Evidence of meeting #23 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 chair.
A recording is available from Parliament.
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Conservative
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Liberal
David McGuinty Liberal Ottawa South, ON
It would be great to know for the next meeting. Canadians want to know.
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Conservative
The Chair Conservative Bob Mills
Can we begin on the amended clause 10, with Mr. Warawa having the floor and following the speaking order as outlined?
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Conservative
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Conservative
Mark Warawa Conservative Langley, BC
Thank you, Chair.
This is on clause 10 of Bill C-377, which is an NDP bill introduced by Mr. Jack Layton. I believe it's a dangerous, irresponsible bill, because in clause 10 we have little detail, particularly on the costs. We were asked numerous times by the witnesses, including Mr. Layton, including Mr. Bramley, to have a costing, an impact assessment done on it.
The cost the NDP would impose on Canadian families and businesses would be astronomical. Conservatives are standing up for Canadian families and businesses by trying to stop this bill in committee. It's not a good bill.
What the NDP is proposing would require a 40% reduction in greenhouse gas emissions from where we are today. That is simply not possible without causing massive job losses and huge price increases in electricity and gasoline, keeping in mind that when the Liberals signed the Kyoto Protocol, Canada had an 8% reduction to meet--that was the target, 6% below 1990 levels--and our greenhouse gas emissions have skyrocketed since they've signed on, and we are now 33% above the Kyoto target.
The fact that the Liberal members are now supporting this is irresponsible. It demonstrates that the Liberals will sign or do anything, because they have no intention of doing anything on climate change. They had 13 years to show they cared about climate change, and now their support of Bill C-377, when they also supported Canada's Turning the Corner plan, demonstrates that they will support anything. They supported Canada's Turning the Corner plan, which has targets of 20% absolute reduction in greenhouse gas emissions by 2020, and which is a good plan.
Our Turning the Corner plan also includes details that we see missing in Bill C-377. Unlike the Liberals, the Bloc, and the NDP, our government is actually taking serious action on fighting climate change.
In Bill C-377 we see vague measures taken, referring to clause 5 and targets in clause 5, and then it goes on to say in subparagraph 10(1)(a)(i), “including measures taken in respect of...regulated emission limits and performance standards”. The next subparagraph 10(1)(a)(ii) says, “market-based mechanisms such as emissions trading or offsets” Then subparagraph 10(1)(a)(iii) says, “spending or fiscal incentives, including a just transition fund for industry”.
Now they are acknowledging they're going to be putting many people out of work, but with no details of how to achieve a plan--interesting.
Subparagraph 10(1)(a)(iv) says, “cooperation or agreements with provinces, territories or other governments”, but we also heard from the expert witnesses that Bill C-377 would give the government unlimited and sweeping powers over the provinces and jurisdictions, which is not what we support.
Under the Turning the Corner plan, on the other hand, the Liberals did support this, and what's troubling is that they're supporting everything but getting nothing done. They seem to be trying to jump in front of parades, but again, not getting anything done.
The Bloc has to be consistent in that they never have got anything done, and they voted against our Turning the Corner plan, but they do support Bill C-377 when the expert witnesses are advising that it should be costed, that an impact analysis should be done. The Bloc is supporting that it go ahead without that, which is concerning.
It also is very concerning that in clause 10 of Bill C-377, by proceeding with it the way it's written, the way it has been amended, we are ignoring the advice of the witnesses. We would end up with Bill C-377 not achieving anything.
On the other hand, the Turning the Corner regulatory plan was supported by the Liberals--and I want to thank them for that--both at the Speech from the Throne and in the budget. Numerous times they've supported our Turning the Corner plan, which actually does get the job done on cleaning up the environment.
In April 2007, a year ago, the framework set an initial required reduction of 18% from 2006 intensity levels for existing facilities by 2010.
Is there a point of order?
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NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
I have a point of order for my colleague from the Conservatives—not to interrupt the flow of his filibuster. I just realized that he's reading from a document, and I think it's in order that when members of the committee don't actually present their own or original thoughts, but read from documents....
