Debates of June 16th, 1995

Income Tax Act

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, it is a pleasure to speak on Bill C-70. The purpose of the bill is to amend the Income Tax Act because of certain budgetary measures which were taken.

Members of the Reform Party vehemently opposed that budget. We opposed the budget because we felt it did not go far enough. It did not address the situations in the country which threaten every Canadian from coast to coast. Canadian jobs are

threatened, their homes are threatened and their social programs are threatened.

The reason the budget threatened each and every Canadian was due to the economic and fiscal irresponsibility of the government in not addressing the debt and the deficit which increased every year. Furthermore, the budget sought to compromise those in our society who are most vulnerable, those who cannot take care of themselves and those who are most dependent on government largesse.

We in the Reform Party proposed the zero in three plan. We gave the first half of that plan to the government. We said to the government: "Here is a how to plan". It was not something esoteric, it was a how to plan to bring the economic situation under control. We told the government how much to cut and where to cut. Did the government heed that? No.

We gave the second part of the plan to the government and said: "Here is the product of hard work. Here is the product of something which is followed by a great many Canadians. It is a plan which is fiscally responsible and sound. It is a plan which will address the debt and deficit problem". Did the government listen to us? No.

As a result we have the problems of today. Figures came out this week that showed the real income of Canadians has dropped significantly over the last two years. The Canadian dollar has dropped and inflation is rising. As well, the investors of the world have downgraded our bonds. Moody's has downgraded our bonds for the first time ever. If this is not a harbinger of things to come, I do not know what is.

It is unfortunate that the wool has been pulled over Canadians' eyes by a budget which is an illusion. The government told us that it is the first government to cut. That is true. This is the first government to actually make cuts. Let us analyse those cuts.

A third of the cuts which were made truly were cuts and the government deserves credit for that. However, two-thirds of the cuts were made to provincial transfer payments. Whose shoulders did they fall on? The provinces. The provinces also tax the same taxpayers and at the end of the day it is the taxpayers who have to pay.

Whether it is the federal government, the provincial government, or the municipal government people who work hard have a huge amount of their money taken away from them to go to the governments which are in difficult financial situations. Governments have not recognised the situation they are in and continue to spend taxpayers' dollars in an irresponsible fashion.

I plead on behalf of all Canadians that the government take heed and work with us on the problem to develop a sound, fiscally responsible solution which is going to help all Canadians from coast to coast. That is what everybody in the House wants to have. We need a strong, aggressive, forward thinking economy that is going to help all Canadians while preserving the core of our social programs to ensure that all those in Canada who need it will be taken care of.

[An hon. member]

They owe it to the young people.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Yes, that is right, they owe it to the young people. This government and previous governments have mortgaged the future of Canadians to pay for what we have today. That is the height of irresponsibility. The young people of today and those who are not yet born are the ones who are going to bear the brunt of this most tragic situation.

The current tax situation is an unwieldy, ineffective system that is bogged down in bureaucratic largesse. All of us here pay taxes. All of us see the tax plans. All of us see the forms that have to be filled out. How can we see these every year and not ask: If we are having a problem with it, is not the rest of Canada?

Why does the government not simplify the tax system to ensure that it is fair and equitable across the whole spectrum of individuals earning money? We must ensure that everybody pays their fair share without going through loopholes and favouritism within the system.

To that end, my colleague from Calgary who is our finance critic has just mentioned the flat tax system that we in the Reform Party have been speaking about since we were elected. It was one of the pillars of our economic and fiscal plan.

Essentially the flat tax system would simplify the tax to ensure that all Canadians pay their fair share. That is extremely important. As we speak to businesses and individuals alike they shake their heads and ask: "How can we deal with this tax system, a system that is so unwieldy, so unforgiving and so complicated?" There are many simpler ways of doing it.

The GST is another aspect of the tax system that was supposed to be revisited. The Deputy Prime Minister stated that if the GST was not gone a year after she was elected, she would be gone. Unfortunately she is still here. I think she should live up to her promises.

