Bill C-288 (Historical)

Kyoto Protocol Implementation Act

An Act to ensure Canada meets its global climate change obligations under the Kyoto Protocol

The purpose of this enactment is to ensure that Canada meets its global climate change obligations under the Kyoto Protocol. It requires the Minister of the Environment to establish an annual Climate Change Plan and to make regulations respecting climate change. It also requires the National Round Table on the Environment and the Economy to advise the Minister — to the extent that it is within its purpose — on the effectiveness of the plans, and requires the Commissioner of the Environment and Sustainable Development to submit to the Speaker of the House of Commons a report of the progress in the implementation of the plans.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

I have a question for Mr. Cleland with respect to full cost accounting, and this is outside of just the narrow interests of your particular sector, but as an economy, because we've been speaking about the economy quite a bit.

We've watched the pine beetle devastation and we've watched the mines in the far north not being able to operate, certainly, like they used to. Does it not come to a certain point--and this is the role of government again--to take in that full cost accounting of the expense of meeting something like Bill C-288, with the various tools and mechanisms available, versus the expenses that get accrued by all members of that society? Does it not come to some point where, as committee members have mentioned, this constant debate and discussion needs to end and you simply have to act? And it may be expensive.

[Kory Teneycke]

I think it's addressing a different issue. Insofar as the government has targets that are long term, stable, and viable both environmentally and economically, I think that's a positive piece of the puzzle. I would agree with those who are saying this is one component of what needs to be a broader strategy.

But I think where we're in limbo as an industry is from the lack of clarity on direction on specific issues that pertain to us—and I think that's something you'll probably hear from many other industries too. And no, they're not in Bill C-288. And some of those issues aren't in the Clean Air Act either. We're having the government saying, we're going to change all the rules, but we're just not going to tell you what the new rules are going to be. Understandably, people don't want to invest in that climate.

So I think there's plenty of blame for everyone to share in, but moving past the recriminations to clarity is what's necessary.

[Mark Warawa, Conservative, Langley, BC]

Thank you.

Mr. Teneycke, this tags on to Mr. Cullen's question regarding Bill C-288 and whether this would be a good bill to guide us in moving forward. Do you see anything in Bill C-288 that would advance the use of renewable fuels? You said there was this limbo right now, with Bill C-30, the Clean Air Act, having been introduced, and now we're in this time of political limbo where the opposition, the Liberals and the Bloc, have said they're not going to support that bill. It's created this instability in the investment market.

Does Bill C-288 provide that security or stability?

[Mark Warawa, Conservative, Langley, BC]

Thank you.

Mr. Sauchyn, I find your comments quite interesting, actually. You said that Bill C-288 only covers a very small portion of the Kyoto Protocol. Yet you said you didn't know if we could meet it, and you also said you're very supportive of it. So I find that a little bit puzzling, but that's fine.

[Mark Warawa, Conservative, Langley, BC]

Thank you, Mr. Chair. I will be sharing my time with Mr. Harvey, as you mentioned.

Thank you to the witnesses for being here this morning.

As has been pointed out, the focus is to be on targeting and modelling. I appreciate the comments on adaptation, because it's an important topic, but that's not the topic this morning.

We've heard some comments from the Liberal Party regarding Bill C-288. It sounds as though they're already considering amendments to this bill in relation to targeting. But Bill C-288, as it is before us, is quite clear, even in its title: An Act to ensure Canada meets its global climate change obligations under the Kyoto Protocol.

In terms of targets, the Kyoto Protocol requires that Canada reduce its average annual greenhouse gas emissions, during the period of 2008 to 2012, to 6% below their level in 1990. We've heard from the Commissioner of the Environment that we will not meet those targets. We've heard from the Minister of the Environment that we will not meet those targets. We've heard from the witnesses at this committee already that we will not meet those targets. One of them said that Bill C-288 would have been a good bill in 1998, but it's not relevant anymore. We had an opportunity to meet those targets, possibly, but it's too late.

My first question to you is this, and I think some of you addressed this already during your comments. Without spending billions of dollars internationally to meet those targets, can we domestically meet those targets?

