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.

Canadian Environmental Protection Act, 1999

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Mr. Speaker, I want to make two points. The first point is that I agree with the member from the New Democratic Party when he said in his speech that biofuels are not the only reason for the rise in world food prices. I think it is important to acknowledge that. There have been significant droughts around the world in the last number of years that have seriously curtailed some of major wheat exporting countries' ability to produce wheat.

The ever changing diets and ever growing populations in the developing world are causing a much increased demand for wheat, soybeans and corn. For example, every pound of meat requires seven pounds of input, such as corn, wheat or soybeans. As the diets in the third world and the developing world change and an ever increasing demand for meat takes place, the demand for these crops increases as well.

The third reason that needs to be taken into account is that energy prices have been increasing in general. Energy costs are a significant portion of the agricultural inputs.

It is commendable that the member mentioned these three other major factors which have contributed to the rising price of food.

The second point I want to make is to address the concern of many who say that biofuels require more energy than they produce. That may very well be the case, but so do solar power and wind energy. One can make the case that solar power and wind energy in past years required more energy than they produced.

The reason that incentives and subsidies have been put in place is to do two things: first of all, to ramp up the economies of scale, so that the cost per unit of production goes down; and second, to provide for greater research and development so that we can get cheaper products, cheaper energy out of these various sources of energy.

While today certain biofuels may in fact require more energy than they produce, the whole idea here is to provide the incentives and the subsidies so that at some future date research and development along with economies of scale will drive down the price and also the carbon footprints so that these in fact will become carbon positive.

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

Mr. Speaker, I am not sure what the exact question is, but I will comment on the two points that my colleague raised.

The first point is self-explanatory and I certainly agree with his statements.

One of the criticisms many people make about biofuels is that they have more input than the actual energy output. We have to look at liquid biofuels and the devastation that they have caused, not here so much, but in poorer countries in the world. My hon. colleague from Western Arctic and I were at a meeting a few weeks ago here in Ottawa where people from Paraguay and Asia talked about the devastation by this industry on their land and the amount of energy that was required to produce the biofuels, while at the same time displacing farmers.

We have to look at input costs, the energy for inputs, for transportation, and the emissions of greenhouse gases from deforestation. I would submit that the comparison with wind energy and solar energy is not the same.

I would like to end my reply with some questions. Would the hon. member, if given a chance to answer, think that the amendments that I have proposed in my initial submission to the committee cover all of these concerns? Does he believe that we could still move forward, but not give the government a green light to do whatever it wants in the area of biofuels?

[Lloyd St. Amand, Liberal, Brant, ON]

Mr. Speaker, I have listened with interest to the speech by the member for British Columbia Southern Interior. I have come to know the hon. member because we sit on the agriculture and agri-food committee.

The comments by the member opposite are typically thoughtful and he is typically prepared, but like all of us, he is occasionally wrong. Let me say that this is one of those occasions.

It is commendable that the member recognizes that corn producers are now able to earn a living. After many years of record low prices, thankfully prices have rebounded and corn farmers are now able to earn a living. The member opposite has recognized that.

I have two questions for the member. First, he surely recognizes that farming practices in Canada are not commensurate to farming practices in some other countries. There is no suggestion, for instance, as I know it, that land in Canada is being ravaged as it is being described as being ravaged in some other countries. Second, would he also concede that it is only a small amount, a fraction of arable land in Canada, which in his phrasing is being used for purposes other than the consumption of food? Would the member comment on both of those questions?

[The Acting Speaker, Royal Galipeau]

The hon. member for British Columbia Southern Interior might take note that there are two other MPs who would like to ask him questions, including one from his own party, and there are four minutes left.

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

Mr. Speaker, I will not limit my answer to a no or a yes.

I would like to thank my hon. colleague across the way for his comments and his sympathy for me being wrong today. I would like to think I am on the right track, as, I guess, most of us do.

Once again I will refer back to the amendments that we had in committee which were debated and defeated. I believe those amendments would have covered us in a policy that would have taken into account the biodiversity and the environment and would have ensured that we did not devote large tracts of land to biofuel production.

Even though we have a very small portion of land devoted to this area now, there is a danger, because of increased pressure, of more good land being taken out of farming for food. That would be my concern.

However, I submit that by bringing this back to committee, discussing it and putting some of those assurances in, it could be a win-win situation for all of us.

[The Acting Speaker, Royal Galipeau]

The member for Brome—Missisquoi for a brief question.

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

Mr. Speaker, I would just like my colleague to tell us—since he has an agriculture background and growers have apparently already been promised that they will have corn to grow—what the chances are that corn production for animal feed or ethanol will change to corn production for human consumption?

