Bill C-33 (Historical)

An Act to amend the Canadian Environmental Protection Act, 1999

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

The House proceeded to the consideration of Bill C-33, An Act to amend the Canadian Environmental Protection Act, 1999, as reported (with amendment) from the committee.

Speaker's Ruling

[The Speaker, Peter Milliken]

There are two motions in amendment on the notice paper relating to the report stage of Bill C-33. Motion No. 1 will not be selected by the Chair, as it could have been presented in committee.

The remaining motion has been examined and the Chair is satisfied that it meets the guidelines expressed in the note to Standing Order 76(1)(5) regarding the selection of motions in amendment at the report stage. Motion No. 2 will be debated and voted upon.

I shall now put Motion No. 2 to the House.

Motions in amendment

[Dennis Bevington, NDP, Western Arctic, NT]

moved:

Motion No. 2

That Bill C-33, in Clause 2, be amended by replacing line 13 on page 3 with the following:

“Canada, including a review of the progress made in the preparation and implementation of the regulations referred to in subsection 140(1), should be undertaken by such commit-”

Mr. Speaker, I am pleased to have an opportunity to speak to this amendment, although it is not the complete amendment that we were looking for in this bill and certainly not an amendment that would lead us to understand how this bill would impact on Canada.

Bill C-33, as put forward by the agriculture minister and through the agriculture committee, is enabling legislation. It would give the government power to make regulations that would open up the ability for biofuels to be used in the Canadian transportation industry across the country. As such, it really does not have any of the characteristics outlined that may be the most important in dealing with this issue in the future.

Concerns are mounting around the world about the nature of the directions that countries have taken with the development of biofuels and with the promotion of ethanol from corn, sugar cane and soybeans. This movement, albeit having good intent, the process has shown and is showing a very detrimental impact on the food supply across the world. In much of the scientific material, it is not showing much improvement in environmental characteristics regarding greenhouse gas emissions and the use of agricultural land. The deforestation of land for the production of these crops has also added to the environmental concerns that people around the world are starting to recognize and talk about.

With the amendments that I proposed, which have now been reduced to the one amendment, we felt there was a need to have greater understanding of the direction that Canada was going to take with its biofuels policy from the House of Commons, not simply leaving it in the hands of the government to make regulations but to have a fulsome and complete understanding in the House of Commons as to the nature of the kind of businesses that we are entering into with biofuels.

That is the nub of it in terms of the motion that we are putting forward here today. We are down to the single motion and I understand, through the process of Parliament, how this has happened, and I respect that. I trust that other members will respect that we are trying very hard to understand how we can ensure this bill will work for Canadians.

This bill also represents the promise of a $2 billion expenditure by the government over a number of years toward subsidies to those who grow the product and develop the fuel that will be used in a 5% mix in gasoline across the country, as well with a significant percentage of biodiesel that will be produced.

The evidence is coming in quite strong that the greenhouse gas emissions from the development of the industry so far across the world have been less than satisfactory. If one includes the deforestation that has taken place in many countries outside of Canada that have bought into the biofuel idea, we find that greenhouse gas emissions per unit of energy consumed in a person's vehicle in this biofuel mix actually turn out to be higher, and that is unfortunate.

As well, there are potentially other ways in which this industry could go where we would see improvements in the greenhouse gas emissions. With the use of corn ethanol, we see about a 20% improvement in CO₂ emissions over conventional gas coming from farm production. However, that creates the problem of using greater quantities of arable land in order to produce corn for ethanol production.

In the United States, through its programs, 16% of its corn production is now turned into ethanol, and it is looking at increasing that to 30%. It has caused an increase in the price of corn around the world. It is not healthy for mankind to be moving in this direction at a time when considerable poverty and malnourishment still exists around the world.

In Canada, the move toward a 5% ethanol content in our gasoline will not be accomplished on our own land. If that is the direction the government takes with regulation and with the investment of subsidies, we will find that much of the corn production will come from other countries, specifically the United States. We will be competing with the U. S. industry for the same product, as well as with people around the world who rely on it as a food stock and in many other ways.

