Bill C-33 (Historical)

An Act to amend the Canadian Environmental Protection Act, 1999

This enactment amends the Canadian Environmental Protection Act, 1999 to provide for the efficient regulation of fuels.
It also provides for a periodic and comprehensive review of the environmental and economic aspects of biofuel production in Canada by a committee of Parliament.

The House resumed from May 2 consideration of the motion that Bill C-33, An Act to amend the Canadian Environmental Protection Act, 1999, be read the third time and passed, and of the amendment.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, in keeping with our theme for this week, which is strengthening democracy and human rights, today we will continue to debate Bill C-47, which is a bill to provide basic rights to on reserve individuals to protect them and their children in the event of a relationship breakdown, which are rights that Canadians off reserve enjoy every day.

We will debate our bill to give effect to the Tsawwassen First Nation Final Agreement, Bill C-34, and Bill C-21, which would extend the protection of the Canadian Human Rights Act to aboriginals living on reserve.

We will also debate Bill C-29, which is our bill to close the loophole that was used most recently by Liberal leadership candidates to bypass the personal contribution limit provisions of the election financing laws with large personal loans from wealthy, powerful individuals, and Bill C-19, which is our bill to limit the terms of senators to eight years from the current maximum of 45.

Next week will be honouring our monarch week. Members of Parliament will return to their ridings to join constituents in celebrating Queen Victoria, our sovereign with whom Sir John A. Macdonald worked in establishing Confederation, and honouring our contemporary head of state, Her Majesty Queen Elizabeth II.

The week the House returns will be sound economic management without a carbon tax week. The highlight of the week will be the return of the budget bill to this House on May 28.

This bill proposes a balanced budget, controlled spending, investments in priority areas and lower taxes, all without forcing Canadian families to pay a tax on carbon, gas and heating. Furthermore, the budget implementation bill proposes much needed changes to the immigration system. These measures will help us ensure the competitiveness of our economy. I would like to assure this House that we are determined to see this bill pass before the House rises for the summer.

We will start the week by debating, at third reading, Bill C-33, our biofuels bill to require that by 2010 5% of gasoline and by 2012 2% of diesel and home heating oil will be comprised of renewable fuels, with our hope that there will be no carbon tax on them.

We will debate Bill C-55, our bill to implement the free trade agreement with the states of the European Free Trade Association.

This free trade agreement, the first in six years, reflects our desire to find new markets for Canadian products and services.

We will also debate Bill C-5 dealing with nuclear liability issues for our energy sector; Bill C-7 to modernize our aeronautics sector; Bill C-43 to modernize our customs rules; Bill C-39 to modernize the Canada Grain Act for farmers; Bill C-46 to give farmers more choice in marketing grain; Bill C-14, which allows enterprises choice for communicating with their customers through the mail; and Bill C-32 to modernize our fisheries sector.

The opposition House leader raises the question of two evenings being set aside for committee of the whole. He is quite right. Those two evenings will have to be set aside sometime between now and May 31.

With regard to the notes that were quoted from by the Prime Minister and the Parliamentary Secretary to the Minister of Foreign Affairs, they were their notes and referred of course to announcements that clearly have been made about the need and the imperative of restoring our military's equipment and needs in the way in which the Canadian government is doing so.

Agriculture and Agri-Food

[Christian Paradis, Conservative, Secretary of State (Agriculture)]

Mr. Speaker, I would like to thank my colleague for his question. We have a balanced approach where everyone wins—the environment, farmers and the regions of Quebec.

With Bill C-33 we will impose biofuel targets of five per cent for gasoline and two per cent for diesel. This is a positive measure that is equal to taking one million cars off the road. When we reach our goal, 95% of Canada's current arable land will continue to be used for food production.

The Bloc has done an about-face and is abandoning the environment, farmers and the regions. Once again, we see that the members from the regions in this party are afraid to stand up.

[Denis Lebel, Conservative, Roberval—Lac-Saint-Jean, QC]

Mr. Speaker, much to everyone's surprise, a few days ago the Bloc reversed its position and stated that it will now be voting against Bill C-33, which would impose biofuel content targets of five per cent for gasoline and two per cent for diesel. The Conservative government's strategy, with Bill C-33, is beneficial for the environment, for farmers and for the regions.

I would like the Secretary of State (Agriculture) to explain the government's biofuel strategy. Does he not feel that the Bloc is once again abandoning the farmers and regions of Quebec?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Let me restart here.

Of course we've seen rapid changes in market conditions, competitive pressures, price and input cost pressure squeezing the margins of several commodities, challenges and opportunities in international trade policies, increasing awareness and sensitivity of food safety issues, and increasingly environmentally aware consumers. These factors are all having an impact on how we respond to the challenges and opportunities facing our Canadian producers.

You know, one of the great things about this job is that it gives me a chance to sit down with farmers from coast to coast to coast, and I've been able to do that over the last short time. I can say we're getting some great comments from people that we're on the right track on some of these key issues. Things are getting done, and if you want to see it in black and white, you have the evidence right here in front of you in those main estimates. I think it goes right back to the fact that we have not wavered from the bedrock principle that we established from day one, and that is of course “farmers first”. If the farm gate is not strong and viable and sustainable, then none of the rest matters or can continue. It's a simple formula and it works. We're listening to farmers, we're acting on what we're hearing, and we're delivering real results.

The livestock sector told us it needed help to get through a rough patch, and we delivered. Changes to the advance payments program was by far the biggest ask by the sector, and we delivered in record time, thanks to the help of you in the opposition parties. Changes to the act made emergency cash advances of up to $400,000 per farm available for our livestock producers. Of that $400,000, the first $100,000 is interest-free. We also dealt with issues around security requirements to maintain the security for the banking sector. We took other actions to speed up cash flow to the industry, including fast AgriInvest payments, targeted advance payments, and the cull breeding swine program, which has already met more than half the target.

Farmers asked us to get older cattle moving south again, and we have done that, Mr. Chair, first through rule 2. Then when we were in Washington in March we got the good news that Mexico would provide OIE-consistent access to all breeding cattle—we've seen the first shipments move south—and further, that Canadian breeding cattle could be shipped through the U.S. to Mexico. It's working out very well.

I'm proud of how this government has delivered, ensuring greater market access for Canadian beef. I'm proud of the professional manner in which the agriculture and agri-food department and CFIA are working together and getting things done for our producers. We're getting great comments back.

Last November, the CFIA worked with our livestock industry to head off the enhanced testing for E. coli that was demanded by the United States. We got that turned around. We're making gains for livestock farmers in the red meat sector, but we won't stop there. We need to restore full access to all cattle and beef with all our trading partners.

