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.

[Peter Boag, President, Canadian Petroleum Products Institute]

Thank you, Mr. Chairman and members.

Good morning. I'm Peter Boag, president of the Canadian Petroleum Products Institute. With me this morning is Mr. Tony Macerollo, our vice-president of public and government affairs.

We certainly appreciate the opportunity to meet and speak with you today on the subject of competitiveness of the Canadian agricultural sector.

By way of introduction, the Canadian Petroleum Products Institute represents the refining and marketing sector of the petroleum industry, what's commonly known as the downstream petroleum sector. Our aim as an institute is to advance best practices in regard to the environment and health and safety, as well as to provide information on the industry in order to assist in sound public policy development.

The agricultural sector is important to our members for three principal reasons: one, the agricultural sector is a large and important customer of our members; two, the emergence of renewable fuels is creating new collaborative relationships with our members; and three, CPPI members are also neighbours of much of the agricultural community, from refining and terminal facilities to pipelines.

For a moment, consider the following facts from Statistics Canada, taken from the 2006 agricultural census. There are nearly 250,000 farms in Canada, with nearly 750,000 tractors worth $13 billion, 500,000 trucks worth over $5 billion, 300,000 cargo and pickup vans worth $3.5 billion, 100,000 combines worth $4 billion, and 750,000 pieces of tillage and cultivation equipment, swathers, mower conditioners, and passenger vehicles, worth about another $6.5 billion.

That's a lot of expensive equipment that requires high-quality fuel to operate. Providing high-quality fuel choices to farmers and other consumers is the principal preoccupation of CPPI members. For Canada's agricultural sector, quality fuel equals productivity and competitiveness. Simple things can be important, like ensuring the fuel delivered to farmers' tanks operates dependably year-round.

So what have we been doing to deliver on our commitment to high-quality fuel choices? Reducing sulphur content has been a major focus during the past decade. This multi-billion-dollar investment program started with the reduction of sulphur in diesel for heavy-duty trucks and on-road applications, from 500 parts per million to 15 parts per million. This phase was completed in 2006.

CPPI members are now in the process of reducing sulphur content in off-road diesel, diesel principally used on farms, from 500 parts per million to 15 parts per million. This process began in 2007 and will be complete by June 2010.

Reducing sulphur in diesel protects the environment and human health through the reduction of harmful emissions from diesel-powered engines and equipment. The phased approach that we've taken ensures that the level of sulphur in diesel fuel used in off-road engines—farm vehicles, for example—will not impede the effective operation of advanced emission control technologies.

Our most important contribution to ensuring the competitiveness of the Canadian agricultural sector is ensuring a highly productive refining sector in Canada. Our members work hard to ensure that all consumers, including farmers, have access to high-quality, competitively priced fuels.

I'm happy to say that Canadian consumers, including farmers, benefit from fuel costs that are among the lowest in the western world, generally second only to those in the United States. This fact is supported by data provided by independent third-party analysts, and I think we have for distribution later an example of some of that data, which shows where Canadian prices and costs relate to those of competitors around the world.

An evolving relationship between the refining and marketing sector and the Canadian agricultural sector is the evolution and use of biofuel blends using ethanol and renewable diesel. CPPI recognizes that this represents a new area of economic opportunity for the agricultural sector under the right conditions. Indeed, several CPPI members themselves are very active in the biofuel marketplace.

Shell is one of the world's largest distributors of first-generation transport biofuels. Shell and my colleagues at logen Corporation are considering investing in a full-scale commercial cellulosic ethanol plant in Saskatchewan, with potential opportunities for farmers to find new markets for wheat straw.

Husky Energy's Minnedosa ethanol plant is one of the largest plants of its kind in western Canada, producing some 130 million litres of ethanol per year. That's matched by a second plant in Lloydminster, Saskatchewan, which also produces that quantity of ethanol. Together these plants make Husky the largest producer and marketer of ethanol in western Canada.

In Ontario, Suncor Energy has its own specific relationship with the agriculture sector, including an investment relationship with a group of farmers. Suncor's St. Clair ethanol plant has a current production capacity of 200 million litres per year. A $120-million expansion is under way and is expected to double its capacity to 400 million litres per year.

The plant currently uses 20 million bushels of corn annually, approximately 10% of Ontario's annual corn crop. Of course, that consumption will double when the expansion is completed.

Many of you will know that in 2006, CPPI supported the desire of the federal government to implement a national renewable fuels mandate. In partnership with our colleagues at the Canadian Renewable Fuels Association, we offered an agenda and key elements for its successful implementation.

We appeared last year before this committee as it was examining Bill C-33. We supported its passage but cautioned that time was running out for implementation of a 2010 mandate.

We are now here almost one year later, and, I am sorry to say, we have to inform members of this committee that there have been more than a few hiccups with the implementation of the renewable fuels strategy that will make its launch, in our view, much less optimal than it could have been.

When the notice of intent to require renewable content in transportation fuel was published in December 2006, there were few provincial mandates in place. This is no longer the case. The hard reality is that the proliferation of provincial mandates has created a patchwork of different fuel requirement that, in the end, may create additional barriers to the efficient and free movement of product between provinces.

