Mr. Chairman, ladies and gentlemen,
good afternoon. It is my great pleasure to be here today representing
Canadian Council of Chief Executives.
Chair, I will present a brief introductory statement, stick to seven minutes, and then my colleague, John Dillon, and I will be pleased to answer any questions you might have.
As representatives of the Canadian Council of Chief Executives, we're very pleased to address the issue of environmental policy, an issue to which my organization and my fellow CEOs have accorded the highest priority.
I have reviewed Bill C-377, introduced by the leader of the New Democratic Party of Canada, Mr. Jack Layton, and while the sentiments expressed in the bill are noble, I fear that Mr. Layton's approach would divert us from the real task at hand.
The bill would set up a process to legislate a series of greenhouse gas targets from 2015 to 2050, but unfortunately, it provides no clue as to how these targets are to be achieved. It would be comforting to think that a simple act of government could get us to where we need to be, but if the past several years have shown anything, it is that setting ambitious targets is meaningless without the will to act by all segments of society and a solid consensus among all players on what needs to be done.
Now, let there be no doubt that turning around our growing greenhouse gas emissions is going to take time and enormous effort, and there is no silver bullet, nor is there any substitute for practical policies, sound analysis, and meaningful engagement about what changes we actually are prepared to make as businesses, governments, communities, and individual Canadians. We should be realistic about what is required, but also ambitious and creative about the kinds of policies that can make a real difference.
The latest initiative of my council to address the climate change issue was the creation last year of our task force on environmental leadership, which I co-chair along with Richard Evans, the chief executive officer of Rio Tinto Alcan, and Rick George, the chief executive of Suncor Energy. The task force, comprised of 33 chief executives from across Canada and drawn from a wide range of leading industries, forged an unprecedented consensus among Canada's business leaders.
In October of last year, we published what we call a policy declaration, in which we laid out five critical elements for an effective, sustainable, long-term plan, one that we believe will not only be successful in reducing Canadian greenhouse gas emissions but can also make a significant contribution to a global plan. It is called “Clean Growth: Building a Canadian Environmental Superpower”, and I have made copies available for all members of this committee in both official languages.
I was pleased to see that a number of our principles were echoed by the National Round Table on the Environment and Economy in its report last month setting out its recommendations for a climate change plan for Canada.
First and foremost, what the country needs is a more cohesive Canada-wide plan on climate change and air pollution, one that can make the most of the tremendous opportunity that we believe we as Canadians have to foster sustainable economic growth and superior environmental performance.
I want to commend the leadership shown by the Government of Canada in setting challenging greenhouse gas targets for Canadian industry, while at the same time recognizing the need to foster economic growth and technology enhancement.
In addition, a number of provinces have come forward with innovative ideas on how to address this complex issue, but what we lack, however, is sufficient convergence and cohesion around a Canada-wide approach involving all parties in Parliament and all levels of government—federal, provincial, territorial, and municipal. We need one set of targets and timetables for industry and, in our view, greater clarity about responsibility and accountability, in order to make the most effective use of public and private funds.
Such a plan must apply to everyone, and here I underscore the word “everyone”: large and small businesses, consumers, farmers, building owners, and public institutions, all of whom will have to do their part if Canada is to meet its ambitious targets regarding reductions in greenhouse gases.
Another key element of our proposal is to recognize the absolutely fundamental role of technology. There is simply no way to make meaningful reductions in greenhouse gas emissions without massive investments in new technologies. Business leaders in the council see this as a tremendous opportunity, since Canada has the natural resources and the technical, financial, and skills capability to be a leader in next-generation technologies such as clean coal, carbon capture and storage, nuclear, hydro, wind, biofuels, and other alternative energies.
A third element of our paper recognizes the importance of targets as a spur to environmental progress. We support the ultimate goal of achieving a substantial, absolute reduction in emissions of greenhouse gases, both in Canada and globally. At the same time, it is important that any target applied to Canadian industry recognize competitive realities and be set within an overall policy framework that allows profitable firms to increase their investment in new technologies.
A fourth necessity is to ensure that globally we have an effective and long-term plan that commits all major emitting countries to do more to constrain the growth of emissions around the world.
I believe that Canada can be a model to the world in demonstrating how to align public policy to strengthen economic and environmental performance. That brings me to one of the most critical elements of our paper, our policy declaration, and here I note our agreement with the recent report of the national round table.
I believe it's time to establish policy mechanisms around the appropriate pricing of carbon. I would tell the ladies and gentlemen of this committee that my organization said publicly that we supported the idea of putting a price on carbon as early as 1990. Appropriately set price signals encourage both business and consumers to change behaviour, and this can be done through emissions trading or environmental taxation, or some combination of the two.
Business accepts that there is a price to pay for our greenhouse gas emissions, and we have said so for a long time. But we have to be smart about how we design a price mechanism so that it accomplishes our environmental objectives and builds competitive advantage in Canada. Both emissions trading and environmental taxation have their advantages and disadvantages.
Cap and trade schemes have the advantage of a defined limit on emissions, but experience, especially in Europe, suggests there can be significant price volatility and difficult questions about fair allocation and emission rights.
Environmental taxation provides a clearer price signal and can be easier to design and administer. Relying solely on taxation, however, does not guarantee any particular quantity of emissions reductions. Any such tax must not discriminate against any particular sector or region and should be implemented only as part, in our view, of broader tax reform that is revenue-neutral and that aims to enhance our country's economic as well as environmental performance.
Increased revenues from environmental taxation could be offset by reductions in corporate and personal income tax, so that Canada can continue to attract the capital, innovation, and people to foster the technology shift that is critical to tackling climate change.
Governments also will need to think about their spending priorities. A strategy for climate change will require significant new public spending in areas such as public transit, clean energy infrastructure, and development of new technologies. This will require governments to change fundamentally how they spend, not just how they tax. Climate change must not become simply an excuse for governments to tax more and spend more.
Mr. Chairman, putting a price on carbon will mean real and potentially very costly obligations for everyone. There are ways to design our policies so that they do not place unfair burdens on vulnerable regions, sectors, or individuals, but we should not pretend that the cost is insignificant or that the policies need to focus on only driving reductions in Canadian industry.
I'll conclude with this. The reality is that we've been talking about this issue for 20 years, and it's long past time to get on with the job. Business has done a great deal already and is willing to make fundamental changes and the significant new investments that will produce a strong economy and a cleaner environment. We need to have a true Canada-wide consensus on the key policy elements and get everyone, including individual Canadians, pulling in the same direction.
Ladies and gentlemen, members of this committee, the ambition of Canada's business leaders in this regard is truly vast. We have stated, and I will repeat again today, that Canada has the natural resources and the technical, financial, and skills capability to justly aspire to environmental superpower status. I believe that you as parliamentarians have a critical role to play in moving Canada decidedly in this direction.
Thank you for your time and interest. Mr. Dillon and I very much look forward to answering any questions you might have.
Thank you very much indeed.