Madam Speaker, one has to note the enthusiastic and overwhelming support for Bill C-48 by that great philanthropic party, the Canadian Alliance. The official opposition is very much inclined to support the bill, as was shown yesterday in the vote at report stage.
That party is opposed to Kyoto. That party by and large is opposed to social security reform. That party is opposed to strong federalism. The fact that the official opposition supports the legislation is a source of some suspicion. We would not want to prejudge it just because the support of the official opposition is there, but there are three very good reasons to reject this legislation and I will outline them one by one.
Bill C-48 aims at reducing taxes for the oil and gas industry. This raises the question, is the industry in trouble and does it need some help? If it were the textile industry, the shoe industry, or some industry in difficulty across the country one would understand, but why apply this form of tax relief to an industry which is consistently posting large profits and is likely to post large profits in the decades ahead? That is the question.
This brings me to the heart of the first reason. The industry has free access to natural resources which are extracted from underground. It extracts a resource which belongs to the people of Canada. This resource also belongs to the next generation of Canadians, and hopefully to generations to come. The time limit available for the exploitation of this resource is not that long. In return for this free resource the industry pays taxes. Those taxes go into the system that permits governments to do the good things that they do for the public from pensions to airports to other services which keep this country together and functioning.
Bill C-48 would reduce the taxation rate from 28% to 21%. The present rate of 28% has been justified over the years as a form of payment by this industry to the Canadian public. The idea of reducing the taxation rate from 28% to 21% is a good reason why the bill should not be supported. The tax rate should not be reduced.
There is another reason and it can be spelled out in one very short word. That word is Kyoto. It is important to briefly explain Kyoto because it has now become a buzzword that implies so much.
Canada, by virtue of ratifying that accord last December by a vote here in the House, which was opposed by the official opposition but supported by all other parties, is now committed to reducing greenhouse gas emissions. These are the gases produced when we burn fossil fuels, from petroleum to oil to gas and to coal. All the fossil fuels produce gases when burned.
Canada is committed to a reduction of 6% by the year 2012, which actually seems to be very little, based on our emissions in the year 1990. But because of the increase in our economic activity this needed reduction is not just 6%; it is estimated by our scientists that we need a reduction in the range of some 23% to 25%. It is a major undertaking, a major engagement, and not an easy one. Therefore, what follows is that if we pass any form of legislation in this House, we would want to pass legislation that facilitates, that makes easier, the achievement of the Kyoto goals.
Here instead, and this is the second reason for considering this bill not worthy of support, we are putting forward a measure that will make it more difficult to achieve the goals which the Government of Canada has set for itself by way of the ratification of the Kyoto accord last December, by way of a vote in this House of Commons.
The parliamentary secretary, when he spoke earlier on the bill on behalf of the Minister of Finance, made no reference to Kyoto and how the bill would affect the achievement of Canada's goal. This lack of reference to Kyoto disturbs me very much, because at least an explanation ought to be given as to why this measure is possible in the light of the commitment to the Kyoto ratification and the heavy engagement by Canada in reducing its greenhouse gas emissions. This bill instead is introduced as a measure to facilitate this particular industrial sector, with no reference, however, to the overall government commitment.
For this second reason, and there is a third one, I submit to you that this bill should die in the Senate. It should die because it runs counter to and opposes the achievement of a goal set by the Government of Canada and counter to its policy, which was decided by the entire government and by this Parliament by way of the vote I referred to earlier. Bill C-48 is an emanation of just one department, the Department of Finance. It is not the policy of the Government of Canada as a whole and, since it runs counter to that policy, it ought to be rejected for that reason alone.
Because as we can see, we have on the one hand the Government of Canada doing the right thing in ratifying the Kyoto protocol. It was a good measure. It was a good decision. In addition to that, the Government of Canada is investing over $3 billion, as of the year 2000, toward the implementation of Kyoto in order to achieve that distant and rather difficult goal. But then on the other hand, we see here a proposition in this bill that is aimed at reducing taxes on the oil and gas industry. This measure makes no sense, because it would stimulate and accelerate emissions of the greenhouse gases we want to reduce in order to achieve the Kyoto objectives.