The notice of intent quite rightly estimated a regulatory design period of about two years. It is complicated for the federal government and for fuel providers. It's not a simple matter.

Had things gone according to plan, the plans laid out in the December 2006 NOI, I wouldn't be relaying these concerns to you today. Unfortunately, the government has not met its path forward and timetable as laid out in the NOI.

In the absence of regulatory certainty, CPPI members have been constrained in their ability to move forward to complete implementation planning and infrastructure investment and acquire the necessary approvals from provincial and local jurisdictions.

As a result of the delays encountered since the December 2006 publication of the NOI, the majority of CPPI members will be unable to meet a 5% renewable mandate for gasoline beginning in January 2010.

This is a fixable problem, but it will involve some compromise and creativity. In terms of timing, I suggest that a 2012 implementation period for both the 5% renewable content in gasoline and the 2% biodiesel would be more appropriate. At a minimum, a flexible and phased approach will be required.

It is unfortunate that it has come to this. Regardless, there are only so many hours in the day to accomplish the work that needs to be done. We don't yet have the regulatory certainty for much of that work to proceed without causing potential negative unintended consequences for consumers like farmers.

I should say that we have not stood still, though, in that intervening period. In particular, we have been working hard to better understand how biodiesel solutions in particular might apply in a Canadian setting. This is especially important for farmers, as significant users of diesel fuel all the way from the tractor to the furnace that heats the farm.

We have been an active partner in projects related to renewable diesel. CPPI supported the Alberta renewable diesel demonstration project, led by Shell and Climate Change Central, and is now working on a NRCan- sponsored Imperial Oil biodiesel research project in Sarnia.

In the Alberta project, the ARDD has shown that B2 blends of canola, methyl ester, and 2% blends of hydrogenation-derived renewable diesel are fully operable in winter conditions in the study area when cloud points are adjusted to meet CGSB requirements. The demonstration has also shown that B5 blends can be successfully made and used in shoulder and summer seasons.

We gained a critical understanding on the infrastructure requirements of quality assurance precautions essential to ensuring, in particular, proper cold flow properties of biodiesel blends in winter conditions.

The next challenge will be to move from the controlled conditions of the successful demonstration project to a real-world rollout in real time. Petroleum refiners and marketers must now ensure that we can reliably supply customers, such as farmers, through a complex national distribution network that includes thousands of retail outlets across the country, many of which are independently owned and operated.

Successfully bringing biodiesel to market on this scale will require a considerable amount of work and expense to be undertaken by fuel suppliers. There are standards issues as yet unresolved, only a limited distribution infrastructure, and several outstanding issues with regard to storage, blending, and transportation of biodiesel.

The key finding of the Alberta demonstration is that considerably more jet-type aviation kerosene fuel must be added to the petroleum blend stock in 2% and 5% biodiesel blends to ensure that these blends will work in Canadian weather conditions. Canada is a current net importer of this type of fuel, which could increase our reliance on foreign fuel sources.

CPPI members are committed to meeting quality standards and the expectations of consumers. Governments must be careful that the design of mandates doesn't lead to operational problems--for example, the waxing of fuel in cold weather conditions. An ongoing biodiesel research project in Sarnia is addressing some of the additional challenges, particularly those that relate to the stability of biodiesel blends in low-temperature conditions.

It's also important to acknowledge that many questions have been raised globally since the publication of the NOI about the merits of biofuels. These questions span a wide range of issues, from the life cycle environmental performance of biofuels to issues regarding the food-for-fuel issue, to massive subsidization globally of biofuels. This larger debate over the role and merits of biofuels is best left to other forums; however, I will emphasize the important need for robust and credible life-cycle analysis to support a biofuel agenda driven by an environmental performance policy objective. In the absence of this, I urge you to carefully review the use of CEPA for mandating renewable transportation fuel requirements. I might add that Canada will never be able to match the generous biofuel subsidy program regime south of the border.

I do want to end on a positive note and reinforce that CPPI supports a thriving Canadian agricultural economy. We are partners, and from time to time we may have differences of opinion and get caught in situations that may seem intractable, but there's always been a solution. Canadian petroleum refiners are committed to finding appropriate solutions to the challenges that we face today, particularly with respect to the implementation of the federal RFS.

[Gordon Quaiattini, President, Canadian Renewable Fuels Association]

Thank you, Mr. Chairman, and good morning to all the members of the committee. Thank you for having us.

Again, as the chairman said, my name is Gordon Quaiattini. I am the president of the Canadian Renewable Fuels Association. The CRFA represents the full value chain of stakeholders committed to building a robust and dynamic renewable fuels industry here in Canada.

I am pleased to be joined by Jeff Passmore, the chairman of the board of the Canadian Renewable Fuels Association. Jeff is also the executive vice-president of Iogen Corporation, a global leader in the development of next-generation cellulosic ethanol. Also with me is Tim Haig, the chief executive officer of BIOX Corporation, Canada's largest biodiesel producer. Tim is also the immediate past chair of the CRFA.

