Bill C-311 (Historical)

Climate Change Accountability Act

An Act to ensure Canada assumes its responsibilities in preventing dangerous climate change

[Jeff Watson, Conservative, Essex, ON]

The government agrees that Bill C-311 is fundamentally flawed and that the approach is wrong. I think that's why we're talking an awful lot with respect to things like the clean energy dialogue, and talking about harmonization that recognizes the integrated nature, not just of your particular industries, but of an entire range of industries and their supply chains. They're North American now.

I come from the auto industry; we recognize that there isn't really a Canadian car or an American car, but a North American car and a North American consumer for that car, and there has to be a North American business case for building that car. The key with harmonization is avoiding a patchwork of standards, a balkanizing of the market.

For example, we've chosen to regulate tailpipe emissions through CEPA; that allows us to avoid a province-by-province disharmony in terms of a standard. We're harmonizing with the reformed U.S. CAFE standards, which creates an investment advantage for the industry while tackling the need for greater fuel efficiency in our vehicles. I think that's the right approach.

With regard to the disharmony in terms of target and pathway that Bill C-311 is proposing, can you give us a sense of the cost? You've talked about some of the areas that are probably most exposed for the industry. Can you give us a sense or a quantification of what the loss would look like? How much investment would potentially be lost? How many jobs are we talking about? Can you give us some sense of what the cost of such a move would be if we adopted this bill in isolation from the United States?

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Mr. Hyndman, I am referring now to Bill C-311. It talks about economic potential. When the government decided to change the reference year from 1990 to 2006, were you relieved? The fact is that, even though the government invested money to get the process going, the oil companies benefited.

When I went to Calgary with another House committee to meet with companies like Shell, we were told that, given the state of current discoveries and research, it will not really be possible to make significant reductions in CO₂ emissions per barrel of oil that is produced. The amount of water used has dropped from 6 gallons per barrel to about 4½ gallons, but the amount of CO₂ cannot really be reduced further. Is it your view that in order to reduce greenhouse gas emissions, the only real solution is to limit oil production?

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

Thank you, Mr. Chairman.

I consider it unfortunate that people representing industries such as the wind, forest and aluminum sectors, are not with us this morning. However, I do hope that, if they submit a brief, we will consider it as part of our analysis and report on Bill C-311.

I want to thank you for being with us today. It seems to me your briefs are quite clear. Over the last 12 years, we have had discussions with representatives of a variety of industries. Many of them are of the view that, when it comes to climate change, there is nothing worse than uncertainty. Whether you are in the forest or oil industries, uncertainty causes considerable harm in regulatory terms. We are in favour of regulations, but we would also like to see them come into force as quickly as possible.

The Minister announced yesterday that his regulatory framework would be postponed until later—until after the conference in Copenhagen, to be exact. Do you think this additional delay will be harmful to your industry? Will that again create uncertainty? Should we not try to bring a regulatory framework into effect as quickly as possible?

[David McGuinty, Liberal, Ottawa South, ON]

Thanks, Mr. Chair.

Thank you both for being here.

I ask the same question of every witness who is appearing on Bill C-311. I just want to get it on the record. Do either of you have in your possession a climate change plan from the present government--after 46 months in office almost to the day today--to address all of the different elements that you have raised in both of your presentations? Is there a plan, and can you share it with us?

[Eli Turk, Vice-President, Government Relations, Canadian Electricity Association]

Thank you very much, Mr. Chair.

Thank you, Mr. Chairman.

I would like to thank Committee members for giving me this opportunity to express my views regarding Bill C-311.

The Canadian electricity sector is committed to reducing Canada's overall greenhouse gas emissions. The targets approach has been a useful contributor to developing understanding as to the size, cost and complexity of the challenge, but targets need to be set with a reasonable understanding of the strategies necessary to meet those targets.

The Canadian electricity sector is committed to reducing Canada's overall greenhouse gas emissions. The targets approach has been a useful contributor to developing understanding as to the size, cost, and complexity of the challenge, but targets need to be set with a reasonable understanding of the strategies necessary to meet those targets. Let me explain.

The central question for the electricity sector is how can we achieve a carbon-reduced future while ensuring that the electricity demand in Canada can be met? As you know, Canada's electricity system is the envy of the world. It is over 75% non-emitting, thanks to hydro and nuclear generation. Only 24% of Canada's electricity fleet is generated from fossil fuels like coal, oil, and gas.

