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37th PARLIAMENT, 3rd SESSION

Standing Committee on Environment and Sustainable Development

EVIDENCE

CONTENTS

Monday, March 29, 2004

1535

The Chair (Hon. Charles Caccia (Davenport, Lib.))

1540

Hon. David Anderson (Minister of the Environment, Lib.)

1545

1550

The Chair

1555

Mr. Bob Mills (Red Deer, CPC)

Hon. David Anderson

Mr. Bob Mills

Hon. David Anderson

Mr. Bob Mills

Hon. David Anderson

1600

Mr. Bob Mills

Hon. David Anderson

Mr. Bob Mills

Hon. David Anderson

Mr. Bob Mills

The Chair

Hon. David Anderson

The Chair

Mr. Bernard Bigras (Rosemont—Petite-Patrie, BQ)

1605

Hon. David Anderson

Mr. Bernard Bigras

Hon. David Anderson

The Chair

Mr. Bernard Bigras

1610

Hon. David Anderson

The Chair

Mr. Joe Comartin (Windsor—St. Clair, NDP)

Hon. David Anderson

Mr. Joe Comartin

Hon. David Anderson

Mr. Joe Comartin

Hon. David Anderson

Mr. Joe Comartin

Hon. David Anderson

Mr. Joe Comartin

1615

Hon. David Anderson

Mr. Joe Comartin

Hon. David Anderson

Mr. Joe Comartin

Hon. David Anderson

Mr. Joe Comartin

Hon. David Anderson

Mr. Joe Comartin

Hon. David Anderson

Mr. Joe Comartin

Hon. David Anderson

Mr. Joe Comartin

Hon. David Anderson

1620

The Chair

Mr. Julian Reed (Halton, Lib.)

The Chair

Mr. Julian Reed

The Chair

Hon. David Anderson

1625

The Chair

Mr. Julian Reed

The Chair

Hon. John Godfrey (Don Valley West, Lib.)

Hon. David Anderson

1630

Hon. John Godfrey

Hon. David Anderson

1635

The Chair

Mr. Paul Szabo (Mississauga South, Lib.)

Hon. David Anderson

Mr. Paul Szabo

Hon. David Anderson

Mr. Paul Szabo

1640

Hon. David Anderson

The Chair

Hon. David Anderson

The Chair

Mr. Charles Hubbard (Miramichi, Lib.)

1645

Hon. David Anderson

The Chair

Hon. David Anderson

1650

The Chair

Hon. David Anderson

The Chair

Hon. David Anderson

The Chair

Hon. David Anderson

The Chair

Hon. David Anderson

The Chair

Hon. David Anderson

The Chair

1655

Hon. David Anderson

The Chair

Hon. David Anderson

The Chair

Hon. David Anderson

The Chair

Mr. David Chatters (Athabasca, CPC)

Hon. David Anderson

1700

Mr. David Chatters

Hon. David Anderson

Mr. David Chatters

Hon. David Anderson

Mr. David Chatters

The Chair

Mr. Bernard Bigras

1705

Hon. David Anderson

Mr. Bernard Bigras

Hon. David Anderson

Mr. Bernard Bigras

1710

Hon. David Anderson

Mr. Bernard Bigras

Ms. Cassie Doyle (Associate Deputy Minister, Department of the Environment)

Hon. David Anderson

Mr. Bernard Bigras

The Chair

Mr. Joe Comartin

Hon. David Anderson

Mr. Joe Comartin

Hon. David Anderson

Mr. Joe Comartin

Hon. David Anderson

1715

Mr. Joe Comartin

Hon. David Anderson

Mr. Joe Comartin

Hon. David Anderson

Mr. Joe Comartin

The Chair

Hon. Diane Marleau (Sudbury, Lib.)

The Chair

Hon. Diane Marleau

Hon. David Anderson

Hon. Diane Marleau

1720

Hon. David Anderson

The Chair

Mr. Julian Reed

Hon. David Anderson

1725

Mr. Julian Reed

Hon. David Anderson

Mr. Julian Reed

The Chair

Mr. Paul Szabo

Hon. David Anderson

Mr. Paul Szabo

Hon. David Anderson

1730

The Chair

Mr. Roy Bailey (Souris—Moose Mountain, CPC)

Hon. David Anderson

Mr. Roy Bailey

The Chair

Hon. David Anderson

The Chair

CANADA

Standing Committee on Environment and Sustainable Development

NUMBER 009

3rd SESSION

37th PARLIAMENT

EVIDENCE

Monday, March 29, 2004

[Recorded by Electronic Apparatus]

¹ (1535)

[Translation]

The Chair (Hon. Charles Caccia (Davenport, Lib.)): Ladies and gentlemen, good afternoon. On our agenda today is the issue of the implementation of the Kyoto protocol and the 60 megaton deficit. We have the pleasure and honour of welcoming the Minister of the Environment, Mr. Anderson, and officials from his department.

[English]

In welcoming you to the committee, Mr. Anderson, I would like to congratulate you on the initiative last Friday, the one-tonne challenge, which is a very unique idea involving citizens at large, and which makes the Canadian plan a rather unique initiative in many parts of the world. We hope that, with the help of the Boy Scouts, the goal will be achieved.

While you're making all of these efforts, of course, it is not very encouraging to see the slow, almost glacial motion on the part of your colleague the Minister of Natural Resources, who is going to appear before this committee, we understand, by the end of April. One wonders whether the one-tonne challenge, in order to be successful, doesn't also require the full cooperation of another cabinet colleague such as Mr. Efford.

I'm coming very briefly to the point, and that is that the Canadian Motor Vehicle Fuel Consumption Standards Act, which was approved by the House of Commons and by the Senate in 1982, was never proclaimed. It is still waiting for some kind of political action.

Right now, as we speak, in terms of fuel efficiency, there are only two governments in Canada that have understood the necessity of providing some incentives for consumers when they purchase cars, particularly hybrid cars. Those are the Government of Ontario and the Government of British Columbia. Apparently they do provide some kind of $1,000 incentive. All other provincial governments are silent, and the Minister of Natural Resources is, too.

This committee in particular, but I'm sure other parliamentarians as well, are wondering what we can expect from the Minister of Natural Resources, in light of your incredibly fine efforts and in consideration of the fact that, since the Kyoto commitment is a Government of Canada commitment, it does therefore require the full participation of all ministers and not just one.

I'm raising these points in welcoming you because I'm sure you may want to include in your comments some assuring words about the question of fuel efficiency in Canada and what can be expected.

On behalf of my colleagues, I invite you to take the floor. We'll be listening very carefully. Then we'll have one round, if not two rounds, of questions.

Monsieur le ministre, à vous la parole.

¹ (1540)

Hon. David Anderson (Minister of the Environment, Lib.): Thank you very much, Mr. Chairman. It's certainly a pleasure to be back here.

I thank you for your kind words about the launch of the one-tonne challenge. We actually had a small group of Scouts and Girl Guides who checked out the Prime Minister's Office, discovered that there were three light bulbs that were not fluorescent, and changed them for him.

We have left the chandelier here for you, Mr. Chairman. We think that may be more appropriate for you and your committee.

[Translation]

Good afternoon, Mr. Chairman and members of the committee. It is indeed a pleasure to appear before you today to discuss climate change and the implementation of the Kyoto Protocol. As I have often said, climate change represents both a tremendous challenge for Canada and many opportunities. Climate change is real. Greenhouse gases are the largest human influence on global climate. The predicted impacts of climate change are real. There is no doubt it is a challenge Canada must meet.

The government made this very clear in the Speech from the Throne, and I believe that Canadians understand that by taking determined, intelligent action to meet the challenge of climate change, this challenge can be turned to advantage.

[English]

Mr. Chairman, you will notice that I am not reading every paragraph of the speech that's before you; I'm trying to highlight it. But you do have the bits in between, and I think this will expedite matters if I do not read the full speech and just deal with the headlines.

So let me say that Canada will respect our commitments to the Kyoto accord on climate change in a way that produces long-term and enduring results, while maintaining a strong and growing economy. We have a responsibility to do this for later generations, to improve the quality of our life, and to build our economy for tomorrow.

Now, over the years leading to our ratification of the Kyoto Protocol in 2002, Canadians heard predictions of apocalyptic times for our economy because of ratification. You, ladies and gentlemen of this committee, heard many of these dire predictions.

Did the dollar crash? Well, it rose from 64¢ into the 75¢ range that we have now.

Remember the oil patch and how it was going to no longer have any investments coming in because of this terrible thing we were doing by ratifying Kyoto? Surprise, the drilling levels in the last year since the Kyoto ratification were at an all-time high, over 20,000, and profits have been astronomical. They have never been higher in the oil industry. Now, this, of course, is a clear indication that those predictions were sheer rubbish.

Did the rest of the economy shrink? Well, we have 334,000 more Canadians on the job in 2003 than in 2002, the highest employment rate in Canadian history, which again suggests that the doomsday crowd had it wrong. So much for the claim that ratifying Kyoto would stop investment and lead to economic stagnation.

By taking action now to ensure Canadian leadership in the development and commercialization of green technologies through more energy efficient transportation and housing and through non-polluting industrial processes, we in Canada can stimulate innovation, we can open new markets for Canadian products, and we can build cleaner communities in Canada and abroad. That is how successful economies of the 21st century will operate, and that is what the Speech from the Throne recognized.

¹ (1545)

[Translation]

Let us talk about the steps that are being taken.

What are we doing to meet this challenge? In the transportation sector, we are demonstrating technologies and strategies to reduce emissions from vehicle use in our cities. We are negotiating agreements with rail, truck and marine sectors to improve fuel efficiency.