Ladies and gentlemen, in these difficult times, I appear before you today with a message of new opportunity, new hope, and new growth. Renewable fuels are now and in the coming years a story of new economic opportunity for Canadian farmers and rural Canada. Renewable fuels are creating new markets for agricultural producers, revitalizing communities, reducing harmful greenhouse gases, and offering consumers new choice at the pump. Every year, new advances in technologies for making renewable fuels like ethanol and biodiesel are opening up even more opportunities, and offer more economic and social benefits. Next-generation biofuels are rapidly coming to market, and thanks to the hard work of many members and parties in the House of Commons, Canada stands to benefit even further.

Let me first give you a sense of our industry on some key metrics. Renewable fuels in Canada today, including current and planned projects, will create some 14,000 new jobs and generate $1.5 billion in new economic investment in Canada. Even if we don't grow beyond what's on the books now—and I believe we will—renewable fuels will be responsible for 10,000 direct and indirect permanent jobs, and roughly $600 million in annual economic activity, much of that rooted in rural Canada, close to the feedstock sources we require to make biofuels.

The demand our plants create will amount to a 240-million-bushel new domestic market for Canadian-grown oilseeds and grains, which will help keep commodity prices at a fair level, thus lowering government support payments, and will assist in making more farms across Canada financially viable again.

Having new markets and value-added processing here at home are especially important on the prairies, where wheat growers have seen the price of that commodity drop in real dollars for over a century. Yet they still rely overwhelmingly on export markets. The biofuels option finally gives them some choice.

The good news about these numbers is that Canadians overwhelmingly agree that we as a nation are on the right track. The CRFA just completed an independent nationwide survey of Canadians, and the results were clear: 69% of Canadians support the move to replace fossil fuels in part with renewable fuels; 76% of Canadians approve of the new law to introduce a national renewable fuel standard, which boosts ethanol and biodiesel content at the pump and, by extension, guarantees market share for our agriculture producers; and 87% of Canadians support federal and provincial government policies and programs that would invest in the development of next-generation biofuels made from non-food feedstocks, such as agricultural biomass, waste materials, and algae.

The renewable fuels sector is in the infancy of a transformation, a bio-revolution that will be every bit as far-reaching as the information revolution in the 1980s. It is most apparent in our industry--that is, in the creation of renewable fuels that draw on what we harvest rather than what we extract. But we are only at the beginning, the cornerstone upon which this vast new opportunity is being built. Soon the full potential of the bio-economy will be plain to see, as all kinds of biomass, grown and harvested, will also be the feedstock for plastics, chemicals, pharmaceuticals, and many other materials. New jobs will be created, industrial policy will adapt, and agriculture can again become a truly growth industry.

Obviously, the bio-economy will not wipe away the need for other resources. The correct precedent to consider, quite frankly, is our own. Renewable fuels will not supplant oil—at least not in any of our lifetimes—but we are able to supplement and add to the energy mix, and by doing so we moderate the price. Renewable fuels such as ethanol and biodiesel are the only viable, real, and accessible alternatives to oil for transportation fuels today and in the foreseeable future.

These are some of the broad benefits that are felt by all, but there are specific benefits as well, most notably for Canadian agricultural producers and rural communities. Canadian growers will become suppliers to not just the food and fuel sectors, but also to industries of all sorts. Consequently, rural communities stand to gain from rising farm incomes and major investments in infrastructure. All of this will place a premium on the issue of sustainability, which is one of the core questions included in your work. Indeed, sustainability is fundamental to secure both the required environmental and productivity achievements of our sector.

On this point, allow me to pause and offer the committee a concrete example drawn from our own experience. A year ago, when crude oil prices were skyrocketing on their way to nearly $150 per barrel, there was a season of intense debate—a misleading and deeply unfortunate debate—with respect to fuel and food. The accusation was that demand for biofuels was leading farmers to divert their grains. Corn was the most prominent example. Indeed, notwithstanding the obvious hyper-inflationary effect of record oil prices, biofuels were also tagged for rising crop prices, leading to the additional suggestion that we were making it more expensive for cattlemen to feed their livestock, thus leading to higher prices at the grocery store.

None of that was true. After exports, North America generated a two-billion-bushel surplus in corn, far outstripping the combined demand of food, feed, and biofuels. Moreover, the inflationary effect was sparked by oil prices, not biofuels. As the price of oil has dropped, so too have prices for commodities right across the board—not always to their pre-spike levels, but certainly down to far more sustainable standards. Simply said, high oil prices were the culprit.

If there was one positive factor to emerge from that entire discussion, it was the spotlight it shone on sustainability and the outstanding performance of Canadian growers. It merits mention because the record of our agriculture sector is poorly understood, which means it is poorly promoted.

This means we are making too little of a global competitive advantage that Canada should be proudly consolidating and sharing around the world. For example, yields are increasing dramatically, even with fewer inputs. In the 1980s, farmers could generate roughly 70 bushels of corn per acre. Now that is up to 150 bushels per acre. And recent predictions see yields growing within five to ten years to 300 bushels per acre. Advances in all areas of crop science are occurring.

Canadian growers are world leaders in keeping direct soil emissions low. Our performance outstrips that of nearly every major European and Eurasian competitor, and by as much as 500% in some cases. And Canadian agriculture leads in areas of finding efficiencies and using new technologies in farming, such as no-till usage. More needs to be done, but we are in a position to lead from the front.