That is another aspect of the tax system which needs to be revisited. I ask and implore members on the government side to please listen to business leaders in their communities, not leaders of the business community leaders who come to us. Go out and walk among the business community/leaders and ask them what it is that absolutely frustrates and prevents them from maximizing their potential as a business person. They will say, nine times out of ten, it is the GST.

The second thing they will mention nine times out of ten is the unbelievable red tape they have to go through to operate within this country. It eludes me why, in a country as rich and as potentially powerful as ours, we have to hamstring the business community with bureaucratic entanglements.

I implore the government to look at ways of simplifying the taxation system, the bureaucratic red tape and internal trade barriers which hamper Canada.

The trade barriers in our country hamstring and prevent businesses from being the best that they can become. We aggressively pursue, and rightly so, international free trade agreements like the WTO and previous to that the GATT. It is done to help our business communities. That is done on the international scene. However it eludes me why on our domestic scene we turn around and say: "No, you cannot do business here. We are going to put tariffs there. We are going to oblige you to follow these rules and engage in the same type of bureaucratic entanglements and anti-free trade rules that we do not follow in our export and international endeavours". It is hurting our businesses and people wonder why we are not doing better. In part it is because of these internal trade barriers which are hamstringing the ability of businesses to do that.

When it was elected the government said it was going to aggressively pursue the elimination of these interprovincial trade barriers. It has only nibbled around the edges and Bill C-88 will prove it to the Canadian public.

In closing, there are good parts to Bill C-70 and many bad parts. We must simplify the tax system. Let us look at the flat tax system we want to apply. Let us ensure that we simplify expenditures. Let us attack the deficit and bring it down to zero. Listen to the zero in three plan of the Reform Party and move forward to a strong economy for all Canadians.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, on a point of order. Would there be unanimous consent for the Chair to put the question now and then proceed to private members' hour?

[The Deputy Speaker]

Is it agreed?

[Some hon. members]

Agreed.

[The Deputy Speaker]

Then we will put the matter to a vote. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Yes.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the nays have it.

And more than five members having risen:

[The Deputy Speaker]

Pursuant to Standing Order 76(8), the division on the motion stands deferred until Monday, 11.30 p.m., at the time of adjournment.

It being 1.30 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

The House resumed from June 9 consideration of Bill S-7, an act to accelerate the use of alternative fuels for motor vehicles, as reported (with amendment) from the committee; and of Motions Nos. 2, 3, 5 and 6.

Alternative Fuels Act

[Marlene Cowling, Liberal, Dauphin—Swan River, MB]

Mr. Speaker, it is my pleasure to rise today in support of Bill S-7, an act to accelerate the use of alternative fuels for internal combustion engines. With the passage of this forward looking legislation, the federal government will assume a leadership role in the reduction of greenhouse gas emissions by requiring by the year 2004 the conversion of 75 per cent of its fleet vehicles to cleaner burning fuel.

The federal fleet consists of 39,000 vehicles that release 150,000 tonnes of carbon dioxide and over 4,000 tonnes of other pollutants into the environment each year. These pollutants collect in the atmosphere and contribute to global warming. As a result of Bill S-7 we will reduce CO2 emissions by 20,000 tonnes annually and will take positive steps to address the greenhouse effect. We will lead by example.

It is anticipated that the conversion of government vehicles will encourage automobile companies to market vehicles that burn renewable fuels and will also increase the number of service stations providing alternative fuels. Not that many years ago gas stations offering ethanol were few and far between. Now they are everywhere. This too will happen with other cleaner burning fuels.

We have all contributed to the environmental problems we now face and it is time to be part of the solution. Bill S-7 will allow us as parliamentarians to take positive action to ensure that our children and our children's children enjoy cleaner air and a healthier environment. We owe this to them.

