House of Commons Hansard #87 of the 39th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was income.
The Acting Speaker Conservative Royal Galipeau
I now thank both hon. members for their points of order. All hon. members have heard me before commend them for their courtesy to each other. I would hope that this kind of commendation will inspire more courtesy, including advance notice of motions. As a chair occupant, I certainly do not like to be ambushed. I would like to make sure that all members are aware of what is to be expected before it happens.
Questions and comments, the hon. member for Ottawa South.
David McGuinty Liberal Ottawa South, ON
Mr. Speaker, how much time is left in this 10 minute session?
The Acting Speaker Conservative Royal Galipeau
The clock did stop while we were dealing with this issue and there is now five minutes remaining.
David McGuinty Liberal Ottawa South, ON
Mr. Speaker, I would like to put a question to the member and thank him for his remarks, but I want to respond directly to this issue of basically delaying the empowering of the Minister of the Environment and any subsequent minister of the environment to be able to regulate fuel content.
I want to point out to Canadians that, yes, it is true that the member has raised some important points. I would say, however, that he is overstating the analysis. He certainly is overstating the evidentiary analysis he is putting forward. I am glad to see that he was quoting from a research program that the previous government set up, but I do not think it is as conclusive as he put it and that troubles me.
Second, I want to understand whether he intends to continue to drive the NDP view that we should be prohibiting the use of genetically modified organisms for biofuel production and also whether he intends to lobby for the establishment of restrictions on the use of arable land. I guess flowing from that, is he now telling us that the NDP is moving toward the notion of perhaps even fettering the rights of farmers or maybe, even worse, nationalizing their lands? I do not quite understand what kind of conditionality the NDP wants to oppose because it is not authorized to do so on farm growers.
Finally, I do not understand his position because the urgency of climate change compels us to act and the onus is on the government within a year, and we will hold it to account, to tell us exactly what is the state of the industry.
Dennis Bevington NDP Western Arctic, NT
Mr. Speaker, I want to thank the hon. member over there and the Liberal Party for doing the work with BIOCAP because it is a very respected organization. Unfortunately, its funding is not going to continue.
Having said that, the numbers are far apart. If the numbers were closer together, if there was some kind of fudge factor in the numbers, we could say they were at least close, but these numbers put the greenhouse gas emission reductions way different. They put the cost per kilogram of CO2 reduction to the government at very different levels. Some of them are at factors of 10.
When I talk about scientific studies that show factors of 10 on the scale and when we are talking about what is logically good for the economy, I do not think I have to worry so much about the veracity of the precise numbers. These are very large differences.
When we talk about agricultural issues, I defer to the agricultural committee. These were raised in the agricultural committee. They were raised on very important issues that talk about what kind of land is used. Are we going to deforest land to increase the yield of agricultural production in order to make this change?
We see what has happened in the United States where the increased corn production has led to less soy bean production which has led to increased soy bean production in third world countries where the environmental conditions are not very good, where there is a lot of displacement of people off the land. We see the interconnection between land and the resources as the changes are made.
I am not an agricultural specialist. I come from a place in this country where there is not much agricultural activity. My grandfather was a farmer but I do not have that practical experience on the land. I defer to, in terms of what should happen with land, to the agricultural committee. I would expect that the committee members have reams of studies that suggest what should be done with land in Canada. If they do not, if they are just making this up as they go along, that is wrong.
The Acting Speaker Conservative Royal Galipeau
Questions and comments. The hon. member for Ottawa Centre will want to have a very short question. There is one minute left. That will include both the question and the answer.
Paul Dewar NDP Ottawa Centre, ON
Duly noted, Mr. Speaker. I want to ask my colleague from Western Arctic if he could explain why we need to have the amendment he just put forward embraced by the House and what the benefits of the amendment would be in terms of this legislation?
Dennis Bevington NDP Western Arctic, NT
Mr. Speaker, really and truly the report that we received from the agricultural committee was that the bill moved along much too fast. It did not take into consideration all the types of things that needed to be looked at. The purpose of the motion is to get a stronger scientific policy position from the agriculture committee and--
The Acting Speaker Conservative Royal Galipeau
It is with regret that I must interrupt the hon. member.
I thank the member for Richmond—Arthabaska for his patience and courtesy. He now has the floor.
André Bellavance Bloc Richmond—Arthabaska, QC
Thank you, Mr. Speaker. I understand. Things like that can happen in the House; it is called democracy. I was waiting patiently.
I am pleased to participate once again in the debate on Bill C-33, An Act to amend the Canadian Environmental Protection Act, 1999. I have already made two or three speeches on this subject. To avoid repeating what I have said, I will focus in this speech on the need to reduce our dependency on oil, which obviously also has to do with the use of biofuels.
The bill itself does not contain any standards. It authorizes the government to adopt regulations, which is basically how biofuels would be monitored, with respect to standards and their impact. In the medium term, this bill can help us reduce our dependency on oil and significantly decrease greenhouse gas emissions from automobiles, depending on the type of biofuel used and, of course, the type of transportation used with these biofuels.
The vast majority of greenhouse gas emissions are produced when petroleum products are burned. To reduce these emissions and fight climate change, naturally, we also have to reduce our oil consumption.
Of course, Bill C-33 is not a binding instrument for reducing greenhouse gas emissions; it is a measure to promote the development of alternative fuels. The best instrument for reducing greenhouse gas emissions, and the only binding one, is the Kyoto protocol, which the Conservative government unfortunately rejected out of hand. Instead, this government is helping the oil companies, which have responded with a price at the pump that is close to $1.40 in the Montreal area. The other day, I saw $1.37. A litre of regular gasoline is selling for nearly $1.50.