Environmentally, the International Energy Agency recently published a report that made clear that grain ethanol enjoys a 55% advantage over traditional gasoline when it comes to reducing harmful greenhouse gas emissions. Similarly, the energy balance for ethanol was determined to far outpace that of fossil fuels.

So when it comes to the future and fashioning policies that support this sector, we urge the committee to place sustainability at the core of your efforts. This is how we get more from less, and how we do so in a way that nurtures our relationship with croplands, and how we respect and increase environmental performance.

Let me close by making a few broad recommendations in that respect.

First, maintain and expand, as time unfolds, support for renewable fuels. That will undoubtedly sound quite self-interested, but let me give you the publicly interested rationale. The bio-economy is coming, but so far it is largely anchored in biofuels. That is where the action is. The tools, experience, and expertise are being developed by way of supporting renewable fuels. So pressing our advantage in this area only serves to reinforce the leadership Canadian farmers are developing in the bio-economy.

Second, help producers finance the costs of transitioning to sustainable practices. Often the price of adopting sustainable farming practices is felt in short-term revenue forgone. And for farm families struggling to get by, that's a tough price to pay. Government can help by expanding its support for that transition.

Third, do not slow down the stampede toward sustainability by asking our farmers to meet a series of onerous bureaucratic tests that will only increase the cost of transformation. Government should assume the burden of collecting data, measuring change, and reporting success.

Fourth, the government should combine forces with provincial counterparts and other relevant agencies to create an international promotion campaign to support the sustainability success of our agricultural producers. To coin a phrase, we've been hiding our light under a bushel, and it's well past time we told our story.

Finally, we are calling on this committee and the federal government to support an accelerated process to put in place the required regulations to implement and enforce the national renewable fuels standard. Canada's Parliament passed Bill C-33 in June of 2008. The environmental and economic development opportunities that we have outlined will only be realized by ensuring that the 2010 commitment to implement the RFS is kept. The renewable fuels industry stands ready to work cooperatively with all stakeholders in a transparent and accelerated consultative process to get the job done.

In closing, let me thank the House of Commons for its leadership, and simply reiterate that Canada, and rural Canada in particular, is uniquely positioned to grow and prosper from the further development of renewable fuels and next-generation renewable fuels. We are only beginning to realize the true value of this new and promising industry.

Thank you.

Thank you, Mr. Chairman.

[Wayne Easter, Liberal, Malpeque, PE]

While I don't disagree with the sentiment of the motion, Brian, we already passed Bill C-33 through committee. We passed it in the House. Definitely the Senate knows much of what you've stated in this motion. Although I support the motion, I would worry that we might get a backlash that here we are, as an agriculture committee, trying to tell those folks of sober second thought what to do. It may gain a backlash. It may not do what you intend it to do.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Mr. Chair, I move the following:

That the Standing Committee on Agriculture and Agri-food send a letter to the Senate Committee on Agriculture and Forestry informing the Senate Committee that the House Committee has recently completed a study on Bill C-33 in which they heard from a wide range of witnesses and stakeholders, and that as a result of the study is firmly of the position that biofuels production in Canada is beneficial both for the environment and for Canadian agriculture. Furthermore, the House of Commons encourages the Senate to expedite the passage of this important legislation.

Statutes Repeal Act

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, Bill S-207, An Act to repeal legislation that has not come into force within ten years of receiving royal assent, is a step in the right direction in terms of the transparency that must exist between the executive and the House of Commons. However, it must be understood that, for us, this is not a way to allow the government or the cabinet to delay the implementation of bills in the hope that the bills would die after ten years, as set out in the current bill.

It is a step ahead, but in the future we must find ways to ensure greater accountability of the executive, of the government, in terms of the implementation of legislation passed by the House of Commons and the Senate. It is abnormal that 56 bills that were passed have never been implemented, according to the library's research for the senator who is sponsoring this bill, and there is no known reason why.

For example, one act pertained to the Canadian Heritage Languages Institute. I do not know anything about the content of the act, but I would like to know why this legislation, which was passed in 1991, still has not come into force in 2008.

The Motor Vehicle Fuel Consumption Standards Act dates back to before 1985, whereas now we are debating Bill C-33, which would allow the federal government to regulate fuel content by requiring a certain percentage of biofuel. It would be interesting to know why this legislation, which was passed before 1985, still has not come into force. Moreover, it is likely obsolete by now.

In any event, when Parliament passes legislation and it is not brought into force by the executive, then Parliament must be told why. As I said, it could be that circumstances and events have made the legislation irrelevant. However, there must be a process whereby Parliament can monitor such legislation, be notified that it has not been brought into force by the executive and question the executive about this.

That is the objective of this bill. As I said, we support the bill in principle, but there needs to be a way to give Parliament more of a say in the decision as to whether or not to bring legislation into force.

The bill provides for a mechanism so that acts and provisions of acts can come into force on a date fixed by proclamation or order of the governor in council. If they do not come into force by the December 31 that is nine years after royal assent, they must be included in an annual report laid before both houses of Parliament.

We would have liked the time period to be shorter than that proposed in the bill. That was not possible for various reasons, including the fact that the work of the Standing Committee on Justice and Human Rights has been blocked for several weeks, which meant that we were unable to make that argument to the committee. Even though we were unable to change that clause of the bill from 10 years to five years, we will support the bill.