We will continue to vigorously oppose the current version of mandatory country-of-origin labelling. Of course, that's expedited with the passage of the Farm Bill yesterday. I've raised that issue on several occasions with Secretary of Agriculture Schafer and also his predecessor. The U.S. has to make sure COOL doesn't choke the industry on both sides of the border with unnecessary segregation costs and stacks of mandatory paperwork that serve only to thicken the border, and of course that thickens it both ways. The version of COOL that is implemented must be trade-compliant under NAFTA, or as we have advised the U.S. and have continued to say, we will initiate a NAFTA panel.

Farmers told us they wanted more opportunities in the biofuel sector, and we will deliver that through Bill C-33 amendments, ecoABC, and other initiatives. Our approach to biofuels is thoughtful and reasonable—I'm sure we'll have that discussion here today—balancing the need to ensure we address the needs of the environment with the need for continued food production in this country. We need to put this issue in perspective, however. Right now, to meet our proposed mandates for biofuels would require only about 5% of our production capabilities, less than the variables caused by weather systems. That leaves 95% dedicated to our high-quality food production. We've also invested $500 million towards the next generation of biofuels using cellulosic technology.

We're boosting our food aid by $50 million, maintaining our position as the second-largest contributor to the world aid food programs. Our biofuels strategy is the right plan for our rural communities, our producers, and our environment.

Farmers told us they need access to new and better crops. We're delivering through our support of science and innovation. We've moved quickly to get rid of KVD and that's going to mean new wheat varieties will get introduced here and commercialized here in Canada, instead of the United States.

Farmers asked for workable, bankable business risk management programs for Canadian farmers, and we delivered with the new business risk management suite, thanks in large part to great cooperation with the provinces, which helped us speed up the Kickstart and cost of production payments.

Farmers asked us for a transition period to Growing Forward, to ensure we developed the right programs, and we did that, negotiating the continuity year with the provinces and territories.

I truly believe the progress we have made on this is directly due to the respectful relationship we have built with the provinces and territories, and a solid consultative process including industry.

Farmers asked us for marketing choice in barley, and we're working hard to achieve that through Bill C-46.

We're also working on new guidelines for “Product of Canada” labelling on foods that will give Canadian consumers clear labelling information to make their informed choices. We'll give Canadian farmers and processors the credit they deserve with proper labelling on the products.

I know this committee has done a lot of legwork on this issue, and I certainly look forward to your report.

We also tabled legislation to overhaul food and product safety laws. This will not only boost confidence amongst our consumers at home that our product safety standards are second to none, it will also make Canadian agrifood products more competitive on that global market for consumers.

Farmers asked us to approach international trade with both solid offensive and defensive positions. At the World Trade Organization agricultural negotiations, we are working hard to open new markets and level the international playing field for our producers and processors. These efforts are complemented by our very active regional and bilateral negotiations agenda, where we are making real headway through our exporters.

This government continues its strong support for supply management. At the WTO agricultural negotiations, we are firmly defending the interests of our supply managed sectors.

We have demonstrated our support for supply management through other concrete actions as well. For example, we have taken action under GATT article 28 to limit the imports of low-duty milk protein concentrates through tariff rate quotas.

We are also taking action to finalize the operational section of the WTO special safeguards for supply managed goods, and we've also implemented cheese compositional standards.

Clearly Canadian farmers are succeeding in world markets. Last year Canada's overall agrifood trade hit a record $31.6 billion, an increase of almost 13% over the same period in 2006. Those market realities are reflected in our main estimates here today.

Here at home we have launched a full-court press to get the Growing Forward framework in place at our federal-provincial-territorial meeting this July. I'd like to see as many of the new programs announced as soon as possible after that.

We're constantly talking with farmers during this process because we want to get farmers the right tools for the job ahead.

Growing Forward is more than a federal-provincial-territorial agreement. It's the result of a lot of hard work and consultation with farmers, farm organizations, and others throughout the sector. Growing Forward is already delivering for farmers. It fully supports this government's strong competitiveness and innovation agenda.

Growing Forward aims to deliver important innovations, new market opportunities, provincial flexibility and affordability, improved service standards with streamlined regulations, and a competitive sector that can adjust to the changing global marketplace. Growing Forward will make the whole agricultural value chain stronger from field to port. Growing Forward is the right response to the realities and challenges facing the agricultural sector today.

Mr. Chair, with that snapshot of where we've been and where we're going, I'd be happy to open the floor to questions.

[Michael Martin]

The directive on strategic environmental assessment is administered by the Canadian Environmental Assessment Agency and by the Privy Council Office. Since 1990, as you know, major government initiatives, proposals, are subject to a strategic environmental assessment. And Bill C-33--

Liberal Party of Canada

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Mr. Speaker, recently the member for Ottawa South said that his party's internal debate over biofuels was over and that the Liberals would vote in favour of Bill C-33, but then, on the same day, his colleague from Esquimalt—Juan de Fuca said that the measure should be defeated.

Canadians are mystified about the Liberals' inability to take a stand on the renewable fuels industry.

Our Conservative Party is the only party that stands for renewable fuels, even though during the last campaign everyone was for it.

Biofuels are good for farmers, good for the rural economy, good for the environment and good for Canadians. When people, such as farmers, truckers, and ordinary Canadians, are struggling with high fuel costs, the Liberals are only interested in taxing fuel another 50¢ or 60¢ a litre.

High taxes, extravagant spending and pulling its support for agriculture is the culture and the opposition's strategy but it is certainly not what Conservatives believe in.

Canadian Environmental Protection Act, 1999—Speaker's Ruling

[The Speaker, Liberal, Peter Milliken]

I am now prepared to rule on the point of order raised on Friday, May 2, 2008, by the hon. Leader of the Government in the House of Commons concerning the admissibility of the amendment to the motion for third reading of Bill C-33, An Act to amend the Canadian Environmental Protection Act, 1999, moved by the hon. member for Western Arctic.

I would like to thank the government House leader for raising this matter, as well as the hon. member for Vancouver East for her intervention.

The hon. government House leader contended that the amendment proposed by the hon. member for Western Arctic was inadmissible because it sought to provide a mandatory instruction to the committee. He was of the opinion that the use of the words “with a view to making sure that” in the amendment constituted a mandatory instruction on how the committee should dispose of the bill.

The hon. member for Vancouver East, for her part, felt that the proposed amendment was clearly permissive. In her opinion, the words “with a view to”, contained in the amendment, support that argument.

As stated in the House of Commons Procedure and Practice on pages 672 and 673, regarding amendments to the motion for third reading of a bill:

The purpose of such an amendment may be to enable the committee to add a new clause, to reconsider a specific clause of the bill or to reconsider previous amendments. However, an amendment to recommit a bill should not seek to give a mandatory instruction to a committee.

House of Commons Procedure and Practice also mentions further on page 793, with respect to instructions to committees of the whole, which also applies to standing committees:

Instructions to a committee of the whole dealing with legislation are not mandatory but permissive, that is the committee has the discretion to decide if it will exercise the power given to it by the House to do something which it otherwise would have no authority to do.

The issue before us today is to determine if the amendment proposed by the hon. member for Western Arctic meets the requirements as set out in our rules and practices, and more specifically, if it indeed constitutes a mandatory instruction to the committee.

