Bill C-30 (39th Parliament, 1st Session) Committee on Feb. 15th, 2007

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

That is not written into the bill. It's a bit of a faith exercise, then. As the bill is written right now, three years out there will be an objective, but we don't know how it will be enforced, what the objective will be, and so on.

[Aaron Freeman]

There are no compliance measures.

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

We will leave that for a second.

Mr. Marshall, as my colleagues have said, you've made the connection between emissions in general and the two issues of air quality and climate change, and there's some debate as to which one to do first. Or do you do both at the same time?

Let's take the issue of intensity for a moment. The government is currently suggesting some intensity standards for the amount of pollution that's allowed out, as a way to measure it; that is, we'll go by intensity rather than say there's a cap on it.

Natural Resources Canada has said that within the oil and gas sector over the next 10 years there will be an improvement of 30% in intensity, just doing business as usual, but with projections of quadrupling, or more, production. What does this do for overall emissions, both of greenhouse gases and air pollutants, using intensity as your guideline?

[Dale Marshall]

Using those numbers, if you improve your intensity by 30% but have even a doubling of production from the tar sands, you have an increase in greenhouse gas emissions. If you go to three, four, or five times what it is now, then you have a significant increase in greenhouse gas emissions.

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

I would assume this includes cancer-causing air contaminants as well, and so on.

[Dale Marshall]

Absolutely, yes.

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

You referred to a study by part of the oil and gas sector, claiming to have 29 megatonnes available. Why would a company not make those investments to reduce greenhouse gases and air contaminants if it is available to them at what they claim to be no cost?

[Dale Marshall]

There are two answers to that. One is that they are not forced to. So when a company looks at what it's going to invest in, is it going to invest in revenue-neutral emission reductions or in the production of more oil and gas that will produce profits? From a business point of view, from a bottom-line point of view, it makes more sense if there are no constraints on its operations from a climate change perspective to continue to invest in greater production.

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

This is a question for Ms. Parkinson-Marcoux.

I suppose this leads me to the question—you've worked in this sector and gained experience—regarding the cost of pollution as it stands right now, which you spoke about in your initial statement. What is the actual cost of greenhouse gas or other air contaminant pollution right now for large industry?

[Dee Parkinson-Marcoux]

You meet your environmental standard; you exceed that standard voluntarily at a cost to you. This is always a consideration for any business. So you have to find some other reason why you'd go beyond any standard that has been set for you, which is the level playing field—[Technical difficulty--Editor]

I don't really care; it's just not acceptable. So we're going to find a way to do it so that in fact it creates profit for us. It does not create a cost for us, causing us to think innovatively and beyond what was a legislated requirement. But most people are not going to think that way, because it actually penalizes them.

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

So in cases not like yours—you might be a bit more of an exception than the rule, in terms of the five priorities you listed. I am trying to find some sort of analogy that works for what the system is right now.

In days gone by, for business, there were no health and safety standards, so the cost of an injured employee was virtually nothing, other than replacing the employee, until lawsuits started coming forward. Then it seemed to make business sense to invest in health and safety standards, and in training employees to avoid those costs.

Are we not essentially talking about internalizing the costs of pollution into the bottom line of companies that are involved in both the creation of wealth and pollution?

[Dee Parkinson-Marcoux]

That's the way to internalize those costs. This is what I'm trying to encourage you to think about when you put a framework in place for the use of the airshed, just as there are penalties in place for the use of the watershed or lands. You have to pay for it.

The person who should ultimately pay for it is the consumer. This cost should flow through. That's why I believe we should be taxing consumption, so people actually know that when they make the choice to buy a certain energy source or whatever, the full cost they're paying reflects the resource user's use of the natural resources of our world, which include air and water, not just the minerals and the lands.

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

Trying to find a way to cost this out is interesting.

My last question is for Dr. Drouin. You just said $1 spent in efficiency produces $3 in health benefits. To be very clear, when a company puts pollution up in the atmosphere that causes a health cost, who picks up the health care cost right now?

[Dr. Norman King]

The notion that $1 gives $3 is not just $1 of an industrial investment. It is $1 of incentives, government planning, and government cost, because the health care costs are picked up. They are calculated in many ways, but the first health care cost is picked up by the state, by our medicare plans, and so on. It is also the loss of productivity and loss of life. All those elements are factored in, so it is an overall global perspective that even from an economic perspective it pays to invest in.

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

Thank you.

[The Chair]

Thank you very much.

Mr. Warawa for seven minutes, please.

[Mark Warawa, Conservative, Langley, BC]

Thank you, Mr. Chair.

Thank you to the witness for being here.