This is a problem that we need to address in Parliament. We need to talk about it, understand it and include it in the bill that is being put forward. Simply allowing this to move to regulation without considering the desirable characteristics and the direction the government will take when it does produce those regulations is not proper governing. It does not represent careful choice.

We saw that in the agricultural committee when it reviewed the bill. My colleague, our agricultural critic, tried unsuccessfully to put forward amendments that would allow more careful consideration of this issue. Many witnesses came before the committee but most of their testimony was in vain. We have come to where this bill is now at report stage.

Most of the political parties in this Parliament at one time or another have supported the concept of biofuels and yet, as we move along in the world, opinion is changing rapidly about the nature of what we are creating.

I had the opportunity earlier this week to have lunch with the minister of energy from Great Britain where biofuels was a topic of discussion. When he was asked what the thinking was of the European Union and his own country with regard to biofuels, he said that we needed to change what we were doing. When asked if this could be done through regulation, he said that we needed to have some policy that outlines the direction that we need to take with biofuels.

There is an emerging consensus around the world that, however well-intentioned the move to biofuels is, the end result is not practically looking to be the way that we wanted it to be. The best laid plans of men and mice sometimes go astray. In the case of biofuels, I think it is quite correct that we need to be very careful. Canada is at an advantage right now. We have not passed any laws. Since we have not entered into the large scale production of biofuels with any particular process, we can make sensible and correct choices that can lead this country in a direction that will work.

It is imperative that we deal with this issue in Parliament. It is imperative that we understand the direction we are going in. It is imperative that the people of Canada understand what we are doing, how we are working toward the future of our country, how we are making correct choices about our energy future.

It is not good enough to simply say, “Here is enabling legislation. Let's just turn it over to the government”. The government has not won that kind of respect yet. The government has not demonstrated that kind of commitment to climate change. It has not demonstrated that kind of commitment to energy security. It is not demonstrated those commitments that would make this kind of choice to simply turn over enabling legislation in the fashion that we are prepared to do in order make the correct choice. We are really caught on the horns of a dilemma.

I will leave my comments there. I am very happy to engage in this debate. It is a debate that needs the attention of Parliament.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I understand the member's concern, which is out there. There is no question that over maybe even the next decades the linkages and the conflicts between food policy, energy policy and environmental policy will be quite evident. We have a responsibility, globally, to ensure that our environment is protected and that there is a good food supply for the public. I understand his concerns. I do, however, feel we are moving in the right direction with this bill.

The question I have relates to the amendment itself. As I understand the bill, a review process is in place to review the economic environmental impact of developing production and the ethanol policy as we move ahead. The motion really refers to expanding the review into “preparation and implementation of the regulations referred to in subsection 140(1)”.

Could the member explain to me what is specifically meant by that amendment? Does it go beyond ethanol? Does it go to other energy areas? Could he give us an explanation on that amendment so we know specifically what the intent of it really is?

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, subparagraph 140(1)(g)(iii) is the determining clause, “the adverse effects from the use of the fuel...on the environment, on human life or health, on combustion technology and on emission control equipment...”. We have a process that would expand the review to ensure it encompasses all the details within the bill and would help out with that.

The amendment is taken in the absence of the other amendments that were declared out of order, and I recognize that. I will attempt in all ways to ensure that we proceed correctly with the amendment. The member can take it that the amendment will, in fulsome detail, help with the review process as outlined in the bill.

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

Mr. Speaker, I will talk a little about the legislation and put a question forward for the hon. member about his speech.

There are different aspects of this legislation. It is very important that we recognize the diversity of this. We have to ensure we take steps forward on the environment and we have to ensure we concentrate on it. However, this is also about agriculture. This is also about ensuring that we can increase the farm gate prices for our farmers by giving them more options.

I am really tired of seeing the NDP members consistently standing up for their cheap food policy in Canada. An amendment was put forward in committee. We worked with the NDP member of the committee to ensure a review process was put in place with which the NDP was happy and that everyone around the table could accept. Then we come to this place today and the NDP members are trying to put restrictions on it. They are trying to stand in the way of enhancing agriculture for our farmers once again.

