Evidence of meeting #16 for Environment and Sustainable Development in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was c-377.
A recording is available from Parliament.
Conservative
The Chair Conservative Bob Mills
I think I have to hear Mr. Vellacott first. Mr. Harvey has passed....
I need to go in the order that you ask, and the order is Mr. Harvey, Mr. Vellacott, and Mr. Bagnell.
Conservative
Luc Harvey Conservative Louis-Hébert, QC
To follow up on what my colleague Mark said about Bill C-377, I think that we have an important responsibility to establish the impact of Bill C-377 on the economy.
When Ms. Donnelly testified, hers was probably the only technically reasonable study that was not challenged by anyone on the committee. Ms. Donnelly stated that, for a province like Saskatchewan, the costs would be close to 99% of its gross domestic product. When we are talking about 99% of GDP—although I have some doubt as to the accuracy of Ms. Donnelly's figure—and when we even want to proceed without studying the matter, I have to say that it is worthwhile to determine the real costs that Bill C-377 will entail.
Bill C-377 calls for a reduction in greenhouse gas emissions of 25% from 1990 levels. That is not 25% of present levels, it is 52%. At this point, we are trying to be constructive and to see what that would mean for the Canadian economy. For me, economic responsibility is of the highest importance.
In our meeting with Mr. Marshall from the David Suzuki Foundation, he said that, in Quebec, producing a tonne of aluminum generates four tonnes of CO2. In China, the same tonne of aluminum generates seven tonnes of CO2. So, if we add significant cost, not just to the production of aluminum, but to all manufactured industrial products...We know the present difficulties in manufacturing. If companies produce CO2, they will have to buy credits.
Bloc
Bernard Bigras Bloc Rosemont—La Petite-Patrie, QC
If they have reduced their emissions in recent years, they could sell credits abroad. That is what Alcan is asking for.
Conservative
The Chair Conservative Bob Mills
Mr. Bigras, could you address the chair, please? Otherwise we get into a conversation.
Conservative
Luc Harvey Conservative Louis-Hébert, QC
I was looking at the chair. Mr. Bigras was paying attention to what I was saying, so I looked in his direction.
Coming back to the point I raised earlier, even the David Suzuki Foundation said that it was important, if we did not want to send Canadian production off to developing countries...
In Canada, we produce a tonne of aluminum and generate four tonnes of C02; in China, they generate seven. If we increase the costs of producing aluminum in Canada, all we will do is send production to China or India where they produce almost twice as much CO2. That was the question I asked the environmental people or groups who know the situation well, like David Suzuki and the Pembina Institute that Mr. Cullen and Mr. Layton used as a reference when they drafted Bill C-377 that we have before us today.
I refer you to page 46 of the "blues" to see the witness's reply. He simply said: "We need fair treatment for our national production as we have for our exports. China should pay an equivalent tax on its production, and should pay more if it is less efficient."
Mr. Chair, Mr. McGuilty is involved in a discussion and it is distracting me. I would like him to hold his discussion outside or to...
Conservative
The Chair Conservative Bob Mills
I believe, Mr. Harvey, that Mr. Cullen and Mr. McGuinty are being quiet enough. I can't hear them.
Conservative
Luc Harvey Conservative Louis-Hébert, QC
If they want to speak together, I don't care about that. They can go outside, but now they are disturbing my speech, and I would be--
Conservative
The Chair Conservative Bob Mills
Mr. Harvey, it's not bothering me. I don't see any other members, so my feeling would be that they can whisper, and I'll ask them to keep it quiet and not be too rowdy.
We'll go back to Mr. Harvey, please.
Conservative
Mark Warawa Conservative Langley, BC
Could you just bear with me for a minute, Chair? My sound on this plug-in is not working. It keeps breaking up here. Okay.
Liberal
David McGuinty Liberal Ottawa South, ON
I have a point of order. I think my colleague, Mr. Harvey, referred to me as “Mr. McGuilty”. It's McGuinty. I would appreciate the record being corrected--McGuinty, not McGuilty.
Thank you, Mr. Chair.
Conservative
The Chair Conservative Bob Mills
Could we just note it is McGuinty, not McGuilty, please, Mr. Harvey?
Would you like to carry on, please?
You're fine now, Mr. Warawa?
February 27th, 2008 / 3:55 p.m.