Mr. Sauchyn, I think you said you don't know.

Perhaps I can ask each of you for a yes , no, or I don't know to this question: do you believe we can meet those Kyoto targets, which is what Bill C-288 is asking us to do?

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Maybe we'll make an amendment to Bill C-288 to encourage walking.

[Dr. David Sauchyn]

With all due respect to Mr. Godfrey, I don't think we can isolate mitigation from adaptation. The degree of adaptation that will be necessary will depend entirely on the extent to which we're able to slow the rate of climate change. So we can't consider one without the other.

The fact that Bill C-288 is exclusively focused on a single paragraph in the Kyoto accord simply underscores the fact that there is a policy vacuum at the federal level and that we're not developing a comprehensive strategy for climate change.

[Michael Cleland, President and Chief Executive Officer, Canadian Gas Association]

Thank you, Mr. Chairman. I'd like to thank you and the committee for the invitation to appear before you today on this important matter.

Let me just take a few minutes to introduce the Canadian Gas Association. We're the association that speaks on behalf of Canada's natural gas delivery industry. Our principal members are the local distribution companies that deliver gas to almost six million Canadian business and residential customers from coast to coast in Canada.

Natural gas accounts for something over one-quarter of the end-use energy used in Canada: 30% of industrial energy, 44% of commercial energy, and 46% of residential energy. As well, natural gas accounts for a growing part, albeit still a small part, of the power generation energy and a small part of our transportation fuel.

CGA and its members have been active participants in the climate change debate for well over a decade, and we take the perspective that the natural gas delivery industry is part of the solution. By that, I mean three things.

First, while our direct emissions from the gas delivery operations are relatively small, we are part of the so-called large final emitters groups of industries, and we have worked and are continuing to work with government to develop a framework to manage our emissions. By that I mean a framework that includes short-term, medium-term, and long-term targets.

We also work with our customers and our regulators to develop and implement demand-side management programs aimed at improving the efficiency with which natural gas is used. Finally, we advance the use of natural gas as a clean alternative in many applications, an alternative that not only can reduce GHG emissions but is also extremely effective at reducing other air contaminants. They can be brought together, though I agree that they are not essentially related.

In short, Mr. Chairman, CGA believes that by using multiple strategies, Canada can cost-effectively manage its greenhouse gas emissions and, over time, begin to reduce them. I think the question of meeting the commitments in the Kyoto Protocol, however, is another matter.

While the intent of Bill C-288 is laudable, with the greatest of respect to members of this committee, I would argue that its substance is ill advised. It is ill advised for two reasons: because it is not possible for Canada to meet the Kyoto target, and because the continuing debate about whether we can or can't do so and who is to blame is a distraction from getting on with solutions.

Let me comment briefly on both of these points.

Why can't we meet Kyoto? Simply put, I would argue that it was conceived with almost no consideration of the underlying reality of Canada's energy system. In 1997 when we signed on, we were well aware of the following things. Greenhouse gas emissions had been growing at something over 1.5% a year for several decades. That growth was a consequence of energy production and energy use throughout the economy. Every individual and every business decision every day affected and continues to affect our GHG emissions. Meeting Kyoto even then would have required us to turn the economy on a dime and get on a trajectory of something like minus 1% a year as compared to the 1.5% a year growth we'd seen for the past several decades. At the time there were no economically available options to capture emissions or to deal with them.

We are now beginning to see that the fourth point may not be true if we can solve the capture and sequestration problem from large emitting sources, and I'm optimistic that we will be able to. But the first three remain true, and indeed, in 2006 there is no meaningful physical possibility for Canada to meet Kyoto. We could buy international credits if we could find them in sufficient quantity, which is in some doubt. But the arithmetic is fairly simple, and I'll leave it to you as parliamentarians to reflect on how government could explain to Canadians that billions of dollars of Canadian taxpayers' money will be sent abroad to meet a commitment that, I would argue, we had no business making in the first place.