In the building sector, we are cost-sharing home energy evaluations and providing incentives for homeowners to invest in energy efficiency improvements. And in the renewable energy sector, we are providing a substantial incentive for wind power production.

For small and medium sized enterprises, we are cooperating in the development of voluntary energy efficiency improvement targets. To engage individual Canadians, we have launched the One-Tonne Challenge, which you mentioned, Mr. Chairman.

[English]

On the assessment of these programs, are we making progress? Yes, we are. With the funding in budget 2003, measures that will achieve two-thirds of the emission reductions of the climate change plans have been funded, and some measures appear to be working better than others.

Energy assessments of homes and incentives to encourage homeowners to invest in energy efficiency retrofits are proving to be very effective. That's why, with budget 2003 funding, we decided to increase--in fact, decided to more than double--our investment in this area.

I think everyone recognizes that we need a regulatory framework if we are to achieve the full 55 megatonnes of additional emission reductions in the large final emitter sector that was described in the November 2002 plan, and I would like to see draft legislation for the large final emitter system tabled in the House before the end of the year.

I'm similarly anxious to see progress in new vehicle fuel efficiency, Mr. Chairman, which you made the comment about earlier. We have a long-standing target to achieve a 25% improvement in new vehicle fuel efficiency, but discussions with the vehicle manufacturers are moving at a slow pace. It would be very helpful if this committee could look at the options for achieving this target. Such a review could look at the state of the current voluntary progress and contemplate the use of legislation, such as the very legislation that you referred to, Mr. Chairman, the 1982 Motor Vehicle Fuel Consumption Standards Act, or indeed the Canadian Environmental Protection Act. It could also include actions that governments might take to significantly increase the proportion of leading-edge technology vehicles purchased in Canada--once more, something that you have referred to, Mr. Chairman.

Given that, on average, a new vehicle in Canada remains on the road for upwards of 12 years, it would be helpful if you could look into this with all due dispatch.

[Translation]

Are we making progress? Yes, but it is clear that we must do more. We need to do more with technology, and that starts with making much broader use of the technologies we have available to us right now. We have barely begun to exploit existing technologies, which themselves are capable of getting us close to our Kyoto goals. And we need more development of new technologies to build for the longer term.

[English]

So we will develop a cohesive system that will allow us to make intelligent choices. We cannot allow ourselves to become enamoured of technologies that simply cannot do the trick. We need steak, not just the sizzle.

In looking at the additional new measures--it should be in our national plan--I especially want to talk about them from the perspective of the new expanded environmental portfolio: work with provincial and territorial governments and with cities to ensure that the government's new deal for cities and the climate change agendas are fully aligned; make sure that all existing and new federal spending and revenue sharing on cities and infrastructure is tightly linked to sustainability criteria and objectives generally and to climate change criteria and objectives specifically; negotiate tripartite agreements that focus on world-class demand-side management on aggressive recycling and waste diversion targets and on increased landfill gas management; and set aggressive energy efficiency targets such as the R-2000 and C-2000 standards for all housing and buildings, and be equally aggressive in setting targets for the use of green power, and make maximum use of other proven technologies such as cogeneration and district heating.

We are looking not just at the things we can do, but at the way we do them. This means determining whether some federal programs can be delivered more effectively and efficiently from municipal platforms.

Provinces and territories have also begun to identify some of their priorities for cooperative action with the federal government through memoranda of understanding. We have signed agreements with Manitoba, Nunavut, and Prince Edward Island, and more are in the works. Manitoba has already indicated that it wants to develop specific agreements on energy efficiency, east-west transmission of electricity, community and citizen action, and hydrogen development.

Working with provinces and stakeholders, we will develop a national renewable energy strategy that includes aggressive national targets for the production of renewable energy over the next decade. Countries such as the United Kingdom and Germany are aiming for at least 10% of renewables in their electricity mix by 2010.

We must work with Ontario to develop a full set of options for a comprehensive electricity strategy to help re-establish a reliable, low-cost supply of electricity while achieving our climate change and air-quality goals. This strategy must include aggressive energy conversation measures and aggressive use of renewable energy--and I should say that I will be discussing that with the Ontario minister in the next few days.

Our strategy must also take into consideration the large hydro projects being discussed in Manitoba, Quebec, Newfoundland and Labrador, and British Columbia. We obviously also want to work with Alberta and the private sector to develop and demonstrate clean coal technology, develop more efficient extraction and processing technologies for the oil sands, and reduce the cost of CO₂ capture and storage.

The government will put its own house in order. On top of the aggressive action that we're already taking, we're examining the implementation of a green procurement program setting world-class requirements for building energy efficiency, the so-called “platinum” and “gold” levels, in both those buildings that we own and those buildings that we lease, and purchasing more green power. Parliament must decide to make the parliamentary precinct a model of climate-friendly and other sustainable practices.

¹ (1550)

[Translation]

There is absolutely no doubt in my mind that we can meet the challenge of climate change, that we can reduce our greenhouse gas emissions and respect our Kyoto commitments while growing our economy and enjoying other benefits, from cleaner air to more livable cities and sustainable communities.

[English]

We simply need the will and the vision to expand our thinking to include transportation systems that are virtually greenhouse gas emissions free, closed-loop production technologies, self-sustaining buildings, an electricity supply that is largely decarbonized, and the possibility and potential offered by hydrogen. It is this vision that will fuel our plan, an equitable national plan.

May I say, in anticipation of questions that will undoubtedly come, that the Kyoto Protocol certainly is not perfect and never has been described as such, but the Kyoto Protocol is a worthy start to the international response that is required for a global problem. Clearly the global response to climate change will evolve in the years and decades to come.

We need to continue to work toward a sustainable, long-term international regime that includes all key industrialized and developing countries. It is part of assuring Canada's place in the world that we cannot simply be involved in this process but we must be among its leaders.

Thank you, Mr. Chairman.

The Chair: Thank you, Mr. Anderson.

Mr. Mills for five minutes, please.

¹ (1555)

Mr. Bob Mills (Red Deer, CPC): Thank you, Mr. Minister.

I think I've heard this before. I didn't hear many facts about how we'd handle the 60 megatonnes, and one has to wonder. You keep saying we haven't felt any economic impacts. Well, it hasn't been implemented yet; it's not in effect yet, so how would we feel the impacts when in fact there isn't a Kyoto Protocol that's in effect? So there's no reason to keep saying that.

Basically, the provinces don't agree, the industry doesn't agree, and CO₂ levels continue to rise. I wonder if you've done some serious economic impact assessments on how you're going to deal with the 60 megatonnes and how it will affect Canadians in their power rates, their heating rates, and their fuel rates.

Hon. David Anderson: Thank you very much, Mr. Mills.

First, on economic impact, you're certainly correct that not everything has been brought in and is in effect. I would simply remind you that the critics were saying that the mere fact we ratified would have this disastrous psychological effect on Canadian investment from abroad and that it would in fact be a dead hand on economic activity in Canada.

The fact is, ratification had none of those effects, and that is what I think is important. In fact, you will recall, Mr. Mills, I was in Alberta frequently, your province, saying to the oil and gas industry, your real problem is cost overruns. And I've been very intrigued to hear and read in the last little while that the financial pages of the Calgary Herald, the Edmonton Journal, and the National Post are all saying that the big problem for the oil patch is cost overruns.

The fact is that we have seen here, in our experience, that the economic predictions did not take place. Certainly, you're correct that there is more to be done, but I think that's a pretty good indication that the sky-is-falling crowd was wrong then and is quite likely wrong now--in fact, in my view, certainly wrong now.

Now, with respect to the GATT, we're taking a number of measures. Obviously, we're working with the provinces and utilities to develop and implement demand management programs in all provinces. That is particularly important in Ontario, where the provincial government--now a different government from the previous one--is very keen on demand management programs. Again, as I mentioned, I'll be talking to the minister about that shortly.

We will also be working on the national renewable energy strategy, including putting in place aggressive renewable energy targets. We are working at the present time, as you can see, on aligning our cities on the climate change agendas. In fact, Mr. Godfrey is spearheading this activity with the urban governments, and I believe there is a great potential here. We're working to achieve something we've not achieved so far, which is a 25% improvement in fuel efficiency from new vehicles. That's going to make a difference.

Mr. Bob Mills: What does Mr. Efford think of your promoting that concept? And I also want to know how negotiations are going with the heavy emitters and with industry.

I happened to meet with them on Thursday, so I'll just give you a heads-up. I'd like to hear your answer.

Hon. David Anderson: Don't forget we're working on things like clean coal technology. I hate to be cut off in mid-flight, but there are a few other things I think will help close the gap.

Mr. Bob Mills: Oh, you'll use all my time.

Hon. David Anderson: Let's go back to that issue, then, of the major emitters. The discussions with major emitters are continuing. They are handled in fact by Natural Resources Canada, and we've had agreement with the provinces, territories, and stakeholders on the approach to reporting. We've had the decision that electricity may be an area where the most work remains to be done in deciding how targets should be met, so we're working very closely on the electricity front.

A series of discussions with the provinces and territories have been held over the past year, and these are complicated by the very different positions of differing provinces, depending on whether their electricity is sourced from hydro or sourced from thermal--coal.

We've had a number of memoranda of understanding and covenants with companies and industries--as an example, with DuPont Canada--and we are finding that the oil and gas sector discussions are proceeding very effectively. But there is no question but that there are still challenges with respect to mining and manufacturing and even with chemicals; we also have some resistance there.

There is a quick look at what NRCan is doing with respect to the large emitters and some indication of where the problem areas are and where the success areas are.

º (1600)

Mr. Bob Mills: Many in industry and the heavy emitters say that there's absolutely no way they can hit their targets unless you'll consider nuclear. Is your intention then to promote nuclear energy through Environment Canada?

