What we have from --or I guess more indirectly on Bill it's from , his leader--in asking the implication basically.... I think our main concern with the amendment, if he's not quite understood that yet, is that by way of what he has here, measured progress would be tied to a projection based on a set of assumptions that have quite an impact on the actual level of greenhouse gas emissions projected.
What this is doing is working off projections rather than what we would suggest, which is that they should be measured against actual emissions recorded in the national inventory report. Our plan uses the 2006 baseline. The international standard is 1990. Ours is different. The fact is that there really is, in some sense, no international standard, because some countries have used 1990, others have used 2000, others use 2003, others use 2005. So there's no agreed-upon baseline there.
When our government, the Conservative government, came into office back in 2006, we were really not able to take responsibility for the inaction and failure of the previous government, the Liberals, to cut greenhouse gas emissions in the previous regime. But we have to take responsibility from this point on, so that means using an actual baseline as opposed to the projections that are included in the clause we have before us now.
I know some have criticized us and have chastised us, so to speak, for talking about an intensity-based plan, this kind of rhetoric, that it allows emissions to grow forever. But we made very clear our commitment to Canadians to cut those greenhouse gases and to do it by an absolute 20% by the year 2020. Those are absolute targets based on the baseline of 2006. It's not something rather vague; they're actual targets, not intensity based, and regulations that actually—as in fact would know—will force industries to massively reduce the greenhouse gases they release for each unit of production. That's part of the plan for meeting that goal, and our plan forces industry to get more efficient each year, as the years go on, so that greenhouse gases go down even as the economy grows.
As opposed to this particular baseline requested here, our plan actually forces industry to get more efficient each year, so that those greenhouse gases go down, and it will even, at the same time as the economy is allowed to grow, require industry to get significantly more efficient: 18% more by the year 2010 and then 2% more efficient each and every year after that.
So the math is really pretty straightforward. The math is quite simple here. The Canadian economy, in terms of a pattern here, grows by 2% to 3% a year. If we require industry to get 18% more efficient, total emissions will go down even as the economy grows. That's just how the math works out. As would know, Canada's total emissions under our plan will go down as early as 2010 and no later than 2012, even as the economy grows.
So we don't believe that our country, our environment, is well served by simply closing factories down and by shipping jobs off to countries like China and India that have lower environmental standards than we do. That would actually mean that Canadians would lose jobs and that we would end up importing products, bringing products in from abroad, produced in dirtier factories that pollute the world with even more greenhouse gases. So the kind of baseline here, where we're actually measuring against projections instead of actual solid figures as reported in the national inventory report there, is the concern we have.
Our plan is actually going to do something fairly significant in terms of the oil sands projects. It will allow some 38 new oil sands projects to proceed. They're really one of Canada's greatest resources out in provinces in the west, but they're a major engine for our economy, and as a government we do have a great responsibility to the generations ahead to ensure that they are developed in an environmentally sound way.
We have that plan. We have that tougher regime for the existing oil sands projects and for oil sands projects under construction, as was clear in our budget--tough measures for planned oil sands projects as well. They'll have some very tough regulations. Existing ones will have tough regulations to reduce their emissions by 18% by 2020 with an additional improvement of 2% every year after that.
Oil sands projects under construction between 2004 and 2011 will not only have to meet the tough standard of 18% and 2%, but additional tougher emission standards to drive adoption of cleaner fuels and technologies. Those new oil sands projects will have the toughest standards of all. Oil sands projects built in 2012 and later will have to use carbon capture and storage or other green technology to cut their emissions.
Those three measures are some of the toughest regulations in the industrial world. We're basing it on actual figures, as opposed to the projected baseline is suggesting in the clause that's before us now.
We don't believe, as some appear to, in a moratorium on new construction. We believe it would be possible, and that it's irresponsible to shut the door on the creation of more good jobs in Canada.
We have made that commitment to Canadians to cut greenhouse gas emissions by 20% by the year 2020, and the Turning the Corner plan is very specific in terms of how we go about doing that, using tough measures to put us on a path to meet those commitments.
Also, I think what's important to know--and members across the way would be somewhat aware of this, or should be--is that we believe in the polluter-pay principle. Our plan recognizes that all Canadians have to fight climate change and that industry has to do its part; and it will, as things stand.
Our regulations will apply to all big industry, as we said, the oil sands and any of the other oil projects as well, in terms of a solid baseline from 2006. All the way from smelters to pulp and paper mills, all industry has to do its fair share, because oil sands and dirty coal are two of the biggest emitting industries.
Electricity plants have requirements to meet. They're going to carry the brunt of this. That plan requires, as we said, banning the construction of new dirty-coal electricity plants and requires all those new ones to use carbon capture and storage or other green technology. And that's happening in my own province.
So again, using the 2006 baseline, by these means and by carbon sequestration, we will meet those goals and we will maintain very tough regulations with respect to that.
Companies will have to choose. They'll have to find the most cost-effective way to meet their emission reduction targets from a whole range of options. These include in-house reductions. They can make contributions to a technology fund or domestic emissions trading. Companies that have already reduced their greenhouse gas emissions prior to 2006 will have access to a limited one-time credit for early action.
But we have to keep coming back and emphasizing the point of using 2006 as a baseline. I think it's much more realistic to start there, and we will press forward on that basis, unlike the failed approach of the previous government.
We're taking a more balanced approach. I think that's what the economy requires, and it's what the Canadian public requires, because making the reductions is practical and gets the job done.
It's a focused approach toward an absolute reduction in greenhouse gases of 20% by the year 2020. It protects our environment while growing our economy at the same time. It moves Canadians forward on a low-carbon economy, using a proper baseline instead of the one that's proposed here, where we've got these projections instead.
It's a challenge, admittedly. Canadians have to share, and there will be a cost, but we believe that together, as we partner and join hands on that, the cost is manageable. Industry will do a significant part of it, but as individuals, we can as well.
What is significant, and what we should all note today and have on the record in respect of this bill, in respect of this clause, is that our plan includes some real tools--practical tools, I might add--to help Canada cut its greenhouse gas emissions. These include more than $9 billion in ecoACTION initiatives for home retrofit grants, for renewable power, for biofuels, and for public transit. We've also delivered other means, such as a carbon market, an offset system, and most importantly, some tough regulations to force industry to cut its emissions, again based not on projections, as in clause 10, but on using 2006 as the baseline.
We know that Mr. Dion and the Liberal Party didn't get it done when it came to cutting our greenhouse gas emissions. But we really are moving forward with some practical plans here.
Some people have said that our plan gives a free pass to some of these areas. Some have said that our plan would hurt the economy. Actually, by cutting emissions to the extent we are, our plan is in fact going to impose some real costs on Canadians. We believe, however, in the commitment, the ingenuity, and the willingness of Canadians and Canadian industry to tackle that climate change challenge.
Our plan works by getting industry cleaner and more efficient so we release less greenhouse gas for every item we produce down the road. It's realistic. Again, using that 2006 baseline, it'll allow us to cut by an absolute 20% by 2020. This is not intensity-based so much as it is absolute, and that's what I think Canadians want.
Due to the inaction, unfortunately, of the previous government--they had lots of time to get at this--Canada is 33% above Kyoto targets now. That's why we have to use a 2006 baseline. The Liberals talked and talked. There was a lot of hot air, if you will, about cutting our greenhouse gases, but they allowed them to soar. So we have to be realistic as we approach it now. We can't allow projections, as in clause 10; rather, we need to use something more realistic by way of 2006, which is the commitment we have. That's what we'll follow through on.
We're already into the target period of 2008 to 2012. Meeting those targets by 2012, something virtually every Liberal environment minister admitted we could not do, would take Canada into a pretty deep recession, with major job losses and a significant decline in incomes for Canadians. Taking that kind of drastic reaction, using the wrong baselines, would create some real problems for our country. It would be irresponsible at the best of times. In the uncertain economic times in which we live--we're all watching it carefully and seeing what the subprime real estate stuff does to Canada--we have to be prudent about it.
It would be irresponsible to take some of the measures being suggested by members opposite. In particular, the Liberal lack of action in the past has exacerbated that. So we pursue, as we've said here in respect of the baseline and in respect of the practical actions, a balanced plan that stops the increase in Canada's greenhouse emissions and cuts them by about 20% by the year 2020.
We hope to get industry to be significantly more efficient, as we said: 18% more efficient by 2010 and 2% more efficient each and every year after that. We will, as a result--you do the math, you do the calculation--become 18% more efficient. Thereafter, total emissions will be going down, even as the economy is growing at its average rate. In fact, Canada's total emissions, using the 2006 baseline and the practical parts of Turning the Corner, will go down as early as 2010 and no later than 2012, even as the economy grows for us.
Our plan, make no mistake--Mr. Cullen will possibly be pleased to hear this--will impose real costs on the Canadian economy. But we believe that as Canadians together, we can jointly do that.
I guess there are some other myths that come up over time. I know this because out in my part of the country, in Saskatchewan, on the border and over toward Alberta, and so on, some people are clearly negative. They use the rhetoric in terms of the oil sands projects out there. But surely some creativity, innovativeness, and new technology can take care of that, get at that, and help us to actually get some good results in that area.
Some have said that our plan gives a free pass to the oil sands by allowing emissions to double, but that's absolutely not true. If we did not take action, emissions from the oil sands would quadruple by 2020, and that's not acceptable. We cannot allow that to occur.
Our plan imposes the toughest environmental regulations for the oil sands in our history. New oil sands facilities will be required to use carbon capture and storage, or other green technology as well, to massively reduce their greenhouse gas emissions. So you use that 2006 baseline as opposed to--
That's on page 8 of the evidence. My first question is, have you costed your plan? The response from Mr. Layton is that this is a set of targets, and that it will be up to the government of the day. That's this government. is being considered right now. It's up to the government of the day to advance plans and figure out how we achieve those targets. He's saying it's up to the government to cost it. So it's absolutely accurate.
This is the question that keeps coming up: has it been costed? Mr. Layton said to cost it. It needs to be costed by the government. Mr. Bramley said it needs to be costed.
I went to the testimony of Vicki Pollard from the EU and Mr. James Hughes from the U.K. They recommended that an impact assessment be done before move forward.
We've heard from every witness group, even the sponsor of the bill, even the person who helped write the bill. I think the question Canadians have is, what has changed? Mr. Layton is saying to do an impact analysis, a costing. And now Mr. Cullen is getting different directions from Mr. Layton. Mr. Layton began by saying to do a costing, and now he's telling Mr. Cullen to tell this committee not to do one. He's telling us not to do one now, to move forward with this bill without knowing what it's going to cost. Well, that's not the way to do things. You need to know whether it's feasible, whether it's been costed. It's very important. This is what we've been advised even from the EU, even from the U.K. Both have recommended an impact analysis.
Mr. Cullen is asking us to move an amendment. I think the analogy that Mr. Vellacott used of trying to build a house on a bad foundation was a good one. I've built a number of houses, and you have to start with a strong foundation. The footings have to be built on solid ground. You dig down to hard pan, or you put in pilings, but you have to have a solid foundation; otherwise it won't stand. We've heard from witness group after witness group that does not have a good foundation. That's why I'm not moving an amendment on , because it's a badly flawed bill.
The Liberals have provided a number of amendments, as have the Bloc and the NDP. I trust they made those motions in good faith, but we have to get the witnesses back to find out if they came up with a bill that's going to be effective. We don't know that. They want us to move forward without all the information. That's very dangerous.
We have right now Canada's Turning the Corner plan, the regulatory framework on emissions. It is a plan that has been costed. It's a plan that will be effective. It will reduce greenhouse gas emissions by 20% by 2020.
We also have absolute reductions in the Turning the Corner plan—60% to 70% by 2050. These are definitely the toughest targets in Canadian history and one of the toughest in the world.
If we had had a plan like this in place by a Conservative government back in the mid-nineties, we definitely would have been able to meet international targets. But we took over in 2006, and we ended up 33% off target. So we have a lot of making up to do. But this government is committed to absolute reductions in greenhouse gas emissions.
Commissioner Ron Thompson was here a couple of weeks ago, and the NDP made the startling admission that the opposition's focus has been on trying to make sure the government fails. A comment was made by the NDP, admitting that this is what they've been trying to do, to cause the government to fail. But this government is not failing. The government is moving forward with absolute reductions of greenhouse gas emissions. Why? Because it needs to happen. We cannot permit greenhouse gas emissions to continue to climb in Canada or any other country in the world, and that's why we've taken strong leadership and have a plan that has been costed, that has policy, and that will reduce greenhouse gas emissions.