CEA member utilities are already making substantial investments to reduce the carbon intensity of power generation. Hydroelectric projects are either in the planning or construction stages in Labrador, Quebec, Ontario, Manitoba, and in B.C. and Yukon. Electricity generated from wind continues to expand, with generation expected to exceed 3,000 megawatts this year. Wind and other forms of micro-generation will be key components of grid modernization and emerging smart grid technologies.

We were particularly pleased to see the Prime Minister's announcement in Calgary two weeks ago on the public-private partnership between the governments of Canada and Alberta on TransAlta's Project Pioneer. Successfully implementing carbon capture and storage is crucial if Canada and the world are to address CO₂ emissions from coal-fired generation. Like many countries, Canada has a plentiful supply of coal in various parts of the country, and CCS has the potential to make coal a carbon-neutral fuel. Canada is leading the world on CCS technology. Once complete, Project Pioneer will be one of the largest CCS facilities in the world and the first to have an integrated underground storage system.

CEA members accept the eventuality of legal constraints on carbon that will change the way the world produces, transmits, and distributes electricity. In many ways, electricity is the energy of the future. Not only is the Canadian electricity sector expected to reduce its own emissions, but we are to help other sectors reduce their emissions. Electric plug-in cars, mass transit in our large urban communities, even gas pipelines, wish to power their compression stations with electricity.

There are uses for electricity in our future that we have never even thought about. To meet these new uses, we need to invest in our electricity infrastructure. We must build new generation that will be reliable and affordable, with either low or nil emissions. We need to look at hydro, nuclear, wind, solar, tidal, geothermal, and clean coal: we need them all. We must also look at a smart grid that will provide system flexibility to include more renewables.

We believe Parliament should consider changes to enable the transition to more non-emitting generation based on the economic reality of turning over our capital stock. Equipment in electricity generation, transmission, and distribution is long-lived and amortized over many decades. We take great care in keeping our equipment in top condition in order to keep electricity prices affordable.

It follows that the laws and regulations, as they apply to emitters in the electricity sector, need to be well thought out and fair, and take into consideration the interconnected nature of the electricity system. Also, laws and regulations must provide options for compliance, other than shutting down the plants producing the electricity.

For the electricity industry, any workable climate change policy must include the following. First, it must include an integrated and coordinated energy and environment framework. The climate issue has global, national and regional ramifications, and cooperation and alignment with the U.S. in terms of outcomes is essential. A fragmented approach by various governments is unworkable.

Second, competitiveness with the United States is a necessary consideration. The pace of change and any future investments in cleaner power generation and new technologies must align with our trading partners so that Canadian businesses can remain competitive. We are encouraged by the ongoing clean energy dialogue between Canada and the United States.

Third, we need adequate compliance mechanisms, including a technology fund that drives clean technology investment and deployment, and policies supportive of more electricity use in the economy, including the progressive conversion of the electricity industry from high-emission fuels to low-emission or nil-emission fuels.

Fourth, we need a holistic approach to legislative and regulatory clarity and coherence on energy and environmental issues. Regulatory processes that crosscut energy and environment would reduce delays that currently inhibit the expansion of clean energy infrastructure and stewardship activities.

Fifth, a fair and equitable burden must be allocated among all industries.

Finally, a recognition of the cycle of capital stock turnover in the electricity industry through a focus on retirement or refurbishment of existing plants at the end of their economic life is critical. We support changes that would enable the transition to less-emitting technology-based productions in an economically realistic manner.

In closing, Mr. Chairman, I'd like to remind members of the need to respect regional balance. The electricity industry is a microcosm of Canada, with varying interests and realities in different regions of the country. The provinces built the electricity system. A climate change plan that would prescribe strict reductions for coal-fired electricity generation would impact provinces like Alberta, Saskatchewan, New Brunswick, and Nova Scotia. Meanwhile, as I stated earlier, Newfoundland and Labrador, Quebec, Manitoba, and B.C. have hydroelectric potential that must be developed.

Clearly these realities of the generation mix in Canada are in many ways a result of geography. It is Canadians who ultimately will pay, and any plans that result in increased costs for some, but not others, will not be accepted by the public. It is perhaps this latter point that is one of the most important, not only for government, but for our industry as a whole. In order to build the electricity system our country will need in the decades to come--to support economic growth and our quality of life--we need broad support from both the public and government.

