Thank you, Mr. Chair.
As you've already said, I'm joined by my deputy minister, George Anderson, and my assistant deputy minister, Howard Brown.
I want to thank you, as chair, and committee members for my opportunity as Minister of NRCan to come and respond to your questions on my department's climate change activities. Natural Resources, of course, is a key player in the government's overall agenda for sustainable development.
We pursue three broad objectives: economic growth, environmental stewardship, and social stability. We take each of these very seriously. Because of the nature of our sector, no other department or agency in the federal government has a bigger stake in the effective implementation of sustainable development practices.
Our business is the resource industries that account for nearly 13% of Canada's gross domestic product. That's nearly four times the value of the telecommunications, electronics, and computer industries together.
We administer some of the most successful green programs and initiatives in the government, which I'll be happy to talk about in a few minutes.
We are focused on the industries that often provide the only jobs in hundreds of communities right across this country, often in the most remote regions of the country. These jobs provide the foundation for social stability in these communities. So when Canadians think about this department, they should not just think in terms of energy, mines and forestry; I want Canadians to think of us as the department of environmentally and socially sustainable economic development for all of Canada.
Let me say that I am proud of our achievements in recent years in promoting sustainable development. We have built up a lot of momentum; we have laid the groundwork for future action. I want to talk to you about these successes today and to offer some views on how we need to move forward from here.
But first, I think it's important to take a step back and look at the enormity of the challenge we are dealing with. Ultimately, while the solutions must be forward-looking, they must also be realistic. Clearly, climate change is the number one sustainability challenge of the 21st century. At the heart of the problem is energy. Over 80% of emissions come from energy production and use. But the challenge is that without significant policy change, global energy use is projected to increase by almost 70% in the next 25 years or so, and over 85% of this will come from fossil fuels.
What does this mean for Canada as an energy-producing country? Forecasts suggest that our energy production will grow by over 40% in the next 15 years alone. We are expected to have the largest production growth of any OECD country. This is good economic news for Canada. Our challenge, of course, is to reap these economic benefits in an environmentally responsible fashion.
The Kyoto framework, while it may not be perfect, provides a solid basis for us to move forward in addressing this challenge.
While the challenges are enormous, we cannot lose sight of the huge progress we are making. When one looks back not so many years ago, the climate change issue was hardly on the radar screen. Today, companies and Canadians all across Canada are becoming engaged with it and are looking to do their part. In no small way, this is the result of the actions this government has been taking, most of which have been implemented by my department.
Our strategy has been in three broad thrusts: promoting cleaner fossil fuel production; improving efficiency and energy use in homes, industry, or the transportation sector; and encouraging alternative energy sources. Time does not permit me to elaborate on our success in all these areas, but let me single out a few examples.
First, let me talk about autos—what all of you have been waiting for. This morning, my colleague, Stéphane Dion, Judi Longfield, chair of the auto caucus, and Jerry Pickard, PS to Minister Emerson, and I were in Windsor, Ontario, for the official signing of an agreement with the Canadian automotive industry, which will result in an annual reduction of greenhouse gas emissions from cars and light trucks of 5.3 million tonnes by 2010.
This is a major accomplishment. As many of you know, emissions from this sector already account for about 12% of all GHG emissions in Canada and about half of the average Canadian's personal emissions; hence, the need to make and drive vehicles that are more efficient and produce less greenhouse gas emissions.
The government is particularly pleased to have the industry commit to this target voluntarily. The automotive industry has a good track record of establishing and meeting voluntary agreements with government in Canada. This agreement is a good example of how industry and government can work effectively together.
Another success story dates back to before the term “sustainable development” was ever coined.
The Canadian Industry Program for Energy Conservation has been around for 30 years. Its network includes 47 trade associations and more than 5,000 companies. In 2003, CIPEC partners avoided 27.8 megatonnes in greenhouse gas emissions, relative to 1990, through improved energy management.
I alluded earlier to programs to improve energy efficiency in buildings. We are particularly pleased with the progress we are making with the EnerGuide for Houses retrofit. This has been a highly successful program. Every month, over 6,000 evaluations for energy efficiency are being performed. The program then offers grants for people who improve the energy rating of their houses. The recent budget included $225 million to quadruple the number of retrofitted homes to 500,000 homes.
