Environment Committee on Feb. 6th, 2008

[Dr. Shahrzad Rahbar]

As I said, I think Bill C-377 implicitly focuses on the large final emitter side. I have no issues with a regulatory framework. It's not clear on how the other 50% should be addressed, and in my estimation, the other 50% matters. Our own emissions matter. Regulate us; I'm not disputing that. But we need to get a lot smarter on how we deal with the other 50%, and I'd like to see some focus and leadership in that.

[Mark Warawa, Conservative, Langley, BC]

Thank you.

Mr. Dillon and Mr. d'Aquino, my time is up, but thank you for your testimony.

[The Chair, Conservative, Bob Mills]

Thank you very much, Mr. Warawa.

I believe we're going to Mr. Godfrey.

[John Godfrey, Liberal, Don Valley West, ON]

Thank you, Chair.

Thank you to all. This has been a good panel. I think it's been interestingly balanced.

I have a comment on Turning the Corner, the plan of the government.

Now, the question was put to you, “Was Bill C-377 costed?” The question I'd put back to the government is, “Was Turning the Corner costed?” The answer clearly, from Mr. Sawyer's remarks, is no. The only way in which you could achieve Turning the Corner was if emissions were priced at $100 a tonne. The government plan calls for them to be priced at $15 a tonne.

Clearly a factor of six is not a costing; it's a gross error. I just would make that observation.

I think the overall thrust of several of your remarks is that we've been a bit too leisurely in our approach. We haven't gotten our act together, and there are many things we could do. The purpose of Bill C-377 is not to provide a full plan that is going to answer what you ask for. It is simply to set an ambitious target that lines us up with the scientific reality of where we are and what we need to do as a planet and as a country.

So let me ask you this. If we accept everything that particularly the Council of Chief Executives has called for, and the Gas Association as well, which is a total plan covering the entire Canadian economy—not the industrial half but the part that deals with the built environment, the transportation sector and the bio-sector, which is agriculture, forestry, urban waste—then surely what we would need as our metaphor is a World War II mobilization of the economy metaphor, not a leisurely 100-year metaphor where we need to get all the targets up in place. We didn't know that in 1940; we just knew we had to win the war. You couldn't know when you would complete the Sarnia rubber plant; you just knew you had to do it.

I guess what I'm saying is that we don't have a complete road map. We do know the direction. We want to win the war on climate change just as much as we wanted to win the war last time.

Don't we really need a plan that covers the whole economy and all parts of the emissions spectrum but that also is far more ambitious, far more urgent than anything we've seen to date?

[Thomas d'Aquino]

Mr. Godfrey, well said, I think.

With regard to your analogy to the Second World War, that war began with the German invasion of Poland, as you know. One knew, or at least most people knew, that within days we would be facing a potentially catastrophic life-death struggle. Unfortunately, the appreciation of Canadians as a whole that we may be dealing with a life-death struggle is not remotely analogous in terms of perception.

[John Godfrey, Liberal, Don Valley West, ON]

Is it in terms of reality?

[Thomas d'Aquino]

In terms of reality, I would say the following: everything that all of us have been talking about, this brave new world that we must all face and move into, will be more transformative than was the Industrial Revolution. That's how profound and how deep I think the change will be, and it will be necessary to be able to match targets with reality.

This is why, when I hear the word “targets” and I am asked by people if they've been costed out, I'm much more interested in the debate we've not had, or many of us have not had in this country--and, I would argue, in most other parts of the world--that if we are truly moving to an environment where we are facing the degree of constraints that many of us believe we are facing....

I shared a platform with David Suzuki two weeks ago. He was asked what would be the optimum number of people on the planet that would ensure sustainability. His answer was 200 million people.

Hmm. We have, at last count, about 8 billion people.

So how do we deal with this? It will require a fundamental transformation in all our thinking, not just for the tax system. I feel that for the last 15 years we have been fiddling at the edges of this whole thing. This debate is now beginning to get very serious.

[John Godfrey, Liberal, Don Valley West, ON]

Let me ask you this question. Mr. Sawyer put a price or a range—we'll call it $100 a tonne—that we need to pay per tonne of carbon dioxide emissions by 2020 to get to the government's target, which is not very ambitious. I'd like to know how your membership would feel if we said, right, we're going to charge $100 a tonne one way or the other, through cap and trade or whatever it is. The price is $100 a tonne and we're going to put it across the whole economy; we see the consequences and they're not absolutely devastating for the consumer.

If everybody else in Canada was being confronted with that price, would your association, all of your members, take a rate of $100 a tonne, minimum, for 2020?

[John Dillon]

Mr. Godfrey, I'm sure you appreciate we can't get there in one step. Many analyses have suggested we need to be moving in that direction; we need to be moving in ways that send the long-term pricing but allow the adjustment to be made. Consumers and businesses have already made significant investments, and they're not going to change that in two or three years. We need the long-term signals and we need a process to get there.

As Mr. Sawyer noted, If we don't want to simply encourage businesses to move elsewhere, or have our businesses lose market share, which just means the greenhouse gases get produced somewhere else in the world, then we've got to move toward that in a transitional way.

I'm not here to dispute whether $100 a tonne is the right answer or the wrong answer. All I'm saying is we can't do that in one step.

[The Chair, Conservative, Bob Mills]

Thank you.

Mr. Vellacott, please.

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

Thank you.

