Madam Speaker, I will be sharing my time with my hon. colleague, the Minister of the Environment.
I am pleased to have this opportunity to address the House on the important issue of climate change.
The world knows that climate change is real. We can already see the evidence: hotter, drier weather in some areas, less ice in the Arctic, and rising sea levels. The science is clear. Canada takes its responsibility to be part of a global solution very seriously. From the major investments we have already made to the leadership role we will take in the future, Canada's efforts to address climate change will be second to none in the world.
As Minister of Natural Resources I am keenly aware that at its heart climate change is largely about how we use energy. In Canada about 85% of carbon dioxide emissions, the leading greenhouse gas, come from producing, transforming and consuming energy. Canada has a dynamic energy framework focused on the continuing prosperity of Canadians, assuring Canadians access to a reliable and competitively priced supply of energy, and ensuring the production and use of energy is consistent with our environmental objectives.
Within this framework Canada has prospered and is positioned to continue to do so. Energy represented 5.6% of our gross domestic product in 2003. It accounts for nearly $50 billion worth of exports and a fifth of all business investments. Canada is the world's biggest producer of hydroelectricity and uranium. We are third in gas production and also are a major producer of coal. Our oil reserves are second only to Saudi Arabia.
We must recognize that Canada's energy context is changing rapidly, beginning with opportunities and challenges, particularly on the environmental front. The 21st century will be the century of sustainable development, development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
It is the responsibility of the government to blaze the sustainable development trail for Canada. That means balancing our economic activities and our environmental goals. We must ensure our continued economic and social prosperity through the development of our natural resources while protecting our environment.
Sustainable development is a challenge, but it is a challenge that brings opportunities for Canadians. It allows us to benefit from resource development and fuel innovation. It ensures that future generations will be able to enjoy a high quality of life.
Climate change is the ultimate sustainable development issue and fundamentally an energy issue.
Between the Kyoto baseline year of 1990 and 2002, total energy production in Canada grew 43%. It is projected to achieve a cumulative growth of about 42% over the next 15 years.
The fundamental issue is how to break the link between energy and emissions. This will require technological change, but until these technological goals have been accomplished, we need to keep our feet to the fire. We need to reduce greenhouse gas emissions from energy production and use, while at the same time ensuring an abundant supply of competitively priced energy for the prosperity of our children and grandchildren. This is not an easy challenge.
Canada has a relatively high energy intensive economy due to a combination of factors that make it unique among industrialized countries: a cold climate, distance between population centres, and Canada's resource based economy. As well, Canada's economy and population have been growing. Between 1990 and 2002 our gross domestic product grew by 40% and our population grew by 20%.
The main thrust of the action we have taken to date has been through measures aimed at reducing emissions during the Kyoto commitment period of 2008 and 2012. We have committed to invest close to $3.7 billion in that effort and have implemented programs all across the Canadian economy.
We are experiencing tremendous success with a number of programs. For instance, we are working toward significantly increasing energy efficient housing. The EnerGuide for houses program has been a great success. It is the same story with our programs aimed at improving the efficiency of commercial and institutional buildings.
We are building on success. The Canadian industry program for energy conservation was launched 30 years ago, and Canadian industry is now saving some $3 billion a year, thanks to the energy management practices that are part of CIPECs efforts.
Emissions from houses, buildings and manufacturing have been essentially flat since 1990 despite robust economic and population growth. This is a significant accomplishment with important ramifications.
Taking the country as a whole, energy efficiency has improved by 13% since 1990. This has resulted in energy costs in 2004 that were $12 billion lower than they would have been if these energy efficiency improvements had not taken place.
Energy consumption has slowed while the economy has grown during the past decade. Canada's economy grew by 40%. Energy demand grew by 18%. This is a significant gain in energy efficiency between 1990 and 2002.
We are a world leader in improving energy efficiency. A recent study by the International Energy Agency ranked Canada in the top third among IEA member countries in improving energy efficiency, ahead of the United States, the United Kingdom and Japan.
Much of this improvement is due to deliberate policy decisions and program resources furnished by the Government of Canada. We have made great improvements to be sure, but we cannot stop now. We have momentum on our side and we have progress in our future. More can be done, more needs to be done and more will be done.
Fundamentally, improving energy efficiency helps reduce GHG emissions. It also reduces, or at least moderates, the demand for energy. Improved energy efficiency cuts operating costs and increases industrial competitiveness.
The Government of Canada is equally committed to reducing emissions in the transportation sector. We are building on a record of success and more progress is being made.
We are working with our auto manufacturers to ensure this sector does its part to reduce emissions by making available to Canadians vehicles that are more fuel efficient and produce fewer greenhouse gas emissions.
We are also making good progress on renewable fuels. The ethanol expansion program, with $100 million in funding, has already allocated contributions to six projects that together will almost quadruple the Canadian ethanol fuel supply by 2006. We have an aggressive target to see ethanol blended in 35% of the Canadian gasoline supply by 2010. Through initiatives like the ethanol expansion program and the continuing federal excise tax exemption on alternative fuels, we are getting closer to realizing that target.
Canada's position in oil and gas production is unique. We are one of the few industrialized countries that is a net exporter of energy. More than half of the energy we produce is exported. While those exports are an essential part of our economy, they also cause us to incur the emissions associated with energy we produce but do not use ourselves.
Most of our competitors in the oil and gas industry are not signatories to the Kyoto agreement and we are constrained in this sense.
In this context, carbon dioxide capture and storage is an important technology for us. It will allow us to continue to benefit from our energy resources while minimizing the impact on the environment.
In January I announced support to four projects under the first round of funding of the CO
capture and storage incentive program. These projects will demonstrate the feasibility of this important technology. Along with this announcement, I issued a call to fund a second round of proposals under the program. The application deadline to submit proposals is February 22.
On clean electricity, Canada is already a world leader. Within the OECD we are second only to the United States in total electricity production from renewable sources, mostly because of our vast hydroelectric and forestry resources.
We are also making notable progress in emerging renewable energy. For example, our wind power production incentive has started a wind power revolution in Canada with projects completed, under way or under consideration in every single province.
The government has already announced its intention to respond to the success of this program by quadrupling its size to encourage a total capacity of some 4,000 megawatts of wind power.
However the Government of Canada cannot address the challenges of climate change alone. That is why we are working closely with industry to establish a regulatory system to reduce industrial emissions and partnering with provinces and territories on innovative measures to reduce emissions.
We signed a number of MOUs with provinces and territories identifying prospective areas for future collaboration. Very shortly, we will be announcing the first round of funding toward a number of initiatives under the opportunities envelope, a $160 million partnering mechanism designed to fund the most cost effective emission reduction ideas put forward by provinces and territories.
These efforts are about much more than short term results. Addressing climate change will transform our energy economy to bring about a real long term solution for our environment and our economy.
New technologies will only reduce emissions where they are taken up--