I said earlier that world dry food reserves have decreased by more than half in five years. I added that surpluses could be exported. The members opposite immediately said that we wanted to export Canadian jobs. I never said that.

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

Mr. Speaker, I thank my colleague for his question.

The price is already high. The issue is not that growers will suffer if there are no more biofuel policies. There is a possibility. Corn can be transferred, planted and grown for human consumption. There is an international shortage. In my opinion, it would make more sense to feed people, give a little money to our growers and, at the same time, help farming in our country.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, my hon. colleague mentioned the solid fuel aspect of biofuel. Quite clearly, in my territory, the Northwest Territories, right now, because of the enormous cost of fuel oil, we are moving toward using solid fuel, biological fuel, in many applications.

If this policy were broad enough and had the correct kinds of conditions attached, there would be some incentives for this type of proposal as well.

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

Mr. Speaker, I think the time is right to explore other areas of biofuels, and solid biofuels is one of them. Research has shown that it is efficient and that it can be the state of the art for the future.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, I am pleased to join in the debate today. I am not a member of the agricultural committee but some day I may have that opportunity. Coming from an urban region, I am sure it would be quite a learning experience.

When I first came here eight years ago there was a lot of talk about ethanol and about our farmers. Farmers were demonstrating because they could not get a proper dollar for a day's work. That was my first introduction to the struggles of our farmers and the difficulties they were facing. They needed an alternative for what they were growing that would provide them with a reasonable day's wages and ethanol was exactly what they needed.

We have now found out that there are a whole lot of other issues that need to be addressed if we are going to really help our farmers and ensure they get adequate reimbursement for a hard day's work. Until those of us in urban regions spend a whole day on a farm, we cannot appreciate just how hard and difficult a farmer's job really is. We need to appreciate the fact that people still want to farm in Canada so we need to find ways of ensuring they get a decent day's pay for their work. These are the people who provide the food on our tables but we do not pay enough attention to that fact.

I am pleased to have the opportunity to speak to Bill C-33 today which seeks to amend the Canadian Environmental Protection Act with respect to the provisions for the regulation of fuels. It would establish minimum levels of biofuel content in gasoline, diesel fuel and heating oil and would be implemented within the next three to five years.

I support the bill in principle, as does my party. I look forward to discussing the parameters of any new regulations that will come from committee. We look forward to ensuring the regulations reflect the desires of most Canadians.

Although I support the bill, it does raise significant questions about the government's policy on renewable fuels and climate change, questions that we have been hearing from our colleagues across the way. Those are areas on which we must all come together in a much stronger way so we can be ready for the future years that will be very challenging.

The government claims that the bill is part of its overall strategy to increase the use of ethanol and yet it refuses to set the minimum standard for ethanol use in fuel above 5%. Clearly there is a difference. The committee will look at all of these things and ensure the bill respects and achieves its intended goals. Meanwhile, all cars sold in Canada already use up to 10% ethanol. The Ontario government is setting that as the minimum standard in the province.

Despite the fact that cellulose ethanol can reduce greenhouse gas emissions by up to 64%, the government has not been aggressively doing everything it can to mandate the expansion of that ethanol specifically so that it would clean up our environment and make our air better to breathe.

The government's perversion to this issue is also manifested on the taxation front where it removed the excise tax exemption on biodiesel and ethanol fuels and thereby heavily taxing the cleanest versions of ethanol. One really needs to question that policy if that is the government's direction. It just does not make sense. I would hope that when these regulations are scrutinized, we get a better understanding of the reason that it should be increased to 10%, if that is what we are doing, especially in the province of Ontario.

Bill C-33 is really just a technical amendment to the Canadian Environmental Protection Act. It would provide the government with useful additional authority so that it can look at various regulations and start making changes to those regulations in a faster and clearer way.

The Liberal opposition is in favour of ethanol as part of our energy mix now and in the future. Many people are looking at ethanol as being one of the tools needed in the toolbox to help us when we are dealing with climate change, particularly second generation ethanol which uses agricultural waste and non-food crops. We have clearly gone a long way from the growing of corn to looking at where we go in the future by using agricultural waste and non-food crops so that it would not hinder the production of food and the providing of food for the world that we all need. It would have the twofold effect of being a winner on both sides of that issue.

The Liberal opposition supported an amendment at committee that would compel the government to perform a detailed analysis of the economic, social, environmental and additional implications of Canada's ethanol industry exactly one year after it comes into force. That is a very important motion passed at committee that would ensure an analysis would be done of all the impacts of Bill C-33.