Canada's new government launched an ambitious and realistic agenda to protect the health of Canadians, to improve environmental quality, and to position Canada as a clean energy superpower. The proposed framework is comprehensive and includes mandatory and enforceable reductions in emissions of greenhouse gases and air pollutants. It also engages all Canadians to take significant measurable action at home in Canada.
The reason we focus on both greenhouse gas emissions and pollutants is that pollutants are the cause of death of one in twelve Canadians. Poor air quality has a major impact on the health of Canadians, costing billions of health care dollars and causing a reduction in quality of life, but also one Canadian in twelve dies. That's why our plan includes greenhouse gas reductions but also aims to clean up the air Canadians are breathing.
Climate change is a global issue of major concern to Canadians. Human activities continue to increase the concentration of greenhouse gases in the atmosphere, producing changes in the climate that are already apparent. And they are. Being from British Columbia, I've seen the mountain pine beetle kill.
Very serious problems are being caused already in Canada by climate change. These changes include altered wind and precipitation patterns and the increased incidence of extreme weather events, droughts, and forest fires. In addition, glacier melt and warmer oceans could lead to significant rises in sea levels. The changes could imperil the way of life in vulnerable communities around the world and here in Canada. The changes would also result in significant economic costs.
It is critical that Canada do its part to address its own contribution to global climate change, and we are doing that. After many years of our not doing what we should be doing—and the Commissioner of the Environment sadly said there were a lot of announcements made but very little action, and we saw our emissions continue to climb, and climb, and climb, which was very embarrassing to Canada internationally—those days are over. We've now moved from voluntary action to mandatory regulatory action to reduce greenhouse gas emissions.
Air pollution is a significant threat to human health and the Canadian environment. Each year smog contributes to thousands of deaths. There are other air pollutant problems such as acid rain and threatened biodiversity in forest and freshwater ecosystems. In order to address the real concern of Canadians suffering from the health effects of air pollution and to clean up Canada's environment, the government must act to reduce emissions of air pollutants—and it's doing that.
Addressing these challenges in a coordinated way will require nothing short of a complete transformation in the capital stock of energy-producing and -consuming businesses and households across Canada. While cooperation among all sectors of government will be required, the Government of Canada is uniquely situated to provide the leadership on this issue that will be required to meet the challenge in a cost-effective manner, in order to ensure the continued competitiveness of the Canadian economy.
We need to have a healthy economy, but we also need to have action on the environment, and that's what we're seeing now. This transformation will not be achieved through the sum of different and potentially conflicting provincial plans or by setting up rules for industry that vary from one area of the country to another. The government's clean air regulatory agenda, along with other initiatives to reduce emissions of greenhouse gases and air pollutants, will provide a nationally consistent approach.
We've recently had the report Turning the Corner—An action plan to reduce greenhouse gases and air pollution. The report was just released. It says:
Climate change is a global problem that requires global solutions. Canadians have long known that serious action is required. Previous Governments set ambitious goals for reducing greenhouse gases, [yet] emissions increased year after year.
Why was that, Chair? Members of the opposition have admitted that when they were government, they really did not have the commitment to reduce greenhouse gas emissions. But that's different. Things have changed, and this government is committed to seeing those reductions, but with a realistic plan, a concrete plan that will see those reductions come. They are dramatic, Chair: 20% by 2020 and 60% to 70% by 2050.
Today our greenhouse gas emissions are more than 25% higher than they were in 1990, putting Canada more than 32% above its Kyoto target. That's today. Without immediate action, Canada's greenhouse gas emissions are projected to grow a further 24% by 2020 to reach about 940 megatonnes or 55% above the 1990 levels. That is unacceptable, and that's why we said it is time to turn the corner, and we are turning that corner.
Our government is committed to stopping the increase of Canada's greenhouse gas emissions and dramatically reducing them. I was reading a little out of our Turning the Corner plan. Last April we released the high level framework of our Turning the Corner action plan for reducing emissions. It's a real plan. It's a plan that will achieve the results of absolute reductions in greenhouse gases, a plan that was costed, a plan that will reduce greenhouse gases.
Since then we have consulted with the provinces. We've consulted with environmental groups and industry to develop the details of our plan, which include forcing industry to reduce its greenhouse gas emissions. Forcing industry is huge. That's because we've moved from voluntary to mandatory.
Our plan includes setting up a carbon emissions trading market, including a carbon offset system, to provide incentives for Canadians to reduce greenhouse gas emissions. We're providing industry with the tools it needs, the tools of a domestic carbon market, and we're also establishing the market price of carbon. We've heard from industry, we've heard from environmental groups, and we've heard from our international partners that these are necessary parts of the plan, and they are now part of a plan.
Our plan to cut greenhouse gas emissions in Canada is a responsible plan. It's a responsible path to reduce greenhouse gas emissions and to address the global threat of climate change. The Government of Canada has established the national target of an absolute reduction of 20% of greenhouse gas emissions from the 2006 levels by the year of 2020. That's a reduction of 330 megatonnes from projected levels. That's huge. The previous plan was that emissions were going up and were going to continue to go up. We are now seeing a dramatic reduction of greenhouse gas emissions--330 megatonnes. This is equal to eliminating the combined greenhouse gas emissions of Alberta, Quebec, and Newfoundland and Labrador. It's a huge accomplishment.
With the Turning the Corner plan, the government is taking action and putting into place, for the first time in Canadian history, one of the toughest regulatory regimes in the world to cut greenhouse gases. Our Turning the Corner plan requires reductions in emissions of greenhouse gases by big industry. Greenhouse gas emissions by the industrial sector will be reduced by 165 megatonnes from projected levels by 2020, an amount greater than the combined emissions by the provinces of British Columbia, Saskatchewan, Nova Scotia, and Prince Edward Island. Existing facilities in all industrial sectors will face tough requirements to improve their emissions performance every year. Plants that began operating in 2004 will face even tougher requirements to force them to use cleaner fuels and greener technology.
New oil sands plants and coal-fired power plants coming into operation in 2012 or later--those that are now on the drawing board--will face the toughest requirements of all. The oil sands are one of Canada's greatest natural resources and a major engine to our economy, but we have a responsibility to this generation and future generations to ensure that they are developed in an environmentally responsible way. Without additional action today, emissions from the oil sands would grow dramatically in the coming years, and we can't allow that to happen.
The Government of Canada will require that all oil sand plants meet a tough new emission standard. Plants that began operation in 2004 or after will face even tougher standards based on the use of cleaner fuels. Plants starting operations in 2012 will be required to meet the toughest targets that will effectively put action into place for a new carbon capture and storage technology. It's a wonderful new technology.
When I was in Berlin, Germany, for the G8+5 conference--and Chair, you were there with me--it was wonderful to hear that the world is counting on carbon capture and storage. We also know that the biggest carbon capture and storage facility in the world is in Weyburn, Saskatchewan. What they do is this. In North Dakota, about 300 kilometres south, you have a synthetic coal gasification plant where they create natural gas out of gasifying coal, and from that they create electricity. The carbon dioxide from that plant is shipped 300 kilometres north to Weyburn, Saskatchewan, and it's pumped into the ground for enhanced oil recovery. An oil field that wasn't producing anymore now is because of that technology.
The world shared with us in Berlin, and there were some of us in this room who were at that meeting--the chair, I myself, and there was a member from the Bloc, Mr. Cullen was there, and Mr. Godfrey was there. We heard the importance of carbon capture and storage. The world is hoping that approximately 25% of the reduction of greenhouse gas emissions globally will be reduced because of carbon capture and storage.
So it's a very important technology, and who has that technology? Who is the world leader? Canada. That's why we saw, in Indonesia and Bali, one of the people who were down there as part of the Canadian delegation sharing that technology with the world. We are world leaders, and that's why we're requiring the new plants in the oil sands will have to use that technology, where you capture the carbon dioxide and it's pumped back into the ground. It can be stored there, and it has a less than 1% chance of escaping over a 5,000-year period. It's very safe. It solidifies as it's pumped into the ground, and it also can be used for safe storage, but it also can be used for enhanced oil recovery.
It's expensive technology, but that is what the world is counting on, and that's the leadership that Canada is providing. The leadership is requiring that the Canadian oil sands will have to use that.
Also, Canada must reduce emissions from the dirty coal-fired electricity generation--carbon capture and storage again. The new coal plants that are going to be built in Canada have to use carbon capture and storage.
So it's a very good-news story. I'm sure, Chair, it's something that excites you, because you've been aware of it for a number of years, and it's good news for Canada, but it's also good news for the world.
Many Canadians are not aware that in many provinces much of the electricity we use at home and at work is generated by coal-fired power plants. The Government of Canada believes it is simply irresponsible to keep building dirty coal-fired power plants. Coal-fired plants will have to meet a tough new emission standard. We'll also bring in regulations that will effectively end the construction of dirty coal-fired plants starting in 2012. This is all part of our regulatory Turning the Corner plan. Utilities that want to build coal-fired plants in the future will be required to meet targets based on the use of clean technologies such as carbon capture and storage.
These tough regulatory requirements will reduce greenhouse gas emissions from the oil sands and electricity sectors by about 90 megatonnes, or 55% of the total expected reductions of the 165 megatonnes from industry, by 2020. This will be challenging for those sectors, but the government is confident they will step up and meet the challenge. It will happen.
All together, our government's industrial regulations will achieve half the reductions required to meet our national target of 20% reduction by 2020. These regulations will change how Canada produces and uses energy and will impose a price on carbon that will rise over time, and they will impact the entire economy. As such, they will provide important new incentives for innovation and new opportunities to develop Canadian green technologies.
Chair, I was at the GLOBE conference two weeks ago. At the trade show, it was wonderful to see what was happening in the technologies here in Canada.
We saw Iogen, a company that creates ethanol from waste product, from straw. They break it down using an enzyme to create alcohol, and it's 100% alcohol. It's like a big still. They mix gasoline with the alcohol to create ethanol, and it's called E85. arrived at the GLOBE conference in an E85-powered vehicle.
When I fuel up, there are gas stations already in British Columbia where you can buy ethanol. It's rated up to 10%.
But this is where the government, through a mandatory regulation--no longer voluntary--is moving forward with cleaner fuels and cleaner technology. In the end, we end up with absolute reductions of 20% by 2020. And we set a good example. We also end up with cleaner air for healthier Canadians.
The Government of Canada is taking further action that will cut greenhouse gas emissions from transportation and from buildings. These actions include mandatory renewable fuel content in gasoline, diesel, and heating oils. A moment ago, I mentioned what we saw at the GLOBE conference. It was very interesting.
For the first time in Canadian history we will have tough new fuel consumption standards for cars, light trucks, and sport utility vehicles. These are some of the toughest targets in the world and definitely in Canadian history. The vehicles--cars, light trucks, and sport utility vehicles--will have to burn less fuel and become more energy efficient.
New energy efficiency requirements for a wide range of commercial and consumer products such as dishwashers and commercial boilers and new national performance standards that'll ban inefficient incandescent light bulbs are actions the government is requiring with our Turning the Corner plan.
But we can already do that. We already have that technology and we are moving forward. These are minimum standards--20% reduction by 2020--but Canadians can already start doing that.
Chair, I've had the great pleasure of buying new fluorescent-type light bulbs as replacements and I've seen my electricity bill drop significantly. It's a nice light, and you can get different types of fluorescent lighting, all using much less energy. Instead of a 60-watt bulb, it's an 11-watt bulb. If you replace all the bulbs in your house, all of a sudden you're saving a lot of electricity. But there is different lighting. Some of the bulbs have a soft glow and some are very bright.
We are implementing ways of reducing our carbon footprint and cleaning up the environment.
Our government has also launched a broad suite of ecoACTION programs that will complement our regulatory initiatives and stimulate the growth of renewable energy and fuels: energy-efficient homes and buildings, fuel-efficient cars and trucks, and increased public infrastructure.