Conservative
Conservative
Luc Harvey Conservative Louis-Hébert, QC
We are talking about the possibility of sending industrial production out of Canada. When we invite witnesses here, it is not just to give them a free trip and a lunch. We are politicians, not scientific experts. We bring the most competent people we can to discuss these matters. Unless we are bringing witnesses here just to pass the time, I think that we should be more aware of what is going on and, above all, of what they are telling us.
The "blues" tell us that we are going to cause ourselves problems if all we do is export our manufacturing, that is, Canada's industrial production, without protecting it or knowing the true costs. If we ship our manufacturing out of the country, not only do we just move the problem somewhere else, we make it worse. Nor will we have solved the greenhouse gas emissions problem because, after all, emissions from outside Canada affect the climate inside Canada. They play a significant role.
It seems to me that Bill C-377 causes problems both constitutionally and in application. We presently have a law that seeks a 20% reduction in greenhouse gas emissions by 2010. Not only has this been tabled, it has been passed and costs have been calculated for manufacturing, for all Canadian production and for industry as a whole. The calculations were thorough.
I find it hard to believe that Mr. Jack Layton came here to the committee to table Bill C-377 and blithely told us that he had no idea what it would cost. For someone who aspires to be prime minister, that is beyond disrespectful. Earlier, Mark used the word hypocrisy. I am disappointed that someone who wants to become prime minister can table a bill with so little regard for its effects on the Canadian economy. Honestly, it makes me sad. He went so far as to say that it was the government who should be calculating the impact of his bill.
Then, Ms. Donnelly tells us about the costs reaching 25% of the gross domestic product, using present economic models. I have talked with economists, that is to say, to officials who are responsible for budget projections, about what effect a bill should have. It seems that the financial models used by Ms. Donnelly are well recognized and they show that 25% of gross domestic product should be calculated as the effect of meeting the objectives of Bill C-377.
At a cost of 25% of gross domestic product, Saskatchewan would have to assign 99% of its gross domestic product to BillC-377. The NDP should have the sense to wait until at least one economic study has been conducted. I am not saying that we should conduct that study. If we did, you would want no part of it. We should find an economic study that everyone recognizes and accepts in order to determine whether it is or is not valid.
During question period, one of the things that people wanted was a budget for families, money for everyone, especially to protect the manufacturing industry. You still brought up a number of matters related to the budget today. As to Bill C-377, I am not saying that we should accept what Ms. Donnelly said lock, stock and barrel, but I am in favour of finding an acceptable way to calculate its impact.
Passing a bill that requires us to reduce our greenhouse gases by 25% below 1990 levels, or, in other words, to reduce our present emissions by 50% by 2020, in 12 short years, that is, is simply not reasonable. I ask that we agree to find someone who can calculate the precise costs of Bill C-377, so that we are in a position to make an informed decision.
We asked witnesses to come before this committee. We also asked for advice, and the most significant advice that we received was to calculate the costs that would be incurred. I think that everyone would benefit from that. This document we have here has been published. We are aware what a reduction of 20% by 2020 means because of the act now in force. As to health, we know that it costs $6 billion annually to care for people with respiratory problems due to greenhouse gases, smog, and other things like that.
I would ask Mr. Cullen to move that we officially ask an outside, independent group to cost out this bill before we go any further. I am not talking about whether it is constitutional; that is another issue. At least we would have some answers. I think that everyone is looking for answers. The Liberals have come here today with a list that exceeds Kyoto targets by 33%. They are no more stupid or more intelligent than anyone else; this is a pretty difficult topic. The challenge is not just Canada's, it is worldwide. So it affects Europe just as much as it affects the other countries of the world. The challenge is significant.
When our Liberal friends signed the Kyoto Protocol in 1997, I do not believe that they expected that, about ten years down the road, we would be so far from meeting the protocol's objectives. Setting objectives means incurring costs. We know that the world economy is undergoing major changes. There is talk of a significant global recession spreading both from the United States and from Europe. At the moment, we are all going through an economic slowdown that is not only major, but it is also predictable. Since the mortgage crisis, in fact, everyone has been expecting problems in industrial production and manufacturing. All this should be quantified. I believe that it would be wise, and would constitute due diligence for the members of Parliament around this table.
Thank you very much, Mr. Chair.
Conservative
The Chair Conservative Bob Mills
Good. Thank you.
The order I have in front of me is Vellacott, Bagnell, and Watson, at this point. That's the order in which they've come in.
Mr. Warawa.