There are many precedents of similar amendments to the motion for third reading that have included the words “with a view to” combined with various action verbs akin to “making sure”. For example, amendments moved in the past have used the verbs “to ensure” on November 8, 2001, “to change” on January 31, 2003, “to eliminate” on March 4, 2004, and “to incorporate” on June 22, 2005, and all were ruled admissible. In fact, with time, this has become an established and accepted form for an amendment at third reading that seeks to recommit all or certain clauses of a bill.

In reviewing the texts of the amendment and of Bill C-33, I find that the amendment does not, in my view, infringe on any of the principles that I mentioned earlier and that form the basis of past practices of the House. The amendment asks the committee to reconsider a clause of the bill, taking into consideration certain issues, but it does not specify that any amendment is required or exactly how the committee should modify the bill to attain that objective. In my opinion, the text of the amendment provides the committee ample discretion in how it wishes to reconsider the particular clause in question.

As such, I declare the amendment in order. I thank the hon. Leader of the Government in the House of Commons for bringing this issue to the attention of the House.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

Mr. Chair, I respect the opinion expressed by the member, but the fact is that environmental groups, economists and even the United Nations emissary to the Canadian food program have proposed a moratorium on the production of biofuels for the very reason that this contributes to the rise in food prices. As I said, between 2003 and 2008, production increased from 212 million litres to 1.5 billion litres, and that figure is expected to climb to close to two or three billion dollars.

I understand what Mr. Warawa is saying. There are other options. Biofuel is not limited to corn-based ethanol, but given the timeline set out in Bill C-33, which targets 5% in 2010, and the maturity of the other technologies available, achieving this goal will inevitably require an increase in the production of corn intended for the manufacturing of ethanol. In these conditions, it is obvious that this is currently contributing to the hike in food prices abroad and that this will likely be the case soon here in Canada.

Canadian Environmental Protection Act, 1999

[The Acting Speaker, Conservative, Royal Galipeau]

I regret that I must interrupt the hon. member for Ottawa Centre. It being 1:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

When we return to the study of Bill C-33, there will be six minutes left for the hon. member for Ottawa Centre for questions and comments.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, earlier today we heard a comprehensive speech from the member for Ottawa Centre, another one from the member for Western Arctic and now we have the addition of our good friend from the Bloc with his comments around Bill C-33. A common thread that appears to be travelling through the remarks I am hearing in the House today is that we should err on the side of caution.

I would refer back to a quote I have here:

Biofuels have many advantages, but we have to look at all our options and make sure we make the best choices to ensure a more sustainable future.

...attempting to save the planet by wholesale switching to biofuels like ethanol and biodiesel may unintentionally have the opposite effect.

That quote was from David Suzuki. In this country we all know that he is very highly regarded when it comes to environmental matters.

I would add one thing. Yesterday, in the Toronto Star, there was an editorial which read:

And while biofuels may be doing little for the environment, they are doing the world a great deal of harm by diverting food from hungry people to the feeding of automobiles.

In the final closing remark, it states:

Parliament should heed NDP Leader...and take more time to consider the implications of Bill C-33 before passing it.

Some of these folks are non-traditional supporters of the NDP, I would go so far as to say, but would the Bloc not agree that we should err on the side of caution and take our time to ensure that when we set this up that we do it properly?

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Thank you, Mr. Speaker. I understand. Things like that can happen in the House; it is called democracy. I was waiting patiently.

I am pleased to participate once again in the debate on Bill C-33, An Act to amend the Canadian Environmental Protection Act, 1999. I have already made two or three speeches on this subject. To avoid repeating what I have said, I will focus in this speech on the need to reduce our dependency on oil, which obviously also has to do with the use of biofuels.

The bill itself does not contain any standards. It authorizes the government to adopt regulations, which is basically how biofuels would be monitored, with respect to standards and their impact. In the medium term, this bill can help us reduce our dependency on oil and significantly decrease greenhouse gas emissions from automobiles, depending on the type of biofuel used and, of course, the type of transportation used with these biofuels.

The vast majority of greenhouse gas emissions are produced when petroleum products are burned. To reduce these emissions and fight climate change, naturally, we also have to reduce our oil consumption.

Of course, Bill C-33 is not a binding instrument for reducing greenhouse gas emissions; it is a measure to promote the development of alternative fuels. The best instrument for reducing greenhouse gas emissions, and the only binding one, is the Kyoto protocol, which the Conservative government unfortunately rejected out of hand. Instead, this government is helping the oil companies, which have responded with a price at the pump that is close to $1.40 in the Montreal area. The other day, I saw $1.37. A litre of regular gasoline is selling for nearly $1.50.

In Canada, the oil companies, which recently again announced profits in the billions of dollars, pay less tax than in Texas. When we see that, we wonder what this government's real intentions and real priorities are.

Between 1970 and 2000, the hydrocarbon industry received $66 billion in direct subsidies from the federal government. For your information, Quebec developed hydroelectricity all on its own, without the federal government's help.

The Bloc Québécois suggests that the government stop giving special treatment to the oil industry, which has no need of government tax breaks. It is not a matter of shutting down the oil industry. We all understand that we need oil, but the idea behind this sort of policy or concern is to stop giving tax breaks to companies that do not need them in the least.

I have a few figures that prove this. Petro-Canada's net profit for the first quarter of this year was $1.1 billion, an 82% increase over the same period last year. This is no laughing matter. In 2007, Shell, the second-largest oil company in the world, had a net profit of over $30 billion. A net profit of more than $30 billion for a single oil company, even one that operates all over the world, is quite something.

Instead of helping the oil industry, the federal government needs to levy a surtax on oil extraction and production industry profits. The revenues from this surtax should go toward measures to promote reduced consumption of petroleum products. This would be a smart policy if we really want to reduce our oil use.

One of the ways we could be less dependent on oil is by improving energy efficiency and using cleaner modes of transportation to move goods. Take trains and ships for example—these two types of transportation account for 8% of oil consumption, compared to trucks, which account for 92%. This is an absolutely incredible difference.

The benefits of increasing our use of trains and ships include reducing our consumption of oil products and reducing greenhouse gas emissions, which we will come back to. What is more, when we take greater advantage of our seaways and rail system, we scale down traffic by reducing the number of trucks. We have all been stuck in traffic. I am not saying that the problem will be fixed immediately, but cutting down on the use of trucks will certainly improve the situation.

We must also move away from fuel oil and favour cleaner energy sources, for individuals as well as businesses. We have been looking at all kinds of alternative fuels and alternative energy sources. Now we must promote the use of these products in order to keep reducing our use of fuel oil, a serious pollutant.

In Parliament, the Bloc Québécois is actively trying to minimize the impact of the rising price of gasoline. This is not the first time we have done so. We are once again on the attack. For instance, this week, we moved forward with deliberations at second reading of Bill C-454, introduced by my colleague from Montcalm. The bill made its way to second reading this week and was the topic of debate. The bill aims to give greater powers to the Competition Bureau.

