Motors

Theo Civitello/Tesla Motors

The company, which makes chargers and cords, is bridging that gap, erecting chargers that work for any car across a 10,125-km stretch of roadway between St. John’s, N.L., and Victoria. Rathwell did it without any government subsidies, reaching out instead to towns and businesses to sponsor installation.“We wanted to do our part to make sure electric vehicles were here to stay,” he says. Fill-ups at Sun Country Highway stations are free, while a full charge at Level 2 charging stations—the 240-volt mid-range “fast chargers” that refuel a car in a few hours and are widely available, unlike those speedy quick-chargers—ranges from a flat fee of around $2 to an hourly rate of $1.

Tesla, too, is putting its technology to work. In January, the company unveiled a cross-country line in the United States, connecting Los Angeles and New York with super-chargers. There is none yet in Canada, but, by summer, the company expects to have two routes of super-chargers connecting Toronto to North Bay, Ont., and to Quebec City, and two linking Vancouver to Whistler, B.C., and Calgary, with a cross-country line in the works for sometime in the next two years, says Shanna Hendriks, a Tesla spokesperson. While Tesla’s Model S is the only purely electric car that boasts an anxiety-easing range—425 km per full charge—it’s also pricey, starting at $78,000 in Canada. But its third-generation vehicle, Hendriks says, should hit roads in three years with a similar range and at half the price.

Both Hendriks and Rathwell say the key to the industry’s future success lies in cutting the time it takes to charge. Rathwell says the way technology is improving, a three-minute charge time is increasingly possible. “With the infrastructure in place, you’re going to see a flurry of sustainable product development across Canada,” he says. In the meantime, in some ways, we have a return to that full-service, yesteryear pit stop, the type of experience once had at gas stations. Sun Country Highway and Tesla put their charging stations in locations where there’s something to do while plugged in, from visiting malls and diners to towns off the beaten path. Proponents of the industry admit road trips may take a little extra time. However, they also believe drivers will gradually come to see their cars the same way they see their smartphones—charging them at the end of each day. “It becomes part of your routine, and you never have to go to a gas station, and I think that’s what most people should look forward to,” says Hendriks.

In the interim, gas stations may seek to evolve. “Smart service-station owners—as the market for these alternative-fuel vehicles matures, and as economies of scale start making them more affordable—you’ll see them have hydrogen and electrical charging outlets, as well as gas,” says Edmunds’ O’Dell. Rathwell, too, has had gas-station owners show interest in his project, but found the corporate bureaucracy too unwieldy. Scholten, the convenience-store spokesperson, just doesn’t see the need yet. “Gas isn’t so vastly expensive to justify the infrastructure for the charging stations,” he says. “It’s coming, though.”

Expect a few potholes along the way. For instance, in 2011, small convenience-store chain Kwik Trip in the U.S. Midwest installed 70 charging stations, boasting it was among the first to provide that kind of service. Problem was, they were 120-volt outlets, which deliver about six kilometres of distance for a whole hour of your time.




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Why gas stations are in decline in Canada

  1. Yup, we are moving to alternate fuels.

    It will take awhile, and there are always some problems involved in a major changeover….but oil is on it’s way out.

    • http://www.bbc.com/news/business-26820405

      ‘Yup’ Germany is going backwards from green energy to coal but don’t let reality get in the way of your belief that we are going to be rid of the dependents on carbon-intensive fuel. Not to mention that everyone in Canada is driving a truck…even city dwellers…what the heck….

      • Don’t cherry-pick the news. It’s a waste of time.

        • Pointing out trends that are reported by EVERY news outlet is not cherry picking the news. The fact that even the Europeans who have been the biggest leaders in green technology are now back using traditional fuels should give you pause before making pronouncements like “yup, we are moving to alternate fuels” but for some reason you never let reality stop you from making one of your confident assertions. I remember when you made the same pronouncements about Ontario and the Liberal government there. You were always saying how everything was “fine’ until it wasn’t and you finally had to face it. Are you sure you aren’t a Con?

          • Germany is using some coal as a bridge while they get rid of nuclear. See that’s the problem with cherry-picking. It leaves out important facts.

            I have no idea what you think I said about Ontario and Liberals….but yes, we’re fine thanks.

  2. Electric refueling stations are easier to install/maintain than conventional gas-station pumps (since they’re basically glorified electrical sockets). They’re becoming a zoning requirement in many cities & green-building certifications. And many companies like the “PR factor” by installing them in their parking lots, making them seem like they care about the environment.