Hon. David Anderson: Our department does not promote particular types of power. We're not an economics department. There are a number of economics departments, particularly NRCan but also Industry Canada, that are involved in the promotion of particular types of economic activity and they would be involved in the promotion.

As you know, the Government of Canada, on a continuing basis, puts a very large amount of money into nuclear annually, and it would be my expectation that would continue. Whether it leads to the creation of nuclear plants would depend very much upon provincial energy crown corporations, as well as some of the privatized corporations in provinces where there is a decentralized system.

Not all of these decentralized systems worked very well. They didn't work well in Alberta; they didn't work well in Ontario when they tried it there.

Still there is a mix of crown corporations and private corporations, and decisions on the type of energy they would go for would be made by them, not by us.

Mr. Bob Mills: How many of your colleagues now are driving energy-efficient cars and have changed their light bulbs?

Hon. David Anderson: I don't know how many are driving those cars. I think about three or four. Why we did not get more when the government changed is an interesting question, and perhaps that's what you're driving at. The fact is that all the others were given older cars. I have been told by the person responsible for the government services and acquisitions and by the President of the Treasury Board that we will in fact have replacements that will be fuel-efficient and/or hybrid vehicles.

Mr. Bob Mills: Idling them out in the front for hours on end...?

The Chair: It's a slow process, Mr. Mills.

Hon. David Anderson: Again, I cannot confirm this personally, but I'm told that no person was given a new vehicle. There was simply a reassigning of existing vehicles, but when it comes to replacing those vehicles, we will get, I'm promised, the type of fuel-efficient vehicles that you and I, Mr. Mills, are so keen for my colleagues to have.

With respect to light bulbs, I'll bring in my Boy Scouts to anybody's office, if you like, and we'll clean you out of incandescent in no time flat. They are very efficient at this.

[Translation]

The Chair: Mr. Bigras, you have the floor.

Mr. Bernard Bigras (Rosemont—Petite-Patrie, BQ): Thank you, Mr. Chairman.

Let's go back to that anecdote. Last Friday, when the one-tonne challenge was being announced with some ceremony, I was in Montreal buying a hybrid car. I would remind you that these cars cost $10,000 more than a comparable model that's not hybrid. It's important to keep that in mind. I would also remind you that you should be the one, in cabinet, who promotes the creation of tax incentives for the purchase of hybrid vehicles.

It costs a person $10,000 more to buy a hybrid car, and yet you voted in favour of Bill C-248, which provides 250 million dollars' worth of tax breaks to the oil industry every year.

Furthermore, still in the area of greater vehicle efficiency, reference is made on page 5 to the fuel efficiency of new vehicles. Discussions are being held with car makers, but progress is extremely slow.

How could you exclude the automobile industry from the application of the Kyoto Protocol, if the negotiations are currently very slow? There's something wrong. Some industries, like the manufacturing industry, have reduced their emissions by over 10% and they're not even taking part in the negotiations. You are having discussions with an industry that is excluded from the protocol. How do you explain this paradox?

º (1605)

Hon. David Anderson: Thank you.

You're right that hybrid vehicles are more expensive. The difference may well be $10,000, I don't know. According to the figures that I've been given, the amount is between $6,000 and $8,000.

The fact remains that the amount is not as important as the fact that buyers of these vehicles are disadvantaged. One mustn't forget, however, that there has been an increase in the price of gas in recent months. So hybrid vehicles are advantageous, especially to distribution companies using small cars or small trucks; they're also advantageous to small pizza companies that need to use several small vehicles. For these companies, hybrid vehicles are now less costly because the price of gas has gone up. Last year, one had to cover a distance of some 240,000 km before the advantage of reduced gas consumption offset the disadvantage of the purchase price. But now it's much less: I believe that we're talking about around 160,000 or 180,000 km.

As for the exclusion of the automobile industry, I'd like to make it clear that this was for a very good reason: those people have made truly extraordinary energy savings in the realm of car making. They have nearly cut in half gas consumption involved in making new cars.

So it would hardly have been possible to obtain compelling results by maintaining the same system for other industries. We therefore told them that they would be excluded from the group of other major industries but that in return, they would have to make cars that were more fuel efficient.

That's why it was so important that the fuel consumption of cars be reduced by 25%. The entire federal government program had to be equal for all regions of Canada, and nowhere in the country could the price be too high. That's why we insisted on a 25% reduction.

Mr. Bernard Bigras: In terms of the international negotiations, we know that clean energy export credits are part of the preliminary plan to reach 60 megatons.

I'd like to know whether, at the next conference of the parties, you intend to continue negotiating with foreign partners over these clean energy export credits.

Hon. David Anderson: Yes, we intend to pursue the efforts that we have undertaken. I can't tell you whether we will get a decision from our partners at this conference; but we do intend to continue.

As I have said a number of times to this committee, the Canadian position is encountering some international resistance. However, we are going to keep trying to get clean energy export credits.

The Chair: Mr. Bigras, you may ask a very short question.

Mr. Bernard Bigras: On page 5 of your speech, you say:

We need to do more with technology, and that starts with making much broader use of the technologies we have available to us right now.

How do you explain that you haven't been, in cabinet, promoting an improvement, subsidy or tax incentive per kilowatt hour of wind energy? We are a far cry from the efforts that have been made by some U.S. states. We are a far cry from an improvement. How is it that you are content to preach these policies that we subscribe to, when in practice, we aren't seeing concrete results? We are a far cry from an improvement to the existing program and even further from what the Americans have accomplished so far.

º (1610)

Hon. David Anderson: We still have funds, as I explained just this afternoon in the House of Commons, during question period. We still have funds available to encourage other forms of renewable energy, like wind energy.

I do hope that in upcoming budgets, there will be policy changes. Like you, I'm convinced that we need to increase federal government support for renewable energy. We still have money to encourage that, and the amounts will have to increase in the years to come.

[English]

The Chair: Merci, Monsieur Bigras.

Mr. Comartin, followed by Mr. Reed, Mr. Godfrey, Mr. Szabo, and Mr. Hubbard.

Mr. Joe Comartin (Windsor—St. Clair, NDP): Thank you, Mr. Chair.

Thank you, Mr. Minister, for being here.

Mr. Minister, my numbers tell me this, that in order to meet the Kyoto Protocol requirements for Canada, we're 18% over now, and we'd have to get 6% below that, the 1990 figures. So we're at 24% reduction; that's what we're looking at. Some of the projections I've seen suggest that at the rate Canada is going, we're not going to make it by 2012 and we'll probably peak at somewhere around 30%, that is, we need a reduction of 30%.

Would you agree with me on that figure?

Hon. David Anderson: What none of us is absolutely certain about is the success of existing measures. I mentioned in my presentation that we have about two-thirds of the distance we have to go by measures already taken. I also indicated in my speech that in some areas we were doing much better, while in some, obviously, we're not going as fast as I would like. So there will have to be some flexibility here. No one can predict the future with absolute precision. But I believe it is possible to reach the Kyoto target.

For example, if we have improvements in vehicle fuel efficiency, that will make a major difference. I think we can meet that if we get the changes made by industry. I think we will have some overseas purchase--I don't know how much--which could reach target, both by companies through clean development mechanisms and, indeed, between governments. So the target is certainly attainable.

As far as figures go, again it depends on the success of the measures taken to date, but I think we can achieve the target.

Mr. Joe Comartin: Has your department or Natural Resources done an estimate as to what level we're going to get to? What's the peak? Has that estimate been made?

Hon. David Anderson: The peak of what?

Mr. Joe Comartin: Of the greenhouse gas levels in Canada.

Hon. David Anderson: I don't have a date or time for the peak.

Mr. Joe Comartin: It's not the time I'm looking at, but if there is a projection on what it is going to hit before we see a downturn in the level.

Hon. David Anderson: It will depend very largely on how successful we are in getting things going. We are behind on certain things, as I mentioned. The issue that is very important here is economic growth. We've had very substantial economic growth, surprising economic growth, compared to just about every other country in the world, and that is always a pressure on our Kyoto target. That is not something I can predict for the future. Last year we had economic growth of 1.5%, more or less, which was half what the private sector had forecast, but the year before our growth was double what the private sector had forecast. These are some of the difficulties we face in trying to put a figure on it.

I don't think putting a figure on it is really the most effective way. My approach is simply to work as hard as we can to get things in place, and that will be the best we can do. I expect we'll achieve our target. To spend too long worrying about what hasn't been done sometimes distracts attention from what can be done and what should be done.

Mr. Joe Comartin: I have a quick response to that, and I don't expect an answer to this, but if we had that kind of figure, maybe there would be some added incentive to not get that high.

Mr. Minister, we've had hearings over the last few weeks on the one-tonne challenge and had descriptions from both your department and Natural Resources about an ad campaign. In the news stories on Friday a couple of the TV channels indicated that the ad campaign had been suspended. You didn't make any reference to it and the Minister of Natural Resources didn't. Has in fact the ad campaign been suspended?

º (1615)

Hon. David Anderson: Yes, it has.

Mr. Joe Comartin: For how long?

Hon. David Anderson: I believe until June 1. I can't give you a solid figure that it'll come off at exactly that date, but my expectation is around June 1.

Mr. Joe Comartin: Why is that?

Hon. David Anderson: The Minister of Public Works has indicated that he wishes to have a review of all issues pertaining to advertising, and this is part of that general, complete review. Everything stops while this is taking place.

Mr. Joe Comartin: Is any consideration being given to transferring some of that ad campaign money to the green communities effort and putting more dollars into that side of it rather than into advertising?