By requiring government vehicles to be converted to cleaner burning fuels, Canada will be making a significant step toward fulfilling our international commitments to reduce greenhouse

gas emissions to 1990 levels by the year 2000. The Liberal government is committed to ensuring that these obligations are met for the good of Canada and for the good of the world.

In addition to greening our country, this legislation will result in long term savings to Canadian taxpayers. During the five years it will take to convert 75 per cent of our government fleet vehicles, we will save $7 million. Once conversion is complete we will save $7 million every year. This represents direct savings to government and direct savings to taxpayers.

Bill S-7 is fuel neutral. It promotes the use of ethanol, methanol, propane gas, natural gas, hydrogen or electricity. The choice of fuels to an extent will be regionally determined based on economic factors and availability.

The expansion of the use of ethanol is of particular importance to me given the benefit it is for the environment and as a growing market for prairie grain. Not only is prairie grain feeding the world, it is getting the world where it wants to go and in a more environmentally friendly way than traditional fossil fuel.

Ethanol provides an excellent opportunity for economic growth and diversification. It greatly expands the market for agricultural products thereby increasing farmers' incomes. It also provides opportunities for value added development and jobs in rural Canada.

The people in my Dauphin-Swan River riding are excited about the prospects of ethanol production. Groups from the towns of Russell and Swan River have approached me about possibilities of establishing ethanol plants in their communities. They are excited about contributing to the greening of our environment and the economic spinoffs for their communities. The construction of ethanol plants in rural communities will not only boost our self-sufficiency in ethanol supply but will also diversify our communities, provide needed jobs and greatly contribute to the long term viability of rural Canada.

To help our rural communities build innovative economies, the minister of agriculture and the environment minister announced the biomass ethanol program which will encourage investment in the ethanol industry, thereby expanding domestic demands for corn, wheat and barley produced on the prairies. The biomass ethanol program shows this government's commitment to encourage the production and use of renewable fuels where it is environmentally sound and economically viable.

I am pleased with the support that companies like Centra Gas in Winnipeg and Ford Canada have given to this initiative. Propane and natural gas suppliers have indicated that they are prepared to convert suitable vehicles in the government fleet at their own expense. These are the types of partnerships we need to encourage to work toward environmental sustainability.

I am very pleased to offer my wholehearted support to this forward looking initiative. It is not often that an idea comes about that is good for the environment, good for agriculture and good for the taxpayers. In short, this is a win-win proposal.

I commend Senator Colin Kenny for his foresight and his commitment to the environment. I urge all members of this House to support this important legislation.

[Lee Morrison, Reform, Swift Current—Maple Creek—Assiniboia, SK]

Mr. Speaker, I am pleased to address my amendments to Bill S-7. There are four in number but all deal with one subject which is mainly to remove crown corporations from the effects of this bill.

It is a well known and well developed tradition in this country that crown corporations at the basic managerial level should be able to operate at arm's length from the political sector. This type of interference is totally unwarranted. The companies are inefficient enough as it is. If the managers are going to have to be constantly looking over their shoulders to see what the politicians want them to do, they are going to be even more inefficient.

There is a basic thrust to this bill which is expressed very well in a briefing note I received from I know not where. It says that legislation is preferable to government guidelines. That is fundamental Liberal policy in just about every sphere of activity. This will be about the fifth time in this House I have drawn attention to what I consider to be the very basic philosophy of the Liberal Party of Canada, that everything that is not prohibited shall be compulsory.

My colleagues are going to address the environmental concerns. I will leave that to them, except I would like to state that as somewhat of an engineer and scientist, I find there is a lot of voodoo science involved in some of the lobby documents I have received backing this bill.

This is not a black and white situation. Certainly propane and natural gas do have some environmental advantages over gasoline and diesel, but they also have disadvantages. On balance perhaps they are better. Over all, ethanol is undoubtedly deleterious to the environment if we consider all of the aspects.