I would also like to touch briefly on the objective of Bill C-454. It is absolutely crucial that the government strengthen the Competition Act in order to better combat the exorbitant increases in gas prices that average Canadians must face every time they fill up. To achieve this, the government must give greater powers to the Competition Bureau so that it may conduct a real investigation, particularly of the refining sector.

At present, the Competition Bureau does not have the power to launch an investigation on its own initiative. The legislation must therefore be changed. When it does conduct a review, its mandate does not allow it to discipline the industry, but simply to determine how it generally operates. Furthermore, it cannot force the disclosure of documents or protect witnesses during such a review. Thus, clearly, it is very broad and above all very fluid. This does not impose many restrictions.

In short, the Competition Bureau has its hands tied and is in no position to fight the oil companies, which are unscrupulously fleecing consumers. I have more examples. Profit margins in refining can reach 20¢ per litre of gas, which represents $10 for an average fill-up of 50 litres. And 50 litres is exactly the capacity of my car's gas tank. That is definitely excessive—not my gas tank, but the profit margins in refining as high as 20¢ per litre of gas. I would like to reiterate that this means as much as $10 for the average fill-up.

Generally, it is businesses, taxi drivers, farmers—since we are talking about the bill studied by the Standing Committee on Agriculture and Agri-Food—and consumers who pay the price. Oil companies already benefit from preferential tax treatment.

Obviously, in light of all this, oil company executives are laughing merrily. In fact, the Competition Bureau does not have the tools to ensure that prices are not artificially inflated. When a very few companies almost completely control a market as large as the gasoline market, someone has to keep an eye on them. You see the same signs when travelling through cities, villages, or almost anywhere. There are only so many oil companies. We are referring primarily to the major oil companies that control the market.

Oil refining comes under the jurisdiction of the federal government. Thus, it is up to the House of Commons to ensure that the Bloc Québécois' Bill C-454 is passed as quickly as possible in order for the Commissioner of Competition to take the necessary steps to prevent excessive gas price increases and oil company practices that are contrary to the public interest.

With the approach of summer it is possible that consumers will once again suffer because of the inordinate price of gas. Our bill must proceed quickly and unimpeded if we want it to be in force before the summer holidays. Not that we are in a hurry for them to arrive—but they are coming. We know that gas prices escalate suddenly and mysteriously in the summer.

Our dependence on oil is also a contributing factor to Quebec's trade deficit. Between 2003 and 2007, Quebec exports rose from $64 billion to $70 billion compared to imports, which rose from $64 billion to $81 billion. We therefore have a trade deficit of $11 billion.

What is Quebec's largest import? Of course, it is oil. In 1998, Quebec imported $2.5 billion worth of oil and last year it imported $14 billion worth, which is an increase of 457%. The price per barrel of oil explains the astronomical increase. Last year, in 2007, not long ago, the price per barrel was roughly $70 and now it is over $100. It was $119 last time I checked. Unfortunately the price goes up more often than it goes down.

Quebec has a policy goal that all fuel sold will include 5% ethanol by 2012. It has already invested $6.5 million in building two cellulosic ethanol production plants in the Eastern Townships, one in Westbury and the other in Sherbrooke. That is not so far from my riding. Cellulosic ethanol is the way of the future. I have already talked about this, as have a number of my colleagues in this House. The process promotes the use of agricultural residues, such as straw, and forestry residues, such as wood chips, along with trees and fast growing grasses, such as switchgrass. Bill C-33 will allow the emergence of this new generation of biofuels.

Biodiesel is another type of preferred biofuels. There is a biodiesel plant in Sainte-Catherine, Quebec.

Beef producers currently have to dispose of their specified risk materials. That is a Canadian standard beef producers have to comply with. We are not against it, but we would like to see reciprocity with U.S. standards. But that is for another debate. One thing is certain for now, producers have to get rid of these materials, which end up in the landfill. Often, unfortunately, producers have to pay out of their own pockets to get rid of these animal materials that can no longer be used, not even to make feed for other animals.

If we gave these materials added value by turning them into biodiesel, we could kill two birds with one stone. We could turn these materials into fuel. That is what sustainable development is all about. Instead of throwing out the material, burying it or paying to have it removed, we could pay for it once it has value and turn it into biodiesel. The technology already exists and this is already being done. Biodiesel is currently being made out of animal fats.

The Fédération des producteurs de bovins du Québec has studied the feasibility of setting up a plant to process animal carcasses and slaughterhouse byproducts into biofuel. Strategic partnerships and help from the government are needed to get that kind of project of the ground.

We have Bill C-33, but we will have to go much farther than that in developing a policy to promote biofuels that have few negative environmental impacts, or at least far fewer than petroleum and fewer than the foods we could use to make biofuels.

According to the Fédération des producteurs de bovins du Québec, we have to ensure that the life cycle of renewable fuels offers true environmental and energy benefits compared to oil products. That is why we should support the federation's project.

I have also talked about the training and recycling centre, CFER, in Victoriaville in my riding. In cooperation with 10 restaurants, this organization recycles used oil, the kind used for french fries, among other things. They are recycling it to make fuel. A pharmacy in Victoriaville even uses this kind of fuel in its delivery vehicle. Here in the House, I joked about how when one is driving behind the delivery vehicle, one does not necessarily get a smell of french fries.

Obviously, that is an important way to use it, a way that will not necessarily consume more energy in transportation. If the vehicle that collects this used oil goes to each of the restaurants and runs on used oil, itself, and if they manage to sell that oil at the pumps one day, that will be a huge energy gain. They are not yet at that point. It is still experimental, but the vehicle works very well.

Let us take this one step further. For example, sludge from sewage treatment plants can also be transformed into ethanol. Quebec's national scientific research institute came—once again—to Victoriaville.

I do not know if they did a very exhaustive study, but one thing is sure: the institute said that sludge from the Victoriaville sewage treatment plant could be transformed into ethanol. This is the kind of project we should be encouraging if we really want to reduce our oil dependency.

The House resumed consideration of the motion that Bill C-33, An Act to amend the Canadian Environmental Protection Act, 1999, be read the third time and passed.

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Speaker, I listened intently to the minister's remarks this morning and I thank him for speaking extemporaneously without notes, which is good to hear. I will try to imitate his style and respond directly to some of the issues that he raised.

I do not think the minister should take too much comfort in the support that he received from this party yesterday in allowing Bill C-33 to proceed because we treat this bill merely as a technical amendment to the Canadian Environmental Protection Act which would allow the existing minister or any future minister to regulate the content of ethanol in fuels for consumption in Canada and for fuels to be exported abroad.

However, let me assure the minister and the government that there are very profound questions that they have not even begun to answer.