Hon. David Anderson: Yes, if the money were not spent, we could reprofile it elsewhere. My hope is, however, that some of it will be spent on information and education campaigns. Advertising is not the only thing that happens. For example, giving out fuel-efficient light bulbs is part of that advertising campaign. It's not all just straight television or radio or newspaper ads. We could reprofile it in a number of ways, and certainly your suggestion could be considered. I think it would be worth looking at.

Mr. Joe Comartin: I understand there's now a new program about to be launched that will allow something like 30 communities across Canada to be test grounds. If that is the case, are we not repeating what we already learned through the early 1990s? I'm thinking of the programs we had in Ontario during that period of time that were subsequently cut by the Conservative government.

It sounds like that program, if I'm understanding it correctly, would be a repeat. It's an experimental type of program and we've already experimented with that. We know what we have to do community by community.

Hon. David Anderson: Yes, I think a good deal is known. I'm not sure whether everything is so clear that there's one clear model for every community. We would undoubtedly start where we have positive partners. There are some city councils that are away ahead of others in terms of their willingness and ability to move forward.

There are some provinces that are much more willing to use the school system for information campaigns than others. We're pretty flexible as to where we go and what we do. I would expect it to be maybe 30 to 60 to start with and then move quite quickly into larger numbers. But of course, my colleague John Godfrey will be informing me of many communities, I'm sure, that will want to take advantage of this possibility.

Mr. Joe Comartin: Would it not be just more efficient to resurrect the green communities, maybe embellish them, since a good number of them have stayed alive in spite of a lack of attention from both federal and provincial governments?

Hon. David Anderson: Certainly, we would not... There's no ideological commitment on my part—Liberals are not accused of ideology—to any particular form of organization. If indeed they're still, as you say, in existence and they're still capable of delivering, then I'm sure we'd be working with them very closely. Where they've passed from the scene or where they're not able to fulfill the job, I guess we'd have to invent something else. But if there is something successful now, my instinct would be to use it.

Mr. Joe Comartin: I have one final question. There was a coordinating committee at cabinet level, but we understand that seems to have disappeared. Who's actually coordinating Kyoto implementation at this point?

Hon. David Anderson: Most implementation is being done, again, as I mentioned earlier, by the economics departments and Environment Canada. That said, I don't want to minimize the involvement of urban communities and the work done by the parliamentary secretary, Mr. Godfrey. That's going to be a major chunk of our activity as well—working directly with communities.

For instance, in Manitoba--we have agreement with Manitoba. We also have some very encouraging signs that Winnipeg would like to work with us as well. Some can say Winnipeg has three-quarters of the population of Manitoba, so why are we bothering to do both? Well, we'll see how it works out in a pragmatic way. If the city council can help, we'll work with them. If the province can do more in other areas, we'll work with them in other areas.

º (1620)

The Chair: Thank you, Mr. Comartin.

We now have Mr. Reed, followed by Mr. Godfrey.

Mr. Julian Reed (Halton, Lib.): Thank you, Mr. Chairman.

Mr. Minister, I don't know whether to cheer or to jump up and down here. I've been in this place for 10 years, and this is the first time I've seen two statements like that, which I not only agree with but I've also been hammering for all of these years. One is the line: “...broader use of the technologies we have available to us right now. We have barely begun to exploit existing technologies...” .

How many years have I been saying that? Thank you for including that.

The other one is: “Our strategy must also give consideration to the large hydro projects being discussed in Manitoba, Quebec, Newfoundland and Labrador, and in British Columbia.” Congratulations for having the courage to say that, because that's been out of popularity for so long. I hope the next thing we can do is to declare them green.

I'm also very pleased with the fact that you are going to be meeting with the Minister of Energy of Ontario in the next little while, because much of the accomplishment of the use of these technologies is going to depend on provincial cooperation, of course, and provincial thrust.

I met this morning with senior people from the Ministry of Energy in Ontario. There's a real hang-up in that government—not in the Ministry of Energy, but in the Ministry of Natural Resources, who have a conflict of interest when it comes to approving projects, where they are not only the approving body but they're also the commenting body. Consequently, you have two factions where the balls are being bounced and virtually nothing is ever done. I've been there; I've done that; I've bought the tee-shirt; and I can give you the details whenever we have the time. It's really going to be essential to break those kinds of blockages if anything is going to happen, especially with the further development of existing technologies.

If we had the same regulatory regime in place when Ontario was coming into existence, it never would have industrialized. It was industrialized because of thousands and thousands of small hydro or water power sites across the province, and they now sit mostly unused today.

The Chair: This is your last question.

Mr. Julian Reed: The one question that perhaps I would like to red-flag for you, if I have time, Mr. Chairman, is the comprehensive electricity strategy to help re-establish a reliable, low-cost supply of electricity.

When you get to Ontario, you'll find that electricity has been sold at very low cost for the last 25 years, and actually below cost for 25 years; hence, the $38 billion debt that the province has racked up. Somehow or other, I hope your leadership can bring some realism into that picture, so that the people of Ontario understand what electricity is really all about.

Thank you.

I'm sorry that I got off on a rant there.

The Chair: Isn't that so, Mr. Minister?

Hon. David Anderson: Well, yes.

First, I'd like to thank Julian, because if he hears echoes of his ten years of hard work here in the House, I think he deserves credit for being a very consistent person in terms of putting forward some very sensible ideas. Hopefully, he'll take some credit for himself, because nobody deserves it more.

With respect to the deadlock between two government departments, you've tactfully referred to two government departments at the provincial level. This is why the Prime Minister has chosen parliamentary secretaries with cross-cutting responsibilities to make sure that ministers don't get too set in their ways. I think we have some interesting opportunities now at the federal level to get away from that and away from the silos that we've always talked about. Again, we'll see how that works.

The Ontario cap is still there--pricing caps. I could never understand in my own province of British Columbia why new dams were constructed. The average cost of power was above the price that it was sold at, because it was always sold at an average price to every person who applied across the province. Of course, earlier systems were cheaper. I gather that Ontario is now facing similar difficulties from similar approaches to low energy costs.

Energy costs are going to rise, and it's going to thus be really important to see energy efficiency. Energy efficiency is what's going to give us our climate change goals and, at the same time, make us more competitive. Time after time, when I hear people telling me that it's going to be so expensive to meet climate change goals, at the back of my mind I think that if we don't meet them, it's going to be even more expensive, because we're going to be energy inefficient and prices will go up.

We could get on for a long time on this, but if you start looking at petroleum, oil supply and future demand, you'll realize that the current prices of petroleum products are still well below what you and I will be paying long before they take away our licences. We're facing some very high-cost energy coming up, and the public has not yet realized that at all.

º (1625)

The Chair: Thank you, Mr. Reed.

Mr. Julian Reed: Thank you.

The Chair: Mr. Godfrey, followed by Mr. Szabo.

Hon. John Godfrey (Don Valley West, Lib.): Thank you very much.

Welcome, Minister, and congratulations on the launch last Friday of the one-tonne challenge.

I wish to report that your wish is our command. You launched the one-tonne challenge on Friday here in Ottawa. By Saturday, in Don Valley West in Toronto, we had responded and launched the Don Valley West one-tonne challenge, with 80 members of the community and various expert groups present.

We wish to be one of those 30 pilot communities. I'm obviously pitching here, but I'm also inviting my colleagues around the table who might wish to join in as well in getting their own communities into the one-tonne challenge. I issue a challenge to all of you. I issue a challenge to the people who may be watching this program to put pressure on their MPs of all persuasions

[Translation]

and both official languages to do likewise,

[English]

to go forward and do likewise. I would invite everybody, since we can't use advertising, to use CPAC.

I have two questions beyond that advertisement, sir.

The first one has to do with the subject under discussion, which is heavy final emitters. As you'll know, we've heard previous testimony from Malcolm Bramley of the Pembina Institute, who made some very specific comments on potential loopholes, things like double counting and all the rest of it. Do you have any specific reaction to those comments that you might wish to convey to your colleague the Minister of Natural Resources, who has direct claim over the file?

That's my first question. Do you have any comments on Pembina's suggestions for tightening up on heavy final emitters?

The second question really is an observation, based both on what you've been saying about cities and communities, which is my new responsibility, and also on the Speech from the Throne. It would seem to me that, given where we are now as a government, if you analyze the budget and the Speech from the Throne, most of the climate change measures can be found on the communities platform, in the cities platform, if I may put it that way.

Would you see that this is how, in the first stages—I guess the one-tonne challenge would be an example of that—we're really going to start to get down to the implementation of Kyoto?

Hon. David Anderson: Thank you, Mr. Godfrey.

With respect to the excellent presentation from Mr. Bramley of the Pembina Institute, he listed three possible loopholes. I describe them as possibles, and I think he also indicated they were potential loopholes rather than actual ones.

First, with the business-as-usual emission levels, it's true we are reviewing emission levels and expectations, but the 55-megatonne target was set at the time on the basis of what was then there, and we are not going to allow a change in the base to cut into the target. We want that 55-megatonne target. So we're well aware of that, and it will be based on current projections of business-as-usual emissions intensity.

Second is double-counting reductions from other measures, and I think he gave the example of agriculture. That is where we have to work quite closely to make sure that simply doesn't happen, that you don't double-count, that you don't allow something to be, on the one hand, agriculture and, on the other, a purchase by industry and therefore being twice calculated.

The third point, which I think is most important, is what happens if the arrangements made with the individual sectors or companies don't add up to 55 megatonnes. That really is going to be a question for my colleague the Minister of Natural Resources, because this is a very major issue. In other words, you have to negotiate always bearing in mind that you have to get your 55 megatonnes. If, for example, you have one sector in one industry and you are, say, looking for a 25% improvement in this or that, something that reduces emissions by 25%, and you don't get it, and the negotiations say you're almost there, that you got to 18% or 20%, you don't get your 55 megatonnes. You really have to achieve the target in each sector, so the negotiations have to be to achieve the target, not to come to some approximation that is mutually acceptable below the target. That's a very difficult role for my colleague the Minister of Natural Resources. I believe you're going to have a gentlemen involved in the negotiation process coming before you, and he probably can give you the details on this particular aspect.