In Canada, the oil companies, which recently again announced profits in the billions of dollars, pay less tax than in Texas. When we see that, we wonder what this government's real intentions and real priorities are.
Between 1970 and 2000, the hydrocarbon industry received $66 billion in direct subsidies from the federal government. For your information, Quebec developed hydroelectricity all on its own, without the federal government's help.
The Bloc Québécois suggests that the government stop giving special treatment to the oil industry, which has no need of government tax breaks. It is not a matter of shutting down the oil industry. We all understand that we need oil, but the idea behind this sort of policy or concern is to stop giving tax breaks to companies that do not need them in the least.
I have a few figures that prove this. Petro-Canada's net profit for the first quarter of this year was $1.1 billion, an 82% increase over the same period last year. This is no laughing matter. In 2007, Shell, the second-largest oil company in the world, had a net profit of over $30 billion. A net profit of more than $30 billion for a single oil company, even one that operates all over the world, is quite something.
Instead of helping the oil industry, the federal government needs to levy a surtax on oil extraction and production industry profits. The revenues from this surtax should go toward measures to promote reduced consumption of petroleum products. This would be a smart policy if we really want to reduce our oil use.
One of the ways we could be less dependent on oil is by improving energy efficiency and using cleaner modes of transportation to move goods. Take trains and ships for example—these two types of transportation account for 8% of oil consumption, compared to trucks, which account for 92%. This is an absolutely incredible difference.
The benefits of increasing our use of trains and ships include reducing our consumption of oil products and reducing greenhouse gas emissions, which we will come back to. What is more, when we take greater advantage of our seaways and rail system, we scale down traffic by reducing the number of trucks. We have all been stuck in traffic. I am not saying that the problem will be fixed immediately, but cutting down on the use of trucks will certainly improve the situation.
We must also move away from fuel oil and favour cleaner energy sources, for individuals as well as businesses. We have been looking at all kinds of alternative fuels and alternative energy sources. Now we must promote the use of these products in order to keep reducing our use of fuel oil, a serious pollutant.
In Parliament, the Bloc Québécois is actively trying to minimize the impact of the rising price of gasoline. This is not the first time we have done so. We are once again on the attack. For instance, this week, we moved forward with deliberations at second reading of Bill C-454, introduced by my colleague from Montcalm. The bill made its way to second reading this week and was the topic of debate. The bill aims to give greater powers to the Competition Bureau.
I would also like to touch briefly on the objective of Bill C-454. It is absolutely crucial that the government strengthen the Competition Act in order to better combat the exorbitant increases in gas prices that average Canadians must face every time they fill up. To achieve this, the government must give greater powers to the Competition Bureau so that it may conduct a real investigation, particularly of the refining sector.
At present, the Competition Bureau does not have the power to launch an investigation on its own initiative. The legislation must therefore be changed. When it does conduct a review, its mandate does not allow it to discipline the industry, but simply to determine how it generally operates. Furthermore, it cannot force the disclosure of documents or protect witnesses during such a review. Thus, clearly, it is very broad and above all very fluid. This does not impose many restrictions.
In short, the Competition Bureau has its hands tied and is in no position to fight the oil companies, which are unscrupulously fleecing consumers. I have more examples. Profit margins in refining can reach 20¢ per litre of gas, which represents $10 for an average fill-up of 50 litres. And 50 litres is exactly the capacity of my car's gas tank. That is definitely excessive—not my gas tank, but the profit margins in refining as high as 20¢ per litre of gas. I would like to reiterate that this means as much as $10 for the average fill-up.
Generally, it is businesses, taxi drivers, farmers—since we are talking about the bill studied by the Standing Committee on Agriculture and Agri-Food—and consumers who pay the price. Oil companies already benefit from preferential tax treatment.
Obviously, in light of all this, oil company executives are laughing merrily. In fact, the Competition Bureau does not have the tools to ensure that prices are not artificially inflated. When a very few companies almost completely control a market as large as the gasoline market, someone has to keep an eye on them. You see the same signs when travelling through cities, villages, or almost anywhere. There are only so many oil companies. We are referring primarily to the major oil companies that control the market.
Oil refining comes under the jurisdiction of the federal government. Thus, it is up to the House of Commons to ensure that the Bloc Québécois' Bill C-454 is passed as quickly as possible in order for the Commissioner of Competition to take the necessary steps to prevent excessive gas price increases and oil company practices that are contrary to the public interest.
With the approach of summer it is possible that consumers will once again suffer because of the inordinate price of gas. Our bill must proceed quickly and unimpeded if we want it to be in force before the summer holidays. Not that we are in a hurry for them to arrive—but they are coming. We know that gas prices escalate suddenly and mysteriously in the summer.
Our dependence on oil is also a contributing factor to Quebec's trade deficit. Between 2003 and 2007, Quebec exports rose from $64 billion to $70 billion compared to imports, which rose from $64 billion to $81 billion. We therefore have a trade deficit of $11 billion.
What is Quebec's largest import? Of course, it is oil. In 1998, Quebec imported $2.5 billion worth of oil and last year it imported $14 billion worth, which is an increase of 457%. The price per barrel of oil explains the astronomical increase. Last year, in 2007, not long ago, the price per barrel was roughly $70 and now it is over $100. It was $119 last time I checked. Unfortunately the price goes up more often than it goes down.