So we believe that the federal initiatives to reduce greenhouse gas emissions—making our cars, our homes, and our industries much more efficient in their energy use—can achieve greenhouse gas reductions of 65 megatonnes from projected levels by 2020, equivalent to taking more than 16 million cars off the road, or eliminating the combined emissions of New Brunswick, Nova Scotia and Manitoba. So these are very large numbers.
These tough federal regulatory and other actions are expected to result in greenhouse gas reductions of 230 megatonnes from projected levels by 2020. That is a huge number, Chair. Yet even with these tough new federal regulations and the promises of some provinces to close dirty coal-fired power plants and to increase their use of renewable and nuclear energy, the emissions from electricity generation are projected to be 90 megatonnes in 2020—still the single largest source of greenhouse gases in Canada.
The Government of Canada wants to achieve additional emission reductions from the electricity sector of 25 megatonnes by 2020—and that's in only 12 years from 2008. So in this very short period of time, there will be an additional 25 megatonnes in reductions from the electricity sector, equivalent to closing seven large coal-fired power plants. We're therefore setting up a clean electricity task force to work with the provinces and industry to meet this goal. If required, the Government of Canada is ready to use its regulatory powers to ensure that these cuts are achieved.
Provincial governments are already committed to targets that would require achieving greenhouse gas reductions of as much as 300 megatonnes by 2020. Over 200 provincial initiatives have been developed to date to begin achieving those great goals. While some of these initiatives overlap with federal actions, it is estimated they will provide an incremental 40 megatonnes in emission reductions by 2020. Most provinces have indicated they're planning to do even more to meet their own targets.
The Government of Canada has provided over $1.5 billion in new funding to the provinces and the territories to support their climate change initiatives. That's good news. I want to thank the Liberal members for supporting that. Unfortunately, the Bloc and the NDP voted against that $1.5 billion in initiatives to fight climate change.
We're convinced it's realistic and achievable for provinces and territories to take further action in the areas where they have important responsibilities, such as building standards, public transit, and urban planning. This is very important: public transit will not be successful if you do not have well-planned, sustainable communities.
We expect that the provinces will introduce new measures that will result, at minimum, in an additional 35 megatonnes of reductions in greenhouse gas emissions. These will enable Canada not only to meet but, potentially, also to surpass its national target of a 20% absolute reduction in emissions from 2006 levels by 2020.
Canada will play an important role in negotiations to develop a new international agreement on climate change, with contributions from all the major emitters, including the United States and China and India. We should be seeking to ensure that global emissions are cut at least in half by 2050. The Government of Canada has committed to achieving a 60% to 70% reduction in Canada's emissions by 2050.
At home, we will stop the dramatic growth in our greenhouse gas emissions and cut them by 20%, in absolute terms, between now and 2020, as I pointed out, which is only 12 years away. This will require all of us to do our part: the federal, provincial, and territorial governments; municipalities; industry; and individual Canadians. Together we can meet our target. In doing so, we as a country will put in place large-scale carbon capture and storage and other existing technologies; we'll generate 90% of our power from sources that do not emit greenhouse gases; and we'll increase electricity from renewable sources, like wind and wave power, by 20 times. These are examples of this government actually getting it done. We'll cut greenhouse gas emissions from coal by more than 50%. We'll increase average fuel efficiency in new vehicles by 20%. We'll improve Canada's energy efficiency by 20%. That's our national energy efficiency.
These and other actions will change the path of Canada's greenhouse gas emissions. Canada will move from rapid growth to achieving absolute reductions of 20%, based in 2006 levels, and a reduction of 330 megatonnes from projected levels in 2020.
The challenge to meet these targets by 2020 is great. It's a big challenge. However, the Government of Canada believes in the commitment, ingenuity, and willingness of Canadians to tackle the challenge of climate change while continuing to grow our economy. Together we are ready to face the challenge and to win.
Chair, we need to win. We need to reduce the amount of greenhouse gases that each of us is responsible for. There are lots of opportunities and lots of ways to find out how we can reduce our carbon footprint. And it's fun to do. As I mentioned earlier, I replaced all my light bulbs, but I also bought a new hot water tank and found out that the new hot water tank was a lot more efficient. Also, when I leave the Hill, I turn my hot water tank off. Why heat water when we're not here? So I've done that. At home, I've reduced the temperature of the hot water tank. I have a new efficient hot water tank and efficient light bulbs.
What's also good is that I'm not the only one doing it and that it's fun; we have a lot of Canadians doing it. With more and more energy-efficient light bulbs available, the prices have come down. And we have a way of disposing of the light bulbs, because you don't want to just take the fluorescent bulbs and dispose of them in the regular garbage. You want to bring them back to where you got them. They will collect them and dispose of them in a safe manner, because the fluorescent bulbs have mercury, and you do not want to just throw them away and have them break and release the mercury.
That brings up another point, Chair. The government is very concerned about the mercury content in our environment. That's why we have a new program requiring vehicles that are scrapped to have the switches taken out of them to capture that mercury. We do not want it released into the atmosphere. The days of using our atmosphere as a dumping ground for greenhouse gas emissions, for mercury, and for pollutants are over. This government is very serious about reducing the amount of greenhouse gases we're putting into the air.
Our regulations will have real, tangible health and environmental benefits for Canadians. These benefits, in turn, will have positive economic effects. A robust regulatory system will also promote technological investment and innovation in Canada, yielding long-term economic benefits from enhanced productivity, improved energy efficiency, greater competitiveness, and more importantly, the ability to sell Canadian products and know-how abroad.
When I was at that global conference, it wasn't just Iogen that I saw there. I saw energy-efficient vehicles. I saw solar technology. I saw a technology for operating rooms. The gases coming from the anesthetics that are provided in operating theatres have 12,000 times the impact of carbon dioxide, so capturing those gases and having them brought down and managed in a safe manner is very good for the environment: 12,000 times carbon dioxide from the operating theatres.
Instead of having methane, which is a natural gas but is 21 times stronger than carbon dioxide, you capture that from landfills, from animal waste, and just by flaring it, it becomes carbon dioxide, but you can capture that and use that as a commodity to run vehicles. It provides a balance within our system. Instead of pulling more fuels from below the earth, we recycle what we already have above the earth. It provides that technology not only for Canadians but for the world.
We saw that at the trade show. It was exciting that a lot of that technology is happening right here in Canada. We're sharing that with the world too.
We also saw Iogen. As well, we saw other waste products, cellulose waste, trees. They can take trees, or waste product from trees, and make fuel from it too, which I think is a better way than taking food stock. We use cellulose technology to create the ethanol, and you can then run your cars and vehicles in a much more environmentally friendly way.
Each of us needs to do our part, but a lot of the world-leading technology is right here in Canada. It's very exciting.
Strong regulations will inevitably come at a cost, and those costs will be borne, at least in part, by every individual Canadian and his or her family. Consumer products, including cars and home appliances, could become more expensive. Electricity and fuel prices will rise. All Canadians must be prepared to bear this extra responsibility in order to get the job done. This government is committed to doing that, and I know Canadians are too.
In implementing the clean air regulatory agenda, the government will work with provincial and territorial governments, industry, environmental health groups, scientists, municipalities and communities, and individual Canadians. These partnerships will ensure that all segments of Canadian society have the opportunity to reduce their emissions and achieve a cleaner, healthier Canada for current and future generations—other examples of this government setting the example and getting it done.
As a side note, we have now hydrogen-powered buses on the Hill. The typical bus that we see running around on Parliament Hill is a green bus, and there are some white buses for the Senate. But we also now have hydrogen-powered buses. They're burning hydrogen, and the only thing coming out of the exhaust pipe is water. It's very exciting, another example of Canadian technology.
The government is also taking other action. In the last Speech from the Throne, the government committed to take measures to achieve—
It's a good-news story.
Did the Bloc support extending the public transit credit to different types of public transit, enhancing public transit? No. Did the NDP support that? No. We have a very serious trend here, where the Bloc and the NDP are not supporting environmental programs.
We provided funding to protect Canada's natural heritage, including $225 million for conserving ecologically sensitive lands and $110 million for protecting species at risk. Surely the Bloc would have supported that. They didn't. Did the NDP support that? No.
Our plan included $22 million over the next two years to strengthen environmental enforcement. You can make laws, but if you don't enforce them you are not going to have an effect. Volunteerism only works to a point. You need to have mandatory regulatory framework and it has to be enforced. Did the Bloc support enforcing the environmental laws of Canada? Did the NDP support that? No.
We provided $92 million over two years to improve the water that Canadians drink, to clean polluted water, to protect ecosystems, and to ensure the sustainability of Canada's fish resources. We included over $200 million in funding to renew the Canadian Coast Guard fleet and support fisheries, science, and research. Again, the Bloc and the NDP did not support that. Canadians wonder why not.
These initiatives will deliver real results while industrial regulations are developing, and will promote the technology innovation required to support upcoming regulations. In addition, these initiatives include the regulations to set Canada on the road to making real progress toward its Kyoto commitments to reduce greenhouse gas emissions. The real reductions in emissions that will be drawn by the regulations, coupled with the impact of both the non-regulatory actions above and the ambitious new initiatives being taken by provincial and territorial governments, mean that Canada's greenhouse gas emissions from all sources are expected to begin to decline as early as 2010. My colleagues brought that to the committee's attention. It's already happening. The environment is already cleaning up. We're getting it done.
I think it was who said that their focus has been on trying to get the government to fail. It's not working. The government is moving forward. We have a regulatory plan, a Turning the Corner plan that is already seeing results. Therefore absolute emissions continue to decline.
The government is committed to reducing Canada's total emissions of greenhouse gases by 20% by 2020, and by 60% to 70% by 2050. The government supports the Kyoto process--I think I'm hearing an echo here--and actions at home that will be the basis for Canada's participation in future international cooperative efforts to reduce greenhouse gas emissions globally. We've seen our minister, , do an incredible job making sure the post-Kyoto negotiations were successful in Indonesia.
We all need to do our part. Greenhouse gas emissions are affecting Canada. We're already seeing the results of a warming climate in Canada, but we're also seeing it globally. Canada is doing its part and taking that leadership that was not there for a number of years. We're also encouraging all the international major emitters to reduce greenhouse gas emissions.
At this point, 30% of the major greenhouse gas emitters are part of the Kyoto agreement. We need everybody to be willing to reduce their greenhouse gas emissions, and that's what we're pushing for. Wouldn't it be wonderful to see everybody signing on and agreeing to a post-Kyoto target that included all the major emitters agreeing to reduce their greenhouse gases? And Canada is providing that leadership.
Significant long-term progress on greenhouse gases and air pollutants will be realized only through the development, commercialization, and employment of new, cleaner energy and transportation technologies, and through the active participation of all Canadians and all aspects of Canadian society. The government recognizes the need to work with all consumers, with industry and the provinces and the territories, to move forward to implement this aggressive plan. All Canadians will need to do their part to reduce greenhouse gases and air pollution to help protect their health and their environment.
On October 21, 2006, our government published a notice of intent that imposed an integral, nationally consistent approach to the regulation of greenhouse gases and air pollutant emissions in order to protect the health and the environment of Canadians. Because greenhouse gases and air pollutants share many common sources, the coordination of requirements will allow firms to make cost-effective decisions to maximize synergies in reducing their emissions. As you reduce the amount of greenhouse gases being emitted, you often are reducing the pollutants that are also going in the air, for the benefit of the health of Canadians. And in our Turning the Corner plan, we have a reduction in air pollutants in half by 2015—a very short period of time. These are huge, aggressive targets that will be achieved for the health of Canadians.
The government has signalled its determination to address greenhouse gases and air pollutants from key sources and has outlined a regulatory agenda for industrial sources, and transportation and consumer and commercial products, for more stringent energy efficiency standards and improved indoor air quality. The government is committed to these targets of a 20% reduction by 2020, and 60% to 70% by 2050.
Environmental protection is an area of shared jurisdiction between the federal and the provincial and territorial governments. The federal government has clear jurisdiction to regulate air emissions in order to protect the environment and the health of Canadians. The government recognizes the importance of endeavouring, in cooperation with the provinces and territories and aboriginal peoples, to achieve the highest level of environmental quality for all Canadians.
The provinces have taken important action to reduce air pollution emissions in their own jurisdictions. However, national consistency is necessary to provide a minimum level of air quality for all Canadians to ensure a level playing field and to protect the competitiveness of our Canadian industry in different regions by avoiding a patchwork of different regulations being applied to the same industrial sectors.