I must say again that Mr. Bramley's comments are salutary cautions. We are not going to let this thing crumble away by failure to show enough understanding of potential weaknesses and by negotiating agreements that do not achieve the target set.

º (1630)

Hon. John Godfrey: And communities?

Hon. David Anderson: What can be done with respect to communities? We have a list, which Ms. Cassie Doyle, the associate deputy minister, has thrust in my hand, being of such good assistance to me. Reducing greenhouse gas emissions and increased recycling and waste diversion are major opportunities. Landfill sites are remarkable for the amount of gas they emit. There are two ways of handling it. One is to capture the gas and put it back in the system as fuel, and the second is, of course, to reduce your landfill waste.

Then there is better use of public transit. Again, there are some very interesting proposals coming from municipalities. I don't want to give Mr. Godfrey too much credit, Mr. Chairman, but I do think we're seeing realism from some of the municipalities now. Instead of simply coming to the federal government and saying, pick up our deficit for rapid transit, arguments I've heard time after time in many parts of the country, we're now having people saying, if we invest this kind of money, we can increase the number of people who actually use public transit in this way or that way. There's also an increased willingness to consider the associated measures that are needed to make public transit work more efficiently. Some of these are, of course, making cars less attractive as vehicles for getting downtown. I'm pleased with the increasing realism of the discussions that are taking place.

There is efficient street lighting. The LED for the stop lights makes a tremendous difference, as opposed to the regular lighting system.

We have energy efficiency of buildings. Universities, municipalities, hospitals, federal government, provincial government, and churches all own buildings for decades and decades and decades. It's not like the commercial sector, where a person may own a building for six years and then sell it. We have the opportunity to be leaders in life-cycle costing of buildings, where you start thinking about the full cost of a century of ownership of a building and how we can reduce the day-to-day costs for heating, air conditioning, or whatever it happens to be.

These are some of the things that I know are out there, and probably you are hearing from municipalities of areas where they want to partner with us. If we can find thirty good partners on a number of these items, we can really start moving. This is a big opportunity area.

º (1635)

The Chair: Thank you, Mr. Godfrey.

Mr. Szabo, Mr. Hubbard, the chair.

Mr. Paul Szabo (Mississauga South, Lib.): Thank you.

Mr. Minister, last week Mr. Bramley from Pembina raised some spectres about the possible loopholes, which you are aware of. The question I asked him, and maybe I'll ask you, is this. Are we prepared to ensure that everyone who is a player is subject to a measureability that is verifiable in terms of achieving their targets?

Hon. David Anderson: Yes, the measurement systems with respect to industry will be mostly NRCan, I understand. We have, however, had $14 million in the most recent budget for a number of environmental indicators, one of which is climate change gases—greenhouse gases. We have the wherewithal to put in place measuring systems that will be effective. It is particularly important to do that, Mr. Szabo. It's going to be important to have a system with integrity. To do that you must have effective measurement.

Mr. Paul Szabo: He also seemed to indicate a concern they have, and I'm not sure if you share the concern, that the large emitters as a group, who represent, I think, about 24% of the greenhouse gas emissions—the single largest segment of greenhouse gas emitters—are not overly cooperative, as I interpret it. We don't have a common objective, and there still is some posturing going on.

What is the relationship of the large emitters with your department now in terms of their commitment to making their contribution?

Hon. David Anderson: Let me just finish off on the earlier question.

March 13 in fact was the very date we announced mandatory reporting requirements for greenhouse gases—that was in the Canada Gazette—for Canada's major emitters. So the reporting is now mandatory.

Back to your question, there has been a varied approach. Let me say that I fully understand the position of both sectors of industry and individual companies. What we have seen, however, is that individual companies that have taken the lead have often found that energy efficiency saves money. This is not a clear debit item. This frequently turns out to be a positive item on their balance sheet. The classic example, I believe, was BP. For a $20-million investment, they made over $500 million through their internal trading system they had put in place. Again, I think we should be cautious about assuming it's always a cost. It sometimes turns out to be a major benefit.

That said, views vary, and some industries are going to have more difficulty than others. Where there are competitiveness issues, we have agreed to look at them closely with industry and to vary what otherwise might have been the original targets. That's an important aspect. We're flexible in our discussions.

The only thing I would stress again is that if you take the group, we know what our target is and we have to reach that target or somebody else has to reach it. That's where there are limits on the amount that you can forgive or change. The principle we're working on is that no region of the country or no sector of the economy should bear a disproportionate burden of climate change measures.

Mr. Paul Szabo: Finally, I want to ask you a little bit about Canadians at large. Your initiative last week I think was a good one. I think the communications pieces you've had in the past that have had national coverage through the distribution with major newspapers, etc., on how all of us can contribute.... It's estimated that you and the department and those who are the stakeholders in addressing our Kyoto targets understand that Canadians are going to have to change their behaviour. Behaviour change is not something that happens overnight. It is going to take a contiguous investment and encouraging and stroking people to keep moving in the right direction. Are you aware of any testing that has been done to determine what the level of awareness is of Canadians at large about Kyoto and about their role in how they can do this, and what their level of commitment is to doing their share?

º (1640)

Hon. David Anderson: Those are two good questions. At a later date I can give you the most recent polling, which is on precisely this issue, and also the changes in polling that have taken place. My memory is not the best, but let me say that right now we've gone up again, and about 81% of people across the country now believe, or believe strongly, that serious measures should be taken to deal with climate change.

The numbers are fairly consistent across the country. In Alberta, it's two to one in favour of taking measures on climate change, which is one reason you've seen much lowering of the temperature of debate between the federal and Alberta governments.

The other important aspect of this is that while it goes up and down, the stories of the last year seem to suggest that Canadians are now really taking this more seriously than ever.

The aspect you raise about willingness to pay or willingness to respond is a very difficult issue. There are various measures on this that relate to a whole pile of activities. How much are you willing to pay for a day of fishing? That's a classic one that you can never determine. What is the value of your fish resources? That can never be determined with any precise action.

On this one, you generally find it's related to what they're sort of expecting, what has happened in the last year. But it's a rolling change that takes place. You think you have to make a change. You also have to realize that there are few areas where there is a completely clear negative.

Once you start taking public transit and realize you're downtown in 20 minutes instead of 45 minutes; once you start realizing that your actual vehicle costs are generally 55¢ or 60¢ per kilometre--you discover that by not using your vehicle, or by having only one vehicle instead of two, as the case may be in the family--you start changing your attitude. So it's hard to anticipate what the level of willingness to pay might be.

There have been a lot of studies, and I've looked at them with great care. But I don't have a clear idea where the level might be. Most of the questions are a little simplistic. You have to look at other polling of this type that has been done in the past in different areas.

How do you deal with the issue of improved air quality with respect to a child with asthma, for example? There is no number. We have to make these calculations on things like what a human life is worth. It's very difficult to say. Different departments, Transport for example, must do it with respect to highway safety--the provincial departments, etc. Aircraft manufacturers have to do that. It's very difficult to get these calculations on what safety is worth, what human life is worth, and what convenience is worth.

The Chair: Thank you, Minister.

Hon. David Anderson: I leave it to you. I'm just unable to give you a figure.

The Chair: Thank you.

Mr. Hubbard.

Mr. Charles Hubbard (Miramichi, Lib.): Thanks, Mr. Chair.

I think the minister's enthusiasm for this project is so much in evidence, and it's probably regrettable, Julian, that if you had another five years we might make this thing almost perfect.

Certainly Canadians always look for a challenge, and as I look in this little book, Mr. Minister, I see so many points in this that indicate how we could change the way we do things that would improve not only the climate change aspect but also the long-term sustainability of our industry and of our country and, of course, in terms of better efficiency and how money could be saved for other purposes.

I'm really quite enthusiastic and I would hope that in your discussions in cabinet and through various methods, we'll see more alternate forms of energy being developed. I know that in terms of solar power there is an incentive. I'm not sure if it's strong enough yet to enable some of our larger companies to invest in solar energy in terms of the special taxation that we have there for it.

Of course, Julian talks about hydro-electricity, and we have the solar element too, and again you draw attention to one of the most difficult.... It seems like a lot of people want to drive these big vehicles that are so much a status symbol in this country--the bigger the tires and the higher the vehicle off the road and the more power you get behind them. I think we have to somehow address that issue, either through your own department or through others, to try to cut back on some of the tremendous....

Mr. Minister, perhaps you would want to allude to our transportation systems. We talk about highways that could be better improved...to restrict distances, about cutting back in terms of modes of transportation that certainly in some cases consume so much energy.

Overall, we talk about consumption, which is the basic part of what we're talking about here. In terms of consumption, for example, of electricity in this country, do we have any good figures in terms of how much this is growing? It appears right now, with the methods we're using to generate electricity and I would think also in terms of the consumption of various fuels, whether it be diesel fuel, straight gasoline, or airplane fuel, that unless we can manage some of those volumes that we're using and try to either put a ceiling on them or cut back on them, we're going to face problems. These problems will continue into the future with the ways in which these fuels are used, and secondly, with the resources that are needed to develop that sector.

º (1645)

Hon. David Anderson: Thanks very much.

With respect to big vehicles, I guess the gasoline companies, the petroleum companies, are helping in that regard by raising the price of filling the tank of the SUV to very high levels. So there's no question the price of fuel is now becoming more of an issue than it was eighteen months ago. I don't know how price-sensitive people will be in their vehicle purchases, but there's no question that the bigger vehicle is becoming far more expensive to operate. Gasoline normally is about sixth on the list of vehicles expenses. It's moving up quite rapidly.