When is the member going to finally stand up and support our farmers and support putting good prices and rising commodity prices in place for them rather than a cheap food policy?

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, the situation in the world speaks for itself on food prices right now. That is probably what we are having trouble with in response to the legislation. The situation in the world is changing. What may have been appropriate two years ago is changing rapidly.

We want to ensure that we make legislation that is good for the future, not good for yesterday or even today, but that works as we move along in the future. I am sure that is the ultimate goal of everyone in the House of Commons.

I do not particularly think this is a partisan issue to deal with the changing situation in the world as we speak. It is incumbent on all members to view very carefully what we are attempting to accomplish with the bill and put it into a perspective that will work. When we say that—

[The Deputy Speaker, Bill Blaikie]

I think we will have to leave it at that.

Resuming debate, the hon. member for Selkirk—Interlake.

[James Bezan, Conservative, Selkirk—Interlake, MB]

Mr. Speaker, it is a pleasure to talk about the biofuels policy, one that we promised in the last election and are delivering upon now. I think all parties can support this issue. I think everybody believes that biofuels are not only good for our environment, but also good for our agricultural industry.

As the chair of the Standing Committee on Agriculture and Agri-Food, we had a good discussion when we reviewed the bill. We heard from witnesses and we covered all aspects of this issue, from the ones who were pro-biofuel to those who were con. At the end of the day, the members around our committee table, from all parties, agreed that this policy needed to move forward.

We made some minor amendments to the bill. The main purpose of doing that was to ensure a review process would be in place. This way, as we move forward, as manufacturing comes online in our country in the production of biofuel, we can look at all the downstream impacts and ensure that not only are our farmers benefiting, but our environment is benefiting as well. We also want to ensure that the industry can supply the domestic market, especially as we see more vehicles on the road that are ethanol based or flex-fuel based and can use both biodiesel and ethanol as well as traditional gasolines and diesels.

We brought the policy recommendations to committee and they were agreed upon by all parties. I am disappointed this motion would come forward as an amendment to the bill today. Essentially it would obscure what we have already been able to accomplish.

We have to remember that we are talking about the entire Canadian Environmental Protection Act, which regulates all aspects of fuel production. By going ahead with this review, it is opening this up beyond biofuels. Right now we are only reviewing biofuels under Bill C-33 with the amendments we brought forward.

In the proposal, in clause 140(1), the whole review process will be opened up to all fuels and that is not the intent of Bill C-33. Bill C-33 is about the biofuel policy and how it will be implemented and carried forward.

One of the concerns of my NDP friend, which was also brought forward by a number of people opposed to this policy, is that grain prices are getting out of control and that is affecting the price of food. They are blaming biofuels in the world for creating this price increase.

The reason the price of grain is going up so fast is because we have the lowest carryover stock in the last 50 years. Coarse grain stocks around the world are at all time lows, but that is not because of biofuels. That is because we have a growing population. It is also because countries like India and China have a growing and blooming middle class who are buying up higher quality food products and are consuming not only Canadian grains, but grains around the world.

We have also had some very difficult growing conditions. The prairie region last year only brought in a 78% crop. There was some drought in certain areas and difficult harvesting conditions in others. The same is true in Australia, a major grain producing area. It has had three successive droughts and last year brought in less than 50% of its normal production. The U.S. mid-west and western Europe have also had extremely difficult situations and came in with less than a bumper crop.

As long as these major areas, which produce the bulk of the food grains in the world, are having difficulty, we are not going to have the carryover stocks that we need to feed our growing population, especially certain areas of the world that now find themselves with better wealth and ability to buy higher quality food stocks.

We have to look at the whole gamut of the biofuel policy and how that impacts grain production around the world. We have to remember that biofuel production in Canada is really at its infant stage. We are only starting to move forward now. Some minor production has happened historically.

We are only now starting to see spades in the ground and new plants actually being built. That will start to produce the biofuels to hit our target of 5% ethanol in all fuel content and 2% on biodiesel. If we look at the total acreage in this country and the amount of grain it takes to produce either ethanol or biodiesel, it will only take about 2% of our land base.