Chief among those questions is why, in the first instance, was this bill put to the House by the Minister of Agriculture when it is an Environment Canada bill? It is the Canadian Environmental Protection Act, separated and driven by the Minister of the Environment. I understand the government's intention here, which is to strategically place this as a farm receipts issue, which it, of course, partly is, but overarching the farm receipts issue, in fact overarching so many issues in Canadian society, are more profound issues and concerns about where we are going with our environmental policy. My remarks today will be cast with that chiefly in mind. How is the government proceeding here with this bill? How is it proceeding in the ethanol field when it comes to environmental perspectives?

However, I first want to talk about the very recent about-face taken by the NDP, which I will not descend to in terms of the remarks made by the Minister of Agriculture, but I do want to express my disappointment in the NDP in its attempts to politicize food prices, in its attempts to try to, in my view, frighten Canadians with its food for fuel campaign. It is much more constructive if we actually pursue a rational debate about the drivers, the factors that are at play not just in Canada but globally. Factors, for example, like oil prices have jumped by nearly 100% over the past year; that in 2007 food prices increased by about 4% overall; that 80% of the cost of food today are food marketing costs. The marketing costs are the difference between the farm value and consumer spending for food at grocery stores and restaurants.

The price of rice is now up 77% since October. Rice is not used in the production of biofuels. As a whole, fish prices are up, not just in Canada but worldwide. Why? In part it is because we are seeing five of the six major oceans fisheries in a state of collapse today. We hear nothing from the government about that. Why is this important? It is important because the government's ethanol policy appears to be completely disconnected from its environmental policy. That is a shame because the two are inextricably linked. They need to be presented as such and they need to be defended as such.

I will turn for a moment to two amendments put forward by the NDP that the Canadian public is not aware of and that were ruled out of order by this House. This speaks volumes to the tone and the approach the NDP members are taking to this debate, which is simply not helpful. Two other amendments they have put to this House include the prohibition of the use of genetically modified organisms for biofuel production.

My understanding of this sector is that if we were to rule out the use of GMO crops, we might as well shut down the entire industry as we speak. For that matter, as an agricultural graduate, I can assure Canadians that most of the foods and the grains that we are eating are and have been improved through the use of science over the past decades.

Second, the NDP wanted to establish restrictions on the use of arable land. I put to the environment critic of the NDP some time ago whether the leader of the NDP would soon announce his intention to nationalize Canadian farms. We have seen that around the world and, as a person who has had the privilege of working around the world, I do not think there are any remaining jurisdictions that seriously believe that such nationalization will help us with our food production patterns.

I will now turn to some of the key issues around the bill. First, as we have said repeatedly, we are in favour of ethanol as a part of our energy mix now and into the future.

There is an industry that exists today. Ethanol is a transition fuel, one of the transition fuels to our carbon constrained future. Why is it a choice transition fuel right now, in the right amounts? It is partly because the infrastructure for ethanol distribution already exists. We have all of the sunk capital costs spent in the way in which we dispense gasoline and other fuels, and ethanol fits into that distribution system.

For example, when we talk about the eventual quantum leap, perhaps to a hydrogen based economy, our challenge will be how we distribute the hydrogen and safely. However, right now, as a transition fuel, ethanol can be used and blended. Every car on the road today with an owner's manual can burn up to 10% ethanol, as we speak.

As I say, it is a technical amendment bill and, in that sense, it is important. We need to give a minister the powers necessary to regulate fuel content.

However, more important, there remains a plethora of questions that the government has not even begun to address. Having just heard the Minister of Agriculture and Agri-Food, I was waiting with anticipation to hear him speak to the connection between the Conservatives' fiscal policies on this issue, their agricultural policies on this issue and their environmental policies on this issue. Lo and behold, I waited too long because he never addressed them. He did not address the environmental implications of this issue at all, which is unfortunate.

We think it is important, as we agreed in committee when the bill was debated, that one year after the bill comes into full force and effect and becomes a law, it will go back to a parliamentary committee and then and there it will be the subject of a major detailed analysis.

The ethanol industry should be examined much more fulsomely. We need to address questions like energy inputs, chemical inputs and meaningful greenhouse gas reductions and whether we are achieving these. We need to address the impacts on food pricing, trade considerations, agricultural land use patterns both here and abroad, freshwater impacts, agricultural run-offs, farm receipts and soil impacts. The most precious resource that most farmers possess is the top three inches of their soil. There are so many other issues.

One year after the bill becomes law, we will hold the government to account and we will be asking for a detailed analysis.

The government has not developed the metrics necessary. In that sense, I commend the NDP for raising this issue, as well as the Bloc. The government has not developed the metrics necessary to tell Canadians clearly why we are choosing ethanol over other transition fuels or, for that matter, why one form of ethanol is more beneficial than others.

It is true that cellulosic ethanol allows us to make a quantum leap, to take us to a second or even third generation form of ethanol, which burns more cleanly and, for that matter, puts more marginal lands into production.

Thirty years ago, as a young agricultural student I remember surveying all of eastern Ontario for a potential project to plant all kinds of new varieties and species of poplar. Poplar, which grows very quickly, could be grown on very marginal lands and can be put into cellulosic ethanol form over time.

Now that we do have the engineering and the chemistry to produce the enzymes required to convert such feed stocks into cellulosic ethanol, we can have a very meaningful debate in a year's time in terms of more details.

Many factors are at play, and the minister has pointed to a few but has omitted others, to create this perfect global storm right now that is wreaking havoc in developing countries, emerging economies when it comes to food pricing and food access.

Yes, it is true that ethanol production in northern jurisdictions is having an impact. The question is, to what extent is it having an impact? So many other forces are at play, forces like decertification, climate change, weather patterns, energy costs, trade rules, subsidies. Forty per cent of the European Union's budget is the common agricultural policy to subsidize the production of agricultural products. This is a question that is affecting food prices.

Food distribution systems, corruption levels, the rule of law, the extent to which we are seeing rising Asian incomes and a propensity to consume more protein, the Australian drought, which is lingering as a result of climate change, all affect food prices.

I was quite shocked to hear the Minister of Agriculture make light of climate change, suggesting that cold weather recently in Saskatchewan clearly indicated that the planet was not warming, but must be cooling. This is tantamount to what we heard from the Minister of Public Safety, before he erased it from his website, when he made light of the fact that B.C.'s climate was warming so he was suggesting buying vast amounts of land in northern B.C. and flipping it for profit. That is not funny. It portrays the government's profound non-commitment to the climate change crisis facing Canada and the planet.

Many factors are at play, creating the perfect storm. Unfortunately now we are seeing nation states moving to nationalize and to hoard food stocks. This is very problematic. This is having a direct bearing on global food prices and global food distribution.

In short, when it comes to the question of where the government goes with its ethanol policy, we have a profound responsibility on this side of the House, as the official opposition, to hold the government to account, and we intend to do so. The government has announced it is spending $2.2 billion in this field. We will watch closely as to how it invests this $2.2 billion.