With respect to improved transportation systems, that again is an area where we're working with provinces. We may have some real opportunities. For instance, in Ontario if Highway 401 was doubled, you'd probably only have 20 years, given current rates, before you'd have to double everything again. There is a certain limit to what you can do in simply expanding existing systems, and better use of vehicles and more use of public transit is clearly essential.

We've done the easy things in transportation systems. It's becoming much more expensive.

On the consumption on energy growth, there is the expectation that we're going to have about a 40% increase between now and 2010. This is a very substantial increase, and in addition, as we switch away from coal-fired plants, as we hope we're able to do with plants such as Nanticoke, we're going to have some very major challenges in this regard.

The question about nuclear earlier came I think from Mr. Mills, and there's no question that is a very clear issue we have to face. Is nuclear going to be the medium-term energy source until we get on to some of the renewables further down the road, or perhaps into fusion? I don't know. That's a question again that Mr. Efford is better able to answer than I am.

The Chair: Thank you, Mr. Hubbard.

Mr. Minister, in your presentation this afternoon, you asked us to look into some aspects of vehicle efficiencies. Given the fact that the SUV publicity has increased considerably in recent times in the media despite all the urging by the government to look at the Kyoto targets, could you indicate why the vehicle manufacturing sector is so slow in coming forward with a position? Why is this target of 25% reduction by 2010 so elusive?

Hon. David Anderson: Yes, certainly. I would not be a very good commentator. It would be second-hand. Undoubtedly the vehicle manufacturers would be quite willing to come here themselves.

I should point out that they are taking some steps. General Motors is expected to have a hybrid available. So is Ford. GM's next generation of full-size pickups are expected to achieve substantially improved fuel efficiency. We have GM's hybrid electric buses, which are going to be important as well. Ford has plans. DaimlerChrysler has plans on the Dodge Ram pickup in 2005, and on the Mercedes.

º (1650)

The Chair: What is the result of what you have just informed us about? Are you confident the 25% target will be achieved by 2010?

Hon. David Anderson: Not at this point, Mr. Chairman, I am not, because we do not have the agreement to achieve it. But I think it goes indeed to Mr. Hubbard's comments about the consumer.

The consumer has asked the car companies, perhaps with a little bit of advertising prodding, for some very large and fuel-inefficient vehicles. Obviously you can't blame the automobile manufacturers for their customers' desires, again excluding that issue of advertising. But there are steps being taken by the big three, and of course by others as well, both Prius, which is Toyota, and Honda with the Civic.

I think there are possibilities. What it persuades me is that we can do it if we wish. It is not going to be impossible to do.

The Chair: Is NRCan in charge of negotiations with the motor vehicle sector? If so, have you lost confidence in NRCan?

Hon. David Anderson: No, not at all. Certainly not, Mr. Chairman.

I will say this. Apparently the European governments have had success in negotiating a 25% improvement in fuel efficiency. The Japanese government has had success in negotiating a 25% fuel efficiency improvement in their vehicles. My hope is that voluntarily, through negotiations, we'll be able to do the same thing here in Canada.

But time is running out. The car companies tell us that it takes a fair bit of time to tool up for a change, and that you cannot introduce something the year before, or two years before, or in fact even three years before. You have to have enough lead time to put in place the changes on the production system that allow them to not have major dislocation. So I think we have to get it soon.

The Chair: The Motor Vehicle Manufacturers Association is renewing its request for the government to outlaw the use of manganese as an additive to gasoline. This is a very recent development. Do you think that request gives NRCan an opportunity to negotiate the 25% reduction by 2010 that has not existed so far?

Hon. David Anderson: I'm afraid I can't answer that specific question. I understand there's a process underway at the present time that is being handled by NRCan. That process I'm just not up to date on. I could certainly ask Mr. Efford to get that information for you.

The Chair: The fact that you are asking this committee to look into this matter, does that not indicate the lack of confidence in natural resources, particularly in NRCan?

Hon. David Anderson: Mr. Chairman, it's a sign of confidence in your committee, certainly not a sign of lack of confidence in anyone. Your committee has frequently embarked upon investigations that have been very helpful to the public and to the government. It has a reputation of energetic examination of these things. It allows witnesses to come forward from other sectors, as well as government ministers.

So my suggestion to you is in no way a criticism of others. It's a recognition that your committee does good work.

The Chair: It's very kind of you to put it in those terms.

Let's come to the second part of your request today; namely, that we should look at the 1992 Motor Vehicle Fuel Consumption Standards Act. Does that act come under the Department of Transport?

Hon. David Anderson: It has been confirmed to me that it does.

The Chair: In that case, are you and the government and all of us not facing a very peculiar situation whereby the act comes under the Department of Transport but the negotiations with the automotive sector come under the auspices of the Department of Natural Resources? Isn't that a recipe for non-results?

º (1655)

Hon. David Anderson: No, because I believe the two departments will work closely together. I believe that Mr. Jim Karygiannis, a colleague of ours, has been instructed to be the transport parliamentary secretary responsible for environment, so I would expect him to bridge any gaps that might exist in the thinking of those two departments.

The Chair: Would you suggest that we call Mr. Karygiannis to give us some insight on his efforts to bridge the gap between the two departments?

Hon. David Anderson: Certainly, and he might well come with the Minister of Transport. There's a very substantial opportunity within the transportation sector. Many options exist there. The switch from truck to rail is feasible in some cases, not in all. The trucking industry has a truck crossing the border every three seconds. Mr. Comartin is the expert on this, coming from the part of Canada that he does. Switching to rail might have some security advantages as well. I think there may be a number of opportunities that could be looked at in this connection.

But I do not see Transport as unwilling or insensitive to climate change concerns.

The Chair: Then it would be difficult to explain why the VIA Rail allocation did not survive the last budget.

Hon. David Anderson: I'm not the Minister of Finance. Having taken VIA Rail in January from Vancouver to Ottawa and having had a very pleasant time, I would urge all members to do likewise. The book I read was one of those big, thick ones on Gladstone. I think that for every 500 passenger kilometres travelled in Canada, only two are travel by rail. So we're going to have to up the number of people using the train, just as we have to up the number of people using public transit.

The Chair: Thank you, Mr. Minister.

On the second round, Mr. Chatters.

Mr. David Chatters (Athabasca, CPC): Thank you, Mr. Chairman.

I've listened with great interest. Although we've been discussing this issue and the Kyoto accord for some four years now, my overwhelming impression is that in spite of the $3.7 billion that has been budgeted in the last seven years, we're no closer now than we were when we first started down this road. It's really no wonder that the various sectors fail to engage in serious and meaningful negotiations when the government, the minister, and the department have yet to come up with a plan to show Canadians who's going to measure the emissions and what the penalties are going to be for not meeting those targets. How can you expect Canadians to be serious about what you're proposing and where you're hoping to get to if you don't give them the concrete building blocks so that they can understand where we're going and how we will get there? This is the same question we've been asking you for four years, and we're not any closer to getting a succinct answer than we were four years ago.

Hon. David Anderson: I think we are substantially closer. There have been meaningful negotiations with industry. Industry has its concerns, and I think they're legitimate. I don't expect these things to always be their agreeing with us and that's the end of it.

On the issue of not having a clear plan, the plans we're trying to put into place also depend on our negotiations. The two are interconnected. It's very difficult to say that we can plan without taking into account the types of discussions that go on with industries one by one or with provinces one by one or with the territories. We would be accused, I think correctly, of a very high-handed approach if we simply said there it is.

» (1700)

Mr. David Chatters: You only have a year left and you're expected to present this plan to the Kyoto working group to show how you're going to achieve your targets. And you've said yourself you can't expect the automotive industry or the energy industry to be told six months from now that they have to do this or they have to do that. We're simply running out of time to achieve what you're trying to achieve.

Hon. David Anderson: I would be the last to suggest we're ahead of schedule, and I have come here to this committee and have got onto my feet in the House time after time to urge speed or reasonable dispatch with the process. That said, 2005 is where we give a report on our planning and the way we will achieve success in 2008 to 2012. The deadline is not 2005.

On the issues with respect to what we are going to measure, I've indicated that we've just included in the Canada Gazette the requirements for measurements. With respect to penalties, clearly if some organization, whatever it might be—let us say, a company—misses a target, that target would have to be made up in the future with some reasonable penalty clause of say 5%, or something like that, per year to give them the opportunity of doing so without getting a benefit from delay.

Provinces and territories are indicating their priorities to us. I mentioned Manitoba and gave you details about it. I understand that the Province of Alberta does not intend to sign a memorandum of understanding with us, but we're still getting a very good idea of where they want to cooperate.

So I think things are moving forward, but where I can agree with you is that I would certainly like to have had everything move forward faster. I think we're facing a tight timeline, and to achieve the goals, we'll have to brook no delay from now on.

Mr. David Chatters: Just to change gears just a little bit, I read the Edmonton Journal of Friday, March 19, which quotes you as saying that you fully expect a barrel of oil to be worth $100 in the not-too-distant future. I wonder where you get that estimate from. Where does that figure come from, and have you any idea what that will do to the economy in Canada if it were in fact to come true?

Hon. David Anderson: Sir, when I started getting involved in transportation issues with respect to petroleum products, it was on the Alaska pipeline. I got very heavily involved for three and a half years. When I started, the price of a barrel of oil was $3.25. It is now 12 times that. To suggest that the price of oil may go up another two and a half times does not appear to me to be any wild flight of fancy.

