Mr. Speaker, as I prepared some notes for my talk today, I could not help but feel like I was sort of in a surreal situation.
We have this bill before us which will give further tax breaks to the fossil fuel industry, the mining industry, the concern there being, particularly from my perspective, the coal mining industry. It would reduce the tax level and give a tax credit over a period of years. We have to juxtapose the bill before us for third reading today with what is going on in this country and in the world.
I come from an area of the country where we have major health problems, a great deal of which are directly related to the burning of fossil fuel, whether it be exhaust from cars or the coal-fired plants in Ontario and, more specifically, in the midwest of the United States that ends up being dumped into my area.
We also have to put it into the perspective of the Kyoto agreement, which the Canadian people finally pressured the government into ratifying at the end of last year, and, in the context of that, the overall natural environment of the country. We know from lots of studies, but most recently just in this last week from the Conference Board of Canada, how badly we stack up compared to other countries around the globe.
The Conference Board of Canada did an assessment of the 24 leading industrial countries in the world. Where do we stand on carbon dioxide, the direct result of the burning of fossil fuel? We stand 24th out of 24. We are dead last. We are also near the end in a whole bunch of other greenhouse gases. We are in the 21, 22 and 23 range in each one of those areas.
What we hear of course, and I think we heard it from one or two speakers on the government side, is that we have to keep doing this to keep the economy going. The Conference Board of Canada is not exactly a flaming environmentalist organization, but it makes the point, and I quote from the report that was issued this past week:
Environmental progress need not come at the expense of economic gains, as many believe....
The board goes on to say in a summary:
Many of the countries that lead the environment list also make the top 12 in the economy category.
What it is saying is that there are countries around the globe, in that 24 grouping of the top industrialized countries, that have a high performing economy, that do well for their people, that have high incomes and a corporate world that does well, and at the same time protect their environment. We do not have to play one off against the other. With good economic policy, with progressive, forward looking economic policy we can accomplish both. We can take care of our natural environment. We can take care of the physical health of our population, and at the same time run a vibrant, strong, healthy economy. The two are not mutually exclusive at all. That is the Conference Board of Canada talking.
Back to the context. We have Bill C-48 which would give more breaks to the fossil fuel industry, and we have it in that context of just how poorly we are doing as an industrialized country around the globe.
Let us look at the specifics of what we are doing. This week the Green Budget Coalition came forward and made a presentation, as it has every year for the last seven or eight years, to the finance committee and, in fact, indirectly to the finance department, on how we green our economy and, more specifically, how we green our budgetary process.
I will quote some of the statistics in its brief that it left with the committee where it talks about fossil fuels and takes a slice of the history. The brief states:
Cumulative direct Government of Canada spending on fossil fuels between 1970 and 1999 totalled $40.4 billion. In addition, $2.8 billion in federal loans to fossil fuel industries have been written off since 1970, over and above direct spending.
We are at $43.2 billion over the last 29 years and that has continued for the last four years, bringing us forward to the kind of incentives we are now increasing to that industry.
The brief juxtaposes it again to put it in some kind of context. It states:
For the period 1987 to 1998, total government support for energy investments totalled $4.3 billion for non-renewable energy and only $118 million for renewable energy.
That is a travesty when one looks at those results that we see all the time, the reason we needed to ratify Kyoto and the numbers that we see from the Conference Board of Canada.
I will repeat that: $4.3 billion over that 11 year period from 1987 to 1998 for non-renewable energy, all of it going to the fossil fuel industry and the nuclear industry, and only $118 million for renewable energy. Whether it be wind, solar, current, wave or even hydroelectric, it was only $118 million, which is just a little over $10 million a year. In the same period of time billions and billions went to the non-renewable energy sector.
In the brief there is a whole policy on to how to deal with budgetary matters, how to green the budget and how to green the economy from a tax, tax incentive, subsidy based, taking all those into account.
In spite of the previous reports the coalition has filed with that committee and with the finance department, as we heard from the parliamentary secretary today, I do not think he even understood the work it has done. I think that is a fair categorization of the response I received from him at that time.
Let us put into perspective how the fossil fuel industry has performed. It was interesting to listen to my colleague from the Conservative Party. I have no apologies to give as a member of the NDP on protecting jobs. Let us look at this industry. Since 1990 this industry has terminated the employment of some 80,000 people.
I know some members will jump up and say that we are just worried about union jobs. Very few of those were union jobs. The vast majority, about 60,000 or three-quarters of them, were as a result of the shutdowns of small companies, retailers in the oil and gas industry. The industry just put them out of work and took them over itself.