There are also other opportunities. We already have a couple of biodiesel plants in this country that are making use of feedstocks from abattoirs and rendering plants. They are using excess brown oils, old greases from the cooking industry and those left over from the rendering industry to make biodiesel. A waste product can be used for some good to produce a biodiesel product that is still very clean for the environment.

There is a great deal of research in the cellulosic ethanol industry that our government as well as other governments around the globe have been supporting. Cellulosic ethanol can be manufactured from products such as switchgrass, wood shavings and wood chips, byproducts left over from our forestry industry. That is starting to come into production as well.

When we look at the overall aspect, a number of different feed stocks can be used to generate the biofuels that we want to see accomplished through Bill C-33.

It is unfortunate that this amendment is coming forward. It is muddying the waters. It is not looking at what we have already accomplished at committee, in consultation with the various players around the table. I am concerned that this has greater implications than just in the biofuels industry and could impact upon the entire fuel industry.

Finally, one of the concerns of Canadians is the rising prices of gasoline and diesel. I am really supportive of the biofuel policy not just because it is good for the environment, good for the farmers and will create jobs and rural development in the rural towns I represent, but because it provides another competitor in the marketplace.

We will have players in an industry that are community owned, owned by farmer groups or smaller businesses who will go out there and sell ethanol and biodiesel against the other refineries out there that are controlled by the major oil companies. This is an opportunity to have true competition in the marketplace with some new products.

Right now the price of ethanol in the North American marketplace is less than gasoline and it has the ability to keep the price of gasoline below what it would be if it was 100% petroleum.

It is important that we bring this biofuel policy into play as quickly as we can so that we can actually have that increased competition, hopefully bring down prices or at least have another source of product that can not only increase supply, but also undercut the other petroleum products that are being offered as normal gas and diesel.

Overall it is a win, win, win. It is a win for consumers, a win for the environment and a win for our farmers.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, it is quite unusual to be able to agree with the government on something.

The bill moving forward and bringing in the regulations to make it possible to have the ethanol and biodiesel blends, we believe, is very important.

We have had a number of discussions about this at committee. The member has been to the U.S. and elsewhere. I ask the member, where is the government intending to go in terms of research and development into other products?

There are discussions in the United States that they will move toward production of cellulosic ethanol in the not too distant future, in five or six years. I am wondering if the member can give us some estimation of what will happen in terms of research and development in this country. That is important as well.

Could he explain a little further what this is doing for the hopes and aspirations of the farm community in terms of grains and oilseeds? It is the first time in quite a while that I have seen a sparkle in the eyes of some of the grains and oilseeds producers and I think that is a good thing.

[James Bezan, Conservative, Selkirk—Interlake, MB]

Mr. Speaker, I want to thank the member for Malpeque for his great work on this policy, something that both of us agree we need to go forward on.

There is no doubt that the grains and oilseeds industry across this country has had some incredibly difficult times. It does not matter if the grains and oilseeds producers were dealing with drought, depressed world markets, or increased subsidization from Europe, Japan and the United States, it always seemed that they were against the wall and there was just no long term outlook that proved to be favourable.

Now the circumstances have suddenly changed. There is a biofuel industry that has essentially created a marketplace for grains and oilseeds producers that is equal to the market of Japan, just right here in Canada. We also know that world prices are going very high and that is good news for our farmers. It means that they can make some long term plans on reinvesting in their operations and on making sure that they invest in the proper technology, and continue to be at the leading edge of new production and management techniques.

The member asked me about other sources in research and development. We do need to be doing a lot of work in this area. That is why we have invested dollars in research and development and through our community futures development groups to ensure that local organizations, as they move forward with developing their own plans for ethanol and biodiesel plants, have the resources for business and environmental planning and are able to get their companies off the ground. We have also supported companies like Iogen, which is doing a lot of great work in cellulose and making the sugars in cellulose available for ethanol production.