More importantly, I think the reason we focus on Kyoto per se as opposed to getting on with climate change is that it distracts us from getting on with solutions. Canada clearly has a very big challenge. We are an inherently energy- and GHG-intensive economy for many historical reasons. That history has left us with an interesting legacy, a strong economy with a heavy proportion of natural resource-based industries, sprawling cities, large houses, large cars, and all manner of energy-using equipment that most of us enjoy having and using. What goes with all of that is a very high level of greenhouse gases per capita, a level much higher than almost any other country.

In these circumstances, it strikes me that we should be focusing on solutions. It is less obvious why we would be focusing on trying to meet a target that is roughly the same target as the European Union. They have very different historical, geographical, and economic circumstances, and indeed, they already had their target in the bank when they signed on to it in 1997.

Mr. Chairman, let me talk about one possible solution that I think is germane to your discussion. My association has been advancing the concept of clean energy for Canadian communities and a strategy to do that. Let me put it in context. About half of the energy we use in Canada is consumed in Canadian cities and towns: about 30% in buildings, about 13% in urban transportation, and about 7% in small urban industries. We all seem to agree that a real climate change plan needs to start action now, but it also needs to look out to around the mid-century and what will involve reductions of 50% or 60%, or more, from today's levels, even though we expect the economy to continue growing. This will entail a transformation of historic proportion, and one part of that transformation needs to be the way we use energy in our cities and towns, in our communities.

To date, the public policy debate on energy and energy and the environment has focused on individual fuels and technologies, and the respective merits or demerits. I would argue that this piecemeal approach ignores the fact that energy is a system of closely interconnected parts and is proving to be suboptimal. We need to do a few things. We need to significantly accelerate our energy efficiency efforts, where the main challenges involve system integration rather than individual technologies. We need to provide an enabling platform for emerging on-site renewable energy sources. We need to reduce the pressure on existing traditional energy delivery systems by ensuring that the right fuel is used in the right place and that we extract the full energy value from the energy delivered.

Energy consumers, businesses, and individuals purchase fuels and technologies to deliver energy services. While consumers want better environmental performance and energy efficiency, they are almost never willing to sacrifice things like safety, affordability, or reliability for environmental performance. We know that from a lot of years of experience. The question is, the challenge is, how do we make sure those factors come together as opposed to being in opposition to each other? That needs a strategy.

Our proposal would be to have something called a “clean energy in Canadian communities” strategy, which would be a platform for moving forward a variety of initiatives that ensure reliability, affordability, and environmental performance delivered at the same time.

Four principles would guide this strategy, Mr. Chairman, and then I'll wrap it up.

One is that we should build on the existing infrastructure and energy service businesses. Canada's energy system is a complex of infrastructure and businesses and customer relationships that we should be making maximum use of in order to ensure that we can deliver those energy services to Canadians using less energy and using cleaner energy.

We should recognize the benefits of diversity, and “diverse” means delivering energy services. We need to bring the grid base—the electricity grid, the natural gas grid— on-site renewable sources, and energy efficiency technologies together to create optimum solutions.

We should develop and deploy new technologies. We should benefit from market-ready technologies today and, at the same time, support the development and deployment of emerging technologies, the full benefits of which will emerge in coming decades.

Finally, we should mobilize stakeholders. We should mobilize interests among new and traditional energy suppliers, equipment and service suppliers, including new technology developers, builders, and community leaders.

In all this, Mr. Chairman, there are many important roles for the federal government, as a partner, working with provincial governments and municipal governments, to move such a strategy forward.

Let me wrap it up by saying that this is a strategy that I believe would receive strong approval from provincial governments. As I say, it could be done in partnership with them without in any way intruding on their jurisdiction. It would improve federal leverage on the efforts that it now undertakes.

Members of the committee, I applaud your commitment to ensure that Canada acts responsibly on climate change, but I leave you with a caution. We have today talked a great deal and done very little to come to grips with our GHG challenge—and other speakers have said this too. We may well be at an historical turning point when we can turn from rhetoric and recrimination and begin to focus on action. In order to do so, we'll need to mobilize every resource at our disposal, every idea, every technology, and every ounce of political will.