Quebec has a policy goal that all fuel sold will include 5% ethanol by 2012. It has already invested $6.5 million in building two cellulosic ethanol production plants in the Eastern Townships, one in Westbury and the other in Sherbrooke. That is not so far from my riding. Cellulosic ethanol is the way of the future. I have already talked about this, as have a number of my colleagues in this House. The process promotes the use of agricultural residues, such as straw, and forestry residues, such as wood chips, along with trees and fast growing grasses, such as switchgrass. Bill C-33 will allow the emergence of this new generation of biofuels.
Biodiesel is another type of preferred biofuels. There is a biodiesel plant in Sainte-Catherine, Quebec.
Beef producers currently have to dispose of their specified risk materials. That is a Canadian standard beef producers have to comply with. We are not against it, but we would like to see reciprocity with U.S. standards. But that is for another debate. One thing is certain for now, producers have to get rid of these materials, which end up in the landfill. Often, unfortunately, producers have to pay out of their own pockets to get rid of these animal materials that can no longer be used, not even to make feed for other animals.
If we gave these materials added value by turning them into biodiesel, we could kill two birds with one stone. We could turn these materials into fuel. That is what sustainable development is all about. Instead of throwing out the material, burying it or paying to have it removed, we could pay for it once it has value and turn it into biodiesel. The technology already exists and this is already being done. Biodiesel is currently being made out of animal fats.
The Fédération des producteurs de bovins du Québec has studied the feasibility of setting up a plant to process animal carcasses and slaughterhouse byproducts into biofuel. Strategic partnerships and help from the government are needed to get that kind of project of the ground.
We have Bill C-33, but we will have to go much farther than that in developing a policy to promote biofuels that have few negative environmental impacts, or at least far fewer than petroleum and fewer than the foods we could use to make biofuels.
According to the Fédération des producteurs de bovins du Québec, we have to ensure that the life cycle of renewable fuels offers true environmental and energy benefits compared to oil products. That is why we should support the federation's project.
I have also talked about the training and recycling centre, CFER, in Victoriaville in my riding. In cooperation with 10 restaurants, this organization recycles used oil, the kind used for french fries, among other things. They are recycling it to make fuel. A pharmacy in Victoriaville even uses this kind of fuel in its delivery vehicle. Here in the House, I joked about how when one is driving behind the delivery vehicle, one does not necessarily get a smell of french fries.
Obviously, that is an important way to use it, a way that will not necessarily consume more energy in transportation. If the vehicle that collects this used oil goes to each of the restaurants and runs on used oil, itself, and if they manage to sell that oil at the pumps one day, that will be a huge energy gain. They are not yet at that point. It is still experimental, but the vehicle works very well.
Let us take this one step further. For example, sludge from sewage treatment plants can also be transformed into ethanol. Quebec's national scientific research institute came—once again—to Victoriaville.
I do not know if they did a very exhaustive study, but one thing is sure: the institute said that sludge from the Victoriaville sewage treatment plant could be transformed into ethanol. This is the kind of project we should be encouraging if we really want to reduce our oil dependency.
Wayne Marston NDP Hamilton East—Stoney Creek, ON
Mr. Speaker, earlier today we heard a comprehensive speech from the member for Ottawa Centre, another one from the member for Western Arctic and now we have the addition of our good friend from the Bloc with his comments around Bill C-33. A common thread that appears to be travelling through the remarks I am hearing in the House today is that we should err on the side of caution.
I would refer back to a quote I have here:
Biofuels have many advantages, but we have to look at all our options and make sure we make the best choices to ensure a more sustainable future.
...attempting to save the planet by wholesale switching to biofuels like ethanol and biodiesel may unintentionally have the opposite effect.
That quote was from David Suzuki. In this country we all know that he is very highly regarded when it comes to environmental matters.
I would add one thing. Yesterday, in the Toronto Star, there was an editorial which read:
And while biofuels may be doing little for the environment, they are doing the world a great deal of harm by diverting food from hungry people to the feeding of automobiles.
In the final closing remark, it states:
Parliament should heed NDP Leader...and take more time to consider the implications of Bill C-33 before passing it.
Some of these folks are non-traditional supporters of the NDP, I would go so far as to say, but would the Bloc not agree that we should err on the side of caution and take our time to ensure that when we set this up that we do it properly?
André Bellavance Bloc Richmond—Arthabaska, QC
Mr. Speaker, that is why in committee we introduced amendments to make sure there are environmental studies, or studies on the environmental impacts as well as the social impacts related to the use of biofuels.
It is important to note that there are many kinds of biofuels. That is why I focused on biofuels made from cellulosic ethanol. There is biodiesel made from canola, which the NDP member for Western Arctic spoke about earlier, but as I was saying, there are also animal oils, animal carcasses and other waste materials that can be used to produce biodiesel.
We have a simple choice to make. We can continue to use oil and deal with steeply rising oil prices. Many people, for example those in the agricultural sector and those affected by the food crisis, will suffer huge consequences. We can keep going as we are and hope that one day oil prices will drop. Except that oil is a non-renewable resource.
Do we decide to develop new fuel sources made from renewable materials—and I agree with the member here—materials that will not be worse than oil in their effects on the environment? It is clear. One day, we will have to get with the times and find an alternative to decrease our dependence on oil.
Harold Albrecht Conservative Kitchener—Conestoga, ON
Mr. Speaker, this is a concern that I raised yesterday in the report stage debate in the sense that too often when we debate these kinds of issues here in the House it becomes very polarized. Again today we heard the statement about a wholesale change to biofuels.
The government is not proposing a wholesale change to biofuel. We are talking about a very minimal biofuel content in our fuel. We also recognize that only about 5% of our land is used to produce crops that will be used for biofuel.
Does my hon. colleague think that, as our minister pointed out not too long ago, the weather pattern changes can actually have a greater impact than just the 5% of land use that is used for ethanol production?