I see an hon. member grinning over there. He wants to have an ethanol plant in his riding. If we study the scientific literature, from a basic, scientific point of view the evidence on ethanol does not add up.

I have noticed there has been an incredible amount of corporate lobbying on this bill. As a matter of fact the corporate lobbying on behalf of this bill has been more intense than anything which has taken place on the Hill since the halcyon days of Dome Petroleum. It is incredible. I have a huge stack of papers.

If this is such a good idea, if the producers of the conversion systems and the people who want to sell propane and natural gas have such good products and they are so sure of their position here, why should government have to interfere in the marketplace to mandate markets for them? This is not the business of government; this is the business of business.

If they cannot break into this market, albeit a small market, I do not know why they are fighting so hard to get it. It is a small market. Let them prove themselves, flex their muscles, talk to the people who do the purchasing, put on some demonstration projects and win the market fair and square in the marketplace instead of getting the politicians to do their marketing for them and shove it down the throats of the bureaucrats. This is not the way government should be run. This is not the way the civil service should be operated.

I most emphatically oppose the bill. However, if we must have it, as it has very clearly become a government bill now, then let us at least have my amendments which will permit the people who operate our crown corporations to continue the unfettered management of these companies on our behalf.

[Charles Caccia, Liberal, Davenport, ON]

Mr. Speaker, having listened to the argument just made by the member for Swift Current-Maple Creek-Assiniboia, I have to deal with the point he makes in relation to crown corporations. He says he does not want to interfere with the operations of crown corporations in implementing this measure.

I have to remind the hon. member for Swift Current-Maple Creek-Assiniboia that crown corporations are created by acts of Parliament. They express the will of the elected representatives and of the elected government.

Budgets of the crown corporations are scrutinized every year by committees of Parliament. They undergo therefore very close examination on the part of the political arm. Therefore there is nothing wrong in also asking crown corporations to adopt a measure that is economically and environmentally sound.

I begin to wonder whether the Reform Party is interested in economy and environmentally sound measures. I know for sure the member for Comox-Alberni is a very good environmentalist. I know also his colleague, the member for New Westminster-Burnaby, is a very fine environmentalist and has proven that on a number of occasions.

Now the moment of truth has come for the Reform Party to show its true colours and to demonstrate where it really stands. As has been underlined on several occasions in this debate, the measure proposed in Bill S-7 to switch the use of fuels from fossil to alternative fuels just emerging in the marketplace would save the government $7 million in consumption and in maintenance terms.

That is not a minor feature considering the interest expressed by the Reform Party on reducing government expenditures. Here is a golden opportunity for the hon. member to demonstrate to his constituents and to the House that he means what he says. I hope he is not using crown corporations as an excuse for not supporting the bill because that would be a very sad matter.

The member for Swift Current-Maple Creek-Assiniboia also made a plea for the marketplace to take care of this matter. We all know new technologies, new usages and new fuels when they appear on the market need some help. That is the intent of the bill before us.

Why is the bill before us? This is an important consideration. It relates to economic savings and we have gone over that a moment ago. We have a responsibility in relation to the trend in climate change. I am glad to learn the member for Swift Current-Maple Creek-Assiniboia is a scientist. He must know the scientific community warned about the serious trends in climate change and climate warming. These are caused mostly because of our dependence on fossil fuels.

It would seem only logical, in the public interest and desirable that the government seek fuels less damaging in terms of climate change.

In the case of the fuels proposed in this bill we have an alternative approach that will cut in half the so-called greenhouse gases, helping the momentum in climate change which has attracted the attention of a number of international bodies and of a number of leading scientists in Canada .

Therefore it seems to me the Reform Party is at crossroads. I am sure it will want to demonstrate to Parliament and to the public that it means what it says, that it is really concerned as it claims at times with economic measures and environmental objectives.

The bill is well known because of interventions made by previous speakers. It demonstrates the time has come for us as a society, as consumers, to move away wherever possible and as rapidly as we can from our dependence on fossil fuels.