It is very strange also because the government's Minister of Finance stands up in public fora after public fora and announces to the world that he does not pick winners and losers. It is this neo-con, laissez-faire, “I don't care” voodoo economics that he professes to practice.

The government now is taking $2.2 billion and ploughing it into a sector. This really raises questions about the government's commitment to this post-post-Conservative approach to economics that I have not seen another country in the world practice.

There are a number of important questions to raise about the science around ethanol and greenhouse gas reductions.

What is the net environmental impact of ethanol use? It depends very much on the raw materials used and the production process used. Has the government spoken to this? Not at all. Is it in the bill? Not at all. Have any studies been tabled? Nothing. Has any evidence been put forward to suggest that the government is meaningfully going to take us to second, third and fourth generation technologies? We have not seen it, but we will be watching for it. In a year, when we perform a detailed analysis on this question, we will be looking for answers to this question.

We hear a lot about corn ethanol. There are mixed studies. Berkley's studies find that corn ethanol reduces GHG emissions by about 13%. We are hearing contrary studies. Has the government actually reconciled the competing science, peer reviewed it and put it to the Canadian people? We have not seen it.

We see other studies that show that cellulosic ethanol would produce about 85% fewer greenhouse gases than gasoline. There are now emerging studies and emerging science. How much is the government investing in science? How much of it is evidence based? How much of it is ideologically based? We remain to be convinced. We are looking for that evidence.

It is true that new demand for corn to produce ethanol is inflating corn prices. There are distributive impacts that we have to be aware of not just in Canada, but throughout the United States, Mexico, Central America and beyond. The government has to address this question, and we will look for that question to be answered in due course.

Yet again, we know that even marginal increases in grain costs harm poor people the most. They could exacerbate world hunger. Again, I am disappointed in some of the tone, maybe even some of the histrionics coming from the NDP recently on this question. It is important to look at the oft-cited example of the price of tortillas in Mexico, which doubled in 2006, a year of record U.S. corn prices. We know we need to get off corn, because it is such an energy and water intensive, highly polluting crop. Plus, the minister knows the impact of mono-cropping of corn on soil friability on organic matter content. He knows the destructive nature of corn production.

Some are concerned that, for example, the use of E85, 85% ethanol as a motor fuel may lead to increased smog and health effects. Has this been addressed? No. We are waiting to see the analysis put by the government, and we will be holding it to account as it begins to allocate the $2.2 billion into the field.

There is a fear that conversion of forests or wilderness to farmland will not only harm biodiversity, but may negatively affect the net greenhouse gas production because of the role that forests and wilderness play when it comes to sequestering carbon. The government, again, picked another winner. It does not pick winners and losers, but it picked another winner by investing over $200 million in carbon capture and sequestration recently in the home riding of one of the government members, to be able to try to pilot through an important and promising technology. However, is it speaking about the role of nature in sequestering carbon? Not a peep. I do not believe the Conservatives take climate change seriously. I do not think they have reconciled their economic, agricultural and environmental policies.

Those are some of the questions that we want to see answered.

Here is another question. At the environmental centre of why nations first began using ethanol, it was to deal with the replacement of lead, as well as reducing the use of benzene, which is the number one petro-carcinogen. The government says that it has a national cancer strategy. We know that the number petro-carcinogen is benzene. If we Google benzene, here is what pops up, “No known safe level”.

Then remember that some 400 million litres or 1% of gasoline is benzene. It is present with toluene and xylene, which are also dubious, according to Health Canada's anti-smoking group, and they are in there only for octane purposes. Ethanol has a 113 octane rating, the highest of any fuel. It could be used to replace at least the 1% benzene portion if oil refiners so desired. That is really important when the Canadian Cancer Society now predicts that one in two Canadians will get cancer. One in three Ontarians today will get cancer.

Is the government linking its three core policies together? We see no evidence of it, and we are looking for it.

Finally, I want to raise the question of the government's fiscal choice on April 1 of this year to repeal the excise tax exemption for biodiesel and ethanol fuels. This is at a time when the ethanol industry is just getting on its feet, and it is let down with the government deciding to remove the excise tax exemption for biodiesel and ethanol fuels. We know that on low level blends, the effect of the repeal on prices in the retail sector is minimum. It is about 0.5¢ per litre on E5 ethanol blends.

However, for higher blends, the additional burden is substantial, 2¢ a litre for E50 and 8.5¢ a litre for E85. How does this reconcile with the government's stated purpose to try to increase the ethanol industry in Canada? We have two or three stations in Canada against the 1,200 in the United States.

We will hold the government to account. I suggest the Minister of Agriculture, the Minister of Environment and the Minister of Finance sit down and share a cup of coffee and actually try to bring their policies together.

I cannot understand for the life of me why the government is not placing this and connecting this to a national climate change response. The only thing I conclude, along with the seven objective and third party groups that have looked at the government's climate change plan, is that no one believes it. Nobody believes it will achieve what it sets out to. As a result, I think they are incapable of actually linking these together.

[Gerry Ritz, Conservative, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board]

moved that Bill C-33, An Act to amend the Canadian Environmental Protection Act, 1999, be read the third time and passed.

Mr. Speaker, I cannot tell the House what a pleasure and an honour it is to stand and speak to the third reading phase of Bill C-33.

As everyone knows, there has been quite a bit of controversy around this bill in the days leading up to this particular juncture in the passage of Bill C-33. And it will pass. I would like to thank my colleagues from the Liberal Party and the Bloc for taking this legislation under consideration and moving it ahead. It shows real leadership by a government that in the face of a lot of adverse media and so on moved ahead with the right thing at the right time. I give those members a lot of credit for that. Of course the fourth party is leading a different parade, and I welcome it to that, because that is what it does best.

This is a tremendous opportunity. It has been a long road to get here. No one thought when we brought it in that this type of bill would face this kind of adversity, because all of us aggressively campaigned on this issue throughout past elections. Elections come around more quickly in minority situations, but in 2004 and 2006 every party campaigned aggressively on a biofuel strategy. Since we are in government now, Canadians obviously judged our strategy to be the most practical.

The other parties, including the NDP, said they wanted 10% ethanol. We are at 5% ethanol and 2% biodiesel, and I think that in this time and place that is the right quantity. We are moving ahead fairly aggressively on this. Ethanol and biodiesel plants have come into being across the country. This is a great opportunity for farmers to move ahead and to have a different warehouse door to deliver to. More than that, this is great for rural communities that are looking for some sort of renewal after many years of seeing urbanization across this country, whatever was driving it. However, I will not get into that today.

Addressing the environment is at the forefront of everybody's mind. As I said, all parties called for a renewable fuel mandate and based it on two things: ethanol is a clean-burning fuel and fossil fuels are not going to last forever. It is time to get serious, especially here in Canada, where we have the capacity to make these changes. It is time to get serious about moving to greener technology. It is all part of what is best for the environment as well.