André Bellavance Bloc Richmond—Arthabaska, QC
Mr. Speaker, in fact, to answer my colleague's question, the Government of Quebec has established a policy on the use of biofuels. It is quite similar, since Quebec hopes to increase the use of ethanol in fuel to 5% by 2012. Once again, Quebec has made a choice. The government, and probably a vast majority of the population, decided that this ethanol should be cellulosic ethanol.
There are pilot plants, as I mentioned earlier. We must therefore encourage the development of this new ethanol production. If we simply say that this is how it is, that it is in the works, nothing will get done. I therefore hope that the Conservative government, which has established its own policy for the use of ethanol in fuel, will allocate the funds needed to ensure that these new alternatives can be developed and that it does not simply say that it will change the crops in our fields, as is the case in some countries, to make fuel. That is where the danger lies.
The current food crisis was not brought about exclusively by the use of biofuels, or agrofuels as some people are now calling them, for there are many other factors involved. Consider the stock market speculation concerning food, the droughts there have been, especially in Australia, which is a major wheat producer and has been suffering drought conditions for years, which cause productivity problems. Consider also China and India, where there are more and more people who now have the means to feed themselves a little better.
Another thing that concerns me is the rising price of food products. We cannot blame biofuels alone, given that rice is the product that has risen the most in cost in recent months. It has gone up nearly 100%. To my knowledge, there is not a single grain of rice fueling any vehicles. The price of milk has also gone up rather outrageously and I am pretty sure that no one is putting milk in their gas tanks.
I am not saying that biofuels have no impact. They do. We must be extremely vigilant about this, but many other factors are also at play.
Paul Dewar NDP Ottawa Centre, ON
Mr. Speaker, it is an honour to speak to the bill and to the amendments that our party has put forward.
I will begin by assuring those who are concerned about our party's position on biofuels in general that this is something that needs to be part of the mix to deal with the catastrophic climate change that is in front of us. However, we also need to be cautious. The do no harm principle should be invoked, the precautionary principle, which is why our party has taken the stand it has.
As we have noted recently, both in the House and in the debate that has occurred in Canadian society and, indeed, globally on the issue, if we look at the advantages of ethanol and biofuels, ethanol being part of the biofuel mix, we have to ascertain what the cost benefits are.
When we take a look at ethanol as an example, which seems to be the one that is the most popular, and certainly the supports are fairly strong within the government, we need to look at the costs in terms of the production of the corn for the ethanol as part of the mix for gas.
I recall years ago, when ethanol first became an option, that many said that we should be careful in what we were doing and that we should look at it both in terms of the cost of transporting the goods to production, in other words, the corn from the farmer's field that goes to the plant to mix the ethanol, and the effects on the environment there. We were also told to drill down deeper and look at the actual costs in terms of the production costs.
It has emerged, if we use ethanol as an example because that is the one that has the most production, focus and support, that there is a huge amount of investment in fertilizer, for instance.
There is an important aspect to fertilizer that we should be dealing with. Fertilizer, as we know, comes from natural gas. If we are disproportionately using things like fertilizer, which is a fuel and one that is not renewable, and we are using that to help with the production of corn for ethanol, it should be part of the cost benefit analysis.
I would also add that when we are looking at the other resources that are required for growing corn, certainly for ethanol purposes, there is a fairly substantive use of water as a resource. Again, if we look at the whole mix and what is required in the recipe for ethanol, that is something that should be taken into account.
The use of fertilizer is not something that has been fully analyzed, in other words, the degree to which it will be using the fuel that is required to make fertilizer. Many have pointed to this as a concern, notwithstanding the use of water.
When we look at the tar sands as an example and the science around the tar sands, what was contemplated first in the science that was pushed was how to get oil out of the sands. That is fair enough and innovative. Some work was done on that. What I do not think was contemplated was what happens with the waste.
We have seen this not just with the tar sands but also with nuclear energy. What I think most of us want to see is a very genuine, thorough analysis of the effects and costs in the production of any new energy source.
In the case of the tar sands, Alberta is about to become a have not province, not in terms of fiscal capacity but in water capacity. Australia was mentioned earlier regarding some of the problems it is having with drought. Water is a resource we take for granted but we should be very careful in how we use it, especially in relation to agricultural production.
We have new technologies such as ethanol. I mentioned nuclear power. We still have not figured out what to do with spent nuclear waste in a safe way into which everyone can buy. I mentioned the tar sands. However, when we deal with ethanol, we have to ensure we have done the proper analysis and due diligence. That is the thrust of our amendments and our concerns about the bill.
A member of Liberal Party, in statements to the press, was trying to convince his colleagues to slow down on the bill and not support it to the degree that we see with the official opposition, and that perhaps it would make sense to amend the bill with some of the amendments we brought forward, to have the oversight and to send it back to committee to do the cost benefit analysis, as I just made. He said that we should admit that things have changed, that since we made assumptions when we looked to ethanol as the way to deal with catastrophic climate change, new evidence had appeared. I suggest that would be the right notion and probably good advice for his caucus colleagues.
I do not assume the governing party will change its direction. It has been noted for going ahead regardless. However, I would plead with the opposition, and certainly with the Bloc, to take a reasoned and sensible analysis of the bill and the concerns we have with it.
The question is, why rush into it? Why not have amendments put forward, as we have done, to do due diligence? If we find 10 years hence that we have in fact gone in the wrong direction, the question will be, why were we in a rush to do this?
It will be difficult for government members and other members of Parliament to get a satisfactory answer when we put amendments forward at committee to have due diligence done. We put forward amendments at report stage. We put forward an amendment today to ensure we were careful with this and due diligence was done. That is important to note.