    However, I question how many of them are being used. While the number of electric cars will no doubt continue to climb, they’re still fairly novel and green. Even car makers like Fiat admit that their electric models are less reliable than conventional combustion-engine cars.

    Hybrid cars will skyrocket in popularity as they become more affordable and more widely available (in different sizes/models), before fully-electric cars become more mainstream. And like the article mentioned, “the fear of running out of fuel” makes the hybrid car a more palatable choice between relying fully on electric and relying fully on gas.

    • I think I already said that.

      I drive a hybrid btw, and my name is in for a fuel cell car.

      Some electric cars come with a charger for your driveway.

    • Fiat has admitted they are LOSING MONEY on their EVs because they insist on producing the bare minimum required by law. Low volume vehicles will always be more expensive than mass-produced ones, so they will always lose money. This is quite different than having reliability issues. Check your facts, please.

  3. Does anybody remeber when Harper(along with Prov interests?) declared that the “EV” will be deemed ilegally/un-safe on Ontario roads, ? -he made it “law”.
    In fact, Quebec, was the “only” provincs that took in the infamous Toronto EV manufacturer, who btw, did a double-face, and now only plays puppet to the BIG American EV makers,… ???

    The inner-city consumer “EV”, should’ve been on the roads by the “millions” in all the center cities,…
    You’re very “non-technical/engineering” people around here, and you really do not understand how crippling the things Harper, et all did, in the past, that has hurt this, and benefits “them” only.

    Now that Hydro-One, …, has, (along with our Gov’t), found a way to profit from this all, by raising “everything” that has nuthin’ do do with “gas”, you all cry victory ?
    You’re all either rich and untitled?, or very stoopid taxpayers’?, or CONS’ schills….

  4. The writer ignores several issues regarding electric cars. The first is cost. Every manufacturer loses thousands on every electric car it sells, even with massive tax incentives (read: subsidies) to the consumer. There are no foreseeable large scale cost reductions, so prices will eventually have to rise and subsidies cannot be infinite. How can we justify hundreds of millions of dollars in tax incentives to coerce people to purchase electric cars?
    Where does the money for Sun Country Highway come from for their charging stations and the electricity they provide? It don’t just grow on trees, kids.
    We constantly hear about the strain our appetite for cheap energy puts on the electrical grid. How do electric cars mitigate this? We’ve already seen wind and solar power drive the costs of electricity up in Ontario. If we propose to fuel electric cars with wind and solar, how do we square all the conflicting circles of logic that creates.
    A gasoline powered car that averages 9L/100km over the course of a 25,000 km year will generate over $1000/year in road tax revenue. How do we collect the equivalent from electric cars? How do we justify taking gas tax revenue from gasoline powered drivers and giving vast swaths of it to electric car owners? What’s the point of that? How do we square increasing the overall cost of electricity in order to allow a small number of end users to reduce their overall fuel costs AND subsidize their purchase and road use. None of those dogs hunt all that well.
    Projections of sales of 100,000 electric cars per year, inside of a decade, in a cold country like Canada are wholly pie in the sky. That’s a 30-fold increase at a time when automakers are increasingly being squeezed by other regulatory burdens in a tight market. Neither they or the taxpayers will have the resources to flush down the memory hole at that niche market.
    Non-technical and non-automotive writers generally fail to understand the underlying realities of electrics. Electric motors and battery power have been advancing in their own marketplace. Unfortunately, they have failed to keep up with gasoline engines simply because it is very, very difficult to compete with the energy density of gas/diesel and the relative simplicity of an internal combustion engine at any price point.
    Think of this: Over a 700 mile distance, the best electric car money can buy, under more ideal conditions than most of the year in Canada, struggled to beat a 100 year old Model T. Think about that.

    • And as you’ve been told repeatedly ‘It will take awhile, and there are always some problems involved in a major changeover….but oil is on it’s way out.’

      Sorry.

    • I don’t necessarily disagree with everything you’ve said, for a change. But a couple of points:

      *”We’ve already seen wind and solar power drive the costs of electricity up in Ontario.” Oft-repeated, but not entirely true. The majority of Ontario’s price increases are due to the cost to build and refurbish the nuclear plants. I’m pro-nuclear power, but nukes aren’t cheap.

      *In one paragraph, you complain that e-car drivers will pay nothing in road taxes, resulting in gas-powered car drivers subsidizing them for the costs of roads. But in the next paragraph, you say that the projected numbers are pie-in-the-sky and won’t happen. So seems the second paragraph negates the problem in the first.