We are internationally committed to the stabilization of carbon dioxide emissions by the year 2000, taking the year 1990 as a base. At the rate we are at now we will reach the year 2000 with a minus 13 deficit; in other words, we are badly behind schedule.

In addition to that, in "Creating Opportunity" in 1993 we made a pledge to Canadian electors that we would reduce carbon dioxide emissions by the year 2005 by 20 per cent. This measure is helping to move us in that direction and it seems every member of Parliament has a great opportunity to demonstrate we are taking to heart the public interest and that we want to take every opportunity to reduce our dependence on fossil fuels.

[Margaret Bridgman, Reform, Surrey North, BC]

Mr. Speaker, I am pleased to speak on this bill.

I cannot agree with the overall need for the bill in the first place. However, the amendment would certainly enhance it. I will direct my remarks specifically to the bill and whether we need it.

I believe the bill is an excellent example of how we as parliamentarians can get caught up in believing that enacting new or revised legislation is the answer to problems we may encounter. Making the bill law is an example of how we have allowed too much government into our daily lives.

The bill's objective is to accelerate the use of alternate fuels for motor vehicles, and specifically targets the government motor vehicle fleet of approximately 30,000 vehicles. The bill then devotes its text to the mechanics of the process deemed necessary to achieve a 75 per cent success rate by the year 2004.

I shall address my remarks to the main objective, as the semantics of the process are irrelevant at this point if one disagrees with the main objective and the overall concept.

The bill is asking us to make a law based on a verb, to accelerate or not to accelerate. The concept of converting gasoline motor vehicles to alternate fuels is already in place. Activity in the government department toward achieving this end is already underway. Therefore to accelerate this activity is not a legislative concern but a management concern in the government departments and corporations, et cetera, this bill includes.

We do not need more laws in our lives. We need to improve the existing ones in their appropriate jurisdictions to resolve problems; if it is a management problem, put the problem there. In this case senior management should have a plan for converting to alternate fuels and the plan should include the number of vehicles by certain dates, be it 2004 or otherwise.

Our colleague, the Minister of Natural Resources, has also indicated the legislation should empower management or bureaucrats to make changes rather than telling them what to do. That was in the Hill Times on April 20. In other words, delegate the authority to carry out the action to management and then expect it to get on with it to achieve the policy as stated by the standards.

The basic principle of delegation when used effectively reduces the number of rules and regulations, laws, et cetera, required and creates the necessary direction at the level of the department or corporation as a policy and procedure versus national law to actually implement the act. By effectively using the principle of delegation we succeed in reducing the amount of law and government in our daily lives.

I am not suggesting this proposal is not an effective action toward reducing the greenhouse effect in our environment. I agree with the comments made by the Minister of the Environment, a member of the Bloc Quebecois and my colleague from Swift Current-Maple Creek-Assiniboia for publicly supporting the concept of converting gasoline motors to alternate fuels.

I agree legislating this type of action, the converting of gasoline motors, et cetera, is in our jurisdiction as legislators, as it provides direction for the people of Canada in this regard. How it is done or the process to achieve this is a managerial concept.

A law of this nature tells all Canadians Canada is working toward this conversion. It provides a sense of direction. The marketplace would be aware of this overall objective and we can pass this as legislation. How fast it goes should be a management situation.

It is not our role to legislate the process to be used by individuals or groups and in this case government departments or corporations. Individuals and groups should be managing their own resources, finances and otherwise and developing a plan conducive to their own situation to achieve this goal.

Bill S-7 is in the realm of management, as I stated earlier, not law. Why is it deemed necessary to be concerned about the speed at which this is occurring? Obviously there are barriers present and the nature of today's marketplace may well be one, as resources for alternate fuels are few and far between.

By legislating that 30,000 plus government vehicles be converted within an eight or nine year period will create much more demand on the marketplace and force the issue on it for change in existing trends. We are not only legislating management techniques for government organizations, we are also becoming involved in the marketplace in that we are suggesting it change its management practices within the next eight or nine years to accommodate the demands this bill will put on it.

