Mr. Speaker, I rise to address the House on Motion No. 298 put forward by the hon. member for Churchill River. I thank him for bringing this matter before the House.
Indeed his concern for the environment and for the high cost of energy in some Canadian communities is truly commendable. I would however like to point the hon. member in a new direction to achieve his worthy goals. Let me explain why I cannot support the motion.
First, I share our government's belief that market forces, not government subsidies, should determine energy prices and supply without undue government involvement or bothersome regulations. This approach has served Canada well over the past decade contributing to economic growth, new jobs, increased resource royalties for provincial governments, and certainty and stability for the energy industry.
The second point of my disagreement relates to the question of federal-provincial jurisdiction. Energy distribution systems, including natural gas lines, are the responsibility of provincially regulated utilities, not the Government of Canada. While it is true some provinces have seen fit to financially support the expansion of natural gas distribution systems, others have not, including notably the hon. member's home province of Saskatchewan.
Finally, I cannot support the motion because it implies that natural gas is the only alternative to higher prices and more environmentally harmful fossil fuels. This is simply not the case.
For the past decade communities across Canada have been exploring new ways to reduce their dependence on fossil fuels, either by using energy more efficiently or by displacing fossil fuels with local renewable resources. More and more they are looking to community energy systems, networks that link environmentally sound sources of energy to space heating loads to deliver on two imperatives: the need for affordable energy and the need to reduce greenhouse gas emissions that are contributing to the global problem of climate change.
Communities are being supported in this quest by Natural Resources Canada of the Government of Canada which for several years now has been working hand in hand with the Federation of Canadian Municipalities to increase awareness and use of community energy systems.
The results of this collaborative effort have been very positive. Interest in community energy systems is on the rise across Canada even in areas where natural gas is readily available. In many cases it just makes more sense economically and environmentally to develop a community energy system rather than to expand our dependence on fossil fuels.
Natural Resources Canada encourages efficiency and the use of renewable energy at all levels.
First, the individual can use current energy sources more efficiently by adopting the most efficient furnaces and keeping them well maintained and by making buildings more efficient by measures such as installing better insulation and more energy efficient windows. Individuals may also be able to use renewable energy technologies such as solar energy, wind energy or small hydro systems. The same principles can be applied at the community level where the opportunities are more diverse.
By adopting community energy systems, waste fuel from local industry or power plants can all be harnessed. By using these types of heat sources, not only are greenhouse gases reduced, but community pollution problems can also be reduced. Let me elaborate on some real examples.
Some municipalities like Charlottetown, the site of Canada's first community energy system, are burning waste wood to produce energy. This not only eliminates a waste disposal problem, it also takes advantage of a renewable energy resource. The first nations community of Grassy Narrows is using a similar approach, in this case burning wood chips harvested by band members. Other communities in the Northwest Territories and Yukon are capturing waste heat from diesel generators to provide space heating.
Another option is to use cogeneration technology to get more out of existing fossil fuel systems by combining both heat and power production.
The cities of Windsor and Sudbury have community energy systems that use this approach. Many more are jumping on the bandwagon because the systems offer benefits that are hard to ignore. They generate jobs through capital investments and keep money in the local economy by reducing the need to purchase outside energy. Moreover, they can greatly reduce or even eliminate greenhouse gas emissions, which is critically important in light of Canada's international climate change commitments.
There are many solutions to the climate change problem and all Canadians have a role to play. It is absolutely essential for governments to show leadership, including municipal governments, if Canada is to meet its Kyoto target of reducing greenhouse gas emissions to 6% below 1990 levels by the period between 2008 and 2012.
Hon. members will also be interested to know that community energy system projects are being supported through the technology early action measures initiative of the climate change action fund which was announced in the 1997 federal budget to move Canada forward in addressing climate change.
I confirm again that the federal government is very serious about meeting this target. This was made abundantly clear in the last federal budget which included more than $600 million to further our search for effective climate change solutions, including new funding of $125 million for two initiatives to help municipalities take action.
The green municipal enabling fund is a five year $25 million initiative to support cost shared energy audits and feasibility studies of projects that will reduce greenhouse gas emissions, improve air and water quality, and encourage the sustainable use of renewable and non-renewable resources.
The second initiative, the $100 million green municipal investment fund, will provide loans and loan guarantees for municipal energy efficiency measures, such as building retrofits that will reduce greenhouse gas emissions. Interest money that accumulates from the fund will be used to provide grants to eligible demonstration projects.
Together these funds will act as a catalyst for implementing new community energy system projects as well as other energy efficiency measures. They are expected to leverage concrete investments from municipal, provincial and territorial governments as well as the private sector.
The recent federal budget goes further by including measures to make it more attractive for the private sector to become involved in community energy systems. We have the manufacturing and processing tax rate reduction, thus lowering the tax rate on private businesses on the sale of steam. We have the capital cost allowance for district energy systems and we will be able to increase that from 4% to 8%, which means that private companies can write off their investment faster. These new budget provisions will add momentum to the growing interest in community energy systems.
In conclusion, many parts of the country do not have access to natural gas networks and the cost of bringing in distribution lines is prohibitive. Community energy systems can ensure more efficient and environmentally acceptable use of energy in these communities, while helping to keep energy dollars in the local economy.
In other areas, natural gas and electricity infrastructures are overloaded. They simply cannot keep up with the demand. Community energy systems can alleviate some of the pressure on these networks by producing electricity locally, making constructive use of rejected heat that might otherwise be wasted, or using local mill wastes to displace space heating from electricity, oil or gas.
I disagree with the motion but I commend the member for the goals and objectives of his motion. I hope he will discuss the initiative of the federal government with the leadership of his community and thereby we can go in a common direction.