Those were small employers with five, ten or twenty employees, either full time or part time. Industry just wiped out 60,000 jobs in that sector, but what is being done? The government is continuing with a government policy to subsidize that industry.
Let us take a look at the consequences of these measures of reducing the effective tax rate from 28% to 21% and giving that 10% tax credit. Just three of the big oil companies, not all of them, but Petro-Canada, Shell and Esso, have already forecast that they will save $250 million a year. That is how much of a tax break the government is giving these companies. Over the five year period, it will be some $1.25 billion. That is how much the savings will be just for those companies.
These companies are already making profits. If we look at their profit for this year we will see that these companies are making profits. One company's profit is $100 million. One is up to $200 million. In fact, in some cases those are quarterly profits. We will see much higher ones over the course of this year, especially when we add on this subsidy.
What does all this get us? As consumers, have we seen rates go down at the gas pumps? It is almost a joke to raise the question given what has transpired through the summer and the early fall. We have seen the price of fuel go up dramatically at the pumps. For those who are on fixed incomes, the price of home fuel in particular has gone up by a tragically high amount.
We do not see those benefits passed on to the consumer. Do consumers benefit from these tax breaks? No. Does the environment benefit? Obviously not, given what is happening, nor does human health in this country. Are we somehow giving an advantage to the renewable energy sector? Again the answer is no.
Bill C-48 is being shoved through the House with the government and the official opposition supporting it in the face of that reality I have just detailed.
I will cover one more point which I heard again from the government side as some justification for this: that we have to be internationally competitive. Let us look at the result. Let us look at the effect of these tax breaks for this industry. In regard to our closest competitor, the United States of America, specifically the state of Texas, and the effective current rate of tax for the fossil fuel industry, right now our tax rates have us about 5% below the state of Texas. That is right now, before Bill C-48 is passed.
If Bill C-48 passes the industry would effectively be paying 41% in Alaska and 35% in Texas. In Canada we would be down to 30.1% across the country. This is effectively where it will end up.
Therefore, we cannot argue that this is a competitive advantage bill, that this policy somehow will make us more competitive, because we already are in that situation. Right now we are competitive with our major trading partner.
This would not help us with a competitive advantage internationally. It would not help consumers. It would not help the environment or our personal health, and it certainly would not enhance the production of energy from renewable energy sources.
It begs the question, why are we doing this? It was interesting to read the newspaper article by Susan Riley last week in the Ottawa Citizen . The headline was, “While you're not looking, Big Oil is set to get a big tax break”. As opposed to a number, the editorializing in that headline is pretty accurate.
In that article, a couple of members of Parliament are quoted as saying they were under tremendous pressure. One is from the government side and one from the official opposition and they say they have been under tremendous pressure since the year 2000 to get these breaks for the oil and gas industry.
That is really the answer to my question about why we are doing this. We are doing it because the industry asked for it and because, since the second world war, whenever big oil has asked for a break, it got a break.
That has resulted in the situation we have in my home community, where we have high rates of cancer and other high rates of illness and disease directly related to the consumption of fossil fuels. It has resulted in the international need for Kyoto to get those reductions we need in the emissions of carbon dioxide into our atmosphere. It has resulted in very high energy costs, whether for home heating fuel or to power our motor vehicles.
It is a policy that has failed from every aspect. What Bill C-48 is doing is perpetuating the economic system that is the underpinning for that industry.
It is time for this government and this House to take seriously our responsibilities under Kyoto and to take seriously what we are hearing from environmentalists and progressive economists about what we can do to reduce those subsidies to the fossil fuel industry, to phase them out. Because we have to do that. We do not have enough oil and gas to continue our consumption beyond somewhere between 2030 and 2050 at the rates at which we are consuming now. We simply cannot do it. The supplies are not there, anywhere in the world. We need to change that policy. We need to phase out that industry.
In order to do that, we must have a comprehensive policy initiative in the tax field. We cannot do this just by signing on to an international protocol like Kyoto. We do have to do that, but then we have to implement. That does not mean just starting a retrofit program, which we need to do in Canada, and not just doing a conservation program, which we also need to do. In addition, what is sorely lacking in the Kyoto plan, and we see that with the bill, is any concept from the government about understanding the need to reform our tax structure. We have to reduce the incentives provided to the fossil fuel industry, on a gradual, phased out basis, and replace them with incentives, tax breaks and subsidies for the renewable energy sector.