Mr. Speaker, I thank my colleague for his question and his work on the environment.
There is a specific carbon exchange named within the motion, the Montréal Exchange. Many in opposition to this will fixate on that and ask why the government would pick one exchange over another. There are two places of confidence for us in supporting the motion.
I have raised some concerns with parts of the translation of the motion between the French and English versions, but this part is quite certain. The reason we are going to fix absolute targets for Canada with respect to greenhouse gases, as it reads in the motion, is “a prerequisite for the establishment...of a carbon exchange market in Montréal”. It is almost self-evident that the carbon exchange market in Montreal is impossible if there is no absolute cap on greenhouse gas emissions, nor is the market possible in Toronto, Winnipeg, or anywhere.
The motion cites what has been seen widely as the leading contender to house this market because of those relationships with Chicago, which is a predominant market in the U.S. and the European markets. The Montréal Exchange has done a great deal of work in fostering those relationships which are critical. We simply cannot have a solely Canadian based market system. It will not work. We need to have access to those larger markets.
The motion directs the most important piece, which is to have absolute targets. This is the point which I think the government is still trying to figure out too because it has refused absolute caps. It is called a cap and trade system for a reason. If there is no cap, there is no trade. That is fundamental. If there is not an absolute cap, there is not an absolute trade.
The business community came forward and the Chamber of Commerce on down said that with an intensity based target it is very difficult to ascertain how to trade because it is a moving target. What is the value? We do not know the value because that intensity target does not allow the prediction of what a company's emissions will be the following year. It is intensity based. It is a percentage of production, whereas an absolute says there is a limit and what it is. Nor could there be any kind of market exchange, a stock market or anything else, which allowed a floating fixture for a company to say how much it is actually worth based upon some intensity figures that it would release a year later. It does not work. The two go hand in hand.
The oil and gas sector in Alberta pointed that out. The Montréal Exchange people, the Chamber of Commerce and the business community pointed out that in order to have the certainty required for the investment needed to make the changes to our economy, there had to be certainty in the price. If there is no certainty in the price, companies will not trade on it. The market will not work. It will not function. Now the government seems to be encouraging a market. That is a move and we encourage that, but it has to understand the principles that are set behind it.
Know this. In the Kyoto negotiations originally, it was the United States and Canada that lobbied very hard for this mechanism. In particular, the United States was the most reluctant country entering into the Kyoto regime. The U.S. said, “If you give us this market, you free up the capital and we are now interested”. That is what caused the U.S. to sign on. The market is absolutely critical. It is fundamental to free up the capital necessary for the most advanced companies to make those investments and create the wealth that for so long we have been looking for in this country.