My colleague Mr. Harvey has brought up the point a number of times that the production of one tonne of aluminum produces four tonnes of carbon dioxide when it's produced in Canada, but in China it's seven. And with growing technology, my hope is that the four tonnes will be reduced more and more. So we need to make sure it's Canadian technology, the very best of technology, being used for aluminum too.
An integrated, nationally consistent approach will enable firms to reduce their emissions in an efficient and cost-effective manner. Again, Canada has to stay competitive. We don't want jobs leaving Canada; we want jobs in Canada. We want Canadian technology used to benefit the world globally for greenhouse gas emission reductions. The federal government has never—never—regulated emissions of greenhouse gases or air pollutants across industries before. This is the first government in Canadian history to do this.
For industrial sources, the October 2006 notice of intent to regulate indicated that the government would introduce a framework for short-term targets and compliance options by the spring of 2007. In the transportation sector, the Prime Minister reaffirmed, in his speech on February 6, 2007, that for the first time ever Canada's new government would regulate the fuel efficiency of motor vehicles, beginning with the 2011 model year. That's three years from now.
There's currently a memorandum of understanding between the auto industry and the government with a target of 5.3 megatonnes of greenhouse gas emission reductions by 2010. That will be regulated for the 2011 model year, and the memorandum of understanding will end. The government will build on this agreement to establish an ambitious regulated fuel efficiency standard for the 2011 model benchmarked against a stringent dominant North American standard. That's good news. We need to have a level playing field, we need a clean environment, and it needs to be by regulation, and that is happening.
The government is also developing and will implement regulations to reduce smog- and acid-rain-forming emissions from vehicles, engines, and fuels. It will take action to reduce emissions from other modes of transportation, including rail, aviation, and marine. I live on the west coast, and marine is a very big contributor to greenhouse gas emissions and air pollution, and our government is taking action on that.
The government is developing regulations that strengthen energy efficiency standards and labelling requirements for consumer and commercial products. The government is also developing, for the first time, a comprehensive regulatory agenda that will address indoor air quality--the first government to do that.
The goal of these actions is to improve significantly and measurably the health of Canadians and the environment by reducing greenhouse gas emissions and air pollutants.
Since the publication of the notice of intent in October, work has been ongoing on each of these priorities. The process you go through to end up with regulations has begun, and it began in October 2006. Two draft regulations in the transportation sector to reduce smog-forming pollutants from vehicles and engines have been published in the Canada Gazette. Work has also begun on a series of amendments to the energy efficiency regulations.
As I indicated in the notice of intent, an integrated approach to reduce emissions of greenhouse gases and air pollutants has been taken to maximize the benefits to the health of all Canadians and to the environment. In the notice of intent, the government committed to develop and implement an integrated, nationally consistent approach to the regulation of industrial air emissions.
As you can see, Chair, what I am speaking to relates directly to clause 10 of Bill . In November and December of 2006, extensive consultations were undertaken with the provinces and territories, industry, aboriginal groups, and health and environmental groups on elements of the proposed approach and the development of the regulatory framework. A companion document was published to further elaborate and present elements and options for consultation. These consultations and the public comments received in response to the notice of intent have informed the development of the regulatory framework.
The regulations will mandate reductions in emissions of greenhouse gases and air pollutants from the following industrial sectors: electricity; electricity generation produced by combustion; oil and gas, including upstream; oil and gas, downstream; petroleum; oil sands; and the natural gas pipelines.
Chair, we have a vote happening. I have much more that I'd like to share, and that's why I didn't believe we would complete today. I think we could complete it in another day.
At this point I would move that we adjourn.
Thank you so much, Mr. Chairman. It's always good to talk about the environment.
Mr. Rodriguez is here. We have some new faces.
Anyway, the government will validate the benchmarked air pollution targets over the next several months. The government will work with industry, the provinces and territories, labour, and environmental and health groups during the validation process. The regulatory framework for air pollutants—that is, the targets, the compliance mechanisms, and the timetable for the entry into force of the regulations—will be finalized in the fall of 2007, which it was, and after the government has validated the benchmarked air pollutant targets.
While this validation process is under way, we've developed sector-specific regulations for the general provisions and those related to greenhouse gases, leading to publication of the draft regulations in Canada Gazette, Part I, in the spring of 2008. The regulations will be revised to incorporate the air pollutant provisions a few months later, following normal regulatory procedures.
So it takes time for a regulation to be implemented, and that whole process has begun. For those who weren't here, it's a process that is already having positive effects.
What's being proposed by Bill , we know, will not have effects. It is, again, one of those announcements with no substance. Yet the government, with our Turning the Corner plan, does have a regulatory process that will see absolute reductions of 20% by 2020, and 60% to 70% by 2050—the toughest in Canadian history and one of the toughest in the world.
The government will monitor the evolving regulatory framework as the regulations are developed and implemented over the two years and will make adjustments as needed.
In addition, the government is committed to reviewing the regulations on industrial air emissions every five years in order to assess progress in reaching medium- and long-term emission reduction objectives. The first such review would take place in 2012. The review would entail an assessment of the effectiveness of measures taken to reduce greenhouse gas emissions and air pollutants, and of advances in industrial technology—energy production, industrial processes, and pollution abatement—in order to determine the potential for further emissions reductions consistent with the goal of continuous improvement. The review would also examine the state of air quality and possible changes in the Canadian industrial sector mix, including regional changes, that could affect the goal of achieving tangible benefits for the health of Canadians and the environment.
The federal government will set stringent national standards and will work to reach equivalency agreements with those provinces that set provincial emissions standards that are at least as stringent as the federal standards. We're already seeing that happening. Equivalency agreements will allow provincial leadership, while ensuring a national level of health and environmental protection—again, strong federal leadership.
You don't see that in Bill . You see, again, the whole structure, as Mr. Vellacott said, built on a very shaky foundation. You see now, with the Turning the Corner plan, a very clear, strong mandatory regulatory framework that is already having positive effects for Canada's environment and for the global environment. As the proposed federal regulations are developed, the government intends to work with provinces and territories to avoid, as much as possible, any duplication and to ensure consistency in the way in which regulations are applied, again respecting provincial jurisdiction. We heard from the witnesses that Bill would give broad and unlimited powers to the federal government over the provinces.
Now, I was quite sure that the Bloc would then not support Bill C-377, but they did. They've made some amendments, but they do not want to hear from any witnesses to find out if their amendments are effective. Of course, our government wants to respect provincial jurisdictional responsibilities and authorities. In our regulatory framework of the Turning the Corner plan, it's very clear that we are proposing a plan that does respect provincial jurisdiction. It's already happening. It's already having a positive effect, and Bill C-377 would take us far from that. That's what many of the witnesses were indicating.
Most provinces restrict the emissions of air pollutants; however, standards vary considerably across the country. Alberta has also recently released draft regulations to reduce industrial greenhouse gas emissions in its territory. Since the federal government recognizes the important role played by the provinces and territories and their management, work will be undertaken with interested provinces and territories to make the best use possible of equivalency agreements. When an equivalency agreement has been reached, the Governor in Council can suspend the application of the specified CEPA 1999 regulations in the signing province so that only the equivalent provincial regime applies. That's good. The federal Minister of the Environment remains responsible for reporting annually to Parliament in the administration of the CEPA 1999 provisions that permit these equivalency agreements.
Again you have the minister reporting directly to Parliament--another good part of Turning the Corner. CEPA 1999 authorizes the minister to enter into an equivalency agreement with a province, territory, or aboriginal government if the minister and the other jurisdictions' governments demonstrate that there are provisions in force in that jurisdiction that meet or exceed the equivalent level of environmental protection mandated by the federal regulations in force, and include rights similar to those prescribed in sections 17 to 20 of CEPA 1999--the right of citizens to request an investigation of alleged offences under the other jurisdictions' legislation. We see this missing in --sweeping powers, unlimited powers over the provinces, which is not in the provincial interest--and also we heard clearly that there would be a constitutional challenge. Yet we have already in place a respecting of those provincial jurisdictions in the Turning the Corner plan.
And clearly we have taken action already with the toughest targets in Canadian history, and that is very preferential to , which we have heard is actually a hollow and phony bill.
Provincial enforcement certificates of approval, or permitting, or licensing systems can be recognized as a basis for an equivalency agreement. Once an equivalency agreement is negotiated, the Governor in Council may make an order declaring that the provisions of CEPA 1999 regulation that are the subject of the equivalency agreement do not apply in the jurisdiction of a particular province, territory, or aboriginal government with which the agreement has been negotiated. The result is that the regulation, or a portion of it, would stand down, leaving the subject matter of CEPA 1999 regulation to be governed by the laws of the province, territory, or aboriginal government with which the agreement was negotiated.
Regarding short-term emission intensity targets, the government has put in place a short-term emission intensity reduction target that will come into force in 2010. These targets will result in absolute reductions in emissions of greenhouse gases from industry as soon as 2010 and no later than 2012.
It is clause 10. I'm sharing the importance of having targets that are realistic and that are achievable. The difficulty we've had with is that there are targets that haven't been costed.
We've asked Mr. Cullen if he would accept a motion, but we haven't made a motion. I was just testing the waters: would he accept having it costed, as recommended by the witnesses? The instructions he has from his leader now are not to have that, which is disappointing. The Commissioner of the Environment advised that there be an analysis. This is what we heard from every witness group. Of course, the NDP, after introducing the bill and recommending that it be costed, is now suggesting that they don't want Parliament to be making a decision based on facts; they want emotional targets.
We agree that we need to set the toughest targets in Canadian history, and we have done that. Our Turning the Corner plan does that. It builds on intensity targets, and within a very short period of time, by 2012, we have absolute reductions coming. By 2020 we'll have absolute reductions of 20%, again the toughest in Canadian history.
We heard from the witnesses previously that intensity isn't bad; what's important is how tough those intensity targets are. Of course, they are mandatory, concrete intensity targets that will result in absolute reductions, which is good news for Canada and good news for the world. The targets will also make a vital contribution to the government's commitment to reduce the national absolute greenhouse gases by 20% by 2020.
The government is introducing the toughest action in greenhouse gases ever proposed by a Canadian government. The government's emission intensity targets are 6% more stringent, at 18%, than the emission intensity targets proposed on July 16, 2005, at only 12%. Unlike the 2005 proposal, our Turning the Corner plan also requires annual improvements in emission intensity of 2%, meaning that by 2015, a 26% emission intensity improvement will be required under this plan. It's huge.
Short-term mandatory reductions in greenhouse gas emissions by sector are defined in terms of reductions in emission intensity from their emission intensity in 2006. That's the base year.
Each country has its own unique circumstances. Globally, everybody needs to reduce greenhouse gas emissions, as we all agree, hopefully; some may not. The reality is that everybody has to do their part globally or greenhouse gas emissions will continue to rise. We need to get all the major emitters, including the United States, India, and China, reducing their emissions too.
Greenhouse gas emissions per unit of production are capped under our plan. We don't hear any details in . It's unfortunately missing any details. We heard that from the witnesses. All they are, are targets, with no idea how they are going to be achieved. The NDP leader, Mr. Layton, equated it to building a railway, with no idea how he was going to do it, but he had a dream.
Our plan, the plan, which will be effective and is already being effective in reducing greenhouse gas emissions, has the units of production capped. The regulatory release limit for individual facilities within a given sector that will be needed to achieve this overall percentage reduction will be determined as part of the process to develop the detailed regulations.
The emission intensity approach ties targets to production. This means that firms will not be able to claim emission reduction credits by shutting down production for environmental reasons or obtain credits for moving production out of Canada. Rather, credits can only be earned through cleaner production. More importantly, these rigorous targets will yield absolute reductions, even as the economy grows. As the World Resources Institute noted in a 2006 report, “For environmental performance, what matters overall is that targets are set at reasonably stringent levels and subsequently are met. This may be achieved with absolute or intensity targets.”
Again, this is what we see missing in Bill --no details, no direction, no substance on how their targets can be achieved, no costing, and no impact analysis.
The approach for determining the emission intensity targets for each sector in the Turning the Corner plan is based on an improvement of 6% each year from 2007 to 2010. This yields an initial required reduction of 18% from 2006 levels in 2010, the year the proposed greenhouse gas regulations would come into full force. Every year thereafter, a 2% continuous improvement on emission intensity would be required. By 2015, therefore, a reduction in emission intensity of 26% from 2006 levels would be mandated. This basic approach will be applied to existing facilities in each industrial sector.