As my colleagues have said, we are not talking about an ideological view. We are talking about scientists saying that we should be very careful in how we go forward with our biofuel policy. Many have suggested that this is the wrong way to go without the proper oversight, as I mentioned.
I find it interesting that in his comments this morning, the minister suggested that this was not about the global map right now, that we were only talking about Canada. That is fair enough. We are in the Parliament of Canada and we are discussing the Government of Canada's policy on biofuels.
The problem with that statement or that analysis by the minister is it denies we are in a global economy. I find it intriguing that I am making this statement for members of the party who suggest that they are the ones who understand the global economy. What we do with our biofuels policy matters to the rest of the world, as does our policy on the tar sands. I share that with the House because if the minister's suggestion is that our policy on biofuels in Canada does not affect the global economy or that we do not have a role to play, I would fundamentally disagree with him on that.
At one point, he said that we needed to deal with an issue because of climate change. He then mentioned that recently there was snow in his province and that the farmers were in the fields. He made a passing remark about it being global warming. It suggests to me that the Conservatives do not have a consensus yet in their caucus about whether global warming exists. I hope that is not the case. This has been a long learning curve for the governing party. I know at one point it denied climate change and the science of it. I hope it was a lightened remark as opposed to an unenlightened analysis.
It is about good policy, and the policy we form here does affect the global view and what happens in the world. The government has been very clear about Canada's role. I think the Prime Minister coined the phrase that he wanted Canada to be an energy superpower. If we are going to be, on the one hand, an energy superpower and, on the other hand, making policy on biofuels and suggesting this is only for Canada and it does not really affect the rest of the world, there is incongruity. What he is saying is that what we do here will not affect what happens around the world, and I could not disagree with him more.
Let us look at the analyses and studies that have been brought forward. The chief economist for the U.S. agriculture department is very critical of what is happening with biofuel policy. Gwyn Morgan, no close cousin of the NDP, has said that this is not the way to go. People have genuine questions about what the effects of this policy will be and we need to listen to them.
All our party is asking for is some reason, due diligence and to ensure when we are formulate our policy, we do not do it in a hurry or be too hasty. If we do that, there are unintended consequences and, some would say, irreversible effects that will occur. Once we build into our mix of energy supply, put in certain supports and have legislative underpinnings to it, it is very difficult to undo.
What that means for not only the environment but our economy is that we will then have our eggs distributed in the wrong basket. I will not say they would all be in one basket with this legislation, but it gives the nod to the economy and says, “This is where you should be investing”.
It was noted by the minister in his comments this morning that perhaps weather could have more of an effect on the supply of fuel, the cost of fuel, et cetera. Granted, I would concur with him on that. However, the same can be said about the supply, in terms of ethanol, that will be built in if there is a bad crop. What happens if there is a drought? What will happen then is we might have to look far afield, pardon the pun, to supply the mix that has been built into the system.
I would like to see the analysis on that. What is the last decade's analysis for the supply of some of these crops that we will be dependent upon, even with the minimum that we have established presently? Those kinds of things need to be understood.
The other thing I find interesting is the people who are lobbying for ethanol in particular. We know the person at the top of the association, who was running the lobby effort for this, was lobbying one day for the industry and the next day was working for the government. I find it that interesting.
We need to be absolutely clear as to the premise for which these policies are brought in. Is it the best direction for our country in terms of the economy, climate change and to ensure we have the right mix? Many people would be surprised that someone who lobbied for this policy one day, ended up the next day in the Conservative government, directing where that policy would go. Again, that is important to note.
If we look at what the legislation purports to do, and certainly the government will say it will do, and look at some of the concerns brought forward by scientists, there is no clarity. There is not enough clarity for my party and I think opposition members, because we have heard from some who are concerned about their party's position, to say that we should rush ahead and do this.
There has not been sufficient argument to say that we cannot hold back, that we have to go ahead immediately because the sky will fall. When we look at some of the arguments that have been made about concerns of bringing this policy forward, we can still slow down, take a look at the cost benefit and have this kind of policy put in place. It is a false premise for those who say we have to rush this through now. Those who have taken a look at the direction of ethanol and biofuels mix have argued the opposite, that we can still go in the right direction on this, but it is important we get the balance right.
We do not take this lightly. We have seen what happens once we start down this direction. We see the concerns in the United States. As I referenced, the chief economist for the Department of Agriculture in the United States has thrown up the cautionary flag and said that they have a problem, that have done too much in one area and that it is undermining the capacity for the United Stated in terms of agriculture. I do not want to be put a corner like the Americans.
As my colleague from Hamilton said, this is something we should rethink and be cautious about. It was interesting to note the editorial he referenced from The Toronto Star the other day. It states:
But in their rush to biofuels, the politicians have overlooked the drawbacks of turning food into fuel.
Although biofuels do emit less greenhouse gas than regular gasoline, environmentalists point out that this comparison does not take into account the emissions coming from the farm machinery and fertilizer required to “grow” these new fuels and the trucks for transporting them.
This is a reasonable question, and it should be put back to the committee to answer it. What is unreasonable about that question? If we are to do due diligence, if in fact this whole policy is to deal with the catastrophic climate change that is in front of us, then why would we not do our homework on this? Why would we not look at an impact, not just of when the fuel comes out the tailpipe, but look at the production of that fuel? We can do that. In fact scientists have done this, working with farmers.