We are going to continue to move ahead and work along with our partners around the world to ensure we produce a better product, and a product that is going to be definitely good for the environment and make use of more of these waste products that right now we are just throwing into landfills.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, in some ways, my colleague's speech and the questions that followed are making my point in saying that there is very much a need to set standards and understand where those standards are going to go before we pass enabling legislation for this particular industry. We have an industry that we can influence, that we can put in the right direction, that we can give those qualifications to that will drive it toward being greenhouse gas compliant and that will drive it toward investors investing in land that will be used strictly for the production of biofuels. Those sorts of things are available to us right now. They should be considered.

The member has made the point quite clearly that he wants these things, so why would we not include these in a bill in a very careful fashion?

[James Bezan, Conservative, Selkirk—Interlake, MB]

Mr. Speaker, the member talked about standards and those types of guidelines. Those are things that are put into regulations, not in the act. The member for Western Arctic is trying to muddy the waters and tie the hands not only of government but of industry. We want to make sure that we provide the proper regulations so there are quality standards when it comes to fuel.

As a farmer, I do not think I am really that interested in having somebody dictate that only a certain amount of my land base is going to be used for biofuels when there is a biodiesel plant sitting across the road. If that operation wants to make sure it is getting the best for its operation, it should be allowed to sell to whoever will pay the most money. I do not think we should be regulating that.

We know we need to have a lot more research done, and this is again something that we do not need to do through regulation, but in new variety research. Especially as we look to western Canada, we want to do more in ethanol. That is going to require a wheat based ethanol industry, and new varieties that produce more and produce the type of ethanol we want. Those types of varieties need to be bred and registered. We need to move forward on that as quickly as possible. The same can be said for canola, soybeans and corn. We want to make sure farmers have the ability to make the decision that is right for their own operations, so they can get the most out of the marketplace.

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Speaker, it is a pleasure to join the debate this afternoon on Bill C-33. For Canadians who are watching or who might read Hansard at some point in the future, this bill is a technical amendment to amend the Canadian Environmental Protection Act to simply allow a government, the present government or any subsequent government, to regulate, for example, the ethanol content in our fuels, to help in setting standards for the export of Canadian fuels that are blended, and so on and so forth. At first blush, it is a technical amendment.

I would like to respond to the member for Western Arctic's proposed amendment and pick up on some of the comments he made in his speech. He said that the testimony at committee was, in his own words, in vain, that many experts had testified in vain. I disagree. I disagree because the text of the bill already embraces the need for a review of the language of the bill every two years, a “comprehensive review of the environmental and economic aspects of biofuel production in Canada” that would be undertaken by the Senate, the House or a combination thereof.

What he is now calling for is something entirely different, but it appears as if the review that is already going to be performed under this act, once it becomes law, would embrace much of what he is seeking to get in, to a certain extent, through the back door today, that which was not presented at committee some time ago. I would say it is a moot point. I would say that the amendment he put forward today is not necessary because I believe the regulatory standards will be reviewed as a function of the comprehensive review of the environmental and economic aspects of biofuel production at some later date.

That is my opening statement on the merits of this particular amendment put forward by the NDP and the member who is speaking on the NDP's behalf.

I would like to now make a couple of more generalized remarks about the bill, which is about expanding the scope of the Minister of the Environment, not the Minister of Agriculture and Agri-Food but the Minister of the Environment, to regulate fuels in Canada.

I would like to talk about the government's 5% ethanol standard. I would like to talk about the government's excise tax exemption changes brought in on April 1, which have a direct bearing on this question, and about how this does not quite fit in to the government's climate change plan, a plan which is supported by no third party in Canada today.

First, the official opposition leader has been calling for a 10% ethanol position since last January. In a speech to Saskatchewan farmers in Regina, he asked for an increase to 10%, but it had already been put forward in our own election documentation of 2006 calling for a 5% ethanol content. There is a significant difference here between 5% and 10%. The government is proposing 5%, but we are still supportive of 10%. Why is that?

First of all, for every car on the road today, car owners can use a 10% ethanol content in the engines of their vehicles. There is no need to retrofit the engine as it is presently built. We know that if we had a 10% mandate in Canada as opposed to the weaker 5% put forward by the government, it would double the amount required to some four billion litres a year. That is a figure that is already surpassed in terms of those plants that are presently operating, under construction and even those being financed.