Evidently the Department of Finance does not know that a major objective of this government is to cut greenhouse gas emissions.
Bill C-48 should not, therefore, be allowed to be approved in the other chamber because it is not in the public interest and because it runs counter to a key government policy.
Now we come to the third reason why the bill should be rejected. The reason is related to the depletion of global oil and gas reserves. What I am going to relate to everyone in a moment is the result of consultations with the International Energy Agency in Paris, which is an agency devoted to the study of energy and its production and the resources that are available to the global community.
According to the International Energy Agency, there is a depletion point called the “mid-depletion point” of reserves for oil, which is identified at the year 2020. In other words, in about 17 years we will reach the midpoint in the exhaustion of the global oil reserves. After that, one may want to ask, how much time is left? We are told by the same International Energy Agency that there are sufficient reserves for another 20 to 25 years. That brings us to roughly the year 2045. That is when our young pages will be in their mature years; they will probably have children and they will be looking forward to retirement.
This is the horizon being described by the International Energy Agency: by the year 2020 we will reach the mid-depletion point for oil and by the year 2045, roughly, we will exhaust the oil reserves. It could be 2050, but it is impossible to determine at this stage. There may be technological breakthroughs, yes, which may extend the depletion point perhaps to the year 2060, but we are definitely approaching within this century a point when the oil reserves will be depleted and we will reach the last drop of oil, so to speak, for use by mankind of this very valuable resource.
How does it look for natural gas? We are told that the mid-depletion point is a little better. It may not be 2020; it could be around 2050. But it is not very clear whether this calculation is accurate. It could actually be reached sooner rather than later.
To compress this particular report from the International Energy Agency, what we can say with a degree of certainty is that in about 50 years we will have reached the depletion point for oil as well as for gas, give or take perhaps a few years depending on technological advancement and the ability through technology to use better and more efficiently this specific resource so as to make it last longer. That is probably the whole purpose of having efficiency programs and efficiency research in the coming years: to make the resource last not for one or two generations but perhaps three.
However, as I mentioned earlier, the resource will be exhausted within a few decades. Therefore, we have to start planning for that time.
What is the conclusion, then, from this quick tableau I have painted for members in looking at the future? Looking at the future is always a very dangerous exercise, as we know, because one might be terribly wrong, but I do have to rely on the experts. On behalf of the public, we as politicians have to listen to the experts because they are the ones who spend their lifetimes on these matters.
It seems to me the conclusion would be that if anything we should be slowing down the exploitation of oil and gas resources rather than accelerating it. That is the logic of it all. We should not do as the official opposition, which is famous for its shortsighted policies, would do. We should not accelerate the process and produce more. Therefore the bill is out of sync. It does not fit into the long term picture that we are trying to come to grips with. That is our task as elected officials.
To conclude, there is also an economic consideration, that is, when we reach the midpoint for gas and oil around 2020 or 2025, this very same oil and gas will command a higher price on the market than it commands now because the supply will be reduced. Therefore, the returns will be greater for future generations if we postpone the exploitation of this resource for their time rather than taking advantage of it now. I hope we can see the economic logic of this kind of reasoning.
There are many reasons converging to force one to conclude that a measure to reduce the taxation of this particular sector is not desirable.
I will conclude briefly, as my time is up. It is therefore in Canada's interests to exploit carefully its natural resources and to make them last as long as possible. In this particular type of industry today, the earnings are high. We can see them in the business section of newspapers. The profits are also high. So then the question arises, why reduce taxes? Why forego a revenue that is estimated by some writers at $260 million? Why move in a direction that is counterproductive and out of sync with the overall approach of the Government of Canada? The approach has been a good one, namely, ratifying Kyoto, which is the basic, fundamental and most difficult sustainable development issue we have ever encountered and which is standing before us as a very difficult challenge to overcome.