The annual report must therefore be tabled in the House on December 31 of the ninth year, which gives the government one year, from the tabling of the list in Parliament, to decide what action to take. It must either bring the act into force or explain in the Canada Gazette how it intends to proceed. In the latter case, the act is repealed if it does not come into force by the following December 31, unless during that year either House resolves that it not be repealed.

The legislation does not apply to acts or provisions that are to come into force on assent or on a fixed date provided by the act. It also includes a transitional provision for provisions that were amended during the nine-year period before the enactment comes into force.

In conclusion, as I was saying, it is quite odd that at least 56 acts have not come into force without knowing why. The provision contained in Bill S-207 will correct this situation in part. As legislators, we must ensure that we have the means to follow more closely what happens to legislation adopted by Parliament. Some of the 56 bills that have been passed but have not come into force, even though they should have, are still pertinent.

For these reasons, the Bloc Québécois will vote in favour of S-207 while hoping that this is the first step toward making the executive, and therefore the government, more accountable.

Business of the House

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

Mr. Speaker, Parliament has been having a very successful week. We started with a successful address to Parliament by the President of Ukraine, Victor Yushchenko. The president gave an eloquent speech that was well received by all parliamentarians and Canadians.

This week the House of Commons has been proceeding on the theme of sound economic management without a carbon tax. We passed Bill C-21 to give aboriginals living on reserves the protection of the Canadian Human Rights Act. We passed our biofuels bill, BillC-33, at third reading and it is now in the Senate. This bill requires that by 2010, 5% of gasoline and by 2012, 2% of diesel and home heating oil be comprised of renewable fuels.

Our bill to implement the Free Trade Agreement with the countries of the European Free Trade Association—the first free trade agreement signed in six years—passed at second reading and was sent to committee.

Bill C-5, which deals with nuclear liability issues, also appears poised to pass at third reading and be sent to the Senate today.

Last night, the Minister of Finance appeared for over four hours to answer questions by parliamentarians on the main estimates of his department.

Yesterday, the finance committee reported the budget bill back to the House. This bill would ensure a balanced budget, control spending and keep taxes down while avoiding a carbon tax and a heating tax on Canadian families. As well, it would make much needed changes to the immigration system, which will help keep our economy competitive. We will begin debate on that important bill, the budget implementation bill, at report stage tomorrow.

Next week we will be on the same theme, focused on the economy week. Through the budget implementation bill, we are investing in the priorities of Canadians. which include $500 million to help improve public transit, $400 million to help recruit front line police officers, nearly $250 million for carbon capture and storage projects in Saskatchewan and Nova Scotia, and $110 million to help Canadians facing mental health and homelessness challenges.

Those investments, however, could be threatened if the bill does not pass this session due to opposition obstruction and delay. Today we again saw evidence of such procedural delay tactics from the opposition in the form of a concurrence motion. All opposition parties joined together again to ensure that important legislation to strengthen key Canadian economic sectors could not be debated in the House earlier today.

I want to state clearly that this government is absolutely committed to ensuring the passage of the budget implementation bill this session.

In addition to debating it tomorrow at report stage, we will debate the bill next Monday, Tuesday and Wednesday, if necessary.

We will also debate: 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 customers, and Bill C-32 to modernize our fisheries sector.

With regard to the question of the remaining opposition day, as the House knows, we have had all but one of those opposition days already during this portion of the supply cycle. The last opposition day will be scheduled sometime between now and the end of this supply cycle. We do know that we are scheduled to rise on June 20.

With regard to the very helpful suggestions of my friend with regard to the apology to our first nations communities for the residential schools issue, plans are underway for that. I am happy to ask the Minister of Indian Affairs and Northern Development to take the very helpful suggestions into account and, if necessary, we would be happy to take up the matter at our usual House leader's meeting.

[Mark Warawa, Conservative, Langley, BC]

We need to stay on topic, which is discussing the main estimates. We're not discussing Bill C-33. That's a different committee. So through you, Chair, I ask that we stay on topic.

[Mark Warawa, Conservative, Langley, BC]

Again, my apologies for interrupting, Chair, but we do have to stay on topic. We are discussing the main estimates. We're not discussing Bill C-33.

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

I thought we were operating in an entirely transparent manner and that, apart from the question period, this was an opportunity to question the officials. However, I realize that the parliamentary secretary doesn't view the committee's role in that way, and that's very disappointing. In any case, even if I insisted, I wouldn't get an answer.

Mr. Sylvester, you say in Part 3 of your brief:

The Agency is an ardent defender of the use of the strategic environmental assessment (SEA) as an instrument for promoting integrated decision-making.

You aren't unaware that parliamentarians have just, that is at three o'clock, voted on Bill C-33. My question is simple: does your Agency have at its disposal a strategic environmental assessment of Bill C-33? It was two weeks ago, if I'm not mistaken, that a deputy minister appeared here and made a commitment to send us the strategic environmental assessment of the bill. However, we haven't received it. I made the same request in another parliamentary committee, the Human Resources Committee, and we haven't yet received it. So this is a third attempt today.