Our efforts in promoting alternative fuel sources are paying off. We have made significant advances in wind energy. In fact, wind power is the fastest growing form of energy generation in Canada. Through the wind power production incentive we are reaching our goal of quadrupling wind power capacity to 4,000 megawatts. That is enough electricity to power more than a million Canadian homes.
In 2003 we launched a $100 million ethanol expansion program. We've funded the construction of six new ethanol plants that will produce some 650 million litres of fuel ethanol. We're just beginning the second round of funding now.
For two decades my department has been supporting the development of hydrogen and fuel cells. At the beginning, the technology seemed like a long shot, but we invested some $200 million over the years. Now it looks as though it may well provide an important key to reducing greenhouse gas emissions, and we recently committed another $215 million to demonstrate and to commercialize. For the 2010 Olympics, we will help design, build, operate, and test the world's first hydrogen fueling infrastructure on the highway from Vancouver to Whistler.
While improving efficient energy use and looking for alternative forms of energy are critical aspects of our plan, the reality remains that fossil fuels will be the dominant energy source and the economic driver for decades to come. For these reasons, we have devoted considerable attention to research and development and technologies aimed at producing cleaner fossil fuels.
As an example, the department has been a pioneer in developing technologies to store carbon dioxide. Last September, the International Conference on Greenhouse Gas Control Technologies concluded that the geological conditions at the Weyburn oil field are favourable for storing CO2 for the long term.
Taken together, these programs and a multitude of others that I do not have time to mention represent a considerable legacy of achievement. Frankly, we have accomplished so much because of the spirit of partnership and cooperation with stakeholders.
But where to next? We are still only at the beginning of a very long journey. Our strategy will need to evolve as we move forward, as we learn more from our experiences, as we receive input from various sources, and as we assess international developments.
I am hopeful that in the very near future we will be in a position to announce refinements to our strategy. I have been working closely with Stéphane Dion and other colleagues on our plan over the past few months. Since the plan has not yet received cabinet approval, it is not appropriate for me to talk about the specifics today. However, I would like to share some of the fundamental principles that will be critical as we move forward.
Firstly, we must build on the successes we have had to date. That does not mean the status quo with all our existing programs. What it means is assessing them and building on those with the greatest potential.
Secondly, it means taking the fullest possible advantage of marketing mechanisms. Governments simply do not have all the answers. What we must do is set out the policy framework within which the market can operate efficiently in meeting the sustainable development goals. The funding in this budget for a Clean Fund will be an important means of pursuing this project.
Thirdly, it means working in partnerships. We are collaborating now with industry and governments across the country. This must continue and must be accelerated. A good example of success has been the opportunities envelope. We have recently approved $24 million for ten initiatives that reflect provincial priorities for emission reductions. The Partnership Fund announced in the budget will enhance our work with the provinces and territories and build on the arrangements we already have in place.
Finally, we need to move in a direction that will promote transformative change. In the long run, the energy economy will need to change fundamentally, and we must begin to sow the seeds for that today.
The development of a science and technology strategy announced in the last budget will be an important step in the process. It will focus on how we might best find long-term solutions to higher energy prices, concerns about energy security and reliability, and above all, the need to reconcile our reliance on energy with our environmental goals.
Let me conclude, Mr. Chairman, with a few final thoughts. I believe Canada is ready to be a world leader in the production and use of energy and in addressing climate change through the realization of its current potential. By working together, we will usher in a new era of greenhouse gas management that rewards innovation and efficiency, that allows for economic growth and regional diversity, and that establishes a framework for effective long-term emissions control.
We will be second to none in the world in our level of effort to reduce greenhouse gas emissions. While it is a daunting challenge, we must embrace the opportunities. Being more energy efficient and at the leading edge of the technologies means that companies can save money in the long run and improve the competitive edge in international markets.
Finally, Mr. Chair, I would like to applaud and to thank the committee for the work you are doing on this very important issue, and I would certainly be happy, with my colleagues, my staff here, to answer any questions you might have.