The 18% emission intensity reduction calculation applies only to combustion and non-fixed-process emissions. Regulatory release limits per unit of output for existing facilities would reflect this.
Predefined fixed-process emissions would have a zero percent reduction in emission intensity from 2006 levels in 2010. Fixed-process emissions are emissions tied to production for which there is no alternative reduction technology. The only way to reduce these emissions is to reduce production. Processes that are currently considered fixed may not be considered fixed in the future if technologies or processes are developed that could reduce or capture and store the emissions. At the sectoral level, the share of total emissions that are fixed-process emissions varies. For each sector, the basic approach will be an 18% reduction from the 2006 levels in 2010, with continuous improvement in emission intensity thereafter.
Fixed-process emissions will have to be determined on the basis of the characteristics of firms and sectors. To provide sufficient time for the facilities to reach normal operating levels, new facilities will be granted a three-year grace period before they have to meet an emission intensity reduction target. After the third year, the initial greenhouse gas emission intensity target will be based on cleaner fuel standards. New facilities will also be required to improve their emission intensity by 2% each year, as do existing facilities. New facilities are defined as those whose first year of operation is 2004 or later.
The three-year grace period means that no improvements are expected in the first three years of operation, and no target will apply during these years. Targets begin to apply in the fourth year of operation, even if that year is before 2010. For example, a facility that began operation in 2005 will begin to face a target in 2008, based on its emission intensity performance in 2007 and on the application of the cleaner fuel standard. A flexible approach to implementation will be taken in those special cases where the equipment used in a plant facilitates carbon capture and storage or another technology offering significant potential for emission reductions.
The approach I've just described is the one that will be applicable across the full range of industrial sectors. Specific sectoral issues will be considered in developing the regulations, but all resulting emission reductions must be equivalent to those resulting from the general approach.
The continuous improvement of 2% in a sector's emission intensity would be applied through 2020. As I noted, there would be a review of the regulatory framework, including targets, every five years. The first review would take place in 2012. This is what's missing in--
I appreciate Mr. Cullen's comments, but in fact I am speaking specifically to clause 10. I'm not going to read clause 10, because we've already done that and we all have clause 10 in front of us.
What we see definitely missing in is the absence of what I'm presenting. Canada has a regulatory framework called the Turning the Corner plan, and this is missing in . We heard from the witnesses that it won't accomplish anything, because there's nothing there to accomplish.
In Canada, we already have the Turning the Corner plan, which sets the toughest targets in Canadian history. Mr. Cullen has asked for the target. So I'll remind him that it's 20% by 2020, which is the toughest target in Canadian history, and 60% to 70% reduction, absolute reduction of greenhouse gas emissions, by 2050. It's never happened before. We've never had such targets in Canadian history, but it's happening now.
The first review will be in 2012. Under the proposed greenhouse gas regulations, firms will have several options to take in meeting their legal obligations. Ideally, firms will reduce their own emissions through abatement actions such as energy efficiency measures, improved energy management systems, and deployment of carbon capture and storage or other emission-reducing technologies.
Are we seeing any of that in ? No, we're not. In the Turning the Corner plan, there will be limited access to other compliance mechanisms. First, firms could meet their compliance obligations through contributions to a technology fund. That's good. mentions the technology fund, which already exists in the Turning the Corner plan.
Secondly, they will have access to emissions trading, including inter-firm trading, emission reduction credits for non-regulated activities, and qualified credits from the Kyoto Protocol's CDMs, or clean development mechanisms. This is missing in . They have a bit about market-based mechanisms such as emission trading and offsets, but we already have that in Canada's Turning the Corner plan. So is redundant. The few tools the bill mentions are already in the Turning the Corner plan. Maybe they're copying the plan.
Also, there will be a one-time recognition of firms that took early verified action between 1992 and 2006 to reduce their greenhouse gas emissions. Is that in ? No, it's missing and it shouldn't be missing. Well, maybe it should be, because maybe we don't need .
Finally, linkages to the North America emissions trading system will be actively pursued. Over time, as the international carbon market becomes more developed and robust, and as emissions verification and reporting systems evolve further, government will consider further international linkages. All this is missing from .
It's important to have a plan that will be effective. This is the warning that the witnesses were giving us about . I'm going into details that may seem a little long, but details are important in a plan that will be effective. You can't just have ineffective targets like those of the Liberals—13 years of not getting it done. But we now have a plan. It has all changed. We have a plan that is effective in reducing greenhouse gas emissions. It's an effective plan. But we all have to actively participate and do our part and not come up with phony bills that aren't going to do anything. That's what we heard from the witnesses.
Over time, as the international carbon market becomes robust, you will see Canada taking an active part. Canadian business and industry will actively participate in trading in the carbon market, which will begin in Canada. We're glad it's going to be based in Montreal. I think Mr. Bigras is happy about that too. Canadians are. It's the market that's decided where that's going to be. It's in Montreal. It's part of our regulatory framework. Canadians need this dependability to be able to begin the trading regime. And it began because we have a Turning the Corner plan.
Bill would turn the clock back. It's a plan with no substance, no meat on the bones, and it would destroy the good inertia to clean up the environment that we now see in Canada. Bill is definitely a bad idea.
Technological advancement and innovation are critical to achieving significant long-term reductions in greenhouse gas emissions. New technologies, both under development and ready for deployment, provide a means to transform Canada's industrial production and thereby significantly reduce emissions. I'll refer again to Mr. Harvey's example of the number of tonnes of carbon dioxide that are created by producing a tonne of aluminum. One tonne of aluminum in Canada produces four tonnes of carbon dioxide; in China it's seven tonnes. So where should the aluminum be made if we're seriously concerned about the environment? With Canadian technology, those four tonnes of carbon dioxide will be reduced, and I believe reduced substantially.
That's just one example of one manufactured product that needs to be developed with the cleanest technologies, and that's why we need to get all the major emitters as part of the solution. Canada is doing its part, and those technologies are being developed in Canada.
Under the Turning the Corner plan--not under Bill , which is missing all these details--firms would be able to meet part of their regulatory obligations to reduce greenhouse gas emissions by contributing to the technology fund. This fund would provide more than just a compliance mechanism for industry; it would act as an important means for promoting the development, the deployment, and the diffusion of the technologies that reduce emissions of greenhouse gases across the industry. Again, that is missing from Bill .
A third party entity would be created to administer the technology fund. Is that in Bill ? No. This would be an independent, not-for-profit entity administered by a board of directors composed of individuals originating from industry, federal and provincial governments, and other stakeholders. It would operate under a federal mandate. Again, it's missing with Bill . Is it an important tool that needs to be part of an effective plan that will see absolute reductions in greenhouse gas emissions? Absolutely, but it's missing in Bill . It's not part of any of the amendments either. It's missing in clause 10 of Bill C-377.
The process of determining the allocation for funding to projects and the legislative authority, governance, and administration of the fund has to be developed, and it is being developed. The design of the fund will respect two basic principles: no inter-regional transfer of wealth and no government control. These are very important items, and again there are no details of anything like that in Bill . It's missing a very important tool for industry.
Before finalizing the structure of the fund, the government will work with the provinces and territories, as well as the sectors, to determine the appropriate disbursements of the fund, taking into consideration the development and employment of technologies that would be used by sectors with facilities across the country and provincial initiatives that support the development of technology to reduce greenhouse gas emissions and potentially the air pollutants as well. Again, there are the dual benefits. Does Bill talk about those dual benefits? No, it doesn't. Should Bill C-377 talk about dual benefits for the health of Canadians and the health of our planet? Yes, it should, and they're missing. It's a big mistake and it's one of the problems with Bill C-377.
Again with reference to the technology fund, other funds that meet all necessary requirements could be certified to qualify as part of the regulatory framework. In particular, provincial funds that are consistent with the federal fund could be recognized as equivalent through working with the provinces. It's very important to have that.
The fund would primarily be used to fund investments that have a high likelihood of yielding greenhouse gas emission reductions in the short term. The primary focus will be funding technology deployment and related infrastructure projects. Carbon capture and storage is one of the most promising technologies for reducing greenhouse gas emissions associated with a broad array of industrial activities, and I don't want to go over again the importance of carbon capture and storage, but I believe the other country that has that technology is Norway. The amount of carbon it captures and pumps into a geological formation in the water from a platform is, I believe, about half as much as at the Weyburn, Saskatchewan, plant. We've had our plant in Weyburn pumping carbon dioxide into geological formations for the longest time of any plant in the world. It's the biggest in the world. It's about twice the size of that in Norway, I believe.
What happens is that carbon dioxide can be stored. It becomes limestone over the years. It solidifies into the rocks. When you first inject it into the strata that are holding the oil, it creates an increased viscosity for the oil. The oil is not in a big pool; it's impregnated in the rocks, and as you inject the water and the carbon dioxide into that strata, the viscosity of the oil is increased. So oil fields that weren't active anymore, like those in Weyburn, now become productive oil fields again. That carbon dioxide and water is recovered then and reinjected back in along with the enhanced oil recovery.
So with carbon capture and storage, I was sharing with you that as one injects the water and carbon dioxide mix into that geological formation—and Canada has an ideal geological formation in Alberta, up along the Rockies—we would be able to put that carbon back where it came from, below the earth. Carbon capture and storage is a technology that the world is hoping will accomplish about 25% of the problem.
So along with the efficiencies and cleaner fuels, the technology that is showing the biggest promise is carbon capture and storage. It is a great technology in Canada, and it's part of what we're proposing. Are these kinds of details in the plan of ? No, they are not; they're missing. Again, there are general targets set, with no substance attached to how these targets are going to be achieved. There's no costing, and there are jurisdictional problems. So what it is important to realize is that Bill C-377, if it were to move forward and be supported by the Liberals and the Bloc—who would be supporting the NDP's bill—is a good bill in principle, but it is missing all the details.
Bill C-377 is missing a fund, yet the fund in the Turning the Corner plan would support critical infrastructure—for example, carbon capture and storage, including a pipeline in Alberta for carbon dioxide transport. We have the plant at Weyburn, Saskatchewan, that pumps the carbon dioxide from North Dakota, 300 kilometres north, and it's very effective. So we need to be able to come up with a pipeline that would be able to move the carbon dioxide. You purify it and condense it. And you have to have a program where we get the dollars where they are needed.
So you should build that technology, and it won't happen just by having . Bill C-377 won't accomplish that, whereas the Turning the Corner plan—what we have in Canada now—will accomplish that and is supporting that.
Now, I want to thank the Liberal members for their support of our Turning the Corner plan. They have supported that, but unfortunately the Bloc hasn't supported it and the NDP has not supported the funding of this great technology.
Our technology fund could also support an east-west electricity grid linking markets from Manitoba to Newfoundland. As a way of meeting part of our regulatory obligations, firms could contribute to the fund at a rate of $15 per tonne of carbon dioxide equivalent from 2010 to 2012, and $20 a tonne in 2013. Thereafter the rate would escalate yearly at the rate of growth of nominal GDP. This rate structure would be reviewed every five years as part of the general review of the regulatory system.
Do we see these details in ? No, we don't. They're all missing. Yet in the Turning the Corner plan, it is very clear. Contributions to the deployment and infrastructure component would be limited to 70% of the total regulatory obligation in 2010, falling to 65% in 2011, 60% in 2012, 55% in 2013, 50% in 2014, 40% in 2015, and 10% in 2016 and 2017. The contribution limit would fall to 0% by 2018.
So what we see is a plan that will achieve an absolute reduction in industrial sectors, a plan that will begin to help industry to reduce their greenhouse gas emissions, a plan that they can buy into. But they can't continue to emit greenhouse gases; they have to clean them up. Every year they have to get cleaner, and they need the tools to put money into a technology fund to buy down their carbon. They cannot continue as they are. Eventually, by 2018, it's zero. These are very clear details that provide very clear direction to industry.
To the different industrial sectors now, in May they would provide their targets. They realize there's a carbon market now forming and they realize their targets are fixed. They report their 2006 targets, and their targets are fixed, and then, within a very short period of time, they have to provide absolute reductions. They have to. It's not voluntary; it's mandatory.