I have documents in front of me from the witnesses to whom he's referring who support Bill C-377, and I will submit those documents showing witness after witness saying this is the right direction to go in, from Nobel Prize laureates to economists, who are saying this is a good bill.
He is reading from a document. I would request that he submit that document for the committee's perusal.
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Conservative
The Chair Conservative Bob Mills
Mr. Warawa, could I ask you to submit the written documents, if you're quoting directly from them? Give them to the clerk and he can then distribute them.
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Conservative
Mark Warawa Conservative Langley, BC
I would be glad to.
But I have a question: was that a legitimate point of order?
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Conservative
The Chair Conservative Bob Mills
He's just asking that they be tabled with the clerk, and we'll see that they get circulated.
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Conservative
Mark Warawa Conservative Langley, BC
I want to make sure he's aware of practice.
Chair, I tried to table this and introduce it as a friendly amendment yesterday, and Mr. Cullen didn't want that to be part of it. Actually, what I'm reading would have been part of that, but he did not want it. At times, he says he wants the bill improved, but then when we try to make amendments, he says no, no, and calls them out of order—which the blues will demonstrate.
But I would be glad to table it, in fact, through you, Chair. How quickly would you want that?
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Conservative
The Chair Conservative Bob Mills
When you get your turn, table those documents of yours. Thank you.
Mr. Warawa.
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Conservative
Mark Warawa Conservative Langley, BC
Thank you.
So new facilities, which are those whose first year of operation is 2004 or later, would be granted a three-year commissioning period before they would face an emission intensity reduction target.
After the third year--and this is all missing in Bill C-377, clause 10--new facilities would be required to improve their emission intensity by 2% each year. A cleaner fuel standard would be applied, therefore setting the targets as they were using the designated fuel. A flexible approach would be taken in special cases where the equipment or technology used in a new plant facilitates carbon capture and storage or otherwise offers a significant potential for emission reductions.
It is so important that we have the technology of carbon capture and storage as a technology that Canada encourages, promotes, and helps fund, because the global community, our international partners, people, the major emitters that have to reduce their greenhouse gas emissions, everybody needs to be able to be given those tools to stop climate change, to fight climate change. One of those tools is carbon capture and storage.
The world community is hoping carbon capture and storage will account for about 25%. So it's important that this be developed in Canada. We already are the world leaders.
The carbon capture and storage project in Weyburn, Saskatchewan, has now moved on to a phase from proving that it is very effective, very successful in storing carbon dioxide, and also by pumping it into the ground with water to enhance oil recovery from old oil fields that were no longer producing.
But we've also, in our funding of $9 billion of environmental programs--$9 billion, it's a huge investment, and it's a historically high investment in Canada, it's huge, because this government is serious about seeing greenhouse gas emissions reduced in Canada and globally. That's why we're investing in this technology of carbon capture and storage.
We have moved to that phase of commercialization. Between now and 2009, there's a phase of commercialization research. So it's very important that we fund that. We have.
When people do something that is good for the environment, I want to acknowledge that. In the past I have been quite disappointed by the Liberals and their lack of action on the environment, but when they do something good, I want to give them credit. They did support our budget, which included that $9 billion for environmental programs, and I want to thank them. I want to thank them for supporting our Turning the Corner plan.
On the other hand, I was disappointed by the Bloc. They voted against $9 billion for environmental programs. They voted against carbon capture and storage research and development. Of course, not surprisingly, the NDP did not support that either.
We need to have that technology, and Canada is moving forward for both new and existing facilities. Fixed-process emissions, which are emissions tied to production and for which there is no alternative reduction technology, would require a 0% target in the reductions. In other words, there is no way with current technology for these types of emissions to be reduced except for shutting down production.
So we're looking at the situation in a very practical way. Are we seeing that in Bill C-377? No, we're not. Bill C-377 is missing substance that would actually initiate reductions in greenhouse gas emissions. This is what we have been telling Canadians we're here for.