Furthermore, if you look at the Hubbert curves and the analysis that's been done on the work of M. King Hubbert with respect to reserves in North America and elsewhere, you see some very interesting shortfalls coming in the not-too-distant future.

I can recollect a time during the Eisenhower administration when the United States refused to let Canadian oil across the border to keep the market for U.S.-produced fuel. Now, more than half the oil used in the United States is imported; 45% is domestic production. More than half is imported, and that's going up to 70% imports by, I think, 2012 or 2015.

You're going to see some major changes in oil prices in the years ahead, and it's not going to be an easy situation for the world's economies, which are so geared to this extremely attractive and convenient form of fuel.

Mr. David Chatters: Thank you, Mr. Chair.

The Chair: Thank you, Mr. Chatters.

Monsieur Bigras.

[Translation]

Mr. Bernard Bigras: Thank you, Mr. Chairman.

Today, reading your presentation, I'm struck by the fact that at least four times, you've referred to the 2003 budget, when just last week, the Minister of Finance tabled a new budget. I'd be tempted to say that I understand your scarce references to the 2004 budget of last week in your speech, because when you get right down to it, it makes no provision for Kyoto.

I get the feeling that there are currently two approaches developing in Canada. The first approach aims to make sure we reach the Kyoto objectives in 2008 and 2012 through concrete measures: funding for public transit, tax incentives for Canadians and funding for existing technologies. The second approach, which appears to be the government's new vision, aims to fund projects that will be implemented in 10, 15 or 20 years.

This brings me to the $200 million in additional funding to the Canada Foundation for Sustainable Development Technology and the fact that this foundation is going to support technologies that will be applied in 10 or 20 years. I'd like you, the Minister of the Environment, to tell me which approach you prefer: promoting concrete measures within the 2008 to 2012 timeframe or supporting technologies that will enable us to meet Kyoto objectives, not between 2008 and 2012, but maybe in 15 or 20 years.

» (1705)

Hon. David Anderson: Mr. Bigras, it's impossible to choose only one of the two approaches: both are necessary. First, as I said in my speech, it's very important to use today's technologies, those that may enable us to reduce our emissions and meet the Kyoto objectives between 2008 and 2012.

However, it's clear that in order to successfully reduce greenhouse gases on schedule by 2050, new technologies will have to be studied and eventually applied. This includes carbon sequestration as well as a number of other solutions. I'm not opposed to new technologies, I'm just saying that we can't wait for them to be invented before getting down to work.

Mr. Bernard Bigras: For starters, I'd like to know if you are in agreement with measures like the ones taken by the foundation in question. They include adding $200 million and funding companies like Suncor to develop a carbon capture process. Do you think that's the direction Canada should be taking to reach the 2008-2012 objectives?

You're very good at stretching things and when you take the floor, it's for a very long time. Well done.

You referred to three agreements with the provinces. But I remember that at the same time last year, you were really pleased that there was a new government in Quebec City. You had a lot of expectations in that regard. And yet in your presentation, you said very little about Quebec.

What is the current state of negotiations with the Government of Quebec?

Hon. David Anderson: First of all, I want to point out that there's not just one approach. I assure you that I am open to the possibility of achieving the necessary results with today's technology. It's clear—and what we've heard today is along the same lines—that today's technology is sufficient and simply needs to be applied.

As for the other provinces, we are ready to sign an agreement with Newfoundland and Labrador, but so far, I haven't had the opportunity to do so. I went to Newfoundland four weeks ago and spent a few hours with the minister. We were confident that it would be possible to sign the agreement. However, that hasn't been done yet.

Currently, we are holding discussions with Quebec, New Brunswick, Nova Scotia, British Columbia and the Northwest Territories. In addition, as I just said, Ontario is very interested. Formal discussions with the province of Quebec are going to start April 1^st, in two days.

Mr. Bernard Bigras: Are you talking about discussions or negotiations? You can discuss and talk on the phone, but... You've been discussing with the Government of Quebec for about a year. Is it the start of negotiations or discussions? Has your negotiator been named? Has the Government Quebec's negotiator been named? Are the negotiations going to begin on April 1^st?

» (1710)

Hon. David Anderson: That's a question that I can't answer right now. I don't have the details. I don't know if you have the details, Ms. Doyle. Do we have a negotiator or are we merely holding discussions with the province of Quebec? Personally, I think that they are discussions, but sometimes these discussions turn into negotiations without much of a transition.

Mr. Bernard Bigras: Has your negotiator been named?

[English]

Ms. Cassie Doyle (Associate Deputy Minister, Department of the Environment): No, I don't think so.

[Translation]

Hon. David Anderson: Apparently not.

Mr. Bernard Bigras: So I take it that these are discussions.

[English]

The Chair: Merci.

Mr. Comartin, please.

Mr. Joe Comartin: Thank you, Mr. Chair.

I'm sorry Mr. Godfrey's gone, because I was going to take a little shot and ask him....

To challenge you, Mr. Minister, the City of Windsor, or its public transit, had a program this summer, which you funded to some small degree, that provided for free riding of the buses when a smog day was declared by the province. It was extremely successful. The ridership went up dramatically. But because we have so many smog days in my city, we ran out of money by the first week of August, I think. Requests were made of your department and Natural Resources. I don't even think they got an answer. The point I'm making, Mr. Chair, is that if in fact we are serious about new effective proposals, I would expect a better answer to other proposals than we got in our city.

Mr. Minister, what I want to ask you is, can we point to any sector at this point that is reducing greenhouse gases—not slowing down the increase but actually reducing?

Hon. David Anderson: I'll check on whether or not the smog-day free buses system will be repeated. I think that is a great way to link human health and public transit in the mind of the public using the buses and in the mind of everybody else. Clearly, where you have that situation, everybody in a car knows they're contributing to the problem that creates illness, that creates respiratory problems for kids.

In terms of reductions, yes, the manufacturing sector has dramatically reduced its emissions. I believe they have a 30% increase in production and they're below their previous emissions. That's one sector that I can think of offhand.

As to companies involved, there is DuPont, which had a 60% reduction in emissions. They made more money, so they decided they would go even further in yet another round of reducing emissions. As to the other sectors, I'd have to check on that. But it is remarkable that when sectors have attempted to get energy efficiency, they have by and large succeeded quite quickly and saved or made money in the process.

Mr. Joe Comartin: Could you provide that information to the committee—what sectors are moving ahead?

Hon. David Anderson: Sure.

Mr. Joe Comartin: With regard to the auto industry—I can tell you my discussions with them are the same as, I think, yours have been—given their reluctance to accept that they can meet the 25% reduction, is any consideration being given to giving royal assent to the legislation that's on the books, has been there for 22 years, and in fact to making it mandatory that they meet the 25% reduction?

Hon. David Anderson: Any legislation on the books that's been left on the shelf like that, not brought into effect, is obviously available. My suggestion that this be looked at by this committee is because I don't have a full grasp, a full appreciation, of merits or otherwise of this approach.

I hope we get a voluntary agreement, I sincerely hope we do, because that's by far the best way of achieving it. It allows the greatest flexibility. It allows the industry itself, which understands fully the nuances of the system, to put their minds to achieving a system at least cost and with least disruption, as opposed to regulatory measures, which generally speaking result in some unevenness of application. So I think a voluntary approach is the best.

We'll see what happens. These negotiations have not gone as swiftly as we would have liked, but Mr. Efford is persevering, I understand, and we hope they will come soon.

» (1715)

Mr. Joe Comartin: I'm not sure I got an answer to that. In fact, I don't think I did. But let me go back to another one that you didn't give me an answer on, and that is the coordination of Kyoto and its implementation.

Is there a plan written out? Are there charts as to who's responsible for what? Quite frankly, Mr. Minister, I think I've been as involved in this as anybody in this room, and I don't understand who's in charge of what. Is that down on paper someplace that you could share with the committee?

Hon. David Anderson: Certainly we have a number of documents that cover that. Treasury Board was working with 15 departments and agencies involved in climate change late last summer. We are continuing that work with them, and we should have a lot better documentation for you in the future.

Fundamentally, I'm not too worried about the current situation. We are not an economics department. Natural Resources Canada is, Transport Canada is, Agriculture Canada is, Industry Canada is, and their general areas of responsibility are pretty well known.

Now, there are always surprises. For example, I have an organization in my riding, a consumer group, that got a cheque from Agriculture Canada. Victoria is not exactly an agricultural community, but it was because of some co-op program that Agriculture Canada had. So you do get these crossovers from one department that surprise you from time to time, but in general, the breakdown is very well known.

Mr. Joe Comartin: Is it at someplace where you can share it with this committee?

Hon. David Anderson: Okay, I'll try to get a better breakdown for you. I don't have it on hand here, but I'll certainly get that breakdown for you.

Mr. Joe Comartin: Thank you.

The Chair: Thank you.

Madame Marleau, s'il vous plaît.

Hon. Diane Marleau (Sudbury, Lib.): You have in place right now a program of energy audits of homes. People put their name in to have the audit done, and then they retrofit certain areas and have another audit done to see whether they qualify for some form of rebate.

I think it's a fairly good program, but I wonder whether you shouldn't just have an audit of all homes, say, that are older than 20 years, and then let the homeowners decide what they can do to make their home more energy efficient. I was asking about it, and one fellow said to me, well, you know, you can do that, and if you change all your windows, it's not worthwhile because you're not going to get a rebate anyway and it's too costly.

I need to change the windows on my house whether it's too costly or whether I have a lot of energy going to be saved or not, but my idea is that if most homeowners knew what was necessary to make their home more energy efficient, they would actually work on it over a period of time, without having this immediate payback, perhaps, of what is it, $400 if you spend $3,000 or something, and only if the second audit agrees? I'm not sure that's the best way of doing it.