Those kinds of details are absent from Bill . With those details being absent from Bill C-377, will Bill C-377 achieve what it says it would like the government to? No, it won't, and that's what we heard from the witnesses.
The Turning the Corner plan gives clear direction to industry, it gives them the tools to reduce their emissions, and it also lets them know it will be done. And there's a rationale that protects the environment and protects the economy and sets these high standards. Bill is missing all of this, which would then tell us very clearly that it will not achieve anything.
One would even question, what is this bill trying to accomplish if it's not going to accomplish a reduction in greenhouse gas emissions? Going back to what the commissioner said--and I will not reread that at this meeting--you've got to have a plan that is realistic, that is achievable, and that has had social, economic, and environmental assessments. If those are missing, which they are in Bill C-377, the end result is a phony bill that tries to make a party look like they care about the environment, a party that has had every opportunity to vote for the environment, for funding for the environment, that has a legacy of voting against the environment, against the environment, and against the environment.
Even in British Columbia—and I encourage people to come out and visit British Columbia, because I think it's the most beautiful province in Canada—we have the Great Bear Rainforest. It was protected, and the NDP even voted against protecting that very sensitive area and the $30 million that was funded.
So one would ask, what is the real purpose of Bill when it's not going to accomplish anything?
On the other hand, the government's plan will explore the option of providing credits to individual companies for government pre-certified investments on specific projects. This option would allow a company that invests in a transformative technology that would incrementally reduce future emissions to receive credits from the government for that investment. These credits could be used towards its regulatory obligations. Criteria for such investments would be determined in advance by the government in consultation with the industry and other experts, and that takes time. But it's good.
Imposing a mandatory requirement for investments to be made in specific infrastructure products and a smaller component of the fund limited to an additional five megatonnes per year from 2010 to 2017 would help finance research and development projects aimed at supporting the creation of transformative technologies that are expected to achieve emission reductions in the medium to longer term.
Emissions trading is very important. It'll be an important component, and it is now the government's market-driven approach for reducing greenhouse gas emissions.
What detail do we have about market trading? We have eight words: “market-based mechanisms such as emissions trading or offsets”, with no details. Well, details are needed, and they're missing in Bill .
Well-designed emissions trading systems can reduce overall costs associated with regulatory compliance by allowing firms with a high cost of emission abatement to fund lower-cost emission reduction projects at other firms. In addition, emissions trading systems create an economic incentive for companies to do better than their regulated targets and bring innovation to bear on the challenge of climate change.
The emissions trading system that will be part of the regulatory framework for greenhouse gases will have a number of components. Inter-firm trading, through which regulated firms may buy and sell emission credits among themselves, will be the centre component. A domestic offset system will allow regulated firms to invest in verified emission reductions outside of the regulated system. There will be no limit on firms' access to domestic emissions trading and offsets.
In addition, Canadian firms will have limited access to certain types of credits from the Kyoto Protocol's clean development mechanisms, or CDMs, for compliance with the regulations.
Potential linkages with regulatory-based trading systems in the United States will be actively pursued. In particular, the government will examine the flexibility of linking with such emissions trading systems as the western regional climate action initiative and the regional greenhouse gas initiative, as well as with other systems as they become established. Over time, as national and regional carbon markets become more mature and the market becomes more global in nature, with robust emission reduction verification systems--and you have to have verification systems--Canadian firms will have increased access to international trading markets for purposes of compliance with Canadian regulations. Canadian firms will not, however, be allowed to use hot air credits, which do not represent real emission reductions, for compliance with Canadian regulations.
It's important that you have a verification system. Is that in ? No, it's not. It's missing. Will it achieve greenhouse gas emissions? Will it achieve a supportable carbon market? No, it won't. Do we need that? Yes, we do. Does industry need to have a carbon market? Yes. This is missing in Bill C-377, and yet we already have that with the Turning the Corner plan.
Recognizing the opportunity offered by emission trading, Canada's exchanges have been positioning themselves to launch trading when the regulatory framework is finalized. We've already seen now the good news about a carbon market being headquartered out of Montreal. The Government of Canada will not purchase credits or otherwise participate in the carbon market. It will not be happening with the Government of Canada; it will be industry-driven.
The central component of the emissions trading system for greenhouse gases will be a baseline and credit system. For each firm, the baseline will be its emission intensity target. Firms whose actual emission intensity in a given year is below their target will receive tradeable credits equal to the difference between their target and their actual emission intensity, multiplied by their production in that year. These credits could be banked for use in future compliance years or sold to other parties through an emissions trading market established by the private sector.
Is it important that you have those kinds of details? Yes. Are they in ? No.
The emissions trading system would also include domestic offset credits. Offsets are emissions reductions that take place outside the domain of the regulated activities. Offsets credits, which regulated firms could use towards their regulatory obligations, would be issued for verified reductions in greenhouse gas emissions that were incremental to what would have happened without the regulatory system or other governmental programs.
An offset credit would represent one tonne of verified greenhouse gas reduction or removal achieved by a given project, measured in carbon dioxide equivalent. The credit would be recognized in the regulations as tradeable and could be used to meet the obligations of the regulated facilities. Offset credits would be issued for those activities where emission reductions could be accurately quantified and verified at a reasonable cost. Examples of possible offset project types include the capture of methane from landfill gas that is then used to generate electricity, energy efficiency projects, and projects that store carbon in agricultural land.
To lower the cost of participation, pre-approved quantification approaches would be provided and the aggregation of small projects would be encouraged. The framework for the offset system would be built on the experience gained in three Canadian pilot initiatives and on project-based crediting systems in other countries.
In addition, considerable work on the development of a framework has taken place in Canada, with the provinces and the private sector playing leading roles. Canada's private sector would play a major role in the offset system, including verifying emission reductions achieved from eligible offset projects and providing infrastructure and services required for the trading of the credits.
The offset system would start prior to the entry into force of the regulations in order to provide adequate time for projects to generate emission reductions. Credits would be issued to those verified emission reductions. These credits could be sold to regulated entities for use for compliance purposes.
Do we see that in , a clarification on an offset system, the mention of an offset system? No, it's not there. Have we heard mention from witnesses? Yes, we have. Is it deliberately missing from this, or is there an omission because the bill is poorly written? I would suggest that the bill was rushed. It was not well thought out and it probably needs to go back and be totally rewritten and reintroduced to Parliament because it's missing so much.
It's also missing mention of CDMs, clean development mechanisms. Generally speaking, an emissions trading system with a broader scope will provide more opportunities for cost-effective emission reductions.
Over the past five years a number of subnational, national, and regional greenhouse gas emissions trading markets have been implemented or proposed for implementation in the near future. The most comprehensive of those is the EU's emissions trading system, which began as a pilot phase in 2005, and it is moving to a more complete system starting in 2008. The experience of the EU trading system has provided valuable insights in developing Canada's regulatory system for greenhouse gases, and the government intends to continue discussions with the EU on what Canada can learn from the EU's experience with emissions trading.
Notwithstanding these developments, the international carbon market is still fragmented and in its infancy. As the global market develops and matures, there will be additional opportunities for Canadian firms to participate in it.
When we were in Berlin, Mr. Cullen, I myself, Mr. Godfrey--and I forget the member from the Bloc--heard clearly that carbon markets need to first develop domestically and mature before you go into international trading, and that's exactly what's happening with our Turning the Corner plan.
The government intends to start modestly by allowing Canadian firms limited access to certain types of credits from the Kyoto Protocol's CDMs for the purpose of meeting their regulatory obligations. The government will determine which types of CDM credits should be eligible for regulatory compliance in Canada.
Mr. Harvey has talked a number of times about Madam Donnelly and her experience in CDMs internationally. We heard that there is a limited number of CDMs, and not all CDMs may be good for the environment.
So we have to be very careful, and that's why the government will determine which are good and appropriate for Canada.
Is there any mention of the CDMs in ? No, it's missing. How much is missing? It seems that everything is missing from Bill C-377, and that's what the witnesses have said. There is nothing there.
Access to CDM mechanisms under the Turning the Corner plan, credits for compliance, will be limited to 10% of each firm's total target.
A number of U.S. states are currently considering implementing regulatory regimes with emissions trading to reduce emissions for greenhouse gases. The Western Regional Climate Action Initiative intends to establish an emissions trading system for greenhouse gas emissions from industry in five western U.S. states. Starting in 2009, the Regional Greenhouse Gas Initiative will implement a regional emissions trading system in nine northeast and mid-Atlantic states that covers carbon dioxide emissions from power plants in the region. Several other greenhouse gas emissions trading initiatives have been proposed at the state and federal levels in the United States.
Canada will actively work with U.S. partners to explore opportunities for linking Canada's emissions trading with regulatory-based emissions trading systems at the regional and state level, and with any that may be established at the federal level. Canada will also actively explore cooperation on emissions trading with Mexico. , again, is silent on all of this.
The government will monitor, under the Turning the Corner plan, the development of an international carbon market. As this market becomes more fully developed and robust, and emissions monitoring, verification, and reporting systems evolve further, the government will consider full linkages that could allow a broader range of international credits to become eligible for compliance with Canada's regulatory system in place. An essential condition is that any international credits used towards compliance with Canadian regulations represent real and verified emission reductions—again, the importance of having a plan that is working, in which you can verify the reductions in greenhouse gases. Do we see that in ? No, we don't.
I wish I could share what good there is in , but it's missing all the fundamentals of a plan that will achieve reductions in greenhouse gas emissions. We don't see that, but we do in Canada's Turning the Corner plan, which is already taking action.
There needs to be credit for early action, and that's what we see in the Turning the Corner plan that Canada now has. Firms in a number of sectors have made efforts over the last decade to reduce emissions, and we applaud those. There would be a one-time allocation of credits to those firms covered by the proposed regulations that took verified action to reduce their greenhouse gas emissions between 1992 and 2006. A maximum of 15 megatonnes would be allocated, with no more than 5 megatonnes to be used in any one year.
Firms would be invited to make a one-time application where they would submit evidence of changes in processes or facility improvements they undertook that resulted in incremental greenhouse gas emission reductions in the specified timeframe. There would be eligibility criteria to determine which emission reduction activities would be considered, and evidence of emission reductions would be audited.
Once all applications were received, the reserve would be allocated to all qualifying applicants on a pro rata basis. The maximum allocation for emission reductions would be one credit for one tonne of carbon dioxide equivalent reduction. If the total tonnage of the emission reduction applied for were to exceed the 15 megatonnes, the credits would be distributed to individual firms in proportion to their contribution to the total emission reduction achieved.
So there is recognition for early action. Is it important that we do that? I think so. The government has recognized the importance of recognizing early action. Do we see any mention anywhere in Bill of giving credit for early action? No, you don't. Why not?
Under the Turning the Corner plan, the availability of different compliance mechanisms will provide industry with the access to emission reduction opportunities it needs to meet the regulatory obligations at a reasonable cost and will support the development of a functioning emissions trading market system. That said, the government recognizes there may be concern about the level of market liquidity in the trading system, both at the start of the system and over time. The government will carefully monitor the evolution of the emissions trading system and other aspects of the compliance mechanisms in order to determine any modifications that might be required. It has to be a system that works, and we're committed to that. And I'm happy, again, that the Liberals supported that plan.
The emission reduction targets for a given air pollutant will specify a maximum level of that pollutant that can be emitted from a given sector in a given year. These targets will represent national reductions from the 2006 emission levels for each pollutant.
Fixed emission caps will be set for the following air pollutants: nitrogen oxides, sulphur oxides, VOCs, and particulate matter. Fixed emission caps for certain other air pollutants from specific sectors, such as benzene from natural gas production and processing, refineries, and iron and steel, and mercury from electricity generation and base metal smelting, will also be set. As more information becomes available and regulatory development is undertaken, the government will consider whether the regulations for specific sectors should include targets for other air pollutants not already identified—for example, benzene from the oil sands.
Do we see any mention of that in ? No. One would ask why not. Why is Bill C-377 void of all these important components?