Another concern is the cost factor involved and the effects of the time limitations we will have on the budgeting process of an organization, not only the actual conversion costs but the operating costs. The rationale now is alternate fuels are cheaper. If we use the supply and demand principle once we get into the process of conversion at some point the cost of that fuel will also go up.

Bill S-7 will have an effect on several principles or concepts considered important in society. The environment is one. Some of those concepts are government interference in the management process, that is, lack of delegation, government interference in the marketplace which relates directly to the principle of too much government in our daily lives and government entering into the field of free enterprise.

I agree this accelerating process for conversion would definitely contribute toward improving our environment. However, I do not see the need for a national law to achieve this objective. The appropriate position in senior management should send a memo to the appropriate position in purchasing to recommend a conversion program within the budgetary parameters and considerations, et cetera, of the existing vehicles and get on with this conversion through a management process versus a national law.

[Julian Reed, Liberal, Halton—Peel, ON]

Mr. Speaker, every now and again, and not often enough, a nation has an opportunity to provide leadership to not only its people but to people in other countries.

Every now and again its elected political people in the democratic process have a golden opportunity to participate in that leadership. Every now and again those elected people who want to participate in that leadership have to drag along other elected people who want to keep the country in the dark ages.

We are on the threshold of beginning the energy transition from a hydrocarbon energy economy to a carbohydrate energy economy. Petroleum resources are finite. Their reserves are declining.

As exploration reaches farther out into more difficult areas, the product becomes more and more expensive. At the same time, the consumption of these products is increasing, particularly when we witness the explosion of industrial growth in nations that were considered third world less than a generation ago. I refer specifically to China and India with a combined population of approximately two billion souls.

Therefore, it is essential that we as an industrialized nation begin to look seriously at bringing alternative energy forms on line. Hence the creation of Bill S-7 to the credit of Sen. Colin Kenny who had the vision and has exploited the vision. I am proud to stand here today hoping to bring this bill to fruition so that we can begin the transition of 75 per cent of the national fleet to alternate fuels by the year 2004.

That transition will not be limited to just those fuels that are named in Bill S-7. Since that bill was written, two more fuels have emerged with great potential, not only for the economy of western Canada, but also to enlarge the options available to individuals.

The question was raised why is legislation preferable to guidelines. The guidelines have been in place since 1976 and nothing has happened. The neanderthals remain in place and nothing moves. Obviously it is necessary to legislate.

There is one more reason for legislating. Bringing something new on stream is a chicken and egg situation. If one does not have enough demand for the fuel then the distributors of the fuel cannot afford to set up to supply the fuel. The manufacturers of the vehicles really cannot afford to retool to supply vehicles that will burn alternative fuels. This is the chicken and the egg. Therefore, it is necessary to develop a critical mass of alternative fuel burning vehicles so the distribution system will follow.

Because the country is beginning to move in that direction, two of our major automobile manufacturers, General Motors and the Ford Motor Company, are now in a position to supply vehicles to the market which will burn up to 85 per cent ethanol or any combination from straight gasoline on up at no additional cost. We have an obligation to get the stream started and get things rolling.

My hon. friend in the Reform Party talked about the undesirability of having crown corporations included in the conversion process. One crown corporation, Canada Post, has a major competitor that advertised it used alternate cleaner burning fuels. If I were the manager of the Canada Post Corporation I would be clamouring to convert my fleet of delivery trucks, vans and whatever to alternate fuels and advertise it in order to get the public relations value. Crown corporations need to be included.

I remember a comment being made when we were in committee by someone regarding the conversion of some vehicles of the RCMP and how undesirable that would be because they needed pursuit vehicles. I had to remind that gentleman the Indy 500 which had run two weeks earlier was not run on gasoline but on methanol. The idea that some conversions produce a little less is just not plausible.