This legislation is probably one of the best policies to come forward in the last decade. It is actually a bedrock principle: it is good for the Canadian economy, good for Canadian farmers, and of course it is great news for the environment.

There are a lot of studies at cross purposes out there. Most of them are based on a global model, which we are not talking about here today. We are talking about Canadian production and Canadian policy and that is what this government has to answer to. We cannot begin to analyze and ascertain the directions other countries are taking, but we have to speak to the Canadian electorate, the Canadian people, about why we are doing what we are doing.

There is good news out there. Due to the innovation and industriousness of Canadian agriculture and Canadian forestry, we have the capacity to do this and in no way affect our food lines.

A lot of people say that we cannot do both. They say we cannot grow food for energy and for consumption. Nothing could be further from the truth.

Anyone who has analyzed food production in this country knows that we are growing more, that it is better quality, and that it is safer. It is time that we started using that great renewable resource to create energy that is great for the environment and also starts to backstop a lot of what farmers were not able to get out of the food line fully to address their bank lines. This legislation is going to do that. We have already seen some effect of that positive side. Again, as I said, it is due to the innovation and so on that is out there.

Things are changing as we speak. Going to our 5% mandate, which is three billion litres of ethanol over the next few years, is the equivalent of taking a million cars off the road, which is a fantastic story in and of itself, but it also takes less than 5% of our capacity to grow these products.

Anyone who is familiar with farm production will tell us that in any given year the weather is a far bigger factor than 5%. There have been instances of floods or droughts, or it just plain does not rain at the right time, and that can cut a crop in half. That is 50%. That is another zero in there.

We are talking about 5% of our land mass being used for this production. With the industry and the innovation that we have out there, we can probably go further than the three billion litres on that type of land mass. We have new types and new varieties coming in with higher starch values in corn and wheat.

We are also spending a lot of money on moving ahead to the next generation of biofuels. For that next generation, the common phrase is cellulosic. What this entails is that we slip into the forestry side. We start to make use of logs and lumber not suitable for building. We start putting them into the ethanol system using a catalyst and using the innovation that is out there now.

A company called Iogen is actually using this. The member for Ottawa South is making muscles here, not very big ones, but he says that Iogen is in his riding and he is quite proud of it. I would imagine that he has had some great discussions with Jeff Passmore, the president of Iogen. Jeff is actually getting the final go-ahead to build a huge facility that will produce in the neighbourhood of 400 to 500 million litres of ethanol in my home province of Saskatchewan. The member for Ottawa South and I will have something in common, finally, and it will be Iogen.

We are looking forward to that. Iogen is going to use straw, wood chips from the Prince Albert pulp mill and different things like that to create that quantity of ethanol. That is a good news story. In the days to come, we will develop that technology, get it to a commercial status and move forward.

I had a discussion with Jeff Passmore a couple of weeks ago now. I ran into him at a function and we talked about it. He is very excited about the move to Saskatchewan. He is very excited about the potential and the capacity of Saskatchewan farmers to deliver the feedstocks to his plant.

So am I, because the majority of Canadians, some 74% or 75% in the latest poll, are very much behind this government in moving ahead on ethanol and biodiesel. Those are big numbers. What they are asking for, and there is no pun intended, is a homegrown solution to our energy situation, to our preponderance of fossil fuels, and they are asking for our exciting new developments to get hold of the environment and start turning things around. That is what they are driving for.

As I said, our mandate is 5% ethanol and 2% biodiesel, which is coming in the next years. The auto sector has taken up the challenge. That sector is now building vehicles that will burn up to 85% ethanol. That little conversion on the assembly lines means a one hundred dollar bill: that can almost be made back in the first month of driving that an average Canadian does. It will actually pay for that $100 plus take charge of the environment.

For the life of me I cannot understand why certain parties and certain groups would not recognize the overall benefit this is going to create for Canadians and of course around the globe. They seem to be stuck in their ideology and cannot get past it. What is required in times like these, when there is adversity and almost media hysteria, as we see in the headlines, is leadership. Leadership is what is required, from people who will forge ahead, who will continue to do the right thing at the right time for the right reasons and who will not bend to that kind of pressure coming from the ignorant masses and the people out there who do not understand the benefit of what this can do. I see a lot of head-shaking and nodding over there from the Liberal side, and they totally agree with me on that statement.

As a government we are concerned about poverty. We are concerned about hunger in the world. We had some great announcements the other day from my colleague, the minister in charge of CIDA. She made a great announcement that Canada continues to be number two in the world on getting those foodstuffs out globally to the poor and the hungry. We have tremendous domestic programs here that address this type of thing.

People from the United Nations are spearheading a lot of this. A lot of what they say I do not agree with, because it is not based on anything that I would call sound thinking, but they also say that there is enough food produced in the world to feed everybody. The problem is that we cannot get it to where we need it in a timely way, because it is all “best before” products. There is not the processing on the ground in some of these communities to make use of and keep fresh the wheat or meat that is delivered.

We have to be more thoughtful in our approach. I think the minister really batted it out of the park by untying our food aid. It has been talked about for a number of years. She finally got the job done. I am proud to stand with her in moving ahead on that issue.

That comes to grips with the timeliness of delivery. It comes to grips with the transportation costs to get that product there. In most instances, there is no port or infrastructure system capable of handling those boatloads of food aid when they arrive. A lot of it spoils on the dock, some of it because of infrastructure and some of it because of a governance system in the affected country that would trade that food for guns rather than distribute it to the people. People who are poor and hungry are much easier to lead when they are kept out there in the boondocks away from the real action where the changes can be made.

There is a lot work to be done to feed the poor, the hungry, and those in poverty situations in the world, but a lot of it comes as a result of good governance and infrastructure, as well as the delivery of that. I think that Canada has proven that we always punch above our weight on those issues.

When we did make the announcement of another $50 million into that food aid program, a lot of people stood up, screamed and hollered that it was not enough. The UN was calling for a 26% increase from all of the contributing nations and we actually came in at 28%, plus we are giving money to the non-governmental organizations like the Foodgrains Bank. It does a tremendous amount of work around the world with donations from farmers. We pay the transportation as the government. There is some processing involved and they get it to where it should go.

We have the Mennonite system working around the world with their different relief programs, whether it is flood, famine, plague or pestilence, whatever happens. The Mennonites are there helping out.

Our tax system also builds in aid that is not considered under the UN envelope in the same way. We want a homegrown solution and we are a resource rich country. Nobody can deny that, whether we are talking about fresh water stocks, oil and gas or the tar sands in Alberta that are taking a bad rap right now, some of it justified, a lot of it not, but at the same time we have to start moving away from our dependence on fossil fuels. Even the big petroleum companies say that.

One of the largest ethanol producers in western Canada at this point is a company called Husky Oil. It is basically owned by a gentleman from Hong Kong, but he has a facility tied to the upgrader in my riding at Lloydminster that is producing several hundred million litres of ethanol. Husky Oil is having trouble getting product because farmers are growing what they can but the weather last year around the Lloydminster area did not let us get those crops off like we should have. That was more of a problem than it should have been. With technology and innovation we are starting to move to crops that are a little more easy to farm and will give farmers better results.