I'll continue. Sectoral emission caps will be set for each air pollutant of concern in a given sector. Whether a cap is set for a specific pollutant in a given sector will depend on whether the pollutant is emitted in significant quantities from facilities in that sector. In some cases, caps will not be proposed for an air pollutant in a sector if the measures to reduce another air pollutant will significantly reduce emissions in the first. How the sectoral caps will be allocated among the facilities will be determined during the process of developing the detailed regulations. The targets will come into effect as early as possible, between 2012 and—
Mr. Chair, again, the problem with is that it's void of substance, and it's quite shocking that members would support a bill that is void. Yet you have a plan, the Turning the Corner plan, which is a good plan that actually has the details, and we're actually seeing improvements already.
We need to have fixed sectoral emission caps, and that's what the Turning the Corner plan has, which does not. The emission trading targets for a given pollutant will specify a maximum level for the pollutant that can be emitted for each sector every year, and that's missing from Bill C-377.
You also need to have benchmarking. In the notice of intent, the government made a commitment to develop emission targets that are at least as rigorous as those in the U.S. or other environmental performance-leading countries. To achieve this end, a benchmarking exercise was undertaken. The exercise began by researching existing regulatory regimes' environmental performance, technology, and operating practices, and the most stringent provincial operating system permits in Canada, Canadian jurisdictions, and other countries such as the United States, Finland, Sweden, and Germany. It also included taking into consideration the factors underlying those regulatory regimes, such as the size and composition of the sectors, the concentration of the facilities across the jurisdiction, and the availability and quality of feedstocks and other raw materials.
From this exercise, environmentally leading requirements were benchmarked by sector and by pollutant. Concurrently, information was gathered on Canadian sectors in which regulatory limits exist in other regulations, for example, the pulp and paper and electricity sectors. Actual Canadian regulatory limits and performance were compared with the regulated limits from the leading jurisdictions. In some sectors, regulatory limits are typically set through provincial certificates of approval or operating permits or licences for individual facilities--for example, petroleum refineries or chemical production facilities--which can have processes and/or products that vary significantly from one facility to another,
In these sectors, the actual emission performance of Canadian facilities was compared with the reported or required performance in different jurisdictions, both in Canada and internationally. This involved deriving the emission intensity values and comparing the performance of similar Canadian and foreign facilities. For other sectors--for example, aluminum smelting in iron and steel-- emission performances both in Canada and abroad, as well as regulatory limits in other jurisdictions, were reviewed. In other cases such as conventional upstream oil and gas, the approach was to benchmark against other facilities in the sector as a whole.
Finally, for the oil sands sector, which is unique to Canada, there are no comparable regulated sectoral emission limits in other countries that would enable a comparison with other jurisdictions. In this case, sectoral targets were established using a multi-step approach. This included an evaluation of performance for similar activities, equipment, and processes at similar sources of emissions in other jurisdictions--such as heavy oil refineries--examination of the potential for reductions using selected emission control technologies, and a comparison of emission intensity performance of individual oil sands facilities within Canada.
In some sectors, analyses carried out in recent years were also taken into account when carrying out the benchmarking exercise. Work done jointly by government and industry was already under way to determine how to adapt benchmarked standards to Canadian circumstances in the pulp and paper sector through the Pulp and Paper Air Quality Forum, in the refining sector through the Canadian Council of Ministers of the Environment national framework for petroleum refinery emission reductions, and in the base metal smelting sector through the base metal smelting pollution prevention plan.
The objective of the Pulp and Paper Air Quality Forum was to design a 10-year overall multi-faceted air emissions management regime for the pulp and paper industry that would include short-term air pollutant targets at a level that would ensure consistent requirements for all facilities. These proposed air pollutant targets were derived from benchmarking analyses that compared world-leading international industry performance and the most stringent provincial limits.
The approach of the Pulp and Paper Air Quality Forum ensures that a consistent level of achievable control technology exists among similar facilities and is in application elsewhere, and that the overall economic impact of achieving these limits remains realistic. It also facilitates the establishment of equivalency agreements with the provinces and territories, which is very important.
The complexity of the existing regulatory system for petroleum refineries makes it difficult to define a single regulatory emission standard within Canada and other jurisdictions. For this sector, the approach used to determine the cap on emissions was based on the methodology developed through the CCME refinery framework established on May 25, 2005. This framework established an approach to setting facility-level annual caps for a range of air pollutants based on benchmarking Canadian emission performance to comparable performance in the United States. Benchmarking was updated to reflect changes to the U.S. requirements.
A notice requiring the preparation for pollution prevention plans for the base metal smelters and refineries and zinc plants was published in the Canada Gazette, Part I, on April 29, 2006. This notice was the result of extensive work involving stakeholder consultations, and five years of analyses of existing standards, performance, and sulphur capture efficiency of smelters around the world. The targets identified for consideration in the pollution prevention plans would be the basis for air pollutant caps for the base metal smelting sector.
In some sectors, regulatory limits or emission performance levels from leading jurisdictions were adapted to take into account characteristics specific to those sectors in Canada. Characteristics taken into account varied from sector to sector and included the financial situation of the sector, potential impacts on the economy, and the quality of the feedstocks and other raw materials relative to the benchmarked jurisdiction.
The technical feasibility of meeting the most rigorous limits was also considered in establishing emission reduction target options. In some sectors, technically feasible options were evaluated to determine expected reductions in emissions and their costs in dollars per tonne. National emission caps were established by adding together the sectoral emission caps for each pollutant of concern, taking into account an allocation for growth of each sector by 2015.
Is there any mention of this analysis within ? No, there's not. There needs to be. There is with Canada's Turning the Corner plan, which is already having a positive effect on the environment, but in it is missing. It needs to be there but is not.
Under the Turning the Corner plan, there would be a domestic cap and trade emissions trading system for SOx and NOx. The method for allocating credits under the system, including the method by which new facilities would be accommodated within the overall cap, would be determined during the regulatory development process.
There would be separate credits and compliance assessments for SOx emissions and for NOx emissions. Firms would be required to submit credits each year equal to the emissions from their facilities for that year. If a firm is in an area where the quality of the air does not meet national air quality objectives that have been set in advance by the government, restrictions would be placed on the use of credits from outside that area. The feasibility of the use of offsets, in combination with the cap and trade emissions trading system for SOx and NOx, would also be assessed.
The United States and Canada share cross-border airsheds and therefore have a shared responsibility for and interest in reducing air pollutants for all sources that contribute to air pollution. Is there any mention of protecting the air quality of Canadians within ? No, there's not. Should there be? I believe there should be. There is in the Turning the Corner plan.
Addressing air pollution on only one side of the border does not make environmental or economic sense. The Canada-U.S. Air Quality Agreement was signed in 1991 to address transboundary acid rain. An annex to the agreement was added in the year 2000 to address ground-level ozone, a key component of smog. Under the agreement, Canada and the U.S. must reduce domestic emissions that flow into the other country and contribute to acid rain or ozone.
Canada and the U.S. recently agreed to start negotiations for an annex to the agreement to reduce transboundary flow of particulate matter. This is very important; recent scientific analysis has shown that joint strategies are needed to address these pollutants. The annex will result in reductions of particulate matter as well as of many of the chemicals that contribute to other air quality issues of concern, such as the acid rain, regional haze, and visibility in the communities along the Canada-U.S. border. Serious action by Canada to reduce its own emissions will make it easier to work jointly with the U.S. to reduce overall emissions.
As part of its ongoing work with the U.S. to address transboundary air pollution, the government will expedite discussions with the U.S. on a cross-border SOx and NOx emissions trading system. Having caps in Canada and in the U.S. of similar stringency would facilitate the development of cross-border trade. Such trading would provide additional flexibility for regulated sources by allowing the most cost-effective emission reduction to be made. A joint Canada-U.S. study published in July 2005 demonstrated the feasibility of cross-border trading of SOx and NOx for the electricity sector.
It is important, Chair, that we have this detail in a bill that's going to be taking Canada post-Kyoto and would be even now taking action on the environment. But is dealing primarily with post-Kyoto, with no substance, no plans, no details, nothing. It has targets that were set internationally—and we agree with setting international targets—and then each country has unique circumstances. We heard from Mr. Bramley that no details specific to Canada were made, no costing, and he said we need to cost, as did Mr. Layton.
On Bill , again we have another example of the importance of air quality. We have it in the Turning the Corner plan. We end up with cleaner air for Canadians to breathe and we reduce greenhouse gas emissions. We have that now with Canada's Turning the Corner plan--details of how to do it, details about the Canada-U.S. Air Quality Agreement, details of focusing on SOx and NOx and particulate matter, and creating this annex with that Canada-U.S. Air Quality Agreement. We don't have any of that in Bill .
CEPA 1999 has a number of compliance and penalty provisions. Failure by regulated entities to meet any of the requirements set out by CEPA 1999, or the regulations made under it, is an offence.
Enforcement officers verify compliance with the act and its regulations. If a violation is confirmed, action is taken using one or more of the enforcement tools provided under CEPA 1999, such as warnings, directions, tickets, and orders of various types, including environmental protection compliance orders, injunction, or prosecution.
Action taken in response to any failure to comply with regulatory requirements will be predicted and will correspond to the seriousness of the non-compliance. When prosecution is undertaken, such offences may be prosecuted by either summary conviction or indictment. CEPA 1999 includes maximum fines of up to a million dollars a day for each day an offence continues, imprisonment for up to three years, or both. Corporate directors and their officers have a specific duty to take responsible care to ensure that corporations comply with the act, its regulations, and any orders of establishments issued by enforcement officers.
As the members are well aware, enforcement is an important part of the government's plan. Did the NDP support that? No. They voted against enforcement. How about the Bloc? They must have supported it. No, they did not support enforcement of Canada's environmental laws. Now, did the Liberals? Yes, they did.
Thank you very much to my members opposite.
We have to have enforcement. It's like not having police officers enforcing the traffic laws of Canada. People would be speeding if there was never anybody enforcing the speed limits. Canada would be a much less safe place if we didn't have our police officers protecting and keeping Canada safe.
It's the same thing with the environment. You have good environmental laws, which we have with the Turning the Corner plan, and you have them enforced. What's being proposed by the NDP is a bad bill that is vague, with no details of how they're going to achieve anything, so it's not achievable. It will create jurisdictional problems and court challenges, constitutional challenges, with no enforcement options and no enforcement officers. It's no wonder the NDP will never have a real bill that will actually see positive results for the environment.
The air quality has to be part of the objectives of any good bill for the health of Canadians and for the coming generations. Health risks to Canadians from air pollution are associated with direct exposure to ambient levels of particulate matter and ozone, the main components of smog. The relationships between actual emissions, the levels of smog, and their effects on human health are complex. However, health science indicates that even at very low levels, air pollutants affect human health. They also have negative impacts on the environment, on human health, and on environmental health.
The government will set air quality objectives for particulate matter and ozone that will specify a target concentration for ambient air based on an assessment of the health and environmental effects associated with exposure to these air pollutants in Canada. A decision on air quality objectives will be made after an analysis of benefits and risks over a range of concentrations in the air we breathe.
Chair, we need to provide an analysis in modelling to determine the health and environmental benefits and the economic impacts of proposed regulations to reduce industrial air emissions. We need to directly address questions of central importance to Canadians. How will actions improve the health of Canadians and the health of the environment?
Does Bill address that? No.
How will these actions affect Canadians and the Canadian economy? No, doesn't address that.
Does the Turning the Corner plan? Absolutely. The impacts of the Turning the Corner plan were systematically traced through several models. All parts of the analysis started with an estimate of what would happen in the absence of the proposed regulations, the business as usual case. The proposed regulatory system and emission targets were then introduced in the model and assessed in terms of established reductions in emissions and changes in economic activity. Reductions in emissions are also translated generally into improvements in key air quality parameters. These improvements, in turn, have associated health and environmental benefits.
The modelling work to date has been complex but provides reasonable, albeit preliminary, general results. Work to generate more refined estimates of the impacts is ongoing.
The economic impacts reflect an integrated assessment of the industrial greenhouse gas and air pollutant regulations. On the benefit side, the modelled impacts reflect improvements in air quality resulting from reduced air pollutant emissions only. It is clearly recognized, however, that climate change has long-ranging global economic, environmental, and social impacts with significant associated costs. These costs are not included in this analysis but are an important consideration in the assessment of the cost-benefit impacts of the regulations.