The government has committed $2 billion to ethanol but it has been deliberately vague on the details. That is not the first time and not the first issue. Vagueness is one of the tributes that the government seems to have when it comes to announcing all kinds of things but not giving a whole lot of information on the details. However, our job is to ensure those details are clear and those regulations will be what Canadians want.

The government must tell Canadians what form of ethanol will be primarily promoted and it must explain how ethanol fits into its environmental, agricultural, international development and fiscal policies. We cannot have a policy on ethanol that does not take into account all the different impacts that these little things, as somebody might want to call them, these different tools will have on climate change and on the environment.

The way I understood it, the government's former highly criticized ethanol plan was supposed to support investments by farmers in ethanol production facilities. I was out west some years back and had a tour of what was to be the next great ethanol facility. Everybody was excited because it would provide an opportunity for farmers as well as focus on climate change. It was to be the future. Now people are having second thoughts and are second guessing some of those decisions.

However, funding would be directly tied to investments by farmers, which means that before any government funding flows toward developing Canadian ethanol production, Canadian farmers would need to first shell out their own money. Any of the Canadian farmers who I have spoken with are not rich people. They are all looking for assistance in order to look after their families and produce the various products in which they have an interest. Coming upfront with that money, I think, would be an extremely big challenge for a farming industry that is under threat pretty much all of the time. If no upfront government money is provided, it would be very difficult for many of those farmers who are looking to the government for leadership.

I would remind members how many rallies have been held in front of the House of Commons by farmers who have driven on tractors thousands of miles to come here to protest and to ask us to be fair. It did not matter whether it was the Liberals in government or the Conservatives in government, the issue was that farming is an important industry for Canada and our farmers need assistance.

By comparison, the Liberal governments made direct investments of over $117 million of upfront support for the construction of production facilities across Canada. As a result of those investments by the Liberal government, the production of ethanol was expanding at a higher rate than anyone had expected.

By not making direct investments, I am very concerned that ethanol expansion will not grow nearly quickly enough. Therefore, for it to be a tool in the toolbox, in addition to the many other things that are needed to deal with climate change, we are actually shooting ourselves in the foot rather than moving forward and clearly helping the farmers and helping Canadians overall.

The Liberals will continue to drive the need to promote biofuels that have been proven to yield high environmental net benefits such as cellulosic ethanol.

For the benefit of those who are watching at home and who may not know quite what that is, it is a particular type of biofuel produced from a structural material that comprises much of the mass of plants. We can see there is a lot for all of us to learn as we move forward to try to find alternatives to the fuel issues and the challenges that our farmers face. Corn stover, switchgrass and wood chips are some of the more popular materials being used for ethanol production.

Cellulosic ethanol is chemically identical to ethanol from other sources such as cornstarch or sugar, but has the advantage that the raw materials are highly abundant and diverse. We hear that from different spots around the world. There are many alternatives. This type of ethanol has lower greenhouse gas emissions than other forms and may help us to use crop lands more efficiently than is currently being done.

However, the NDP are deliberately misleading Canadians about the complexity of the worldwide food shortage, something that all of us in the House are concerned about and it is something that we all will have to work to overcome the problems and to contribute to providing food throughout the world. However, the NDP ignores a dozen or more identified factors at play.

For example, the desertification in Africa has severely diminished the agricultural output on that continent. What are those people going to do for food? We know of the struggles. We know all the other issues that thousands of people living in Africa are facing. These are going to add to those problems.

Rising energy costs has to be on the minds of everybody in the House, as it is with Canadians. Every time we turn around, the bills keep going up higher and higher. Rising energy costs have made farming much more expensive.

Trade rules and subsidies in the developed world have created market distortions. Many parts of the world suffer from the collapse of food distribution networks, widespread corruption and the refusal of governments to impose the rule of law.

Going back to the details of the bill currently before us, the new measures are administrative in nature and appear to give the government more control on regulations. For example, the government would enhance its ability to regulate fuel produced in Canada to be exported. Regulations may be made regarding the blending of fuels. The bill would also expand the bases upon which the government might distinguish among different kinds of fuels.

We will support Bill C-33 as we are in favour of the increased use of biofuels, such as ethanol, biodiesel, and other renewable fuel sources. We will move forward on a variety of bills that will help to deal with climate change and other opportunities for us to ensure that all of us do our jobs as we move forward.

This is fundamentally a housekeeping bill. There is nothing in the bill that will immediately affect any commercial interests or immediately require any fuel producer or vendor to do anything. It is a preliminary step that will allow the government to regulate all kinds of fuel within the same regulatory regime. From that perspective, the bill is an improvement over the current wording of the Canadian Environmental Protection Act.