I thank you very much, Mr. Chairman.

I would also like to thank Committee members.

I look forward to having a good conversation.

Thank you.

[Dr. Rick Hyndman, Senior Policy Advisor, Climate Change and Air Issues, Canadian Association of Petroleum Producers]

Thank you, Mr. Chair.

I appreciate the opportunity to be able to come and discuss this topic today. I've been working on climate change with CAPP since 1988. I think some of you remember the issue tables process, which was the huge process that got us launched.

We've been working on policies for pricing carbon in Canada since the fall of 2002. So it's been a long time, seven years, since we first started becoming articulate about carbon pricing. CAPP has been supportive of carbon pricing since.... I think our public position was around 2001, 2002. We've been studying ways to make good policy.

I want to give you some comments on how we perceive the greenhouse gas policy and how our perception leads to the position we have adopted.

I'm sure you all know the nature of the greenhouse gas challenge globally: incomes and population are rising dramatically in the developing world, and incomes are rising in the developed world as well. All of that gives rise to an increase in the demand for energy.

Hydrocarbons are the dominant form of energy supply in the world, and our energy comes to us through huge capital-intensive systems that take a long time to put in place and to change. So in light of the dangerous rise in greenhouse gases, the world faces a challenge: to develop future economic alternatives to hydrocarbons, while reducing present hydrocarbon emissions. In the face of the rapidly growing demand for energy, that's no small task.

There are major actions that we need globally to deal with this and try to slow down and reverse the growth in greenhouse gas emissions. First, we need to focus on energy efficiency and conservation so that we can slow down the demand for energy, which is going to happen for some time to come. We need to deploy the existing technologies we have available to us that are economic that can reduce the carbon emissions. More importantly, we need to invest heavily in energy technologies that will get taken up in the developed and the developing world as the demand for energy grows. Finally, we need to reduce global deforestation, which is crucial to the health of the planet and a necessary part of our long-term strategy to transform the global energy system.

Canada must do its share in this global effort, but we've discovered just how different our Canadian circumstances are from those of other developed countries. We have roughly 10% of the world's land mass, with all the resources that go with it. But we have only 0.5% of the world population. So it's no surprise that Canada has a resource-based economy, which depends on resource-intensive industries that are both energy-intensive and emissions-intensive. Canada has high per capita emissions because of our climate and our focus on the resource sector.

Unlike many other developed countries, which are undergoing deindustrialization and have stable populations, we are facing rapid growth in greenhouse gas emissions as our economy expands. We're naturally going to look much worse than economies that are deindustrializing and have stable populations. So comparing our efforts in Canada with those of other countries is misleading. In any assessment of our emissions, it is important to take our special circumstances into account.

If we adopt a target relative to history that is similar to what other countries are adopting, we're going to be in a situation where we have an unachievable target relative to these other countries. What that will do is cause us this endless debate that we have seen since the Kyoto Protocol has been signed over how we're going to do this and achieve the impossible, and who's going to pay for it? All of that debate slows us down from actually getting on with what Canada's contribution can be, which is improving efficiency, deploying existing technology, and investing in new technology to deploy and get greater reductions in the future.

So let's just look and see what the target proposed in Bill C-311 actually implies. And I'm just looking at the 2020 target—for me, 2050 is pretty far out and lots of things can change dramatically between now and then. But if we look at the 2020 target of 75% of 1990 emissions, that's 38% below the 2006 emissions, and it's 49% below Environment Canada's projected business as usual--BAU--or current trend emissions for 2020.

Obviously, if we're not going to have a major reduction in economic output or drop in population or incomes per capita in this country, that means we would have to reduce the emission intensity of gross domestic product in this country by large amounts—49%, if we compare the BAU for 2020.

If we just look at some recent trends in the U.S. and Canada to see how significant that is, in the U.S. the carbon intensity of GDP decreased by 2.2% per year from 1980 to 2006. That was overwhelmingly because of the reduction in energy intensity of GD, and only a small amount through fuel switching from hydrocarbons to non-hydrocarbons.