Thank you very much, Mr. Chair.

[Dr. David Sauchyn, Research Professor, Prairie Adaptation Research Collaborative, University of Regina, As an Individual]

Thank you, Mr. Chairman, and members of the committee. I appreciate this opportunity to participate in your study of Bill C-288.

The preamble to this bill accurately describes climate change as one of the most serious threats facing humanity in Canada, one that poses significant risks to our environment, economy, society, and human health.

First, I want to make the observation that scientists do not believe in global warming. They don't have to. Global warming is not a religion. Global warming is a fact. It's not a question of whether you believe or not. The evidence for global warming is extensive, conclusive, and overwhelming. There no longer is a scientific debate about global warming. The debate has shifted to the analysis of the appropriate institutional, corporate, and individual responses to climate change.

As Dr. Burton pointed out, there are two categories of response, and those are mitigation and adaptation. My message will be similar to Dr. Burton's, although I take the slightly different approach in that I'm going to provide a review of the objectives of Bill C-288, and in particular, relative to the other proposed legislation, Bill C-30.

I'd like to congratulate the proponents of Bill C-288 for their attempt to restore Canada's commitments under the Kyoto Protocol. This international treaty is a first and major step in the effort to control greenhouse gas emissions, and thereby the rate of global warming. It establishes a common language, targets, and objectives. A single protocol supports international collaboration and cooperation. We have research projects in Chile and Ukraine, and I can tell you that because they are parties to the Kyoto Protocol, it very much facilitates our international research because we are speaking a common technical language.

A made-in-Canada solution, on the other hand, separates us from a process that was developed and monitored by an international body of scientists and decision-makers. Furthermore, the Kyoto initiative will lead to further action beyond 2012, and Canada must be involved in this further planning of science and policy to deal with the causes and impacts of climate change.

In terms of more meaningful and effective targets for controlling greenhouse gases, Bill C-288 is a major step forward relative to Bill C-30, the Clean Air Act. As climate change policy, Bill C-30 has three major flaws. First of all, Bill C-30 suggests that climate change is an air quality issue. It is not. Embedding climate change in the Clean Air Act is avoiding the real issue. Secondly, Bill C-30 sets targets for greenhouse gas emissions for the 2050s. This implies that by meeting these targets we will somehow bring climate change under control by the middle of this century. This approach demonstrates a misunderstanding of the climate system. The climate of the mid-21st century is being determined today by emissions of greenhouse gases. This is because there is a lag of several decades between activities that modify the atmosphere and the full response of the climate system. As the preamble of Bill C-288 states, the problem of climate change requires immediate action.

I refer to these flaws in Bill C-30 only because Bill C-288 addresses these and avoids them. However, there is a third shortcoming of Bill C-30 that is perpetuated by Bill C-288. Both of these bills address only a small component of Canada's commitment under the Kyoto Protocol. Bill C-288 explicitly deals only with paragraph 1 of article 3 of the Kyoto Protocol. There are 28 articles in the Kyoto Protocol, and article 3 alone has 14 paragraphs.

To this brief I have appended other articles of the Kyoto Protocol to remind the committee that Canada is also obligated to address climate change and its adverse impacts, including capacity-building and adaptation measures, facilitating adequate adaptation to climate change, cooperating in scientific and technical research and developing systematic observation systems and data archives, reducing uncertainties related to the climate system, and addressing adverse impacts of climate change and the economic and social consequences of various strategies.

We're also obligated to implement education and training programs and to strengthen national capacity, to facilitate public awareness, and to share the proceeds from certified activities to assist developing countries to meet the costs of adaptation.

I'm making the same argument we just heard from Dr. Burton, which is that we have a policy vacuum in this country with respect to the impact of and adaptation to climate change. There are no references in either Bill C-30 or Bill C-288 to these important obligations.

Canada needs a comprehensive climate change strategy to avoid the adverse consequences of climate change. Besides the mitigation of greenhouse gases, a comprehensive strategy should address our understanding of the climate system; the influence of human activities; the impacts of climate change; the risks and the opportunities; and the necessary adjustments to public policy, resource management, engineering practices, and infrastructure design.