When the Minister of Agriculture and Agri-Food and his parliamentary secretary or members of the government talk about supporting our farming community, one has to ask the question, why is the government pursuing such an unambitious target of 5%?

In late June, in fact, the former minister of agriculture labelled the official opposition leader's call for 10% as overly aggressive, which the Canadian Report on Fuel Ethanol described as an excessive term in itself. Ontario, the largest provincial gasoline market in the country, is already moving from an existing annual average, E5, to 10% starting in 2010.

Why is the federal government lagging behind the province that consumes the largest amount of gasoline in the country? There is no explanation so far which is a question that I have raised before.

Speaking now quickly to some of the environmental implications and considerations that ought to be paramount with what we are trying to accomplish here, there are all kinds of important questions around the environmental impact, for that matter even social justice questions, when it comes to the expanded use of ethanol in Canadian and worldwide markets.

In this, I think, the member from the NDP is quite correct. Those are precisely the questions that we see and envisage being treated and dealt with by the Senate committee and/or the House of Commons committee that will review the performance of the country every two years as the bill contemplates.

However, here is another angle and I would like to conclude on this. That is the incoherence between the government's purported 5% ethanol content regulation and what it is actually doing when it comes to the taxation policy for these very fuels.

On April 1 the government repealed the excise tax exemption for biodiesel and ethanol fuels. We know the effect of the repeal on low level blends is small, maybe even minimal, but we know the additional taxes are substantial for higher blends. The price of what they call E50 for example will increase by 2¢, for E85 it will increase dramatically to 8.5¢ a litre higher than it is, hardly making the fuel competitive.

This is at a time when we are trying to kickstart the fuel market and lend the added hand to our farming community if it is done in an environmental and responsible way. We only have 31 vehicle models today on the road in the Canadian market that can use E85 as we speak, but there are only 2 E85 retail fuel stations in this country compared to 1,250 in the United States.

Therefore, we have incoherence here between the government's purported claim to support our agricultural farming communities, which is a very important initiative, with its own fiscal and tax policies. They are leading to higher costs for this fuel and do not necessarily reflect, as we heard in the original speeches here in the House and at committee from the government members, the profound environmental considerations that are inherent in making a shift to a wider use of a specific fuel.

I go back to where I began on why it is so important that we have built into the bill a two year review of the economic and environmental performance across the country as to how we are doing as a country.

We are not Brazil. We are not transforming vast amounts of tropical forests into for example eucalyptus plantations or sugar cane plantations where it is obviously having profound environmental impacts on ecological integrity of those regions and of course ultimately the lungs of the planet. We are not in that kind of situation. Our concerns are different, yet just as important.

As we go forward with this bill, I find it hard to understand why the NDP would at the very last moment seek to bring through I guess the back door of the House that which it did not bring to the committee. I also cannot reconcile at all the amendment put forward by the member with the call already inherent in the bill to have this two year review on the economic and environmental implications, not that his concerns are not important, not that they are not valid, not that they should not be treated and dealt with but I think they will be dealt with precisely at that period of time, 24 months after the bill becomes law.

Twenty-four months later we will have a much better idea of where we stand and I think that will allow us to make mid-course corrections as a country as we go forward and deal with this particular fuel source.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I thank the hon. member across the way for his comments. I want to touch back on this review. A review of policy is fine when we are dealing with things that we can change easily.

What is going to happen here with the industry is that it will move ahead in a certain fashion. The industry will make investments. Farmers are going to line up land and change their agricultural practices. There will be many things that go ahead once we put this bill in place, once the regulations are in place, and once the subsidies go on.

A review two years from now may be at the start of an industry. It may be when industry has just made major investments and it is not going to be a great time to decide that we have made the wrong decision here, made the wrong choices or moved in the wrong direction. The time to decide what the right direction is, is before we start.

That is why quite clearly my colleague on the agriculture committee brought forward many recommendations. I spoke to this issue when it was in Parliament before. We are saying it again to the hon. member across the way, do you really think that a review two years from now is going to--