If we look in Canada from 1990 to 2007, the decrease in carbon intensity of GDP was 1.3% per year. If we look at Environment Canada's projection for business as usual for 2020, it's 0.73% per year from now till 2020—that's the anticipated trend improvement in intensity of GDP. So if we're trying to reduce the emissions to the target level from the current level, that's a 6.7%-per-year drop in emissions. And with a growing GDP of, say, 2.1%—which is, I think, in the latest budget information from the government—you add those two together and that would require an improvement in emission intensity of GDP by 8.7% per year.

That's over seven times, roughly seven times, the 1990-2007 improvement, and it's over ten times the BAU anticipated improvement to 2020. That's unprecedented. It's unobserved anywhere else. It is just inconceivable that we could actually improve our GHG intensity over that timeframe by that amount.

We could go and buy foreign credits, hypothetically, so what we don't do here we pay somebody else for doing. But there are a couple of things that stand in the way of that. It assumes that other countries are doing far more than their commitment to improve their GHG performance and have this extra space to sell to us, which begs the question of why we have taken on a commitment or why we would take on a commitment that is so much more onerous that we can't do ours and they have one that they can overperform on.

The second thing is that, if countries like China and India, which are the big industrial developing countries, are actually contributing to the global effort, they're going to need their own reductions for their own commitments. So this idea that there are these gigatonnes of foreign credits floating around that we can buy and thereby meet our commitment, I think, is a bait-and-switch game going on. Most of the informed observers I've run into believe that the amount of foreign credits that will be available when the whole world is actually acting on climate change will be much smaller than what people are assuming in some of these projections.

I think Bill C-311, with its target of 25% below 1990 in 2020, is counterproductive to Canada's getting on with doing our part in the global effort.

What should our GHG policy be?

We need to align with the U.S. in the obvious areas of industry and transportation, given our strong economic ties to the U.S. and our integrated energy systems. So we need to keep in mind that whatever we do, we need to do in a way that is compatible with the U.S. We need to establish a price on carbon emissions. We've been trying to work on that policy, as I said, for seven years with the federal government and some of the provincial governments. We need to increase the price, over time, in line with what the price is set in the U.S. and other major economies. And we need to increase our investment in low-carbon emission technology, especially in those areas that are particularly relevant to the Canadian industry and circumstances.

We need to keep in mind that at the provincial level, Canada has already taken a leadership role. Alberta put in a pricing for large industry emissions in the middle of 2007, and so far it's $15 a tonne for emissions above 88% of their base period intensity. Quebec put in its carbon tax of roughly $3.30 a tonne, covering broad combustion emissions from hydro carbons, and it did that in October 2007. B.C. put in carbon pricing through its broad carbon tax on combustion emissions in July 2008. It started at $10 a tonne, it has gone up to $15 a tonne, and it's headed for $30 a tonne in 2012.

We're already leading. What we need is a national policy on carbon pricing, one that will work together with the provinces, and we need to ramp that policy up in line with what the other major economies are doing. We need to get on with our contribution to the global effort in pricing emissions to drive that efficiency, and investing in technology to be able to provide solutions for Canada and the rest of the world in the future.

Mr. Chairman, I look forward to a discussion following Mr. Turk's presentation.

The Environment

[Jim Prentice, Conservative, Minister of the Environment]

Mr. Speaker, before the beginning of question period, the hon. member was good enough to provide me with hundreds of tear-off sheets relating to Bill C-311. I now have a better idea of what inspired her generosity.

I would like to assure her that the names, mailing addresses and email addresses that she has provided me with, I will take full advantage of and will correspond with all of those people. I will provide them with details not about the NDP's so-called publicity stunt but rather about the good work that the government is doing on a continental basis, clean energy dialogue, tailpipe emission standards, aviation standards, marine standards, and work on a continental cap and trade system.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, on Saturday people in 181 countries joined the most significant day of action on climate change in the planet's history. At over 5,000 events, people gathered to call for bold leadership on climate change. Last week, Canada's lead climate scientists asked Parliament to pass Bill C-311 without delay, and re-establish Canada's reputation on climate change.

Will the Minister of the Environment continue to ignore Canadians' demands for timely action, or will the government bring Bill C-311 back to the House for a vote before Copenhagen?