      • The point is that there is a dichotomy at work here. The average electric car buyer is upper middle income, yet the very same governments who consistently muse about how to extract more money from upper income individuals. So explain to me why we would give those same people $5-8500 tax incentives to buy expensive cars? More to the point, we have governments bending over backwards to encourage the well-heeled to purchase what are largely “image” cars. Multiple market studies have shown that electrics and hybrids are almost exclusively sold into households with multiple vehicles. Why would we contribute $20-22 million in tax incentives to these households?
        Road taxes are completely and utterly egalitarian. The more you drive, the more you pay. The more gas you buy, the more you pay. Pretty straightforward. Last year, I paid over $3000 in road use taxes with my work truck alone. I paid another few hundred with our RV, and my wife’s car contributed about $1000.
        Tell me again why a struggling young family with 2 or 3 kids and a household income of, say, 85K/yr might have to pay more than $2000/yr in road use taxes while the guy with the Tesla gets a free pass on his road use taxes. Bear in mind that almost any Tesla on the road is used in the same fashion as any Corvette or Viper or Porsche. It’s an image car, yet the Tesla guy gets a free ride on the backs of every family humping a ten-year old minivan down the QE2 or the 401.

        • Ahhh you’re pleading poverty.

          It amazes me how alike Cons and the NDP are.

          PS Kindly explain what you’re calling ‘road taxes’ and ‘tax incentives’.

          • Road taxes are the 40% of the price of retail gasoline that is tax. You don’t pay them unless you buy gasoline or diesel, so they are de facto “road taxes” no matter what various governments want to call them.
            Tax incentives are the rebates that come from the federal and provincial governments to reduce the purchase price of an electric or hybrid vehicle. A $48,000 car gets a tax rebate that drops the price to $40,000. It’s not a manufacturers rebate, but a federal/provincial one. You do the paperwork at the point of sale, sign the tax credit over to the dealer and roll out the door.
            BTW- I’m not pleading poverty. I’m just asking why the same people who are always whining that we need to tax the rich more are all over giving tax incentives and rebates to wealthy people for buying electric “image” cars.

        • Ahhh another ‘framing’ moment by the rightwing….ordinary gas. Snort! I thought you were referring to toll roads.

          Betcha don’t scream about cigs and booze. Actually I’ve never heard anyone even mention them.

          Higher gas prices just mean more people switching to other fuels.

          If it’s that cheap to buy a hybrid…why don’t you have one?

          Hybrid cars aren’t expensive, so if you can’t afford one….yes you’re pleading poverty.

          They aren’t ‘image’ cars either…can’t tell them from any other vehicle.

          • Hybrid cars aren’t cheap, and there are none on the market that suit our needs, so that’s a non-starter.
            I have no idea what you’re babbling about with cigs and booze. What does that have to do with it?
            Your understanding of power storage, conversion, and transmission is laughably ludicrous. There are no fuel sources that can compete with the energy density and portability of gas and diesel. If there were electrical source that you could plug a car into that could transfer enough electrical energy to power a car for 500 km, in the same time frame that it takes to fill a car with gasoline, it would be either ruinously expensive or very, very dangerous for the untrained public to use.
            Again, I point out that if you wanted to replace 20% of Canada’s gasoline powered automotive fleet with wind sourced electrics, you would have to have so many windmills that no Canadian could ever be out of sight of a wind farm on any Canadian highway. Again, ruinously expensive. At the very least, such a network would be at least as expensive as gasoline.
            There is nothing inherently wrong with electric cars. They suit the needs of a very tiny market. But, they need to pay similar annual road use taxes as the drivers of conventional cars bear, and governments need to stop offering tax incentives to the sale of them.

  5. Did somebody else write paragraph 4 of this article? It’s full of inaccuracies and likes to make things up.

    Firstly, I think “whoever” wrote it mixed up their DC quick-charging tech. A Tesla Supercharger will fill a car to 80% in 20 minutes (and that rate is being consistently improved, 90->120->135kW). It is Nissan’s CHAdeMO technology (which has existed for YEARS, BTW) that takes 45 minutes to charge cars that have much smaller batteries than Teslas do.

    The typical EV (ie: everything but a Tesla) has a maximum range of 160km, not 200km. More than enough for a day of driving around a single location, but forget about reasonable long-distance travel.

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