Conservative
Maurice Vellacott Conservative Saskatoon—Wanuskewin, SK
Thank you, Mr. Chair. I appreciate that.
I'm going to address some of the concerns that were already raised, or at least implied, by my colleague Mr. Warawa.
Another aspect that I want to refer to here is how this impacts Saskatchewan. This bill has a pretty significant, pretty negative effect for the province of Saskatchewan, which has been alluded to before by Ms. Donnelly and others, and that concerns me a great deal.
At this point, particularly when Saskatchewan is coming into a good time and we're a “have” province, now we're going to have the NDP—which purports to protect the little guy, and which is a party that actually had its roots in my own home province with Tommy Douglas as its leader—now we're finding them, for whatever reasons, coming back at our province and, it would seem, significantly trying to hurt the province, whether intentionally or inadvertently, I'm not sure. But that's of great concern to me as a member from that province.
We've had the status of being a “have-not” province, and now for the first time we're moving into a category of being a “have” province.
The premier, just yesterday, expressed great pleasure with our budget, in particular the $240 million for carbon sequestration in the province. That will be good for the environment. It will be very good for the south of the province, where we have already begun to do that kind of thing. I want to come back to that a little bit, and especially make the point that what we have proposed as a government is a practical kind of solution in a number of areas, on clean water and land and air. That regulatory framework is very practical with respect to air emissions and would do us good as a province as well.
I'd like to mention some of the negative aspects or downside of this particular bill we have before us here today. I share some of the concerns that the Bloc member Mr. Bigras has raised in his testimony earlier here with respect to Bill C-377. I'll be referring to some of the stuff in Hansard and the blues here.
I've found very helpful—and I think other members hopefully did as well—the document submitted to us committee members by Mr. Peter Hogg, on February 11 this year. He submitted to the committee a document on the constitutionality of this particular bill and raised some pretty heavy-duty concerns about the constitutionality of Bill C-377. He talked about how, in his view, our accountability act here clearly, in its present form without a major rewrite, was not at all withstanding the constitutional test with respect to climate change. He wrote it on February 1, but submitted it to the committee on February 11.
For the record, Peter Hogg is a well-respected legal scholar in the country, a Companion of the Order of Canada, Queen's Counsel. Those are some significant and very impressive credentials. He's a professor emeritus at the Osgoode Hall Law School of York University and the former dean there. He's also a scholar in residence at Blake, Cassels and Graydon LLP. His field of expertise in particular—as you would know, Mr. McGuinty—is constitutional law. That's what he excels in, and he has much to say and some pretty pointed things to say on the issue of this particular bill.
He's written extensively. For members like my friend Mr. McGuinty and others—and it is one that David has possibly read in detail, every word of it—he has written Constitutional Law of Canada, Carswell edition, Toronto, 5th edition, 2007, two volumes. I suspect that the law students have probably read a fair bit of that.
He addresses some of the things here, and I'll just read some of his remarks from his brief that we all have and maybe we all recall from that submission on February 11 here:
Bill C-377, the Climate Change Accountability Act, First Reading October 31, 2006, is a bill with the purpose of reducing Canada's greenhouse gas emissions (s. 3). By s. 5, it provides that the Government of Canada, “shall ensure” that Canadian greenhouse gas emissions are reduced to 25% below 1990 levels by 2020 and to 80% below 1990 levels by 2050.
The bill itself makes no provision—and that's been acknowledged by a number of people—for the achievement of these targets, leaving that entirely to regulations to be made by the Governor in Council.
Subsection 7(1) provides that “the Governor in Council may make regulations for carrying out the purposes and the provisions of this Act”. Subsection 7(2) provides that “the Governor in Council shall make regulations to ensure that Canada fully meets its commitment under section 5”, the emphasis added.
Peter Hogg says, “Putting the Government of Canada's obligation under section 7(2) into a realistic context, I note that Canada signed the Kyoto Accord in 1997 and committed to reducing greenhouse gas emissions down to 6% below 1990 levels by 2012”. He goes on to say, “At the time of signing, Canada's emission levels were already 13% above 1990 levels. I am reliably informed that the level of emissions is now 33% above 1990 levels”. And this is all the backdrop to what he's about to say in terms of the constitutionality or lack thereof of this Bill C-377.
And where he gets this information from apparently, that number being 13% above 1990 levels at the signing—Canada's emission levels were already 13% above 1990 levels, and 33% later—that number was generally accepted by informed participants at the C.D. Howe conference on the economics of greenhouse gas emissions control in Canada in Toronto, December 6 to 7, 2007.