I know the Minister of Natural Resources was out to make an announcement in Minnedosa the other day, talking about our regulations and how that would help to start the blending of that product. Husky has bought a company called Mohawk. I remember as a young guy when gas was two bits, 30¢ and 40¢ a gallon, not a litre. That was before the former prime minister decided to make things metric. At those kind of prices per gallon it sounds really cheap but at the time I was making 90¢ an hour, so it is all relative.

They used to put an ethanol blend into their products some 25 or 30 years ago and I am giving away my age when I say that but that is the reality. This type of product has been around for a long time. It is finally coming to the fore, that with these regulations passed in Bill C-33 we will see, mixed right at the refinery and brought to the pump, that minimum 5% blend.

I have seen pumps, Mr. Speaker, in your home town when I was coming back the other day. I stopped in Kingston to have a great meal downtown on the waterfront. I asked how well you were doing. They all said they loved the guy but he should come home more. We also stopped for fuel. I note that the Liberals over there are saying, “Mr. Speaker, you should not go home because you might not get elected”, but I am not sure about that one.

We fuelled up. I cannot remember the name of the station but it was a 10% blend. That is good news. Kingston is on the leading edge of ethanol and I praise you for that, Mr. Speaker. I know you have made that issue one of your own.

When we see the price of oil over that same timeframe jump from $20 a barrel to approaching $120 a barrel, it makes this type of economic activity more viable. We have a lot of work being done on new ways to produce ethanol. We have lots of work being done on biodiesel which is another huge success story. We as a government have taken on pilot projects to use rendered products from animals, the byproducts from restaurants, the leftover oils and greases and so on that of course we do not want in our food anymore. We are running them back through biodiesel. It is a tremendous opportunity to build environmental products around that.

There are a number of situations that have arisen that have driven up the cost in the food chain and a lot of those can be based strictly on transportation because our product does not move from the farm right to the processor. It goes through middlemen. There are a lot of different things that go on and when we seen increases in transportation costs that are doubling, tripling and so forth, because of fossil fuel and our addiction to it, the problems begin to arise where everyone takes a chunk of the pie. I will use round numbers.

When we see a $3.00 loaf of bread, and I hear the bread processors saying they have to raise the price again because the cost of wheat is going up, it is ridiculous to the extreme because the farmer on that $3.00 loaf of bread is getting 15¢. That is the cheapest part of that loaf of bread. The damn wrapper with the labelling on it is worth more; or the darn wrapper, sorry.

That is the reality. That is the situation that farmers have always faced. So, if the price of bread went to 20%, that is a 33% increase, if my math is still good. That is a huge increase for farmers. Is that nickel going to affect that $3.00 loaf of bread? It should not. I would think it should not, but the costs of transportation of course are exaggerating the reality of what is going on out there. This is another good reason to move ahead with biofuels where we can start to have a renewable resource that is friendly to the environment and of course much easier to maintain the costs.

We should be looking at ways to make our agricultural processes even more innovative. We are doing that with a little thing called the removal of KVD in western Canada. Saskatchewan alone has 47 million acres of arable land. That is a big number. We run big operations and run big equipment to do it, and of course the overhead costs are all commensurate with the price, so we have seen the price of wheat going up.

We have also seen huge increases in fossil-based fertilizer fuel chemicals. All those types of things are also ramping up as well, so we are pushing a bubble where farmers are starting to make a little more money, but it is also costing a lot more money to make that, so we have to start addressing that and I think biofuels are a great way to do that.

There are opportunities out there now where people can buy a unit that they can actually put on their farms and make their own biodiesel. I talked to a neighbour of mine the other day and he was getting ready to start seeding, and then of course global warming kicked in and we got another 15 inches of snow. That slowed him down a little, but he had gone to town to fuel up his tractor because the roads were too muddy to have the truck come out, so he drove his tractor and it cost him $1,000 to fill it up. The way we farm out there, that lasted about 12 hours, less than a day's shift.

When we look at the young fellow who seeds my ground now, who farms 24,000 acres, he will run 14 or 15 hard days like that with four and five outfits, so he has $5,000 in fuel per day, plus the seed, plus the chemical, plus the fertilizer, plus the manpower, plus the overhead of the equipment and taxes on the land, and all that kind of stuff. Those are the economies of scale we are looking at.

Farmers start to look at the skid units that will actually produce biofuel out of their own canola. There are models like that out there now and it is a great opportunity for these guys to take some canola from their own production, run it through and create their own biofuel, but it does make more sense to do it on economies of scale at larger facilities.

I have always been a proponent of a number of smaller capacity units scattered throughout a province as opposed to one or two big ones. The problem with one or two big ones is the product has to move. The trucking beats up the road and it starts to defeat the whole process, so smaller and locally owned is the right way to go.

I am very fortunate to have in my riding, almost in the centre of my riding, a little town called Unity. There is a North West Terminal there that is owned by farmers. It is a huge success story. It is relatively new on the scene, but in the time that it has been around, some 10 or 15 years since the drawing board, it has doubled in capacity in the grain it has handled. It is now building a 25 million litre ethanol facility next door to the terminal, so as the grain is delivered in, it can slide some of it off to make ethanol right there.

As well there is another innovation. A fellow named Mervin Slater has been the push behind this, and I give a lot of credit to Jason Skinner and the crew out there at North West Terminal for their foresight and their vision, and the guys that were on that committee. Merv dropped in to see me when he was in Ottawa. He was on his way to Germany to look at technology that brings about 10% or 15% chaff in with the wheat.

Chaff cannot be hauled. It is like hauling potato chips or ping-pong balls. There is no weight and one cannot get enough on a truck, but when 10% or 15% chaff is brought in with the grain product, it virtually costs nothing. They are using that as the feed stock to fire the turbines to create the ethanol, then they recapture the heat and use it. It is a tremendously integrated system and I give them a lot of credit for that.

They have not put out a litre of ethanol. They are already looking at the potential and saying it is time to think about expanding the plant already, and that is great news for the farmers of Unity, great news for Canadians, and great news for the environment.

However, we have so many other potentials out there to make great quality ethanol. We have just a tremendous opportunity to show the world this can be done and not affect the food line. There are just any number of ways to point to this and say this is the right thing as we advance forward.

As I said in my speech, it is basic economics. There are so many things that we will gain from these different lines that will be created. There are offshoots from ethanol: the distiller's grain that goes back into livestock feed, the slurry, and the water. Everything that is used is captured and used as protein base for livestock feed.

It is not a zero sum gain. There are benefits from all the differing aspects of ethanol and biodiesel as it goes back into livestock feed. There is a loss of 20% or so but we will make that up. It will be good for the communities, good for the farmers, and good for the environment.