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

It's hard to oppose virtue, but I find it somewhat paradoxical that this motion is being brought forward after study of the bill has already commenced, after we have already heard shocking testimony from scientific experts and after the government has made its position known. I'm not opposed to the motion, but I do hope that the committee will not make a habit of opening the discussion up to the general public after it has begun to study a bill.

I would have preferred to see the motion tabled earlier. We always agreed to have committee meetings televised and to have as few in camera sessions as possible, particularly when the time came to set out the agenda and our list of witnesses on BillC-311. Not every opposition party felt the same way, but I'm pleased today to support this motion, even if it is a little late in coming.

[Mark Warawa, Conservative, Langley, BC]

I thank Mr. Trudeau for his motion. I think it's a good one. We'll be supporting it. We want to give Canadians an opportunity to hear from science, industry, economists, all the professional expert witnesses who will be coming here. They need to hear this as we critique Bill C-311. I don't think it's a good bill, but we look forward to Canadians hearing from the witnesses. Having it televised will give them that opportunity.

[Justin Trudeau, Liberal, Papineau, QC]

Yes. The motion is that the meetings in relation to Bill C-311, An Act to ensure Canada assumes its responsibilities in preventing dangerous climate change, be televised.

I think the interest generated by the discussions we're having here would be of great interest to Canadians and I think we should. We've talked about it many times before, so I finally moved a concrete motion that we ask the clerk to try to schedule, inasmuch as it is possible within the limits of the House of Commons, that each of these hearings in the future be televised.

[The Chair, Conservative, James Bezan]

Thank you.

I want to thank the witnesses for your presentations today. It will help us form our study and report and evaluation of Bill C-311. I appreciate your comments and very frank discussion, Mr. Martin.

Thanks for joining us, Dr. Cooper and Ms. Buckley. We appreciated your input today as well.

We do have a notice of motion to consider from Mr. Trudeau. Would you like to read that into the record.?

[Mark Warawa, Conservative, Langley, BC]

I find it interesting that all the questions, even from the NDP, had nothing to do with Bill C-311. It was all about Copenhagen. It's also ironic that the NDP voted against the budget and the commitment of millions of dollars for clean energy. They voted against that.

The focus is on Copenhagen. There's great interest in that. We heard on Tuesday, as I said before, from the scientists on the importance of having a North American approach. The target we take to Copenhagen is a North American target of a 20% reduction by 2020. We heard from scientists that it's good to have a coordinated approach.

You talked at length about comparable efforts from other countries. The North American commitment of a 20% reduction is comparable globally as we globally tackle the issue of climate change. What are Canada's key priorities as we go into Copenhagen? What is the approach of the major emitters, such as China, India, and other developing countries, towards these negotiations?

It's critical that we have all the players participating. As you highlighted, one of the weaknesses in Kyoto was that we did not have the major emitters participating. To have a successful, effective agreement you have to have the major emitters. What are our key priorities, and what's the approach of China, India, and other developing countries?

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

You always refer to a continental policy and give the United States as an example. To my way of thinking, the United States have a regime in place that often allows them to negotiate agreements with the different states.

Does the regime that you intend to put forward in the coming weeks on the eve of the Copenhagen Conference take into account the fact that bilateral agreements may be concluded with provinces that pledge to uphold Canada's international commitments? Will some provision be made for flexibility, asymmetry and bilateral relations mechanisms, or will Canada put forward a coast to coast plan setting out different national global targets for different sectors? Will there be the kind of flexibility that we see in BillC-311 that will allow provinces to conclude a bilateral agreement? When the Liberals were in power and Stéphane Dion was Minister of the Environment, the federal government had the option of concluding a bilateral agreement with Quebec. Discussions had taken place between the then federal and provincial ministers of the environment. Will the proposed regime give Quebec the flexibility to conclude a bilateral agreement on greenhouse gas emission reduction commitments?

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

I seem to recall, Mr. Chair, a province addressing a gathering of the Conference of the Parties. A precedent has been set and a minister should not be prevented from addressing the Conference of the Parties, instead of simply being relegated to the role of observer, all the more so given that Quebec has adopted one of the most ambitious stands of all on climate change.

I'd like to get back to the subject of BillC-311. You say that if Canada were to adopt this legislation, it would likely be one of the most ambitious pieces of legislation ever developed by an industrialized country. That's what you appear to be telling us. The bill may be ambitious, but do you also think it is unrealistic?