By focusing public policy on only one of these five components of a climate change strategy, Canada is at risk of failing to meet its treaty obligations, and in general, Canada is failing to deal with climate change.

I want to conclude by describing the impacts of climate change in my home region, the prairie provinces. I'm with a research institute called the Prairie Adaptation Research Collaborative, or PARC, based at the University of Regina. PARC was established with funding from the federal government and the governments of the prairie provinces. We were asked to research the impacts of climate change on the prairie provinces.

Currently, PARC is responsible for preparing the Prairies chapter of the national assessment of climate change that the Government of Canada will release next year. Therefore, I can tell you with confidence that the climate of the prairie provinces is changing dramatically. All the weather records show this. Summer river flows are declining as the Rocky Mountain glaciers are disappearing and as warmer winters are producing less snow and ice for the spring runoff.

The growing season is getting longer and warmer; however, the productivity of the forests and the farms is constrained by declining water supplies. The recent weather has included the worst drought since the Prairies were settled by Europeans. It also has included the worst flooding. The drought of 2001-02 cost the economies of Alberta and Saskatchewan $3.6 billion. This is in reference to the adaptation deficit Dr. Burton mentioned.

Ecosystems have begun to change. There are threats to the integrity of the ecological services that support agriculture, forestry, the recycling of water, and the traditional lifestyles of our first nations.

The Rocky Mountain pine beetle has devastated the B.C. forests. This year it skipped over the Rocky Mountains. It now exists in Alberta, and there is a real threat that the boreal forests of Canada will be devastated by the pine beetle because it is surviving the warmer winters.

Finally, these shorter winters are also a problem for northern industries that require frozen ground to move materials and supplies. We are losing the advantages of a cold winter in the interior of Canada.

These are just some of the changes that Canadian scientists have documented for our region. Please note that I made no mention of air quality. The impacts of climate change are occurring first in the Arctic and the Prairies, where air quality is just fine, thank you, except for maybe Calgary or Edmonton.

The rate of climate change and its consequences will almost certainly accelerate through the coming decades, and until we are able to retard the rate of greenhouse gas emissions, as a Canadian citizen and a climate change scientist, I am deeply concerned by actions that would have Canada undermine our international treaty on climate change. I'm also deeply concerned by the lack of action to deal with the climate change and impacts that are presently occurring.

Our children and their children urgently need your leadership to create public policy that will reduce greenhouse gases as quickly and as much as possible. However, we also need your help to enable individuals, institutions, communities, and industries to adapt to the impacts of a rapidly changing climate. These impacts are already serious, and we are already locked into more severe impacts in the immediate future.

Thank you.

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

Thank you, Mr. Chairman.

First of all, I don’t see any problem with that. I know that we have obligations, but we must remember the principle behind the motion that we adopted regarding Bill C-288. It intended to ensure that this bill could be sent back to the House before this current session ends. I do not have the parliamentary timetable in front of me, but isn’t it possible this schedule change could prevent us from sending this bill back to the House before the end of its session?

[Maurice Vellacott, Conservative, Saskatoon—Wanuskewin, SK]

The interesting thing that I picked up from a comment you made, Mr. Paton, in terms of the billions of dollars required, was that every $1 billion manufacturers invested in new technologies and structures between 1990 and 2003 resulted in a 0.2% annual reduction. There's a need, obviously, for technology. I think that was the underlying point here.

So I say this kind of tongue-in-cheek here that I assume, then, that the CCPA was not making big moves in terms of converting to income trusts with the need for technology and that kind of stuff. I'll just leave that hanging out there on the record, because I do believe there needs to be capital infused into the technology if we're going to get some major gains in manufacturing, in chemical, in terms of energy, oil, and so on.

I have just a few comments, though, because I want to get to the heart of my question, which is the whole matter of setting targets and getting credible, realistic targets. I'll set you up with a few quotes here, first off by no less an individual than Michael Ignatieff.