What happens to air pollutants released to the atmosphere from human-related activities as well as natural emissions, as simulated by Environment Canada's regional air quality modelling system? It describes the physical process such as transport, mixing, the deposition of the air pollutants, and the chemical transformations that air pollutants undergo in the atmosphere. The model provides the concentrations and geographic distributions of primary air pollutants, those directly emitted to the atmosphere, and of secondary air pollutants, those formed chemically in the atmosphere from reactions involving the primary pollutants to which humans and the ecosystems are exposed. The effects on human health and the environment from exposure to these air pollutants are then estimated by impact models. The results are based on these models.
If one goes to Environment Canada's web page, one will see a figure that provides an indication of the reductions of NOx emissions that are expected from the proposed regulatory system and targets, assuming they're all in place by 2015. Reductions in emissions are expected in the major urban centres and throughout the western provinces. That's good news.
The predicted improvements in air quality resulting from the proposed reductions in air pollutant emissions are also illustrated as percentage reductions in annual levels of particulate matter and in summertime ozone levels, again assuming the regulations are implemented by the year 2015. Improvements in ozone levels are shown only for the summer, as the formation of ozone increases with the amount of sunlight; as a result, ozone is not an issue in the winter months.
In addition, in order to highlight the impact of the proposed regulations on Canadian quality, transboundary emissions of air pollutants from the U.S. were assumed to be constant in the model. If one looks at figure G.2, preliminary results indicate that full implementation of the industrial regulations would decrease ozone levels by approximately 5% to 15% in large portions of Alberta, Saskatchewan, and Manitoba; in localized areas in British Columbia, Ontario, Quebec, and the Maritimes; and by 1% to 5% in the rest of the country. Decreases in levels of ozone are also seen in neighbouring U.S. states.
In figure G.3, the preliminary results predict annual reductions in PM2.5 of between 5% and 50% across a large portion of the country, with large reductions of 15% to 50% in PM2.5 across the prairie provinces and reductions of 5% to 15% for southern Ontario.
Improvements in both ozone and PM2.5 levels are largest in western Canada, where marked reductions in emissions would result from the proposed regulations. Improvements in eastern Canada--although smaller in magnitude, due to the large influence of long-range transport of air pollutants--provide benefits for the large populated areas that are more than often affected by smog events.
In addition to improvements in ambient levels of both PM2.5 and ozone, figure G.4 shows that reductions in acid deposition are predicted primarily in areas where there are significant reductions in NOx and SOx emissions. This will result in a reduction in the size of the area receiving acid deposition levels that are in excess of what the environment--such as lakes or soils--can withstand without being adversely affected.
Health Canada's air quality benefits assessment was used to estimate the human health benefits expected from changes in Canada's ambient air quality due to the proposed regulatory actions. It uses information on air quality, health effects of air pollutants, and the value of avoiding specific effects to calculate both the number of effects and approximate value of these to Canadians.
Substantial health benefits are predicted from the proposed regulations, since it is established that they will achieve reductions in summertime ozone levels of about 3% and a decrease in particulate matter of about 8% in the year 2015. These two air pollutants are the major components of smog.
The total health benefits in the year 2015 from the reduced risk of death and illness associated with these air quality improvements are established to be $6.4 billion. That's huge. The health benefits include reductions in premature mortality and various types of health effects. Most of the benefits are associated with the reduced risk of premature death because of the large value placed on reduced mortality.
Reductions in particulate matter account for the greatest share of the benefits because of the much greater effects on human health of long-term exposure to particulate matter relative to ozone. The total health impact is probably underestimated, because only two air pollutants are considered and only some health outcomes could be quantified because of the lack of information on all the outcomes.
Reductions in the emissions of harmful air pollutants and greenhouse gases would have many benefits for society, including improved environmental conditions. That would provide direct benefits to Canadian ecosystems. In addition, reductions can also raise economic productivity for specific sectors and increase the well-being of Canadians.
Some direct estimates were made of the environmental benefits from the proposed regulations. For example, ozone can hamper photosynthesis and increases the vulnerability of plants to pests and other stressors. The proposed regulations are predicted to reduce ozone levels and associated stress to agricultural plants, resulting in an increase in production of $123 million for key agricultural crops in Canada. That too is huge. The total benefits to agriculture could be much higher because the crops modelled only account for roughly 60% of the value of all crops and the impacts of soil acidification were not included.
It's very important that we consider in Bill the impacts of the environment and the impacts of a bad plan. A good plan will save Canadian lives. Canadians will live longer. It will increase agricultural output. It will save health care costs. That's what we see now with Canada's Turning the Corner plan.
A poorly written plan will not accomplish anything other than a line in the newspaper—as the commissioner said, confetti and then nothing happens, which is Bill . You end up with a continuing environmental problem where Canadians are dying prematurely. So we have a responsibility to provide a healthy environment, and that's what we get with Canada's Turning the Corner plan but we do not get with Bill C-377, a plan that is void of details, a plan that is void of costing, a plan that is void of impact analysis, a plan that is void of constitutional stability. It is a plan that will not accomplish anything to protect the environment or the health of Canadians.
Canada's Turning the Corner plan has estimated costs of environmental damage. It's rated it as a relatively new area of research, and it is complex. Estimating the costs of environmental damage is important. Further work will be taken to estimate and place a value on the broader range of anticipated environmental impacts of the industrial air emission regulations. This work will build on the results of numerous studies that have estimated various costs of air pollution. For example, acidification of the lakes and rivers in eastern and central Canada has been estimated to result in annual economic losses of $500 million—that's annually—from reduced recreational fishing. Acidification depletes fish stocks in Canada's inland commercial fisheries, an industry worth $70 million per year.
It's important that we protect the environment. Bill ignores this.
The loss of nutrients due to leaching from acid rain affects forest productivity. Some estimates put annual timber losses from reduced forest growth at $197 million, and $89 million from damage to the maple syrup industry in eastern Canada. Acid rain in the most highly polluted areas in eastern Canada accelerates structural corrosion of costly transmission towers, imposing annual repair costs of $1,000 to $2,000 per tower and reducing tower lifespan by almost 30 years. The environment has a direct cost on Canada's infrastructure.
Greenhouse gas reductions by Canada alone will not significantly address global climate change. Nevertheless, Canada needs to do its share to control global greenhouse gas emissions in order to help address both the global effect and the more local threats to key sectors, resources, and the infrastructure associated with climate change. Those threats could include increased drought and temperature, with particularly severe consequences for the north and the west; decreased hydroelectric generation and transportation capacity from reduced water levels in the Great Lakes and elsewhere; and increased frequency of extreme weather events.
I've noted that the benefits associated with improved human and environmental health arising from the proposed regulations, the Turning the Corner plan, are in the order of $6.4 billion annually. What do we get from ? Nothing.
So there are huge benefits to Canada and the environment from the direction Canada is heading in with the Turning the Corner plan—$6.4 billion annually. These benefits need to be weighed against the possible economic costs that can be attributed to the regulatory regime, in order to assess the overall impact on the Canadian economy and quality of life. The economic costs of regulation are often difficult to measure, as they depend on the reactions of a number of economic factors beyond the specific sectors directly affected.
In the case of the proposed regulatory package, the Turning the Corner plan, this would require not only the estimation of the direct impacts on production costs arising from industry compliance with emission regulations, but also that the indirect impact of these costs on future investment decisions, demand and supply, and related consequences for other businesses and consumers be tracked. There are many points of uncertainty throughout this chain of action and reactions.
Preliminary analysis performed by Environment Canada indicates that these costs will be small, but not inconsequential, relative to the total GDP. From an aggregate perspective, the annual economic costs of meeting both the regulated greenhouse gas targets and the regulated air pollution targets should not exceed 0.5% of GDP in any given year up to 2020.
The size of the national economic costs anticipated under the regulations, combined with the inherent margin of error that must be applied to microeconomic model results, makes it difficult to assess with any degree of certainty the impacts of the regulatory initiative at a provincial or a sectoral level. However, the following general observations can be made. There will likely be some year-to-year variation in the national and provincial GDP impacts, reflecting changes in industry and industry investments, with the possibility of small positive GDP impacts in the early years as the regulated industries accelerate investments in more energy-efficient, less polluting capital and technologies in response to the regulations.
Provincial economies with a strong oil and gas sector are expected to continue to see large uninterrupted volumes of production and exports of natural gas and oil. Global demand and strong world prices are expected to allow oil and gas producers and gas pipelines to absorb the relatively small incremental costs of production arising from the regulatory package. For major parts of the oil and gas sector, existing analysis also indicates a high potential for meeting much of the required reduction in greenhouse gas emissions through cost-effective options for carbon capture and storage.
Machinery and construction industries, together with sectors such as iron and steel that supply many related inputs, are expected to benefit overall as demand for their products rises because of new capital investment motivated in other sectors under the regulations. Energy utilities, electricity and natural gas, will likely be mildly affected as they'll be able to pass through many cost increases to their customers. Other major sectors such as manufacturing may experience a small rise in the cost of production associated with the pass-through of increased energy prices by the utilities. The extent to which prices will increase depends on a number of variables, including provincial regulatory policies, differences in capital turnover cycles between provinces and electricity generation units, and the take-up of renewable energy initiatives under recent federal and provincial programs.
A noticeable increase in electricity prices is nevertheless possible. This increase could in turn result in some minor downward adjustments across most sectors of the economy over the long term, for example, around 2015 and later.
The proposed industrial regulations present Canadians with concrete action on key environmental challenges and meet their expectations for responsible and effective government measures to secure a cleaner and healthier environment for themselves and their children. I have five children and four grandchildren, and I want them to be able to inherit a clean environment. That's why I am so proud to be part of a government that is actually cleaning up the environment for the coming generation.
The economic costs associated with our Turning the Corner plan, which we see in the plan but not in , are real and manageable. The benefits of our plan are equally real but in many respects incalculable—cleaner communities and natural spaces, healthier children, fewer premature deaths, more sustainable natural resources, and for the first time since signing the Kyoto Protocol, meaningful contributions by Canada to the global effort to control greenhouse gas emissions.
The $6.4 billion a year in health benefits that will accrue under this initiative is significant on its own, yet it represents only a portion of the health and environmental gains that Canadians will receive. The cost-benefit analysis demonstrates that the proposed regulatory package we now have in Canada's Turning the Corner plan presents a responsible path forward. It'll enable Canada to address climate change and air pollution without putting Canada's quality of life and economy at risk.
It is equitable across regions and economic sectors. It respects the polluter-pay principle. It puts in place for the first time in Canada a regulatory policy that can be fine-tuned to meet climate change and air quality objectives as we move forward. Most important, it provides Canadian businesses and citizens with the economic signals required to take into account the environmental consequences of daily decisions— whether it's choosing more environmentally efficient appliances or deciding to construct a new plant that uses renewable energy instead of fossil fuels.
Canadians have long demanded that their government provide the leadership and tools necessary to enable them to better manage climate change and air quality as responsible citizens. Canada's new government is responding to this, and we've moved forward with our comprehensive, realistic, and achievable plan.
Our regulatory framework for air pollutants, including the timeframe for the entry into force of regulations, is well under way. Sector-specific regulations are being developed, leading to publication of the draft regulations in the Canada Gazette, Part I. The regulations will be revised to incorporate the air pollutant provisions a few months later, following normal regulatory procedures.
The government intends to undertake a series of consultations, and it has been doing that. We have none of that in Bill . We need, for this generation and for generations on, to provide leadership.
Mr. Cullen--I wish he were here, but I guess he has stepped out and been replaced--made a comment when the commissioner was here that it was the opposition's focus to try to make the government fail on the environmental file. Fortunately for the Canadian environment, for Canadians, and for the globe, they haven't been successful. We are moving forward. The Turning the Corner plan, by regulation, is forcing the industrial sectors to reduce their greenhouse gas emissions, with the toughest targets in Canadian history.
Bill will not achieve greenhouse gas emissions because it's a plan that is void of substance. It's a plan that will not withstand constitutional challenge. It does not include enforcement. It's a plan that won't work.
The irony is that the author of the bill, or the sponsor of the bill...well, actually, both the author and sponsor were witnesses here, and both of them said that the bill needs to be costed and we need an impact analysis. We heard that from every witness group. Yet now we're hearing from the NDP representative that they don't want to do that. They want Bill C-377 to move ahead just for reasons of optics.
The time for optics, Chair, is over. Canadians want action. They're getting action. We are reducing greenhouse gas emissions. That's what Canadians want, that's what they're getting, and that's why we will not be supporting Bill C-377.