I'm asking, would you consider it the other way around?

The Chair: That question should be asked of the Minister of Natural Resources, because that's the minister in charge of that program.

Hon. Diane Marleau: Perhaps, but Mr. Minister--

Hon. David Anderson: Certainly the suggestion is an excellent one, that we extend the audit program, and I don't think there is any doubt that it would be beneficial.

In fact, one of our choke points in this system is the qualifications of the individuals doing the audits. You're sort of caught between what you'd like to do and what's realistic. Until we get more qualified people, we don't want to take it away.

When the program first came in, in Alberta, for example, I don't know whether it was in Bob's riding or not, but I was listening to a Alberta radio program, and the number of calls from people who phoned the company that does weatherstripping, windows, and so on, rose from 50 to 500--a tenfold increase--as soon as the incentive program was advertised.

This is one of the difficulties of establishing such a program and why in the 1970s these programs didn't work as well as we thought they would, because we ran out of qualified people to do the audits.

Hon. Diane Marleau: That's a good point, but the way the program is set up now, the audit has to be done twice--once before, and then once after. Why not just do it once and give people the encouragement to just do everything they need to make their home more energy efficient, period, without a further rebate?

» (1720)

Hon. David Anderson: I'm sure Mr. Efford would be delighted to chat with you behind the curtains as we wait for the vote this evening.

The Chair: Thank you, Madam Marleau.

Mr. Reed.

Mr. Julian Reed: Thank you, Mr. Chairman.

Well, it's amazing what the price of energy does to conservation. I think if you observe areas of the United States where the price of electric power is double, the consumption is half. Part of that is because citizens there are also empowered to manage their demand. I appreciate the fact that the Premier of Ontario has announced the installation of smart metering in Ontario, which will enable homeowners to manage their demand now. But that has now to pass down through all of the local utilities, because utilities are all different in the way they approach it.

One municipal utility in the riding I serve has been doing smart metering for some time. The other one says it can't be done. Yet they both buy their electricity from the same source. If we go to Europe and look at the price of electricity there, the consumption is even less. And nobody seems to have suffered in terms of lifestyle, quality of life, and so on. If you walk into a five-star hotel in Germany, the lights come on in the hall when you walk down the hall, and when you turn the corner, the lights go out. This is no big deal. It's not rocket science. It's in place in other parts of the world.

I share the experience of the 1970s, when oil prices were escalating until they had reached a place on the stock market in Chicago at about $50 a barrel, and the experts of the hour were predicting the price to go to $120, etc. Before that spell that OPEC was holding was broken, it precipitated the biggest voluntary conservation effort that ever existed in North America. The government changed the speed limits to 55 miles an hour. People got out of these large fuel-consuming boats and into compact cars, whereas 10 years before, the automobile builders were saying--and I heard the president of one company say this to a high school group--that mini cars make mini profits. And that was the whole thrust.

Some new things are happening, Minister. As you're observing, the supply of oil is escalating now on almost an exponential curve. China particularly is consuming more and more. They're now the second-largest consumer of oil in the world, yet the consumption per capita is a fraction of what we use here. As their economy expands, it's going to continue to rise even more.

There's also been the red-flagging of natural gas supplies a decade out, which is another new thing we have to contend with that we didn't have before. I'm wondering if some of that, as obtuse as it seems, may work in favour of the Kyoto accord and help us to introduce, for instance, the new alternative fuels, which are there but which have not yet taken their rightful place in the scheme of things. I wonder how far you can go as a minister, especially discussing this with your provincial counterparts, in terms of showing them how they can enable their citizens to reduce their consumption of electric power, yet not affect their lifestyle one iota.

Hon. David Anderson: Well, certainly much of what you're asking for would be speculation on my part, but I would think that the opportunities are very clear for conservation. A big area that we have not yet seen is, of course, the American position, which currently is not conservation based. I believe the Vice-President came to Canada to say that it was a matter of personal virtue, not a matter of public policy. I see that as being a transitory position to hold, given their dependence on overseas supplies, not just from Canada but from the Middle East.

So I would think we're probably going to see other forces elsewhere contributing to what you're talking about. Again, I don't know exactly when, but I expect that to happen certainly in the next decade to 15 years.

I think a lot of forces are going to be working toward fuel efficiency. We're seeing it now. The price of gasoline has shot up in the last year, and this isn't likely to be simply a spike. It may drop again, but I think the trend line is clearly upward. So I think we're going to see a lot more issues, some of which I would regard as being major policy issues that the Americans are going to face up to in the next little while, which they've not really faced up to--in my personal opinion, speculating of course--to the degree that we can expect in the years ahead. We're going to see more concern over this issue of conservation south of the line.

» (1725)

Mr. Julian Reed: Sheik Yamani, who was the oil minister for Saudi Arabia in the 1970s, made two very profound statements when he was visiting Canada. One was “oil is too precious a commodity to combust”. The other one that is attributed to him--and I didn't hear him say this one--was that “the Stone Age ended before we ran out of stones”.

Hon. David Anderson: Well, we'll see. Sheik Yamani was a very perceptive person and very influential on world events. He will undoubtedly be put down as one of the greatest political influences of the 20th century.

You're right. On the issue that I was talking about earlier, the decline of conventional crude production in the United States, there are oil shales, but we don't know whether they will ever come on stream. These are major issues.

You mentioned China. When I was studying Chinese at the Institute for Oriental Studies at the University of Hong Kong, the Chinese were just building up their oil industry. It has now gone through that whole cycle. It's now in a rapid decline in terms of the amount it can provide as an overall percentage of Chinese requirements. The only area they may be able to go to is offshore in the South China Sea. I don't know what will happen when China becomes perhaps the second-largest purchaser of petroleum products on the international market.

These are some major issues that I think will all work, finally, to a conservation ethic. The Chinese have far stricter fuel efficiency requirements than we do. Why? It's because they know they have to import oil and they know the cost of this to their economy.

Mr. Julian Reed: Thank you.

The Chair: Thank you, Mr. Reed.

Mr. Szabo.

Mr. Paul Szabo: I can ask a quick one.

Mr. Minister, one of the last times you were before us--and I think at the time we had a cabinet committee with the Minister of Agriculture, Natural Resources, and you--the point was made that the communications instruments that we had were spread over all departments. There was no focal point to it. I suggested, at the time, that it would be nice if we had a one-stop point of public information for our whole Kyoto program so that Canadians could go to one place.

Has there been any progress?

Hon. David Anderson: I believe we have a website: www.climatechange.ca. That is where it all should be available. Presumably it will lead to some other sites, but climate change is the website.

Mr. Paul Szabo: That's the problem. You go to a site and it takes you to several other sites. We saw the same problem when the SARS thing was there. There was a site, and then it listed the 27 different sites you could go to in order to look about SARS.

I'm going to raise it with you again, Minister. I wish you would ask somebody who's a communications expert, whom the Government of Canada has some confidence in, to look at what we're doing in terms of communicating and facilitating communications back and forth with Canadians about Kyoto--about their awareness, about their commitment, about our progress, about the pieces of the pie, who contributes what, and all these other good things. I'd like to go to a nice user-friendly site, because I need to know if I'm going to be part of the solution.

Hon. David Anderson: I will take your suggestion immediately and ask my associate deputy minister, Ms. Cassie Doyle, to make sure that happens.

I agree with you, the issue of information is very important. This is so critical now, as we will not be doing advertising that was originally expected with respect to the one-tonne challenge.

» (1730)

The Chair: Thank you, Mr. Szabo.

Mr. Bailey.

Mr. Roy Bailey (Souris—Moose Mountain, CPC): Minister, on the weekend, I'm sure you were aware of the problems with the new governor cutting out the trash from Ontario to northern Michigan. While I was watching that, I was led to believe there is some value to this in the way of methane production.

From what I have read...I can't seem to get too much information. Do we have enough information that we can actually tap into methane sources to make it a viable gas to make use of?

The reason I ask is that we have tonnes of garbage that we could bury to make the methane. Is there somewhere in the world where they are way ahead of us in the production of methane gas?

Hon. David Anderson: I'm sure there are places in the world that make much greater use of landfill sites for methane, but the technology is certainly available here. I have seen Canadian sites where the piping systems are capped and the gas is bled off for purification and cleaning up, and then used as fuel. So it is certainly possible to do that. The technology is not rocket science; it is fairly straightforward technology. The real issue is that it's quite expensive in terms of capping and capture.

Mr. Roy Bailey: Thank you.

The Chair: Thank you, Mr. Bailey.

Mr. Minister, we are quite convinced about the tremendous work you and your department are doing, particularly on the issue of managing the demand. That became quite clear in today's presentation and exchanges.

It is not so clear whether demand management is the goal of the Department of Finance. It certainly hasn't expressed that political intent in recent budgets, but that is the object of a discussion we could have when Mr. Goodale appears before this committee.

As to the Department of Natural Resources, on which we all depend for the success of the overall plan, we still don't know whether it will be active and helpful on demand management or not. We have invited Mr. Efford, and we hope to have him here this Wednesday to dig deeper into the whole issue of achieving the common goal.

We will take very seriously the suggestion you have put forward today, but an election may intervene in carrying it out. It's not a minor exercise. It will require quite a large number of witnesses and hearings, and it will take several months to do a proper job. Before we do that, it would be helpful if you could let us know through the normal channels whether your department has carried out or will carry out a study or report on the content of the 1982 legislation, so we can benefit from work that may have already been done.

Apart from that, we are very grateful for your presence today and for the very helpful exchange. We hope to see you again soon. We congratulate you again on the launch of the one-tonne project last Friday.

Hon. David Anderson: Thank you, Mr. Chairman. It has been a pleasure to be here.

The Chair: This meeting is adjourned.