We're here in the Standing Committee on Environment and Sustainable Development to work together cooperatively to see tangible results. Bill C-377 is not accomplishing that; the Turning the Corner plan is.
We need to see Bill C-377 dramatically rewritten. I think it was the Bloc that suggested that Bill C-377 be totally rewritten. Now they have introduced a number of amendments, as did the Liberal members, as did the NDP. They basically rewrote Bill C-377.
But we need to accept further amendments, and as I said before, we need to seriously change clause 10, because the way we have clause 10 written now in Bill C-377, it's missing the ingredients to see absolute reductions in greenhouse gas emissions. And that's what Canadians sent us here for, to work hard together to see absolute reductions.
We're already seeing results through our Turning the Corner plan, because it includes what Bill C-377 does not. It needs to include compliance mechanisms like those we see in the Turning the Corner plan. In order to provide flexibility and to minimize the economic impacts of the regulations, firms could comply with the regulations either by reducing their own emissions through abatement actions or by making use of one of the framework's compliant mechanisms, for example, the technology fund.
Now, Bill C-377 does mention a transition fund dealing with businesses that would be put out of business. A technology fund is quite different. Firms would be able to obtain credits for compliance purposes by contributing to a technology fund. The fund would be a means to provide the development, deployment, and diffusion of technologies that reduce emissions of greenhouse gases across industry. A third party entity at arm's length from government would be created to administer the fund. A key principle is that there would be no inter-regional transfer of wealth. It's a very important point.
Are we seeing any of those details in Bill C-377, clause 10? No, we're not. It's very concerning that we have Bill C-377, clause 10, which is not providing mechanisms that will actually see reductions in greenhouse gas emissions. It's not providing mechanisms, like a technology fund, to help industry, and those are definitely needed.
Under the Turning the Corner plan, contributions to the development and infrastructure component of a technology fund aimed at investments with a high likelihood of yielding greenhouse gas emission reductions in the near term would be limited to 70% in 2010. That's less than two years away, and industry is aware of this happening. That is why we're already seeing tangible and concrete action through our mandatory reductions of greenhouse gas emissions to a level of 20% by 2020.
I might add that this is the toughest target in Canadian history, and it's one of the toughest in the world.
The contributions to the technology fund--which are missing from Bill C-377--as I said, would be limited to 70% in 2010, but falling to 65% by 2011, 60% by 2012, 55% by 2013, 50% by 2014, 40% by 2015, only 10% by 2016, and again 10% in 2017. So you see a definite pattern. This gives direction, Chair, to industry that they can use the technology fund, but only for a certain period of time. You have to phase out of it.
Now, do we see that in Bill C-377? No. The fund they have is a transition fund for industry that is being put out of business. That's not good for Canadians, and it's not good for the environment. Industry needs to be successful at cleaning up the environment, and it needs to be able to continue to provide good green jobs to Canadians if we're going to be able to tackle climate change and show how we do it,and take that strong leadership here in Canada, and demonstrate to the rest of the world that it can be done here.
An example of that concerns the amount of carbon dioxide that you create when you make aluminum. In Canada, one tonne of aluminum creates four tonnes of carbon dioxide--in China, it's seven--and through technology we're cleaning it, and it will become even less than four tonnes. So Canada will be one of the cleanest, environmentally friendliest producers of aluminum, when we already are and we'll continue to improve that. So that technology fund helps build Canadian technology--technologies, again, like carbon capture and storage.
No further contributions would be accepted to the technology fund after 2017. The research and development component, which would focus on projects aimed at supporting the creation of transformative technologies, would be limited to five megatonnes each year, also ending in 2017.
From 2010 to 2012, the contribution rate for the fund would be 15 tonnes for carbon dioxide equivalent, and that is the rate that's set based on carbon dioxide, and that's why it's called the carbon dioxide equivalent. Methane is 21 times more damaging than carbon dioxide, and that's why you use the base of a carbon dioxide equivalent.