There is a suggestion that if we are critical of this policy, that somehow we do not support farmers. It is unfortunate that some are using this argument to create a wedge between society in general, which wants to deal with that catastrophic climate change, and the challenges that confront farmers. Our party has been clear for decades about the way to support farmers. We believe in the Wheat Board and other institutions that have been built by farmers. We are not going to undermine them. I think this is something where the government is trying to create a wedge. I have talked to farmers locally and they do not buy that. They are as concerned as the rest of us on this rush to put in legislation that would tip the hat one way in terms of where agricultural direction is going.
I hope that reason will carry the day, that the government will take a second look at this and that the opposition will support our amendments. I hope we can look back 10 years from now and say that we did the right thing, that we did due diligence and we made sure that we did not rush into something that we had not thought through thoroughly.
Canadian Environmental Protection Act, 1999Government Orders
Prince George—Peace River B.C.
Conservative
Jay Hill ConservativeSecretary of State and Chief Government Whip
Mr. Speaker, I hardly know where to begin after listening to that, but let me start with a phrase that I heard the NDP member use repeatedly throughout his dissertation: why rush into this?
I do not know how long the NDP would like to study this issue, but as a former farmer and someone who is proud to represent a large rural riding with a large agricultural component, which is unlike the riding the member represents, I have to tell him that a lot of farmers have been waiting a long, long time already for this type of option. They have been waiting for this option to see it impact favourably on commodity prices, even in a small way, so they can receive a better return from the marketplace, as opposed to taxpayers being forced to assist them in order to keep them afloat.
They are looking forward to this. I hope they are watching this debate today. I hope they are watching the NDP members stand in their places and vote against giving farmers this option, this alternative for which they already have been waiting years. They have been waiting for years for governments to catch up to the technology that farmers have known was out there.
What do we see now? Farmers are looking forward to this legislation. They would argue strenuously with the hon. member and would say that we are not rushing into this at all. They have already waited some time for this.
Never mind the environmental benefits, this change in policy could be of great advantage to the struggling forestry sector in my riding and the riding of my colleague from Cariboo—Prince George. We could start utilizing more of the wood waste from trees to produce biofuel. Never mind that advantage. Never mind the environmental advantage in reducing CO2 emissions, which the member himself admitted.
These are all positive things, yet the NDP wants to vote against this legislation. They want to kill it. They want to stop. They want to wait for another 5, 10, 15 or 20 years while they study this some more. Rather than taking a positive step and moving forward, those members want to send the bill back to committee.
I want that member to stand up and express why he believes that farmers should not view the NDP as being against them when it wants to kill this bill that will help them so much.
The Acting Speaker Conservative Royal Galipeau
I would like to advise the hon. member for Ottawa Centre that there are seven minutes left in the period for questions and comments, but only one of those minutes is today.
Paul Dewar NDP Ottawa Centre, ON
Mr. Speaker, there is no coincidence between the member's comments and the time remaining for my response. That is an old parlour trick, I suppose.
I will simply note for the member that there is farmland in my riding. He should know that very well. In fact, I am very proud to have the Experimental Farm in my riding, and it does research for farmers. He should know that it is part of where we are finding that there are concerns.
I will simply say that the member is actually helping me with my argument when he is trying to establish that there is a wedge between farmers and other Canadians. It is unfortunate that he is trying to drive a wedge between farmers on the one hand and everyday Canadians on the other. I do not think most Canadians would put up with that. I am happy that they will see through this as just wedge politics, not really about caring for farmers--
The Acting Speaker Conservative Royal Galipeau
I regret that I must interrupt the hon. member for Ottawa Centre. It being 1:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.
When we return to the study of Bill C-33, there will be six minutes left for the hon. member for Ottawa Centre for questions and comments.
André Bellavance Bloc Richmond—Arthabaska, QC
moved that Bill C-445, An Act to amend the Income Tax Act (tax credit for loss of retirement income), be read the second time and referred to a committee.
Mr. Speaker, I hope that you do not get the feeling that I am always talking, since I just spoke during another debate. I want to say that this bill is particularly close to my heart and that I am moved today as I speak to this issue, not only because this is my bill, but because a number of people worked on this bill. These people deserve our consideration, and that is why we drafted such a measure.
I will briefly explain Bill C-445, An Act to amend the Income Tax Act (tax credit for loss of retirement income). This enactment amends the Income Tax Act to provide a refundable tax credit to a taxpayer in respect of whom an employer and the employees failed to make the contributions required to be made to a registered pension plan. It was introduced at first reading on May 17, 2007. Today, nearly one year later, we are ready to debate it at second reading. It is making good progress. We hope that the bill will move quickly through Parliament so that the people affected get what is coming to them.
I will give a brief account of how this bill came to be. In my riding, the Jeffrey mine, a chrysotile mine, went bankrupt, throwing many people out of work. Unfortunately, their retirement fund also disappeared like snow in the sun because there was a loophole when the company went bankrupt. People lost a great deal of money in all this. For years, Jeffrey mine retirees used every possible means to obtain some compensation. The Government of Quebec gave a certain amount of money at a given point, but it was a one-time contribution that did not cover their losses.
What could be done? These people came to see me to determine what could be done. At the same time, retirees from Atlas Steels, in Sorel, also went to see their MP, who will speak in a few moments. We worked together, along with the member for Chambly—Borduas who worked very effectively on this file, to see what could be done at the federal level to help these people.
Mr. Gaston Fréchette, chair of the Jeffrey Mine retirees subcommittee in Asbestos, in my riding, represents more than 1,000 retirees who worked at the mine. There are about 1,200 in all. In addition, Mr. Pierre Saint-Michel is the chair of the Atlas Steels retirees group, which has just under 300 members. These people and their supporters—there are many—truly worked with us. Mr. Fréchette came up with the idea of a tax credit. We met with them here and we held press conferences in Asbestos and in the riding of the member for Bas-Richelieu—Nicolet—Bécancour, who also participated in these discussions. Together, we came up with the basis for Bill C-445.
