Evidence of meeting #15 for Environment and Sustainable Development in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was kyoto.
A recording is available from Parliament.
10:05 a.m.
Brossard—La Prairie, BQ
So if all the responses have been sent in and included in the report, this material is in the public domain.
10:05 a.m.
Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada
Yes, definitely.
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Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada
No.
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Bloc
Marcel Lussier Bloc Brossard—La Prairie, QC
So you have already informed the government. Were you consulted regarding the drafting of the Green Plan?
10:05 a.m.
Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada
I would like to give you a very simple answer. No.
10:05 a.m.
Bloc
Marcel Lussier Bloc Brossard—La Prairie, QC
That is very clear.
My next question is about the tar sands. I am looking at your figures and trying to understand them. When you say that by the year 2015, the production of greenhouse gases will double, does that take into account some of the steps oil companies will be taking to reduce these gases, or is it the extrapolated production expressed as greenhouse gases?
10:05 a.m.
Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada
First of all, that information did not come from us. My colleague will correct me if I am wrong, but I believe it is from the National Energy Board. The National Energy Board provided these projections which state that greenhouse gas production from the tar sands would double by 2015.
10:05 a.m.
Bloc
10:05 a.m.
Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada
That does not take into account the reduction measures. It refers to the greenhouse gases produced by the tar sands, and does not take into account any measures to reduce emissions.
10:05 a.m.
Bloc
Marcel Lussier Bloc Brossard—La Prairie, QC
I see.
In the course of the deliberations that have taken place since 1990, have you seen any documents that accurately predicted this huge increase in greenhouse gases from the tar sands? We signed an agreement to reduce greenhouse gases by 6 per cent based on the 1990 levels, but in the documents, in the various stages leading to the acceptance of the protocol and the international agreements signed by the government, did anyone see this increase coming?
10:05 a.m.
Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada
I cannot answer with respect to the documents. I do not know whether...
David, are you aware if there is some information on that?
10:05 a.m.
Bloc
Marcel Lussier Bloc Brossard—La Prairie, QC
In other words, has the Department of Natural Resources recently announced that tar sand production would double, causing a significant increase in greenhouse gases? Was this announcement made recently, or could this increase caused by the tar sands have been anticipated between 1995 and 2000?
10:05 a.m.
David McBain Director, Office of the Auditor General of Canada
When we were doing our audit we found a variety of sources of information that date back to the 1990s. When the government started the national process for consulting on how to deal with climate change, information came forward from industry and other participants.
Natural Resources Canada has also contributed projections--what they call emissions outlook--and I believe in 2002 they came out with their last report. Then there's the National Energy Board itself, which does market assessments on a regular basis as part of their mandate. In this report we chose to cite the National Energy Board because it was the most recent information available to us.
10:10 a.m.
Conservative
Luc Harvey Conservative Louis-Hébert, QC
Ms. Gélinas, there is a ceiling in Europe. The cost of a tonne of CO2 is about $45. There are cycles, but that is more or less it. At one point, I even saw the price nearing $65. It all depends on participation in the Kyoto Protocol. If it increases, there will be a greater interest in buying carbon credits. Given what I have just said, the previous Canadian government had guaranteed business, if I remember correctly, that it will never pay more than $15 a tonne. Is that correct?
10:10 a.m.
An hon. member
Yes.
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Conservative
Luc Harvey Conservative Louis-Hébert, QC
So that means the Canadian government could buy approximately 200 million tonnes at approximately $30, which would represent an annual expenditure of $6 billion.
Is that how I am to calculate it?
10:10 a.m.
Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada
Mr. Harvey, we did not do those calculations. Those calculations cannot be done sitting at the end of a table. However, I will correct what you said about the price of a tonne of CO2. We have absolutely no idea what the average cost of a tonne of CO2 is. We have no other reference than the European market. Over a year, the prices have gone up and down. We had a graph that showed that. The price can fluctuate from one month to the next, going from $15 to $30, dropping to $10, and going back up to $25. So there is no number that can be used as a reference. This is a stock market, so there are fluctuations.
10:10 a.m.
Conservative
Luc Harvey Conservative Louis-Hébert, QC
I fully understand that, but once the Kyoto Protocol truly comes into force, the price could be set at about $40. It would be easy to...
10:10 a.m.
Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada
No. First of all, Kyoto is in effect as we speak. Secondly, we have no idea, since it is a stock market. If it is a buyers' market, that will affect the market one way, whereas if it is a sellers' market, the effect would be different. It is the supply and demand principle. There is no price. No one can pull a number out of his hat and say that it would be the average price. The evidence shows that the $15 amount was based on an analysis of what was happening at the time with the cost of a barrel of oil. But you know as well as I do how much the price for a barrel of oil fluctuates. So there are no guarantees.
10:10 a.m.
Liberal
The Vice-Chair Liberal Mario Silva
Mr. Harvey, you were sharing your time with a colleague. There are only two and a half minutes left.
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Conservative
Luc Harvey Conservative Louis-Hébert, QC
Okay. I am going to use my time.
To go back to the existing program, we know that approximately $1.6 billion was spent for a one megaton reduction. Is that correct?
10:10 a.m.
Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada
No. We examined three programs, which have to date made it possible to reduce by one third the objectives that had been set for them. The money that was spent was not spent under all of the programs we examined. We cannot make a direct link between the money that was spent and the reductions, because we did not examine all of the programs.
10:10 a.m.
Conservative
Luc Harvey Conservative Louis-Hébert, QC
So we know that $1.6 billion was spent, but we do not know exactly how much of a reduction there was in CO2 emissions.