I also had the opportunity to tour the Pratt and Whitney plant in my riding last Monday. It has already completed all the work on burning ethanol in jet engines for the Brazilian government. The technology is already in place and all ready to go.

I know my friend in the Reform Party does not like the word ethanol. Somehow it does not have a nice ring to it. He comes from western Canada and I would think he would be an enthusiastic supporter of ethanol as one of the options which is available to us.

[Lee Morrison, Reform, Swift Current—Maple Creek—Assiniboia, SK]

We cannot afford it.

[Julian Reed, Liberal, Halton—Peel, ON]

My friend says that we cannot afford it. I always said that if we had a surplus of it we could drink it.

The fact is that all of these fuels, while they may be a little more expensive at the present time, will find a niche market as times goes by. As production increases in efficiency, the cost per unit will decline. When the transition occurs, when the demand for petroleum resources puts the prices through the roof, Canada

will be in the driver's seat and will be able to lead the world in the supply of alternate fuels. It is a natural that will happen and we have this glorious opportunity to help it along.

We are on the cusp of the future. No longer can Canada be looked at as a country we can put a fence around. We have to think of our resources as being marketable to the world. We have to think of where the demand is going to go as the population accelerates, as it will in the next 25 or 30 years, and we will have to be ready for that. This is one bill which will get us ready for it and put us in a position of leadership.

[Bill Gilmour, Reform, Comox—Alberni, BC]

Mr. Speaker, I am pleased to have the opportunity to speak to Bill S-7, an act to accelerate the use of alternative fuels for motor vehicles.

Bill S-7 proposes that by the year 2004, following a scheduled phase in period of over seven years, 75 per cent of the 39,000 federal government fleet of vehicles will be fueled by alternative transportation fuels.

I agree with the environmental intent of the bill and I agree that we need to take action against priority air quality concerns. Our party supports the efforts to reduce pollution, but these must balance economic with environmental considerations. I believe that there are other more economical and effective solutions available than those proposed in Bill S-7.

As my colleague before me has said, there has been an unprecedented effort to ram this private member's bill through the House. I have to ask: Why is that so?

If the government supports the legislation, then why is it not putting it through itself? Why does it take a Liberal senator to initiate the bill? When approached by the sponsor of the bill no minister in the government was prepared to sponsor the legislation. Again, I have to ask why.

There appears to be a controversy between the Minister of the Environment who appears to support the concept of the bill, and the Minister of Natural Resources who does not come out in support at all. The Minister of Natural Resources has expressed concerns about the government not incurring unnecessary and unreasonable short term costs which push up the deficit and that government still needs to understand the economic as well as the environmental implications of fuel conversion.

Obviously the bill does not have the full support of the Liberal caucus. That is why it is coming in through the back door. I have to ask myself: Why is it not receiving the support of the government? There have to be a lot of reasons and they need to be answered before we support the bill.

The Reform Party strongly supports the principle of market forces. I do not support the principle used in the bill of pushing the market as Bill S-7 would have us do. We are talking about a considerable number of vehicles, 30,000 in fact. The precedent of government interference in market decisions is unwarranted and unwanted and the bill is a direct attempt to manipulate the marketplace by mandating government vehicle conversion to natural gas.

Government purchasing agents are hired to make the right and the best decisions possible for government purchases. Environmental and economic considerations are supposed to be taken into account when decisions such as fleet purchases are made. If the legislation is as good as the Senator claims and if the environmental and economic benefits are so obvious and certain, then why must it be legislated? Are these managers not paid to make the decisions themselves? Why is it necessary to go over the mangers' heads and mandate these purchases and conversions? Something is not right here.

Alternative fuel vehicles can be purchased openly on the market today. There is no need for the heavy hand of government to attempt to manipulate the market in any particular direction.

Canadian energy policy is best served through the open and fair operation of market forces to manage energy development, production and consumption in an efficient manner which should be subject to standards established to protect against risks to human health and the environment.