In 2013, the combination rate for a tonne of carbon would be $20. Thereafter, the rate would escalate yearly at a rate of growth of nominal GDP to 2017.
We've already seen action happening on the environment that we will not see with Bill C-377. Again, we've heard from every witness group that Bill C-377 does not have the components to evoke action, while we are already seeing action happening on the environment through Canada's Turning the Corner plan, which is moving from a voluntary program, which was used by the Liberals, to now a mandatory regulatory program using CEPA 1999. And we've had our notice of intent to regulate, so the regulations are already in that process, which has now spurred a carbon market, the Montreal Climate Exchange.
So they're already seeing very definite positive results. It is puzzling that from the support we received from the Liberals for our Turning the Corner plan to move forward—and them all over the place.... I'm hoping they're encouraged by the good work that they are seeing happening already in Canada from the Turning the Corner plan. We definitely are, and I know Canadians are.
One of the other compliance mechanisms that we have in the Turning the Corner plan that we don't have in Bill C-377 under clause 10--and I really believe it needs to be in there--is the inter-firm trading. Firms whose actual emission intensity in a given year is below their target would receive tradable credits equal to the difference between their target and their actual emission intensity multiplied by their production in that year. These credits could be banked for future use or sold to other parties, including other regulated firms.
Another mechanism is the offset system. You need to have these compliance mechanisms, and Bill C-377 is missing that. I would be very open to seeing Mr. Cullen accept these as amendments to Bill C-377. In the offset system, offsets are projects that result in incremental real verified domestic reductions or removals of greenhouse gas emissions in activities that are not covered by the federal greenhouse gas regulations. These projects would generate credits that firms could use for compliance purposes.
Then there are CDMs, clean development mechanisms, through the UN. Firms could use certain credits from the Kyoto Protocol's clean development mechanisms. Access to these credits for compliance purposes would be limited to 10% of each firm's total target.
CDMs are one of the many tools that are important to industry, and this is what is being used internationally to help industry reduce its greenhouse gas emissions and their effect on the climate. CDMs are not in Bill C-377, clause 10. They are supposed to be listing mechanisms that would actually see reductions to greenhouse gas emissions. They are not in Bill C-377, clause 10, but they are in Canada's Turning the Corner plan.
As we go through this, it becomes very clear that Bill C-377 is not going to reduce greenhouse gas emissions. It still needs a lot of work before we proceed.
Another compliance mechanism that's missing in Bill C-377 that should be there is a one-time credit for early action. Firms that took verified action between 1992 and 2006 to reduce their greenhouse gas emissions would be eligible to apply for a share of a one-time credit for early action. A maximum of 15 megatonnes worth of credits would be allocated, with no more than five megatonnes to be used in any one year. Firms would be required to submit evidence of changes in processes or facility improvements they've undertaken that resulted in verifiable incremental greenhouse gas emission reductions.
The maximum allocation for emission reductions would be one credit for each tonne of carbon dioxide equivalent reduction. If the total tonnage of emission reductions applied for were to exceed 15 megatonnes, the credits would be distributed to individual firms in proportion to their contribution to the total emission reduction achieved. So it's a good recognition of good corporate citizens that were doing their part already in Canada to reduce greenhouse gas emissions. Is it fair? I believe so.
The government's plan has already been enacted, is already at work, and is already happening. We're seeing actual positive results, real results, in Canada's Turning the Corner plan, which includes credit for early action. Why would that not be in Bill C-377, clause 10? I'm not sure, but it should be. Credits for early action should be given. So that's another suggestion for Mr. Cullen, and maybe he will accept that as an amendment--to see credits for early action. Businesses that have invested in cleaner technology for the benefit of the environment are good corporate citizens.
On the example he used about aluminum, there are cheaper ways of making aluminum. You can make aluminum using dirty coal-fired generating plants. To make aluminum takes a lot of electricity. If you use coal-fired plants to make aluminum, you're using an old technology and you're going to be producing a lot of carbon dioxide and pollutants. It is a very popular metal and is used worldwide. The demand for aluminum is continuing to grow, because the more aluminum you use in making vehicles, the lighter the vehicle becomes, and the less energy is used to move a vehicle down the road. That's why our North American auto manufacturers are using a lot more aluminum.