He says, “As a practical matter of politics, nobody knows what (Kyoto) is or what it commits us to.” He also said, “Kyoto allows polluting countries like Canada to meet its objectives by buying credits from countries emitting less carbon dioxide. We'll clean up Kazakstan, but we won't clean up downtown Toronto.” And “Despite efforts by the previous Liberal government to curb emissions growth, Canada cannot now meet the Kyoto target of cutting greenhouse gas emissions to 6% below 1990 levels between 2008-2012 without spending billions of dollars buying emissions credits from other countries.”

He goes on to say at another point in the Globe and Mail that Canada is not on track to meet its commitments under the Kyoto Protocol.

I just want to get to something very basic here. As a father of four children, as a grandfather to five, when I make commitments and promises to my children or others within the family configuration, there is an impact in terms of what I say.

So my question is this, and I'll set it up this way. If I were to say to my children or my grandchildren--and that's more difficult to do, because they are at the other end of the country in Saskatoon. If I were to sit those four children down--two of them are married, but there are five grandchildren--and say, “I'm going to spend two hours with you every night, doing what you want to do, a family time kind of thing every night, with each one of you separately....” So we get into this, and it's obvious pretty soon that I'm not able to keep that commitment. I guess, for one, I destroy a trust and credibility. I hurt the relationship, I think, by making those kinds of promises. It's obvious that I can't keep those commitments.

Our party, the Conservative Party, is actually interested in and willing to take action on clean air in terms of greenhouse gas reductions as well.

So my question, in a philosophic sense, is to several of the presenters--Mr. Villeneuve, Mr. Paton, Mr. Rutherford. When we make commitments of the unrealistic sort that we did in Kyoto, what is the net effect in terms of our credibility, our trust relationship with other partners internationally, across the world stage, and so on, when you set those unrealistic targets, as acknowledged by Mr. Ignatieff and others? Those are the kinds of targets that are emphasized in the Kyoto Protocol and also in Mr. Rodriguez's Bill C-288.

What, philosophically, is the impact of making unrealistic commitments like that?

[Paul Kovacs]

If I can speak very briefly to the second question, I am an economist. I guess economists speak on most issues or something. I'm not quite certain what the reference to the profession is about.

I believe very much that it's good economics to set targets and measure performance against targets. I think it's good politics as well. The spirit of Bill C-288 to do that is a very positive thing. I only remind the committee that in addition to Canada ratifying Kyoto, Canada also ratified earlier the Framework Convention on Climate Change. I think that's actually a more important document, and that was much of what Professor Villeneuve talked about.

The bigger goal is the climate change convention. It deals with issues like adaptation and another set of issues, including informing the public about progress. To measure progress against the climate change convention would actually contribute more to this issue.

Thank you.

[John Godfrey, Liberal, Don Valley West, ON]

Thank you very much, everybody. It was a most helpful session.

I have two questions, and these are addressed to Messrs. Stone, Rutherford, Kovacs, or Villeneuve, whoever wishes to answer.

My first question relates to Mr. Paton's presentation in terms of the difficulties he sees in moving in a way that responds to the urgency you describe. I would like to know what your reaction is to his difficulties or the case he made, in terms of how the two balance off—the urgency you describe and the problems he describes.

The second question relates to the bill we're studying, Bill C-288, which is simply an attempt to increase accountability in terms of our obligations under Kyoto. Imperfect though Kyoto may be, do you think this is a helpful way of increasing the urgency of our response to the urgency of the problem you describe?

I'll turn it over to whoever would like to respond from among the four I asked.

[Richard Paton, President and Chief Executive Officer, Canadian Chemical Producers' Association]

My name is Richard Paton and I'm the president of the Canadian Chemical Producers' Association. With me is Gordon Lloyd, our vice-president of technical affairs, who I understand seems to very often appear in front of your committee.

Thank you for the opportunity for CCPA to appear in front of the committee to review Bill C-288 on the important issue of climate change.