We should probably have on the record right away that although members across the way have alleged the Conservative plan has not been costed, it has been. Those who have read Turning the Corner carefully will find that there. In our worst year we would lose 0.5% of economic growth, of GDP.

So respond as you choose, in general or specifics. In Jack Layton's private member's bill, which we have before us now, given that we're already above our Kyoto targets by about 35% because of years of inaction under previous Liberal governments, now that we're already behind the eight ball to that degree, what would this cost us on a year-to-year basis in terms of loss of GDP?

[David Sawyer]

I can jump in there.

This discussion is surreal. Regardless of the targets—you've got two deep targets—you're talking significant reductions from what we're going to do anyway. That requires a response. If one announces these are the targets, one needs a response to hit the targets. What folks are saying, including me, is that if you're serious about this, these are the types of things you need to do, and, yes, there will be costs. There will be public costs, there will be private costs, there will be hits on exporters and importers, but there will also be benefits, and that benefit story is missing.

Regardless of the target you take, when you're talking about reductions of the kind that are being floated around and contemplated in this room, you're talking about significant deployment of technology, significant change in behaviour. The five megatonnes that were just announced for carbon capture and storage, looking for $2 billion from Parliament, is going to reduce five megatonnes. We need 50 megatonnes under either scenario, either target you're looking at.

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

I need to get to all of us here, but I need a specific answer, if you can give it to me. Maybe you can't, and that's being honest, but what reduction of GDP on a yearly basis would we see under this scenario?

As a way to lead into this, Ms. Donnelly tabled here, and this is where it hurts pretty good, a minus 43.2% loss in GDP for my province of Saskatchewan. That's pretty huge.

Would you agree or would you disagree with Ms. Donnelly's presentation in terms of a very significant loss in GDP for my province, minus 43.2%?

[David Sawyer]

I'm going to jump in. I don't know where that number came from, but it seems massive. We're talking about halving the size of the economy.

Energy accounts for 3% to 5% of the energy bills of some of the large final emitters. I don't understand if you doubled that how you'd suddenly shrink the economy in half. The numbers—

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

Okay, let me go on. I want to get to the next question.

[David Sawyer]

Yes, okay, just to throw in the numbers—

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

No, I'm sorry, sir, I would like to go to the next lady.

If you can go....

[Dr. Shahrzad Rahbar]

Are you talking about my numbers?

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

Because we're already behind by some 35%, I'm asking you, in terms of what you predict or what you would judge, what you think there might be in the way of an annual loss of GDP under Bill C-377, Mr. Layton's bill?

[Dr. Shahrzad Rahbar]

On specific numbers, I'll have to beg your pardon, we haven't done any calculations.

But by way of coming at this, is there a way we can move forward? If you look at the environmental footprint of energy production, that's electricity generation as well as upstream oil and gas, please have in mind that this energy is produced to meet some demand. If you don't look at meeting that demand, your energy footprint keeps going up, and then you're back in the world of—and I know this has been in vogue for 10 years—“Clean up your act at the generation site, the production site, and don't worry about demand.”

I'm not disputing that we need to do something about the generation/ production site, but I'm suggesting—

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

Let me move to Mr. Dillon then.

Again, are we going to have significant loss of GDP? And I guess I'll throw the follow-up question to you right now, as well: if this bill meant putting Canada into a deficit position, would you still support it?

[John Dillon]

Well, I don't think we're saying we support the bill, in any event, as we indicated earlier, but to answer your specific question, I don't have the analysis. We haven't done the analysis. I think, as Mr. Sawyer has suggested, the regional impacts are much more difficult to quantify, but it's only common sense that if you're applying a significant carbon reduction target to the country, the biggest impact would be in Alberta and Saskatchewan. The reasons are very obvious, because that's where a huge proportion of our oil and gas production comes from, and those are the provinces that are most reliant on coal-fired electricity.

So whatever the numbers might be for the GDP as a whole, obviously there will be a much bigger impact in places such as Alberta and Saskatchewan. But what the size of that number is depends very much on the actual policies you implement, how quickly they're implemented, and what transition assistance and what assistance you give to the technologies that are going to be the real source of greenhouse gas reductions.

[The Chair, Conservative, Bob Mills]

Thank you, Mr. Vellacott.

Mr. Lussier, please.

[Marcel Lussier, Bloc, Brossard—La Prairie, QC]

Thank you, Mr. Chairman.

My first question is to Mr. Sawyer.

Mr. Sawyer, you gave us some figures about the increase in energy costs for the year 2020. You talked about a 25% increase in the cost of electricity, 15% for gasoline and 10% for gas. Could you tell me why the cost of electricity would increase by 25%? I do not think that applies in the case of Quebec. In the Canadian context, if producers would convert from coal to gas, electricity or renewable energy, then I would understand. However, I do not understand why you would apply this increase to Quebec, which produces 95% of its own hydroelectricity. I do not understand these figures. Are the figures accurate, or is this a Canada-wide projection, which includes all producers of electricity?

[David Sawyer]

That's a very good question.

The regional implications will depend on the emission intensity of the electricity. Quebec, then, being a low-emitting generator of electricity, would benefit greatly, one would think, with an increased rise in the price of electricity, because they're supplying into the grid at very low prices, and as price goes up there's more profit to be made.

So the growth in the electricity sector under either of these targets—again, minus 35% under Turning the Corner, or Bill C-377, minus 50%. You're talking about a significant expansion in the electricity sector--more renewables, more hydro power, and so on--so yes.