Environment Committee on May 17th, 2007

[The Chair, Conservative, Bob Mills]

Obviously we're here to look at the government's current plan. It was brought to my attention by Mr. Cullen that some of Mr. Harvey's questions were about Bill C-288, which is not really what this committee meeting is about. It's about the government's plan.

I just cautioned Mr. Vellacott, and I believe he's living with that.

[Mark Warawa, Conservative, Langley, BC]

I would just point out that it was Mr. Cullen who brought up the Mackenzie pipeline. So I think there is some latitude.

[The Chair, Conservative, Bob Mills]

I try to give as much latitude as possible, yes.

[Luc Harvey, Conservative, Louis-Hébert, QC]

He also talked about Bill C-30.

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

I hope this is not deducted from my time, Mr. Chair.

[The Chair, Conservative, Bob Mills]

We'll balance it off.

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

Anyway, actions to the new regulatory framework--there is obviously a cost involved. Someone has suggested that it is pretty strong action, and inevitably there comes a cost with that. I assume government bears part of it, but at the end of the day individual Canadians and families do, I guess.

So my question is this. In what manner will ordinary individual Canadians like you and me be affected? How will we be affected? How will we see the impact of this new regulatory framework in our life? What kind of consequence would it be for the ordinary person?

[Denis Gauthier]

I think you're right. In the end, it's individual Canadians who will bear the cost of any action, and it can turn into an impact on the price of energy, whether it's electricity or gas. As new regulations are introduced to make cars more fuel efficient, it is quite likely that those technologies that will be developed by the automobile industries will not cost less. It will impact on the price of new technology to make those cars more efficient, so it should have an impact on the price. At the same time, you'll pay more but you will get a better product, a more efficient product, and it will be the same thing in terms of new products that will become regulated in terms of new energy-efficient appliances.

So it is likely that the development of those new products will cost a bit more, and that's how the cost will be translated to individual Canadians.

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

So we would pretty much be assured that we as consumers are all going to be receiving some higher costs with respect to vehicles, for example, to our energy costs, and so on. There are reasonable odds that it would be significant or—some degree of increase for those.

Okay. That's why I think I will interject at this point that we do need to get some balance here. We are all prepared to pay some bite on this, but not to the point that it devastates us and devastates the Canadian economy.

I have a question with respect to the budget 2007. I am assuming I can go there, Mr. Chair, with respect to those measures affecting the environment, and maybe a little more detail—You referred to the trust fund for clean air and climate change. There's been a reference to the phase-out for the accelerated capital cost allowance as well on the oil sands, and some of the $2 billion to support the renewable fuels as well.

I have a question, and it came from something my colleague Francis Scarpaleggia mentioned yesterday. He referred to the fact that he drives around—I don't know what kind of vehicle he has, an older SUV or whatever, but he drives around and he gets frustrated by listening to radio ads on the environment.

I suggest he—

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

I didn't say I was frustrated by radio ads on the environment. I said I'm frustrated by government, publicly financed radio ads that use subjective terms like “tough” five times in a 30-second bite. I have no problem listening to radio ads about the environment. And I don't have an SUV, and it's not really relevant to the discussion.

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

I'll carry on from here, because I do think we are all—Francis and I and others—interested in terms of the scrappage program.

I suggest to people like Francis that they buy an annual bus pass. I don't listen to any radio ads when I'm on a bus. There are none of those.

But I am curious about the next two-year scrappage program to retire older vehicles. There is some $36 million there.

Can you tell me a bit of the detail of how that will work?

[Richard Botham]

There are really two components to the budget measure that was announced. Some $6 million was announced to increase support for non-governmental organizations that are already active in scrappage programs. The second component was $30 million to support an enhanced incentive for scrappage. That measure is going to be designed by Transport Canada and Environment Canada. So the details on that will be forthcoming.

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

So the end of that obviously gets more of those older vehicles off the road and provides a little more incentive for people to do so.

[Denis Gauthier]

Not only to get more of them; the $6 million is going to existing programs. Naturally it's to get more off the road, but it's to get those vehicles off the road in an ecologically responsible way. So it's not just parking a vehicle in a scrapyard and letting the oil—It's draining it properly and disposing of it properly.

So there will be the combination of doing it in an ecologically friendly way and also getting more off the road.

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

You said $36 million is the total for that?

[Denis Gauthier]

Yes, that's right.

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

I think that really rests my questions for now, Mr. Chair.

[The Chair, Conservative, Bob Mills]

Thank you very much.

I will now go to five minutes. We'll go first of all to our radio listener, Mr. Scarpaleggia.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Do you know what is the dollar cost per tonne of greenhouse gas reduced with the public transit tax credit?

I' like to read you an excerpt of an article by Louis-Gilles Francoeur in the April 28 issue of Le Devoir. You can tell me whether or not you agree.

The Baird Plan was preceded by an unauthored study, which the government based on reaching Kyoto targets in eight months. The basic hypothesis for that study, which yielded a price per tonne of $195, was obviously far-fetched because Canada has six years left in which to attain its targets, and might even gain additional time with a catch-up plan, with no penalty, if the plan is considered credible.

[Denis Gauthier]

The Kyoto objectives were supposed to be met in eight months. There was no intention of reducing the GHG emissions by 6% based on the 1990 baseline by 2012, but to meet that objective over a five-year period, between 2008 to 2012. The target is averaged over a five-year period. We have five years to reduce GHG emissions by an average of 6% compared to the 1990 baseline. We may not meet that objectives as of 2008. If we don't meet the target in the first two or three years, then we will be have to catch up in the following years in order to meet the average that has been established.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

I don't think there will be any penalty if we bring forward a credible catch-up plan. The initial comments made by the chairman of the UN Framework Convention on Climate Change do not lead us to believe that the UN considers the Baird plan to be credible. Do your economic forecasts provide for any penalty to which Canada may be subjected?

[Denis Gauthier]

Mr. Robidoux could tell you if we have taken any penalty into account. As to whether or not a catch-up plan might allow us to avoid any penalties, that would be a question for Environment Canada or the people who negotiated the agreement. I have always considered that a second period would be renegotiated, at which time there would be a penalty of 30%.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

If we had no credible plan for catching up.

[Denis Gauthier]

That remains to be negotiated. I don't know. I can't answer your question. Mr. Robidoux—

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Never mind. I will ask another question.

Since we are no longer working within the Kyoto Protocol framework and since we cannot benefit from the purchase or sale of greenhouse gas credits, Canadian companies will not be able to sell these credits on the international market, and that represents a loss for those companies. Is the loss of potential earnings for Canadian companies accounted for in your economic models?