Environment Committee on Dec. 1st, 2009

[Pierre Boucher]

What concerns us more is a target for each industrial sector. Insofar as the cement sector is concerned, we advocate that our sector be treated in a unique manner taking into account its specificities everywhere in Canada, in the United States and throughout the world. We advocate that there be a target for the cement sector which could be the same throughout Canada.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

So you are certain that in its next plan the Government of Quebec will set a very high bar for the manufacturing sector and will not take into account the efforts it has made in the past, because that is currently the problem. In this sector, industries made efforts in the past but these were not recognized. The efforts that were made, and the available technology, are not taken into account. We know that in your sector there are limits to how much greenhouse gas emissions can be reduced.

For Quebec to reach its 20% reduction objective, manufacturing sectors are not the ones that will be affected in the future; it will most probably be the transport sector. Indeed as the representative of the oil industry said, that sector accounts for 40% of greenhouse gas emissions. To reach the greenhouse gas emission reduction objective the industrial sectors will most likely, as they have reduced their emissions by 24%, not be the ones affected, but the transport sector will. So there are chances that the Quebec industrial sector will be spared, to the extent that Quebec controls its emission reductions.

Basically what I'm trying to ask you is this: should we not have a common and differentiated approach, just as Europe has adopted, taking into account our industrial structure, our past reductions, our population, energy efficiency, technological possibilities and available renewable energy?

[Pierre Boucher]

That is what I am saying, insofar as the cement sector is concerned. A cap and trade system is conceivable to take into account all of the aspects you just mentioned.

Indeed, certain sectors should make greater efforts, in particular the transportation sector in Quebec. More efforts are required. It has been clearly said I believe by the Quebec government that the greatest effort will have to be made in the transport and housing sectors, as the industrial sector has indeed contributed a great deal.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

In a federal framework, I wish you good luck.

In the steel sector you reacted very well when the Buy American Act was passed, so that the steel industry will probably be penalized during the next few years.

We didn't hear you talk about the fact that at least two out of three projects being studied in the various chambers in the United States would impose a “carbon tariff” on the countries or industrial sectors in Canada that would not reduce their greenhouse gas emissions.

Isn't there a danger that targets will be set that are not rigorous? We are talking about harmonization. In reality these targets in Canada aren't absolute reduction targets. They are intensity targets.

Last week at least two economists came to tell us that a North American cap and trade emissions market is a good thing, but on condition that it be harmonized. We can' t have a cap and trade system in the United States based on absolute targets while the federal government continues—even though it was claiming the opposite yesterday—to adopt intensity targets. They are not planning reductions at the source.

[Mark Warawa, Conservative, Langley, BC]

I have a point of order.

[The Chair, Conservative, James Bezan]

Go ahead, Mr. Warawa, on a point of order.

[Mark Warawa, Conservative, Langley, BC]

Mr. Chair, we've heard inaccurate information in an attempt to confuse the witnesses. The fact is, Chair, that the government's position on greenhouse gas emissions is not intensity based. They are absolute targets of 20% by 2020. For a second member of the opposition to now try to confuse the witnesses by making false claims is not appropriate, Chair. The targets are absolute targets of 20%.

[The Chair, Conservative, James Bezan]

Go ahead on the same point of order.

I didn't see it as a point of order, though; it was more debate.

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

We might as well correct the record. If Mr. Warawa is saying we have an absolute target by 2020, what he's saying is we have absolute targets for every industry in Canada by 2020.

[The Chair, Conservative, James Bezan]

Committee members, as I've stated before, I want to make sure that when we raise points of order, they are actually points of order. This is debate; I'm going to give the floor back to Monsieur Bigras.

You have one minute left.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

I demand that the point of order not reduce my speaking time.

[The Chair, Conservative, James Bezan]

It didn't. You were at one minute; I stopped the clock.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

Fine.

Basically, this 20% greenhouse gas emission reduction target is all well and good. First of all, I don't see why the government is claiming that it is a 3% reduction with regard to 1990, if these are absolute targets. You see, there is an inherent contradiction in what they have been saying.

So I would like to hear what you have to say on the fact that the government is adopting intensity targets while on the other side of the border they are adopting absolute greenhouse gas reduction targets. Isn't there an inconsistency in the whole system?

[The Chair, Conservative, James Bezan]

Go ahead, Mr. Watkins.

[Ron Watkins]

Monsieur Bigras, thank you for your question.

From our point of view, the reference point is what is happening at the sectoral level between ourselves and our U.S. counterparts in terms of what the regulatory obligation will be. I think their system is clearly moving in the cap-and-trade direction. I would add that they, of course, have also introduced other measures to deal with the external trade issues, and that aspect also certainly needs to be tracked for its impact on us as producers. That's the comparability that, frankly, is important to us. It's that alignment, so that we're facing essentially the same challenge.

[The Chair, Conservative, James Bezan]

Moving right along, we'll go to Mr. Bevington. You have seven minutes.

[Dennis Bevington, NDP, Western Arctic, NT]

Thank you, Mr. Chair, and to the witnesses for coming here today and sharing their interesting and important points of view on this subject.

I want to focus back on the bill, because that's what we're here for.

Mr. Lloyd, you indicated that you didn't support the bill. I've been listening to everything that's been said here, and I don't understand in what way Bill C-311 will not allow flexibility in determining which industries are going to provide the greater carbon dioxide reduction targets. Could you tell me a little bit more about why you think this bill is not appropriate?

[Gordon Lloyd]

Sure. The main problem we have with the bill is that it requires us to meet certain targets way off in the future, and we have no way of knowing whether we're going to be able to meet them. If we can't meet them, the bill is a recipe for buying credits internationally. In our view, a much better solution is for the government to take that same money and invest it in technology.

[Dennis Bevington, NDP, Western Arctic, NT]

Does it say anywhere in this bill that the chemical industry is being targeted for particular reductions? Are you not going to be part of a larger government plan that has total reductions coming from all industries?

[Gordon Lloyd]

We'll be part of a larger government plan. But when I say we don't know if the chemical industry can meet them, I mean the same thing Canada-wide. We simply don't know if Canada can meet those targets so far off into the future.

[Dennis Bevington, NDP, Western Arctic, NT]

So it's more your concern with the overall targets, not with the impact on your industry.

[Gordon Lloyd]

The main concern is that this bill would drive us to spend all kinds of money internationally. Emissions trading is a useful element in addressing climate change. But in our view, there should also be a larger investment in technology, and a technology fund is something that's very important. Investment through promoting ancillary capital cost allowance improvements would also be effective. That would be a better way to spend the money than the $6 billion or more that in 2020 we'd have to spend abroad under the terms of this bill.

[Dennis Bevington, NDP, Western Arctic, NT]

You have indicated a 65% reduction in CO₂ emissions. What has that done to your bottom line? Does that improve your sales or take away from them?

[Gordon Lloyd]

It was positive. We were able to do that because in the nineties, when things were booming, we invested in new technology and equipment. We want a return to those times, and that could happen with the technology fund that we've talked about, and with improved accelerated capital cost allowance.

[Dennis Bevington, NDP, Western Arctic, NT]

I want to go on to the petroleum industry. What we've seen in the U.S. over the last three years is an almost 20% reduction in the use of crude oil. The barrels per day have gone from 21.7 million down to 18.8 million. So your industry has accomplished large absolute reductions in the U.S. What's the situation in Canada?