Mandating the use of alternative transportation fuels and vehicles is inappropriate as it restricts the consumer from routine economic choices which are fundamental to a successful market economy.

The Reform Party is fundamentally opposed to subsidization within the marketplace and alternative fuels require major subsidies in order to be competitive in the transportation sector.

All alternative fuels are exempt from the 10 cents a litre federal excise tax. Provincial road taxes are also reduced or even not applied to alternative fuels in most provinces. Alternative fuels could not survive in the marketplace today without these government subsidies.

I am also concerned about the bill because I do not believe that mandating fuel choices will achieve its proposed economic and environmental objectives. Mandated or subsidized use of alternative transportation fuels comes at a high cost to Canada's economy and is contrary to the government's stated goal of reduced government expenditure and deficit reduction. Government and taxpayers are penalized twice in the bill, first through subsidies and second, in forgone tax revenues.

If the principles of Bill S-7 were applied to Canadians at large with mandated use of alternative transportation fuels with current subsidies, it would be at a high cost to Canada's economic base because of loss of government revenue. If the bill were applied to 10 per cent of Canadian vehicles it would cost taxpayers over $730 million in lost revenues.

If the policy does not make sense in the private sector, then why should it be applied to the government? I am sure there are other policy options available to the government that will help it achieve the environmental intent of the bill in a manner that can demonstrate that the government is using best practices to achieve its policy goals.

An examination of the bill shows that there will be significantly higher costs and marginal benefits achieved by mandating alternative fuels. For example, the relative time required to get a payback on a vehicle converted to alternative fuels needs to be looked at much more closely. Bill S-7 defines alternative fuels as fuel that is less damaging to the environment than conventional fuels, including ethanol, methanol, propane, natural gas, hydrogen or electricity.

When we are speaking of alternative fuels we are referring to several different formulations and vastly different environmental effects. Some alternative fuels such as compressed natural gas and propane offer advantages in air quality over conventional fuels. However, the advantages of compressed natural gas are minimized when used as a transportation fuel. Compressed natural gas is less convenient than gasoline because of its limited range and the fact that it has to be stored in heavy, bulky storage tanks. Compressed natural gas vehicles are also more expensive to own and operate than gasoline vehicles.

Liquefied petroleum gas is also a cleaner burning fuel but it does not contribute to reduced emissions in any significant way because it has a limited overall supply and like compressed natural gas it requires bulky storage tanks.

When we think of alternative fuels, many confuse it with environmentally friendly forms but this is not always the case. Some alternative fuels are actually more environmentally damaging than conventional or reformulated fuels.

For example, the production of ethanol which uses corn or other grains is more environmentally damaging in its production than gasoline. Electric vehicle technology may be non-polluting itself, but the environmental effects of the energy source for production of electricity, whether it is nuclear, hydro or fossil fuel, has to also be brought into the equation.

Environmental impacts associated with after market vehicle conversions which currently dominate alternative transportation fuel applications have not been favourable in comparison with ordinary gasoline. The environmental attributes of alternative fuels must be assessed on a lifestyle basis of both the vehicle and the fuels.

Significant emissions can occur in the extraction, processing manufacturing and distribution of alternative fuels. This bill attempts to force the hand of the market to make alternative fuels more competitive in the transportation sector rather than allowing purchasers to drive the market through need and demand.

I am concerned by some of the claims associated with the bill that it will save taxpayers money. These claims are false. On the one hand the bill claims to save upwards of $43 million in fuel over five years and $15 million the year after. This sounds pretty good. If it were true I would wonder why the government had not implemented this many years ago.

The bill is being rammed through using the guise that it will be good for the environment when really it is the gas companies that stand to make billions of dollars.

I cannot support the bill because of the attempt to manipulate the market and the fuzzy economics that do not add up to the program that will benefit Canadian taxpayers.

[The Deputy Speaker]

Is the House ready for the question?