CCPA is not here to speak for the industry in general, but we will talk a little about the overall issues facing our sector, in particular, and focus on the challenges and experiences of the chemical sector, which is Canada's second largest value-added manufacturer. This will perhaps provide members of the committee with an insight into how industry is trying to deal with this issue.

Our association recognized the concerns about climate change after the Rio de Janeiro convention around 1992, and as a result, we started to report and monitor our emissions of greenhouse gases starting in 1992. In 1995 we also developed a policy on climate change to help our companies address this issue and to reduce emissions. We've been involved in this issue for a long time.

Because we take this issue seriously, we believe governments must develop policy approaches that are sound, realistic, and effective. This will require a significant change in how Canadians live and will require a significant economic intervention as well as provincial coordination.

Since our government agreed to the stabilization target in the mid-1990s, we have yet to see any program to meet this commitment that is either workable or effective at achieving the environmental priorities for Canadians. These programs all had the potential to create grave problems for the economy and, had they been implemented, probably would not have helped achieve environmental priorities either.

We thus have serious concerns about a bill that proposes that the federal government adopt the Kyoto targets without a clear idea of how this could be accomplished and the impact this would have on the Canadian economy or society.

On a note about our association, if our association was given credit for the early action we took as an association since 1992, we would meet the Kyoto targets for our sector. However, no proposed program has recognized this contribution.

As you can see from the charts that I believe you have, the top chart shows that Kyoto called for a 6% reduction in greenhouse gases from 1990 to 2010. On a CO₂ equivalent basis, CCPA members will achieve a 56% reduction by 2010.

By 2000, CCPA members had already reduced GHG emissions by 43%. While CCPA members' GHG emissions will have declined 56% by 2010, our output will have increased 26% from 1992. We're creating a high-intensity improvement basis of around 65% improvement.

We've been reducing emissions for over a decade and will continue to make improvements. I think how we have done that is instructive for how you deal with this issue. It's been done gradually. We've been making improvements of about 1% to 1.3% a year in greenhouse gas performance. We've been making those improvements linked to our economic objectives, as well as reducing other pollutants linked to clean air. We've continued to make that kind of progress. These investments were aimed at reducing energy costs, which have economic benefits for companies and a return on investment.

We also had one huge technological breakthrough at DuPont that is limited to one plant and is a “once in a generation” kind of improvement. It illustrates that these can happen, but they happen very rarely.

Our environmental performance is not unusual for large manufacturers. As the third chart illustrates, you'll see a chart that was developed by the Canadian Manufacturers and Exporters association showing general manufacturing progress on greenhouse gases.

I know in our parliamentary day, many parliamentarians were quite surprised to find that manufacturers are generally 7% below the 1990 levels, and large manufacturers as a whole, steel, aluminum, and others, will be 20% below the Kyoto targets by 2003.

There's a lesson to be learned here. The lesson is that capital investment is the key to reducing emission intensity in manufacturing and, in the longer run, the key to absolute emissions. Over a long period of time, investment works to reduce pollutants and greenhouse gases, it works to reduce energy costs, and it helps productivity. This has all been done without regulation and without targets.

Recognition of this fact is a critical foundation to build climate change policy. As you can see from the second chart in your package, also done by the Canadian Manufacturers and Exporters association, there is a very strong link. The chart shows that as the investment goes up the top curve, the emissions intensity performance showed by the bars that go down improves substantially. On average, every billion dollars manufacturers invest in new technology and structures between 1990 and 2003 resulted in a 0.2% annual reduction in their emissions intensity.

Unfortunately, as you can see in this chart, something happened around 2000. Improvements in emissions intensity slowed as manufacturers cut back on capital spending, and this reflects the impact of the high-dollar energy costs and Asian competition, which reduced available capital for investments.

Targets for greenhouse gases can be set if they fit with the performance of our industry and with natural investment cycles. This is a win-win for industry and for the environment, but it takes time to make these technological changes and it takes money.

An important contribution this committee could make to Canadian climate change policy would be to recognize the link between new capital investment and improved environmental performance on greenhouse gases and other pollutants generally. It's extremely important to understand the realities and restraints on how companies invest capital and the technological realities of reducing greenhouse gases.