Canada is using a cleaner technology that produces only four tonnes of carbon dioxide for one tonne of aluminum. It's a cleaner technology than what is being used in China, where they produce seven tonnes of carbon dioxide for one tonne of aluminum. So should those Canadian companies that have invested in cleaner technology that benefits Canada--and it's more expensive to build it that way--get a credit for that early action? I think they should. That's why we have that.
Why would that be missing in BillC-377? As I said, I believe strongly it shouldn't be missing. Bill C-377 is unfair by not having that. It needs to be in there.
An application for the industrial regulatory framework is expected to result in significant absolute reductions of greenhouse gas emissions from the 2006 levels. I'm not optimistic at all that this would happen with Bill C-377. That's why I'm so concerned about Bill C-377. The Turning the Corner plan would put Canada on the path to meeting its national emission reduction targets--20% absolute reductions by 2020--and that's good news.
We were at the international COP 13 meeting in Bali. We had the witnesses come back to this committee, and they shared with this committee that Canada had gone through a cycle of being embarrassed because they weren't getting things done. That's what concerns me about Bill C-377, clause 10. It would not accomplish a reduction in greenhouse gas emissions. Bill C-377 is a bill that would embarrass Canada.
Canadians are tired of being embarrassed by inaction by the previous government. They want action. They have action now. We're already seeing positive results from the Turning the Corner plan. Why would we want to go back and have Bill C-377 slow the process down, not get any results in reducing greenhouse gas emissions, and again embarrass Canada? We don't want that, and I believe Canadians don't want that either. They want action, and they're getting that under this government.
Following the release of the framework in April of last year, the government consulted extensively with the provinces and territories as well as with ENGOs, aboriginal peoples, industry, and other stakeholders on key policy and regulatory development issues and the framework that remains to be elaborated on.
The federal, provincial, and territorial governments have initiated a cooperative process to work through the regulatory issues, through the environmental protection and planning committee of the Canadian Council of Ministers of the Environment. Some provinces have indicated an interest in negotiating equivalency agreements with the federal government. We're working with every single province and territory in Canada to see absolute reductions in greenhouse gas emissions.
We heard, and there is mention in Bill C-377, clause 10, of cooperation or agreements with provinces, territories, or other governments, but there are no details--no consultation, no mention of ENGOs, no mention of aboriginal government. That's another example of not even coming close to the mark of what kind of consultation needs to happen.
The federal government is responsible for setting targets that are realistic and concrete, and for setting them within a regulatory framework that will end up with results. We see that in the Turning the Corner plan. We do not see that in Bill C-377.
It also involves the federal government providing partnership with the provinces. We've set standards that are minimum standards. If the provinces want to exceed them, then we encourage that. We are helping fund that. Almost $600 million, I believe, was provided to the Province of Ontario to close down some coal-fired plants. I'm not quite sure what the Province of Ontario has done with that dollar amount, but that's what it was for, to help them close down the coal-fired plants.
That needs to happen, because that's the old technology. The new technology is reducing greenhouse gas emissions. That's where the Government of Canada is going. We're providing leadership. We're providing regulations. We're providing targets that are realistic.
At the same time, we're helping the economy and helping the environment. We're providing the funding. We then want a partnership. We want to work with the provinces in equivalency agreements and in friendly ways to see absolute reductions in greenhouse gas emissions. And we're very happy with the progress we've made working with the provinces.
Following the release of the framework last year, the government, as I said, consulted. The federal, provincial, and territorial governments initiated a cooperative process to work through the regulatory issues. The consultations focused on coverage.
Should small facilities be excluded from the regulation in order to minimize the administrative burden, and if so, on what basis? I believe that we need to show consideration for the smaller facilities. You have to take a different approach with a large facility than you take with a small facility. Each is producing greenhouse has emissions, but the business case for an older facility or a small facility is different from that for a facility that is just being built using a cleaner technology. So that has to be considered. It was part of the consultation process with the provinces.