Let me tell you that, after three requests, Mr. Chairman, I'm taking other steps to obtain a document. So I'm asking Mr. Sylvester whether he has, at his Agency, a strategic environmental assessment of Bill C-33, which parliamentarians voted on a few minutes ago.

Incidentally, there's nothing personal in this. I'm angry, but that often happens to me.

Canadian Environmental Protection Act, 1999

[The Speaker, Liberal, Peter Milliken]

It being 3 p.m. or so, the House will now proceed to the taking of the deferred recorded division on the previous question at the third reading stage of the Bill C-33.

Call in the members.

The House resumed from May 27 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 motion that this question be now put.

[Louise Thibault, Independent, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I was listening to my colleague and I must say, I do not share his optimism.

Today we are at the end of the debate on Bill C-33. I find this target—if it is not an obligation then to me it is a target—of 5% biofuels in the composition of gasoline to be rather disconcerting. To many people this will become a type of panacea. We are quickly getting caught up in this.

Earlier, when we were voting on the amendment by the New Democratic Party, I was talking to a colleague about canola oil, the use of our fine land, and our food products. To my great surprise, the colleague in question—who shall remain nameless—thought canola was not edible.

When we are on the verge of adopting a bill, the least we can do, despite our many and diverse activities, is to be well informed. Most of the time that is what we all try to do.

If this bill is passed, it will allow the government to regulate the composition of gasoline to achieve certain objectives. In energy and agriculture, in light of our recent experiences, we should recognize that the time has come to prepare for the future and that the future is now. The planet needs us to take care of it, not abuse it.

The government's target to include 5% ethanol in gasoline is not the best approach. Instead, the government could concern itself with funding research into new technologies that would allow us to use substances other than foodstuffs for this purpose.

Currently, as we know, grain based ethanol constitutes a major part of this production. Why? Because that is the simplest way to produce this ethanol and the other technologies are underdeveloped. These biofuels are raising vital questions that absolutely must be answered before we dive head first into mass production, blinded as we often are by this market economy instead of being driven by values that promote an economy of solidarity and respect for our environment.

In my humble opinion, this is not a viable option considering the world crisis. I have heard many colleagues in this House say that funding and encouraging the production of ethanol has nothing to do with rising food prices. I disagree. In fact, the International Monetary Fund estimates that the use of biofuels and the subsidies granted to producers account for 70% of the increase in corn prices. So I find it rather odd to hear members claim that there is no connection.

I see some other potential problems and I am not alone. For example, this morning when we were debating the amendment, I spoke about the massive use of water, a very important natural resource that is becoming scarcer. The massive use of water will considerably detract from the supposed environmental advantages of grain-based ethanol. As a resource, water is often referred to as blue gold. Wasting blue gold to produce black gold is a paradox created only by our commercial appetite and our very short-term environmental vision.

On the weekend, like many others who have read his writings, I suppose, I listened to Hubert Reeves speak. As members know, he is an authority on the matter, and he said that if we continue to use our planet this way, we will not need one planet Earth; we will need four or five.

We are talking about the not-too-distant future. This is not science fiction. This is not about something that will happen in 3,000 years. This is reality. Every time we encounter situations like the one we are talking about today, we should all take an interest.

The wholesale use of grains and other products—such as canola, which I mentioned earlier—in ethanol production will create other problems. Our producers will not work as hard to keep our grain crops safe because they will be destined not for human consumption but for processing and ultimately, for gas tanks. Crop safety will not be a priority because the crops will not be for human consumption.

Could this have an impact on the use of insecticides, pesticides and GMOs? People will want to produce as much as possible and achieve ever-increasing yields. Given the extraordinary yields that producers want to achieve to process corn into ethanol, I was trying to imagine what an ear of corn might look like a few years from now. Quite honestly, I would rather not contemplate it, but I did so anyway.

Soon, technical and technological efforts will no longer be directed at meeting human needs and producing better-quality foods with more nutrients that cause the least possible environmental damage. The Monsantos of the world will develop new genetically modified crop varieties not to do a better job of feeding people, but to produce more energy with each kernel of corn, for example.

Producers who want to be part of the system will benefit from this new application. Certainly, it will take less effort to earn more money. Who could blame producers for wanting to make money? These people go through crises regularly, and they have a hard time making a decent living because of the problems associated with their work. Who could blame them for looking to energy production?

What is shocking is that all this goes against a philosophy that is developing more and more, little by little, in Quebec. I am repeating myself, since I talked about it this morning, but I would like to mention it again. I am talking about food sovereignty.

The goal of food sovereignty is to feed our population using foods produced as close to home as possible by our own producers. This is done in an environmentally-friendly manner. It means less transportation, since we are buying our food at local markets. All the market garden production comes to mind, for example. Everyone knows how great it feels to find fresh fruits and vegetables available close to home.

We are working to develop this new social contract, especially in Quebec. The Pronovost commission comes to mind. Many people have already accepted paying a little more for food that has been grown and harvested close to home, the quality of which they do not have to question. We know that the production safety standards respect the environment and that this food comes from where we live.

Farmers are encouraged to produce for humans, on a human scale. In Quebec, all UPA members gladly advocate for this production on a human dimension. The men and women involved in this initiative have good reason to be proud.