Ms. Parkinson-Marcoux, you shared five things that need to be done well. I've missed one of them. I've got the health of the employees, care of the environment, productivity, profitability. What was the other one?

[Dee Parkinson-Marcoux]

Quality—in other words, care for your consumer. That, in your case, is the citizens of Canada. The government's consumers of your product are us, as the citizens.

[Mark Warawa, Conservative, Langley, BC]

Thank you.

Do you have some technologies that you believe are essential to developing a cleaner environment, specific technologies that either need to be developed or that people are encouraged to use?

[Dee Parkinson-Marcoux]

There's no question that if you set out a target and a framework in which people can work effectively, knowing that we want to achieve the long-term objective—say, closed-loop engineering—one of the things you can do in your taxation system, the things that support doing the right things, is to look for supporting innovative technologies, much as the government has combined forces with the Canada Foundation for Innovation or with Sustainable Development Technology Canada. That's all about finding technologies that help us meet long-term objectives by acting now.

So we set up tax frameworks or grants that let people get on with it. At the moment, we don't have an economic system that supports what I consider to be high-risk and ultimately high-return projects when they're in the high-risk, low-return stage. So the government's financing system, that very backbone of how we view economic profitability, can be used to achieve this objective of clean air. But it means overhauling the way we think about what we tax and how we tax it. If you want these objectives to be achieved, I'm pleading with you to try to integrate your thinking with what the barriers are in our fiscal system that are preventing people from making the right choices. Everybody will make the right choice if they have the framework in which to make it. We have a framework that's perverse.

There are many technologies out there. Probably some of them are going to be groundbreaking. But I would say they're 20 years away from becoming commercial activity. So we need things that bridge us to using those new technologies to get into a low-carbon world. Forget the low carbon. We need a world that works on closing its loops, so we don't use the airshed and the watershed and our land as sewage systems.

[Mark Warawa, Conservative, Langley, BC]

You recommended a tax based on consumption. Could you elaborate on that? The comparative you used was the real cost of driving a gas-guzzling SUV. How would that tax structure—? Would it be annually? At point of sale? Ongoing? What are you recommending?

[Dee Parkinson-Marcoux]

I'm recommending something that's been implemented in other countries. In at least one I know of, Iceland, which has no income tax—God forbid! That just shatters most government thinkers. They don't tax income and they don't tax work. But they do tax consumption. So at the point of sale, the cost of that SUV in the manufacturing of it, which includes all the resources that went into it, plus its running costs, meaning it's going to use more of the world's natural resources running, because it uses more energy, it uses more air—You know, cars don't combust without the use of the airshed. Then they use the airshed as a sewage system because it's not a closed-loop system. At the point of sale, you pay for that. And at the point of sale of your then subsequent purchases of gasoline to run that SUV, you pay, but you don't pay income tax. So for people who are trying to do—

This isn't a moral argument. If I want to run an SUV and I can afford to do it and I pay for it fully, I should be allowed to have one. If I'm not paying for it fully and I'm being subsidized by other Canadians who are driving their Smart cars and doing all the rest of it, but they save money and then get taxed on the savings, being efficient in their use of resources for themselves and others, I consider that a perverse system. It will not change the fundamental behaviour of consumers. In the consumer's mind, it doesn't link the impact they're having on their own environment that they live and breathe. And it doesn't allow business to make good decisions either.

This isn't about foisting the cost on the manufacturers; this is about all of us who want to use the resources of the world to use them. That's all it is.

It's very hard to overhaul our systems, but I'm really pleading with the government to think in a much more—[Technical difficulty--Editor]

[Mark Warawa, Conservative, Langley, BC]

Thank you.

I have a question for Dr. Drouin.

It's changing the way we think. The more dense the population in the urban area, the more realistic the use of public transit is--the actual providing of the cost. Our past is big lots and spreading out instead of densification. It's a change of mindset.

It was the way I grew up, on acreage and enjoying a large-sized lot, but the community I live in is becoming much more dense and therefore public transit is usable.

We've made announcements on $1.4 billion for providing capital costs for public transit. We have, of course, the tax benefit to encourage people to use public transit. We've announced $1.5 billion for the provinces, to work with the provinces. We've announced our clean energy, renewable fuels, and so on. Are we on the right track there with the goal to clean up the air we breathe and to encourage people to use public transit, cleaner fuels? Are we on the right track in that respect?

[Dr. Louis Drouin]

Yes, we are on the right track on these two aspects. You have to realize that in Montreal and Toronto the major source of smog comes from transport. We're on the right track, and we have to push much further for clean energy on cars and also on public transit.

[The Chair]

Thank you, sir.

We'll have to move on, and we'll have to be really tight on these five-minute rounds.

Mr. McGuinty, please.