When I said that this was an issue close to my heart and that I was moved speaking about the bill, it is because I saw these people wrack their brains, approach us and ask what we could do to help them. And then they worked on the bill with us so that we could introduce it. I would therefore like to thank not only Mr. Fréchette and Mr. Saint-Michel but all those individuals and retirees who helped out. I would like to extend a very warm thank you to the members for Bas-Richelieu—Nicolet—Bécancour and Chambly—Borduas because, without them, there would not be a bill.
I would like to briefly explain what this bill will do once it comes into force. As I was saying, it would create a refundable tax credit for loss of retirement income. Many retirees have seen their income drop because their retirement fund was running a deficit when their company ceased operations. That is what happened to people who retired from Atlas Stainless Steels, which belongs to Ontario's Slater Steel, and from the Jeffrey mine in Asbestos, closer to home. To help retirees caught in this situation, we propose creating a refundable tax credit for loss of retirement income.
This refundable tax credit, which would amount to 22% of lost income, would not affect retirees' income, whether or not they pay income tax. The credit would also be transferrable to a surviving spouse and would apply to both money purchase and defined benefit plans. Accordingly, a retiree whose income drops from $30,000 to $20,000 would receive 22% of the $8,000 lost, which would be a non-taxable amount of $1,760.
We do not believe that retirees should have trouble making ends meet because they are not receiving the retirement income they contributed to for years. That is what happened to retirees from Atlas Stainless Steels in Sorel-Tracy, whose income has dropped between 28% and 58% since July 1, 2005, and is still dropping.
Passing this bill will make it possible for all retirees caught in this kind of situation to recover part of the money lost. Take, for example, retirees from the Jeffrey mine. Since 2003, they have lost $55 million from their pension fund and $30 million in benefits.
Of course, this bill would not be retroactive. My colleagues should understand that when it comes into force, this bill will apply to the previous tax year. We will not be able to go any farther back than that.
Retirees whose complementary pension fund is smaller than it should have been will be compensated, as will surviving spouses, when they are entitled to part of the income.
The tax credit is 22%. Some may wonder where we came up with that figure. It corresponds to the federal marginal tax rate that applies to the middle class. For people whose income is between $36,000 and $72,000, the tax rate is 22%. That is where we came up with that percentage.
The tax credit is refundable so that everyone can take advantage of it, even those whose incomes are very low and who do not pay taxes. It is a matter of social justice for us. We thought about this. I know that this morning, a ruling was unfortunately made concerning royal assent. From what I understand, if the tax credit had not been refundable, the decision would have been different. We are bound by the royal assent, but I hope that the government will listen to reason.
We made this choice thinking of the poorest members of society. We knew that some people had lost their retirement income, and that some of them had even less money than others. A non-refundable tax credit would have benefited only those with more money. Some people would have been eligible, but I think, unfortunately, that most of our retirees would not have been able to take advantage of the tax credit. That might have been a step in the right direction, but I think it would have been unfair to do it that way. That is why we went with the idea of a refundable tax credit in the bill.
I just explained that low-income people would have essentially been left out. The elected members, at least these three members, as well as the people from the two retiree committees I mentioned earlier, felt that the bill should apply to everyone, especially the least well off. I would like to congratulate the members of the retiree committees who were also thinking of their less fortunate colleagues.
We have to determine how many people this will affect in Quebec. I have heard rumours that the government thinks this measure would take a big chunk out of the consolidated revenue fund. I can say that in Quebec, we have found only two cases where the bill would help now-retired victims of business closures. I am referring to the two cases we have been talking about since the beginning of this debate— Atlas Steels in Sorel and the Jeffrey mine in Asbestos. These are victims of very exceptional cases—I do not know if we can call them very exceptional, but exceptional at the very least—that should never happen again.
Take Quebec for example, again. The Quebec government changed its legislation to require improved capitalization of money purchase benefit plans. And there should not be many cases that come up in Canada either. In Ontario, there is a government fund set up to replenish the pension plans of employees who find themselves in a similar situation. Luckily, governments have made adjustments so that there will not be any more situations like those that the retirees in Asbestos and Sorel have had to deal with.
We are now seeing measures like this in a number of provinces. Perhaps there are former workers from the St. Anne Nackawic Pulp Company Limited in New Brunswick who might be eligible—our research service looked into this. We could study the file in committee, since we have not been able to determine if this is the case or not. More examples like this could come up, but it would not involve many workers.
But even though this may not affect many people, we cannot simply wash our hands of it and stop worrying. Quite the opposite. One thing is certain: we are talking about very few cases and about exceptional situations. The fact that they are exceptional does not mean that they are any less important for the people involved.
We are talking about people who contributed to their employer's pension fund their entire lives only to end up with almost nothing once they retire.
The intention of Bill C-445 is not to hand out a lump sum payment, but to provide an annual payment equivalent to 22% of the loss. If we take the actuarial deficit of the two retirement funds for the people we are talking about, we expect this to cost roughly $1.7 million in the first year for Quebec. Obviously, that amount will decrease over the years as the number of former employees decreases. For all of Canada this measure is estimated to cost between $3 million and $5 million, again if we take the example of the retirees I am referring to. More may be discovered with the current provincial measures, and if we look back, but note that this measure is not retroactive. In cases such as Singer and others, retirees have been compensated. At first we thought about including those cases in our bill, but they are different cases. This exception really only concerns two industries, two companies in Quebec and maybe one in New Brunswick.