Why are we concerned about this bill if we've had all that great performance? At this point in time, no one can seriously believe that Canada can meet its Kyoto targets by reducing emissions. It's basically just too late. Potential for action that would meet these Kyoto targets by actual reduction is now long past. It's a long-term problem; it's going to take a longer-term solution. Ensuring that the Kyoto targets are met would require Canada to purchase credits abroad. To look back at the Liberal platform, that's the plan that was basically going to have to happen, at a cost of around $5 billion a year over the Kyoto commitment period of 2008 to 2012.

The math is very simple. According to the previous government's projections, Canada was about 270 million tonnes short of our target in 2005. That number is increasing as the economy grows. The Environment Commissioner used a $20 tonne as a base price for purchasing carbon. You just multiply 270 times $20 and you get $5.7 billion. Maybe we can do better than that; maybe we'll do worse. The number is going to be $4 billion or it's going to be $6 billion, but it's a big number, and we're going to have to deal with that number in order to be talking about meeting the Kyoto targets.

The industry committee's work has noted that the manufacturing sector is in trouble right now. We've seen that with pulp and paper plants closing, which I know many members have commented on in the House. The huge cost of buying foreign credits, even when our performance in the manufacturing area is remarkably good--in fact, it's probably going to be below Kyoto--would have significant impact economically and reduce our ability to attract further investment. It may also reduce our capacity to meet other environmental objectives relating to clean air and water.

I'm sure some of you will debate the economic impact in trying to meet the Kyoto targets. CCPA is not the group proposing this bill. The onus is on the proponents to demonstrate that it will not have serious consequences for the economy and on individual Canadians. As far as I know, no substantial analysis has been done that would give me any comfort that the bill has taken into account these potential consequences. In fact, I've not seen a legitimate and credible analysis by government to date of the potential impact of meeting Kyoto targets. Until that analysis has been completed, our association cannot support this approach or this bill.

My final point is that addressing climate change in a serious way, as is needed, means looking at what can be done realistically in the short, medium, and long term and recognizing that we are committed to this issue in the long term. The government's notice of intent with respect to the clean air bill does set out a framework that could be used to do just that if it's implemented effectively. It recognizes that we need an integrated approach to clean air and climate change, to working with the provinces, and this needs to be an approach that recognizes the critical role of investment and business cycles.

In conclusion, we believe that to make progress there has to be a carefully developed path to achieve reduction targets. We have not seen a workable plan yet. Until it is clear how Canada can meet such targets and at what cost to economic, fiscal, and environmental priorities, we cannot support this bill. After ten years of discussion on Kyoto, I have not yet seen a government do this kind of assessment. Without any target, it's going to be unrealistic and probably counterproductive.

The evidence illustrates that technological change and capital investment are the key drivers to greenhouse gas reductions. This is something that takes time and cannot be legislated into existence by the government. Right now the technology is simply not available to economically capture greenhouse gases, particularly in a short timeframe. There is no program that adequately addresses this fact, and to that end the alternative is to bear the huge cost of purchasing foreign credits that have no environmental benefit for Canada or Canadians in terms of absolute reduction of greenhouse gases.

Thank you very much for your time.

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

That is fine with me. We can discuss the broad outline of the Kyoto Protocol, the cost, the mechanisms, but I am intent on doing one thing, and that is examining Bill C-288. I feel that it is important. Our mandate here is not Kyoto, we should try to see if we can amend this bill to make it acceptable to everyone. For example, clause 6 gives the provinces a certain amount of flexibility. That is something that concerns me greatly, and I would like to tighten up the definition and see how the provinces could implement the objectives that are set out in the bill's preamble.

We should devote some time to discussing how the provinces will implement this bill and how much flexibility they will be given. I do not know if one meeting will be enough, but this is something that we must certainly do. Personally, I do not think we will need more than one sitting out of six to discuss how these mechanisms to provide flexibility to the provinces would work. I think it is an interesting suggestion. And one meeting out of six is not too much to ask.