He says, “Canada's economy and population continue to grow, increasing the demand for energy. Obviously radical changes in the behaviour of Canadians would be needed to take the level of emissions down from 33% above 1990 levels to 25% below 1990 levels by 2020—a date that is only 12 years away.”
He goes on to say, “Since government incentives and exhortations to voluntary reductions have not halted the trend of rising emissions, very severe and pervasive regulatory restrictions on activities that produce emissions would be necessary to actually reverse the rising trend and reduce greenhouse gas emissions sharply enough to reach the Bill C-377 target for the year 2020.”
He goes on to say, “The need for strong and pervasive regulations to meet the Bill C-377 target for 2020 is especially the case since Bill C-377 is not a tax measure and does not authorize the imposition of carbon taxes.”
He further goes on to say, “Many economists have advocated the view that taxes are the most effective means of changing behaviour to reduce greenhouse gas emissions”, and apparently that was the view of a number of economists who presented papers or participated in discussions at the C.D. Howe conference we just referred to.
So economists point out that carbon taxes could be revenue neutral by being balanced with cuts in income taxes or other taxes.
The Parliament of Canada has unlimited taxing powers, so this would raise no constitutional issues. However, he goes on to say, “No taxes are authorized by Bill C-377, none were proposed by the previous Liberal government and none have been proposed by the present Conservative government.”
“The Parliament of Canada has two heads of legislative power that might be invoked as the authority to enact Bill C-377. One is the criminal law power and the other is the peace, order, and good government power. In my opinion, neither of those powers will support a law that is as broad and vague as Bill C-377. I will briefly discuss each of these powers in turn.
“The Constitution Act,1867, by s. 91(27) confers on the Parliament of Canada the power to make laws in relation to 'criminal law'”. The Supreme Court of Canada has held that a law will be classified as criminal law if it has “a valid criminal purpose backed by a prohibition and a penalty”.
Again, that was the widespread view among economists who presented papers or participated in that earlier referred to discussion at the C.D. Howe conference.
So far as the “valid criminal purpose” is concerned, the Court has held that the protection of the environment counts as a valid criminal purpose. The purpose of Bill C-377 therefore qualifies as a valid criminal purpose.
So far as the “prohibition and a penalty” is concerned, the question is whether Bill C-377 contains a prohibition and a penalty, as those terms have been understood in the case law.
The courts have traditionally distinguished between criminal law and regulatory law. The Criminal Code is a classic case of criminal law in that the Act itself contains prohibitions of various kinds of conduct (theft, assault, murder, and so on). These prohibitions can be self-applied by citizens who, if they offend, will then be subject to punishment by the criminal courts.For the great bulk of offences, there is no role for an administrative body or official to make regulations or to exercise discretion. A regulatory law, on the other hand, is one that achieves its purposes by more sophisticated means than a simple prohibition and penalty, typically vesting discretionary powers in an administrative body or official and often relying on regulations made by the executive. Even if the regulatory scheme is ultimately subject to the sanction of a prohibition and penalty (as is the case with most laws), those are not the leading characteristics of the law: the prohibition and penalty originate in a regulatory scheme. On this basis, federal laws attempting to regulate competition through an administrative body and to regulate the insurance industry through a licensing scheme have been struck down as falling outside of the criminal law power.
I think that's important for us to note for the purposes of this bill.
In R. v. Hydro-Québec (1977), the Supreme Court of Canada upheld the Canadian Environmental Protection Act (a 1988 version of the current federal statute) as criminal law, despite the fact that the Act’s prohibition of the emission of “toxic” substances was preceded by an administrative process to determine whether a particular substance should be classified as “toxic”.
I think my friends from the other parties would probably have some recall of the significance of that particular decision.
The Court split five-four on the issue with the dissenting judges saying that “it would be an odd crime whose definition was made entirely dependent on the discretion of the executive”.
Conservative
Maurice Vellacott Conservative Saskatoon—Wanuskewin, SK
Six-three? He says it was five-four.
He goes on to say:
...that “the Act’s true nature is regulatory, not criminal”. But the majority held that the intervention of some administrative discretion did not rob the law of its criminal character. At the end of the day, there was a prohibition and a penalty for the release of toxic substances.
“Speaking for the majority”--Mr. McGuinty will probably know this from memory--was La Forest, and he said “what Parliament is”.... You remember that, right?