It has been a great opportunity to speak to the issue. As a member who comes from the city of Toronto, I do not have a lot of opportunity to visit the farming industry, but I clearly recognize how we have to work together to ensure we protect the environment. We also need to move forward to ensure we do not add to the problems of the world shortage, which we clearly are addressing worldwide.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Mr. Speaker, the member of the Liberal caucus from Toronto is to be commended for her support for this legislation.

I want to provide a couple of comments.

First, I want to correct a misconception out there in the public that somehow Canadian farmers are making record profits. Today Statistics Canada reported that last year Canadian agriculture made a net income of $1.7 billion.

Before we all think this is a tremendous amount of money, I would point out that this is about the profit of one company in one quarter among the big five banks. In other words, last year Canadian chartered banks in each of the last quarters made about that much money in one quarter.

I do not say that to begrudge the banks for being successful. The financial services industry is incredibly important to Toronto, Montreal and a number of large Canadian centres. I used to work in that industry and it is incredibly important we have a vibrant financial services industry, but I quote those numbers to put this in perspective.

There are 220,000 Canadian farms. If we divide a net profit of $1.7 billion among those 220,000 farmers, we end up with a net profit, per farm, of about $7,700 per year. I do not know very many Canadians who would invest hundreds of thousands of their own dollars, hundreds of hours of labour and stress to produce $7,700 a year in income.

We need to ensure there is no misconception out there that somehow Canadian agriculture is making a windfall profit from the new structure of pricing in the agricultural sector.

The second point I would make is if we are to point the finger at the reason why the third world is struggling to feed itself, one of the areas we need to look at is the European Union's common agricultural policy, which dumps 40 billion to 50 billion euros a year into subsidizing European farmers.

Subsidizing European farmers itself is not the problem. The problem is when they overproduce certain commodities, which they then dump on to the third world market, undercutting local producers in the developing world and putting them out of business. In my view that is the heart of the problem with respect to the developing world feeding itself.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, clearly we all acknowledge that Canadian farmers are having to live on an average of $7,700 a year or whatever.

Eight years ago, when I first came to Parliament, farmers were marching to Ottawa, looking for help and assistance. Clearly, they were struggling, but they were not getting paid enough for the crops they were producing. We say that we all love them, but that will not put food on the table.

I certainly agree with my colleague on the whole issue of how we can help the farming industry stay viable in Canada. Ethanol is one of those options. We cannot ask people to live in a country as rich as Canada and to stay in the business when they only earn $10,000 or $20,000 a year. They cannot cope with that. They cannot even pay their taxes.

The cost of fuel is going up every day and that has a big impact on urban regions like Toronto and Montreal, but it has a bigger impact on the farming industry. Farmers need to fuel their tractors and the rest of their equipment and they travel a farther distance to get from point A to point B.

We need to be supportive of all the opportunities for different ways of doing things. At the same time, as I said earlier, the second generation will have more opportunities, by the sound of it, when we get into the ethanol. However, we have to continually find that balance to help all those in the farming industry. We are grateful they are still committed to growing a variety of things, whether they do it for the ethanol or to at least continue to provide the food and the produce that all Canadians need.

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

Mr. Speaker, I would like to tell the member for York West that l also support farmers. Our agriculture industry must become more profitable than it has been. We all agree on this.

My question is the following. In order to support agriculture, is it absolutely necessary to grow animal-grade corn for the production of ethanol? Could other types of crops not be used to support agriculture, such as the fruits and vegetables we need to eat? That is my question for the member for York West. Is the current government not just promoting ethanol to avoid developing agriculture legislation to help farmers? Is this not a way to avoid helping farmers have a better life, without getting directly involved?

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, it has always been a struggle. From all the reports I have read, farmers have been struggling for a long time. If they happen to be in a particular crop that is highly desirable, they will get a bigger dollar for it. Other than that they get far more competition today from other countries when it comes to what they get for the dollar. It is not just other materials. It is also in the produce.

I have an annual chestnut roast in my riding. We are used to paying a fair amount for those sacks of chestnuts. When went to order them for the next event, they were half the money. I said to them that there must be something wrong with them and asked them where they would come from. They were not coming from where we usually got them. They were coming from China. They would be brought into Canada and delivered to me at half the price.

No way can things move forward if we look at those kinds of differences between what some countries are able to produce and expect our farmers to be able to compete in any way, shape or form.

Ethanol is another way of helping them, but we need to look at other ways we can help them by producing other opportunities.