Mr. Speaker, I would like to applaud the motivations of my colleague in bringing forward a bill that aims at improving the environmental performance of vehicles through more environmentally acceptable fuels. However, while the government supports the objectives, it does not support the specifics of Bill C-235 to require oxygenates in all Canadian gasoline and diesel fuel within the context, chronology and framework that the member's bill has presented.
Oxygenates are added to fuels to improve combustion and, therefore, decrease carbon monoxide tailpipe emissions, which has environmental merit. Oxygenates that are blended into gasoline include ethanol and methyl tertiary butyl ether, MTBE.
Ethanol is a renewable fuel that reduces greenhouse gas emissions. Under our climate change plan the government has targeted increased use of ethanol in Canadian fuels. Ethanol produced from cellulose has the largest greenhouse gas benefits. However, the technology to produce ethanol from cellulose is still being developed.
Although methyl tertiary butyl ether, MTBE, is presently being used in Canada, it has been the oxygenate of choice in the United States where oxygenates were mandated. As members may know, MTBE has caused groundwater contamination south of the border as has been pointed out. We want to prevent this from becoming a problem here in Canada.
The transportation sector is a major source of greenhouse gases and other air pollutants in Canada.
As part of a balanced approach addressing vehicle and fuel technology, behaviour change and infrastructure, we need to increase the supply and use of less carbon intensive fuels like ethanol and biodiesel. Increased use of biomass ethanol and biodiesel will not only reduce Canada's greenhouse gas emissions, but will also stimulate innovative Canadian companies already active in the bioeconomy and stimulate potential new income sources for farmers and other sectors.
In co-operation with provincial governments, the Government of Canada has been delivering a comprehensive and stringent program for cleaner vehicles and fuels to reduce harmful emissions from vehicles since 1994. We have in place today a 10 year regulatory road map for cleaner fuels and vehicles that will give Canadians cleaner air to breathe and better protect their health from airborne pollutants.
Never before has the government produced such an agenda for action for a product that all Canadians use. Our 10 year plan of action contains stringent new low emission standards for passenger cars, light duty trucks, sport utility vehicles and new standards for the fuels that power them. With this package, nitrogen oxide emissions, a key ingredient of smog, will be reduced by 90% for the vehicles built in 2004 and beyond.
We are also dealing with the fuels that power these vehicles. In June 1999 the government put regulations in place controlling the sulphur content of gasoline to an average limit of 30 parts per million starting January 1, 2005. The interim requirements for less sulphur in gasoline came into effect this past summer. Also in July the government put in place regulations limiting the sulphur content of diesel fuel to 15 parts per million by 2006. These measures will significantly reduce emissions of harmful substances from the transportation sector.
It is understood that a major tenet of the bill is support for oxygenated fuels, such as ethanol. The government continues to support the use of ethanol through a waiver of the federal excise tax on ethanol used as a fuel and through continued research into the production of ethanol from cellulose and through promotion of the environmental benefits of ethanol.
Action Plan 2000, the Canadian government's response to climate change to meet the Kyoto goal, includes five transportation initiatives, two of which are fuel related. As part of Action Plan 2000, the aim is to increase ethanol production in Canada by 750 million litres per year over the next five years. In effect, this will quadruple the production of ethanol in Canada. When fully implemented this will be equivalent to 25% of Canada's total gasoline supply containing a 10% ethanol blend.
The climate change plan for Canada further commits the government to working with the provinces, territories and stakeholders to increase this target to 35% by 2010. It also indicates that the government is looking at alternatives, such as a standard for a certain percentage of fuel to be greenhouse gas free, which would encourage the development of cellulosic ethanol.
To further encourage the development of biodiesel, the plan proposes that federal, provincial and territorial governments collaborate on how to reach a target of 500 million litres of biodiesel production by 2010 using a variety of tools including incentives, standards and research and development.
An important policy to encourage the use of ethanol is its tax treatment as compared to gasoline. We currently waive the excise tax on the ethanol portion of gasoline to make ethanol blended gasoline more attractive to consumers. The federal budget 2003 extends federal support for ethanol by proposing that the ethanol or methanol portion of blended diesel fuel also be exempted from the federal excise tax on diesel fuel. In addition, it proposes that biodiesel, which is produced from biomass or renewable feedstocks, be exempted from the federal excise tax on diesel fuel when used as a motive fuel or blended with regular diesel fuel.
The government recognizes the key role of provinces, territories and industry in expanding the ethanol markets in Canada. We will negotiate with provinces and territories a national framework for the production and use of ethanol, with voluntary agreements on regional targets.
The Government of Canada will also work with provinces and industry to enable the development and commercialization of high performing technologies such as cellulose-based ethanol.
These actions are in keeping with the government's desire to see the use of clean, renewable fuel expand and thrive in a context for which has been well prepared.
The government has also signaled through its climate change plan that it will work with the auto industry to improve by 25% fleet fuel efficiency by the year 2010. More fuel efficient vehicles save the environment, protect our health and save us money.
The 10 year plan is a major step forward in bringing cleaner air to Canadians but our job is far from finished. We want to engage more Canadians in direct actions they can take and also to empower them to hold governments accountable to meet clean air commitments.
The 10 year plan for cleaner vehicles and fuels is yet another step along the road to cleaner air and healthier Canadians.