Environment Committee on June 10th, 2014

[John McKay, Liberal, Scarborough—Guildwood, ON]

Right now you're not getting anything for your GHG reductions.

[W. Scott Thurlow]

Currently, under the federal regulations, there is not a mechanism in place.

[John McKay, Liberal, Scarborough—Guildwood, ON]

So there has to be some pricing mechanism in order to be able to level the playing field vis-à-vis ethanol versus other fuels.

[W. Scott Thurlow]

Where you say “price”, I'll say “fair value”. I don't think it's incumbent on government to establish what that price should be and put that out there as a bulkhead. What I want to do is make sure that where GHG reductions happen, there is a mechanism that allows for individual commercial entities to negotiate that into the—

[John McKay, Liberal, Scarborough—Guildwood, ON]

One way or another, it has to go to the bottom line. It has to be a dollar or a cent value somehow or another, whether you call it value or price.

[W. Scott Thurlow]

I can tell you anecdotally that some of my members are now putting that GHG value into the price for sale of their products—

[John McKay, Liberal, Scarborough—Guildwood, ON]

For which they're getting zippo.

[W. Scott Thurlow]

That's not true.

[John McKay, Liberal, Scarborough—Guildwood, ON]

No?

[W. Scott Thurlow]

But it's because of provincial regulations.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Okay.

The second point is with regard to the excise tax. Your big thing is to get....

Now, it seems to me that the excise tax is 10¢ on a litre. Isn't that correct? Eliminating 10¢ a litre on fuel at the pump is, (a), a huge drop of revenue, but (b), it's a huge competitive advantage for ethanol.

Are you actually advocating for the total reduction or a percentage reduction?

[W. Scott Thurlow]

We're advocating for a total reduction on cellulosic ethanol. Right now, ethanol that's blended into gasoline is taxed at the same rate as the petroleum fuel component. Just like in the 1990s, we had the first exemption for ethanol, and just like when we had the same exemption for biodiesel, these very limited targeted tax exemptions will do exactly as you just said—create that advantage to allow the industry to kick-start itself.

[John McKay, Liberal, Scarborough—Guildwood, ON]

When I'm looking at a fuel pump, and I'm pumping—I don't know whether it's 5% or 7% ethanol—you want the percentage of that excise tax.

Given the price sensitivity, i.e., that Canadian consumers will drive miles in order to be able to get a cent reduction—

[W. Scott Thurlow]

Let's hope they drive to Enerkem.

[John McKay, Liberal, Scarborough—Guildwood, ON]

—doesn't this in effect give you an enormous competitive advantage?

[W. Scott Thurlow]

Yes. But the point is that right now we're at an enormous competitive disadvantage.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I buy that, but I want to tease out the whole thing.

[The Chair, Conservative, Harold Albrecht]

For clarification—Mr. McKay, I think I'm following your line—is the 10¢ that you're removing just on the ethanol part of what's in that litre, or the whole litre?

[W. Scott Thurlow]

It's just on the ethanol part, and just on the cellulosic part.

[The Chair, Conservative, Harold Albrecht]

It's going to be like 0.03 cents a litre.

[W. Scott Thurlow]

I'm pretty sure that Mr. McTeague would notice and drive right across the country.

But, yes, that is correct; it's just on the cellulosic part and it's just on the ethanol part.

[John McKay, Liberal, Scarborough—Guildwood, ON]

He'll have to put that on his website.

Ms. Labrie, what's the price of that plant?

[Marie-Hélène Labrie]

We've invested about $100 million.

[John McKay, Liberal, Scarborough—Guildwood, ON]

So that's a $100-million plant.

[Marie-Hélène Labrie]

That's private investment, so it's not the city buying it. It's not a technology that we sell, because sometimes for waste management the model is to sell the technology that then needs to be upgraded by the municipality.