Mr. Speaker, it gives me great pleasure to rise today to speak on Bill C-94, the manganese based fuel act.
I will explain the bill and why we are taking action against MMT. MMT is a manganese based fuel additive used to increase the octane rating of gasoline. It has been used in Canada since 1977 as a replacement for lead in unleaded gasoline.
Lead was phased out of virtually all Canadian gasolines by 1990. Who uses MMT? Just about every Canadian motorist does, and that is because Canadian refiners use it. The exact amount of MMT used may vary, depending on the batch of gasoline. However, premium grade gasoline generally contains a higher dosage than regular grade gasoline. Canada is the only country that uses it. The United States, for example, banned it from unleaded gasoline in 1978.
The automobile industry is convinced that gasoline containing MMT adversely impacts the operation of sophisticated onboard diagnostic systems. These OBD systems are important because they monitor the performance of emission control components in vehicles. The auto industry has made the decision that it will not accept the risk of increased warranty repair costs caused by damage related to MMT. Some companies have even indicated that they will disconnect the OBD systems in whole or in part and may reduce Canadian vehicle warranty coverage starting with the 1996 model year if MMT continues to be used in Canadian gasoline. That means that the cost of maintaining these systems will be passed on directly to Canadian consumers.
This is where the federal government comes in. Last October the Minister of the Environment urged both industries to voluntarily resolve the issue of MMT by the end of 1994 or the government would take action. This deadline was subsequently extended until February of this year to review automobile and petroleum industry proposals. The matter was not resolved, so the federal government has had to step in. This has resulted in Bill C-94.
The MMT issue is no longer an industry dispute. Its outcome can affect the vehicle emission program we are putting into place and in the long term could negatively impact the automobile sector.
Successful solution of the MMT issue will ensure that environmental benefits are realized through the use of the most advanced emission control technologies. It will ensure that Canadians are offered the same warranty coverage as in the United States. It will also ensure that the Canadian motor vehicle emissions control programs do not diverge from those of the United States. This means that Canadians will continue to benefit from the cost and technological advantages of a North American harmonized fleet. It also means good news for Canadian jobs and the Canadian automotive sector. That of course is because diverging emissions standards and different anti-pollution equipment on Canadian cars will negatively affect the marketplace and decrease the competitiveness of the automotive sector.
We could also be faced with a situation where cars built in Canada to go south of the border could have more advanced equipment than those sold in Canada. That is clearly not acceptable.
We should be clear about the economic impact of removing MMT. It will be small for the entire petroleum industry. Estimates for the cost of MMT removal provided by the industry range from $50 million to $83 million per year. That means an additional increase of 0.1 to 0.24 cents per litre at the gas pump.
I would now like to take a few moments to explain some of the key highlights of the bill.
Bill C-94 will prohibit the import or interprovincial trade for a commercial purpose of MMT or anything containing MMT. It will also give the minister the power to authorize exceptions for MMT that will not be used in unleaded gasoline subject to monitoring requirements. Coverage of the act can be expanded by order in council to cover other manganese based substances.
The act is binding on all persons and entities, including the provincial and federal governments. The enforcement tools are similar to those that are in the Canadian Environmental Protection Act, and the penalties are strict.
For the unauthorized import or interprovincial trade of MMT, the maximum penalty on summary conviction is a $300,000 fine and/or six months in jail. On indictment, the maximum fine is $1 million and/or three years in jail. For knowingly providing false or misleading information on the importation or interprovincial trade of MMT, the penalties are the same, but with a maximum of five years in jail instead of three on indictment. On conviction, as in CEPA, the court can also order an additional fine equal to the monetary benefits resulting from the offence, prohibit conduct that may lead to a repeat offence, and direct the offender to notify third parties about the conviction.
I believe this gives the members of the House some idea of what the government is proposing under Bill C-94.