Mr. Speaker, let me begin by giving a brief history of motor vehicle fuel efficiency in North America. The United States passed its corporate average fuel economy legislation in 1975 after the 1973 OPEC oil embargo and Congress set fuel economy standards for cars for every year from 1977 through 1985. Standards were added later for light trucks.
Canada's cabinet approved and announced automobile fuel consumption standards in 1976 that were based on the U.S. standards. Parliament subsequently passed the Motor Vehicle Fuel Consumption Standards Act in 1982 to enforce these standards. Vehicle manufacturers then committed to meet the standards voluntarily and proclamation of the act was postponed.
Canadian company average fuel consumption standards currently match U.S. standards. The standards are 8.6 litres per 100 kilometres for passenger cars and 11.4 litres per 100 kilometres for light trucks, including pick-ups, minivans and sport utility vehicles. The standards apply to the average fuel consumption of all new vehicles sold each year in Canada by every automobile company, no matter where the vehicles are manufactured.
Historically, vehicle manufacturers have not only met these standards, but they have exceeded them compared with the U.S. new vehicle fleet. Currently, new cars are 7% lower or better than the standard and new light trucks are 3% lower than the standard.
While the performance of Canadian manufacturers has been excellent in the past, fuel consumption standards have not improved for nearly 20 years for passenger cars and about 10 years for light trucks. There is a need for improvement. I know my colleague knows this.
Canada has ratified the Kyoto agreement and committed to reduce our greenhouse gas emissions. Because motor vehicles account for 11% of Canada's greenhouse gas emissions, improvements in vehicle fuel efficiency are an important element of any strategy to reduce emissions.
Given this, the motor vehicle fuel efficiency initiative was first announced in action plan 2000, and the 25% target was announced in the climate change plan of November 2002. Our goal with this initiative is to reach a voluntary agreement with manufacturers on a new target for 2010, based on a 25% improvement from our current voluntary company average fuel consumption standards.
We realize this target is challenging but believe it is feasible and cost effective for both manufacturers and for consumers. There are many currently available and upcoming technologies that can be used to improve fuel consumption by 25% by 2010. Moreover, recent Canadian and U.S. studies have shown that reducing fuel consumption does not require sacrifices in performance and other attributes consumers value, and the cost of most technologies will be paid for through fuel savings over the life of the vehicle.
Canadian consumers, by way of their purchasing choices, continually demonstrate that they value fuel efficiency. The Canadian vehicle market is quite different than the U.S. market in that Canadians mainly buy smaller vehicles with better fuel efficiency. A new fuel consumption agreement will stimulate fuel efficiency innovation and will therefore make more choices available to Canadians in these market segments, and improve technologies in all segments. With NRCan's enhanced programs in consumer education and awareness, we are optimistic that Canadians will respond positively to a wider range of fuel efficient vehicles.
We regard these consultations as a first step to addressing the longer term issue of reducing vehicle greenhouse gas emissions in North America. Improving vehicle fuel efficiency is a necessary step.
I have more information and perhaps I will pass it directly to the member.