We don't see that in Bill C-377, clause 10. I believe that it needs to be in there. I hope Mr. Cullen is listening, because I'm hoping this is another part he would be willing to see added to clause 10 of Bill C-377.
Also, the consultation included discussions about targets. For example, how should the greenhouse gas targets be applied in different sectors? Each province has different sectors, different focuses of industry. Should certain sectors face special circumstances that would require a different application of the framework?
There was discussion on finalization of the definition of fixed-process emissions in each sector and on targets for treating major expansions and transformations. Do they have carbon capture storage built into them? How will a cleaner fuel standard be incorporated into the target for new facilities in each sector? It is very important that we burn a cleaner fuel, that we recycle the fuel, the energy that we already have above the earth.
The problem with climate change is that we are taking the energy that is below the earth above the earth and burning it and adding this new carbon dioxide to the atmosphere. We need to stabilize that. We need to recycle the carbon dioxide, the carbon we already see above the earth, to stabilize and stop a warming climate.
We need to have targets with the provinces--and that's part of the consultation--for incorporating the cleaner fuel standards. How would the regulations apply an appropriate incentive for cogeneration, a wonderful technology that needs participation from the provinces and the federal government? That's already happening. A wonderful example of that is landfills.
Chair, you've often encouraged the committee to talk about actual practical things we can do to see greenhouse gas emissions.... What we need to have in Bill C-377, in clause 10, is an opportunity to focus on solutions. One of those solutions is cogeneration, or gasification of garbage. Instead of using a landfill to bury it, you gasify it, and from that gasification you separate out the gases and chemicals and use them instead of burying them in the ground. That's good technology.
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Liberal
David McGuinty Liberal Ottawa South, ON
Mr. Chair, it's been exactly 42 minutes since the parliamentary secretary began speaking. I thought that in the spirit of collaboration and to offer up an alternative to him, because he's been repeating virtually everything he said before, it would be beneficial that I offer him two phone books. This is the Ottawa phone book white pages, and this is the Ottawa phone book yellow pages. I'm going to offer them to him so he can actually take them forward and read from them.
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Conservative
The Chair Conservative Bob Mills
Mr. McGuinty, that's not a point of order, thank you.
Mr. Warawa, if you'd like, you can continue.
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Conservative
Mark Warawa Conservative Langley, BC
Chair, what I was sharing was that Bill C-377 is missing important solutions, technologies, and mechanisms to help industry reduce its carbon footprint. We're seeing that in the Turning the Corner plan; we're seeing tangible mechanisms that will help industry. And it's missing in there. I strongly believe that we need to focus on them and maybe even spend some meetings looking at solutions instead of having rhetoric and silly games.
Now, the sectors have to have minimum thresholds. Again, that's missing in clause 10 of Bill C-377. You have to have thresholds. Some sectors have very large facilities, often including many small facilities that contribute little to a sector's overall emissions. Other sectors have only a few, but large, facilities.
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Liberal
David McGuinty Liberal Ottawa South, ON
I have a point of order, Mr. Chair. We've heard these remarks. This is the third or fourth time Mr. Warawa repeats these very remarks. Are these going to make a contribution to this debate? I strongly recommend he reads from the phone book. That would be a more positive contribution to this debate, Mr. Chair.
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Conservative
The Chair Conservative Bob Mills
Mr. McGuinty, we have about two or three minutes until the bells go for the vote tonight. I would like Mr. Warawa to continue and complete.
3:42 p.m.
Liberal
David McGuinty Liberal Ottawa South, ON
I'd just ask, Mr. Chair, that you exercise your responsibilities well--as you do--and that is to actually monitor the fact that Mr. Warawa is reading from the same documents he read from at the last meeting. So again, I would plead with you on this point of order, if he's going to do that, then he should read the Ottawa phone book.