When I think about this mass production for our cars, I think we are moving in the wrong direction. This bill really needs to be carefully defined and must incorporate certain elements. My NDP colleague alluded to this earlier when he talked about checks and balances. I think this is very important.

In conclusion, we do not need to reject biofuels. I think that innovation is the road to take when it comes to energy. We have to commit ourselves and use the smallest possible amount of arable land and environmental resources to meet our energy needs, which we know are sometimes excessive.

When we can convert waste and residues—be they food, vegetable or artificial—into energy without using food products that would feed humans or animals, when we have that guarantee, then things will change.

The government is currently encouraging pilot projects. That is excellent, but it is not enough. I think about my area, given that we are obviously affected by this forestry crisis, particularly in the Lower St. Lawrence region. We could be thinking about these future techniques that would use forestry residues. Obviously it is a promising idea.

As I just said, we know the state of our forestry industry, and it would be good to encourage the development and study of this type of energy. I would go so far as to say that it is urgent because it could help some of our businesses and forestry workers, including those in private woodlots whom we know have been completely ignored in the Conservative government's trust fund.

In conclusion, it is important to remember that this is not a good time to be aiming for that 5% target. Residual material technology is not ready yet, the world markets are fragile and, as we know, the world's population is starving. I think we need to be responsible and act accordingly.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Mr. Speaker, I am pleased to speak to Bill C-33 this afternoon as we are nearing the end of debate at third reading and final passage.

The bill has received fairly normal treatment through its early stages, through committee and then reported back to the House, but then something interesting happened. The spotlight of the world was turned on food commodity prices. It looked like we had a very significant spike in the pricing of many world food commodities.

Some of the people looking at those spikes in prices speculated that it was possible that the new market for biofuels, which requires the production of some agricultural commodities, was part of the reason that the prices of the commodities were being bid up.

It is certainly possible that is and was the case and it may be the case in the future, but, in my view, there is a very tenuous line between that circumstance and the need for passage of this legislation.

I will say right off the bat that while the bill deals with the regulation of biofuels in the sense that it defines them and purports to give over to the government, from Parliament, regulatory authority to manage and regulate biofuels as a new commodity in the marketplace, which needs some regulation, there are very few standards in the industry. I will note that ethanol has already found its way into our fuel supply. I can think of at least one gasoline refinery and retailer who have up to 10% of their fuel as ethanol. At the present time these standards are being managed by the fuel companies.

The bill indicates a need to have the regulatory tools and instruments to define and regulate the industry, where needed, in the public interest.

The real issue being raised by the hon. member for British Columbia Southern Interior is the whole issue of a biofuels policy, not the regulation of whatever component of the industry may need regulation. At root is his suggestion, although he did not put it this way, and perhaps his party's position on the bill, that we have a clash in public policy terms between food for humanity or killing the planet with greenhouse gases, or something in between.

I suggest to the House that we are not there yet. I suggest that we can grow lots of food for humanity, while, at the same time, deal with our greenhouse gas challenges. We also may be able to use some biofuels to offset the need for fossil fuels in some sectors in some countries, as is already happening.

The real issue for the House and in the bill is the ability of the government to regulate biofuels policy, not necessarily to push biofuels nor to do it in a way that bids up the price of food commodities on world markets or even Canadian markets, but simply to regulate it as a consumer and industrial commodity in the public interest.

If we were to have half a dozen different types of ethanol and half a dozen different types of fuel, the consumers with a car or the truckers with a truck may not know what fuel that would be putting in the fuel tank. In order to get maximum efficiency, we need to match the fuel with the engine that is being used.

In the absence of regulatory tools, the government will not be able to refine what those things are. It may not be able to say that it is 5%, 7% or 10% or that it is called such and such and only goes into a certain type of engine.

I read last week that some truckers in some places were running around buying cooking grease from restaurants for their trucks. Maybe it works but I would not use it in my car. I can just imagine what it does to the truck engines or the environment when it is being burned. I am sure everyone will accept that there is a need for the government to have the tools it reasonably requires to regulate this particular market price.

I must say a few words about food commodity prices because it is that circumstance that has caused many environmentalists, observers around the world and people in this Parliament to pause, have a look at this bill and perhaps even reconsider positions. I do not know whether the party of the hon. member who spoke earlier is changing its position or not but it is clear that this globe that has six to seven billion people on it needs a lot of food every day.

The recent interest in food commodity pricing was not displaced. There were huge increases and still are increased pricing for rice, corn, wheat, barley, oats, vegetables, fruit, fish and pork. Somebody approached me last week looking for pork in Canada for a region of China that has a shortage of pork. The individual was interested in developing a supply chain for that purpose.

What is happening is that countries that we used to think of as lesser developed countries are now developing very rapidly in Asia. They are consumer nations. They are out there bidding on all commodities and they have every right to do that because they have billions of people to feed and they need to get food at the best prices. However, if there are too many bidders for a limited food supply, the price will go up. This is a concern around the world for people of limited means, poor people or people who might go hungry because they cannot afford food. We need to keep our eye on that.