Why does this issue concern the federal government? The federal government has a constitutional right to legislate while respecting the supremacy of provincial and Quebec legislation, of course, with respect to old age pensions and additional benefits, including survivor benefits and disability benefits, regardless of age. That is one of the reasons. The compensation set out in Bill C-445—and I wish to emphasize this—is provided as a tax credit. It has no impact on other government program benefits, does not interfere in any way in provincial social programs and is therefore very respectful of the division of powers. The Bloc Québécois would never show up with a bill calling on the federal government to interfere in provincial jurisdictions. That is why I wanted to emphasize this, in case that was what anyone was thinking, but that would surprise me. Most parties here understand what I am saying. The government has a say in this type of procedure.
There are other reasons as well. With a monetary policy that produces recurring deficits and a fiscal policy that does not allow the government to build up a surplus in good years, Ottawa is also responsible for providing relief for retirees who have to pay the price. These are good reasons why the federal government has a role to play in this issue.
I should mention that the coverage by the local press has been very interesting, and I want to thank the local media that have taken an interest in the cause. I will give just one example, because I want to give my colleague from Bas-Richelieu—Nicolet—Bécancour a chance to make his speech. The local media in my riding have covered the story of the Jeffrey mine retirees for a long time. They are involved in an ongoing legal battle, but that is something quite apart from what we are discussing today. This is an issue that regularly makes the news.
I want to read from the May 26, 2007 issue of Les Actualités, the Asbestos newspaper, which refers to this issue and gives a good summary of the situation. I am reading from the front page:
The 1,200 Jeffrey mine retirees who have been fighting for four years to obtain redress after losing their group insurance are beginning to see the light at the end of the tunnel. A bill that would create a refundable tax credit for the loss of retirement income has just been introduced in the House of Commons.
This was very good news.
In conclusion, I want to extend my warmest thanks to Gaston Fréchette, the chair of the Jeffrey mine retirees subcommittee, for raising awareness in this House. He decided to send letters—signed also by the president of the Sorel retirees—to all the members to make them aware of this issue. Mr. Fréchette, who is one of the retirees, also called all the members from Quebec, regardless of their party, to ask them to support this bill. That is what I am also doing today. I am calling on my colleagues to do justice to these people and support Bill C-445.
Mike Wallace Conservative Burlington, ON
Mr. Speaker, I want to thank the hon. member opposite for presenting his bill today. It gives us an opportunity to discuss it. I recognize the concern of the Bloc members on the issue of helping seniors, which is also important to us.
The government has been doing a number of things for seniors. For the first time in history, we provided pension splitting for seniors. There is an increase in the budget of the new horizons for seniors program of $10 million to raise awareness of elder abuse and other issues they face, including fraud. We are giving older workers the choice to stay in the labour market by permitting phased-in retirement. We are doubling the amount of pension income eligibility for the pension income credit, which benefits nearly 2.7 million pensioners.
In his speech, I heard the member talk about the costs of the two, possibly three, locations that he was referring to, and it is not retroactive. I did not hear any long term projections of what this may cost the Government of Canada over the years. If it applies now, would it not apply in the future? Does he have any sense of what the financial issues might be for the Government of Canada in the future?
I find it interesting that he did try to make a distinction between provincial and federal jurisdictions. When the Bloc members want something from the federal government, it is always very easy for them to justify that it is a federal jurisdiction, but when the federal government tries to do something to help Quebeckers, there is often a push back from that party that it is a provincial jurisdiction and that the federal government should stay out of it.
From a finance point of view, I would like to know, has he studied the long term financial issues in presenting this bill?
André Bellavance Bloc Richmond—Arthabaska, QC
Mr. Speaker, I was very clear in my speech. I gave figures. When it comes to pension benefits, some people do not get the same as others. We estimate that the entire cost would only be $5 million for the two industries, the two we know about. We did not find others, but there may be a third.
We have to understand that it is a question of retirees who will sooner or later be able to use the tax credit once the bill is passed. Some of them will pass away. In some cases, like in Sorel, retired employees who were unfortunately shortchanged when the businesses closed are no longer there. Spouses who are entitled to a pension could also use a portion of this tax credit.
In total, the entire cost of this measure would not exceed much more than $5 million.
That is my answer to the member's question. In all fairness, this is the type of proposal or bill that everyone in this House should make sure gets passed.
Louis Plamondon Bloc Bas-Richelieu—Nicolet—Bécancour, QC
Mr. Speaker, I would like to congratulate my hon. colleague on his fine speech. He summarized the problem very well and explained the solution we are proposing for the former workers of Atlas Steels and the Jeffrey mine.
I would like to come back to the previous remarks by the Conservative member who expressed some concerns. Those same concerns regarding costs have been expressed to me and the hon. member for Richmond—Arthabaska. People are wondering if there will be many cases like those. When people say that, they are forgetting that there cannot be others, because the provinces now have legislation to prevent a deficit in such funds.
As a result, we have seen a number of plant closures over the past year, but no other employees have been left in the same situation as those two groups of citizens.
It really is a unique case and one we hope to rectify with this bill. Does the hon. member for Richmond—Arthabaska agree?
The Acting Speaker Conservative Royal Galipeau
The hon. member for Richmond—Arthabaska has 15 seconds to answer.
André Bellavance Bloc Richmond—Arthabaska, QC
Mr. Speaker, with 15 seconds, here is my answer: I agree entirely.
To allay the members' fears, we can provide all the necessary information, if they agree to send the bill to committee. That would obviously be the best solution.