It is probably a fact that there is absolutely nothing in this bill that would bid up the price of food or cause the price of food to be bid up. The bill does not mandate that there be any biofuels produced. It will, in a sense, follow the marketplace if biofuels are produced and if the market needs biofuels. If the government wishes to encourage biofuels, it will have the tools to regulate it but the bill itself does not encourage, promote or trigger biofuel production in any direct or visible way.

I will give the example of corn, which the hon. member mentioned earlier. It is a good one. Corn is a major crop in the western hemisphere. Our American neighbours produce a whole lot of corn. I think at some point the American government is or was paying its producers to not produce corn because there was so much of it. It is likely that a corn producer will not grow a crop if he or she cannot sell it. However, that may vary in the United States. If there is a subsidy to produce and it is produced because there is a subsidy, the country may end up with a whole supply of surplus corn. In Canada, however, I do not think a farmer will produce corn if he or she is not able to sell it. Right now, for the most part, it is sold for food in various ways or for components in food. However, there is a biofuel industry here now and some of our corn does go into that.

I could perhaps say it best this way. If we had a growing biofuel industry and a particular farmer wished to produce a corn crop for that, why would we want to do anything to prevent that? Surely nobody in here is saying that there is anything wrong with growing corn. If there were to be an additional corn supply grown here and put into the marketplace, at whatever price, including higher prices, induced by higher prices even, that would not be a bad thing.

What might be bad are two things. First, if the promotion of biofuels were to cause the diversion of human food into a biofuel production and take food off the marketplace that would otherwise have gone into somebody's mouth, that would not be a good thing.

The second thing that would be bad is if the biofuel manufacturing caused the food pricing for the food supply to increase and put it out of people's reach. We have seen the news reports of a number of countries that have had to take special measures to ensure a supply to its population. I suppose we must keep our eye on this.

Canada is a rich and well-fed country. I think we are even a bit overweight these days. However, we are a well-fed country and we have a moral obligation to ensure we do not do anything to impair food supplies for other countries. We must do what we can to assist in feeding them and to assist them in growing food on their own. Those are things I know all Canadians would want us to do.

I want to come back to the bill and point out a couple of things.

First, the government in this case has not taken any steps to deal with ethanol as a fuel component. At this point, I believe the government sets the fuel standard for ethanol at 5% or encourages it go to 5%, but some countries have gone beyond and gone to 10%. There may arguably be a need for government to become a leader in this, in consultation with industry and with automobile manufacturers, in pegging certain standards that involve the use of ethanol. This particular bill might open the door to that but it would not, as I say, actually make that happen.

The second thing I want to comment on relates to ethanol. For reasons that have not really been adequately explained in the House, the government decided that it would remove the excise tax exemption from ethanol that had previously existed to stimulate the production of ethanol. It removed that exemption in the last or the second last budget and it did it without really explaining why. I suppose it could say that it wanted to create a level playing field, but if we are in the business of stimulating alternate fuel sources or fuel supplies to offset the greenhouse gas emissions and the carbon reduction targets we have, then it seems illogical that the government would remove the exemption. However, that has been done. It seems rather contrarian but, as I say, I have not heard an adequate explanation.

However, now that the exemption is not there, it leaves room for the government to do something else to stimulate biofuel production. I have said many times that the government hates the policies of previous governments, particularly mine, which is why so many times it has terminated an existing program and then brought it back rebranded with a new name and perhaps with less money.

This rebranding has been going on since the Conservatives took power a couple of years ago. Maybe that is what will happen here, that the government has gotten rid of the exemption and in the next budget it will come forward and tell us that it has a brand new tax exemption, rebranded with their name on it, to stimulate ethanol production. I would not be shocked to see that at all.

Last, the government, with its apparent lack of interest in ethanol, has failed to note that cellulosic ethanol can reduce greenhouse gas emissions, currently measured, by up to 64%. That is a major reduction in greenhouse gas emissions if they can be attained by the use of the average automobile engine. I do not understand why the government is not pursuing that a bit more aggressively.

All of that having been said, Bill C-33 provides appropriate administrative tools to the government to regulate the biofuels field as it evolves in the marketplace. For that reason, and because we are very certain that what is in the bill does not cause the price of food commodities to go up around the world, at least not at this time it does not, my party is prepared to support the bill.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Speaker, I think the main thing is that we have to ensure that any biofuel program or policy in Canada looks at the environment in a sustainable manner, that we do not have a program that displaces oil and yet increases greenhouse gas emissions.

Let us not forget that this bill, Bill C-33, is part of the environment bill. It is a bill that is supposed to mitigate the negative effects on the environment. That is the first thing we have to do. So if in fact ethanol and biodiesel are increasing greenhouse gas emissions, then we should be looking at perhaps other areas, such as pellets, as my colleague from Western Arctic mentioned. According to the REAP study, solid biofuels have a much better efficiency and almost no negative effect on the environment. So, that is one area.

I know of a company in British Columbia that collects used oil from restaurants and converts it into biofuel. What better way is there of disposing waste? There are other enterprises. I think there is one in Alberta and also one British Columbia that is using waste and biomass to create biodiesel.

I think from the point of view of the environment and new energy sources, if we look at some more efficient areas of production, then this will have a much better effect on the environment as we try to battle climate change.

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.