[Recorded by Electronic Apparatus]
Thursday, April 27, 1995
.1107 
[English]
The Chairman: Order.
First, on behalf of the standing committee, I want to welcome Sue Kirby, the senior director of the Environment Division of Energy Policy Branch.
We're going to get a briefing on the global climate change. Sue is going to give us a half-hour presentation and then we'll go from there. As you can see, we're doing a slide presentation, so you'll have to stay awake and follow along. Also, just so you'll know, our intention is to get a complete background on what took place in Berlin and what our position is and then decide whether in fact we want to follow up any further with this issue after this presentation.
I'll turn the floor over to Sue and let her carry on. As I normally do, I expect you to signal to me in one fashion or another if you want to ask questions relating to the presentation.
Ms Sue Kirby (Senior Director, Environment Division, Energy Policy Branch, Energy Sector, Department of Natural Resources): Thank you very much.
I'm with the Department of Natural Resources, and I'm here today to talk about climate change.
As mentioned, I was expecting to speak for about a half an hour and then respond to questions for as long as you have any you'd like to ask.
I have two people with me from my staff, whom I would like to introduce: Mr. Peter Sol and Ms Lindsey Patrick. They're going to be assisting and turning slides for the presentation.
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I thought I would start by giving you an overview of the structure I would propose for the presentation so that you'll have an idea of the issues as they're likely to come up.
I'll start by briefly describing the climate change issue itself and what it's about. I'm not a scientist, so I would propose not to spend very long on the science of climate change but to give more of a background as to what this issue means from a natural resources perspective. I was then going to talk a bit about the challenge posed by climate change in the Canadian context.
I know that many people here are particularly interested in Berlin, and I will speak about that. I thought that before getting to Berlin I would talk a bit about the domestic situation in Canada and where we have come to in terms of our own national action plan, since I think that sets the stage for Berlin. I was then going to talk about some of the key events coming up in the next few months and some of the dates and some of the events you might want to be aware of if you're not already.
If it suits the committee, I would propose to take questions at the end, save for any that are clarifications. If I'm running longer than you would like or going over issues that you feel you already know, please let me know and I can adjust accordingly.
[Slide Presentation]
Ms Kirby: As I said, the presentation is divided into sections, the first being just what is the climate change issue.
Climate change is really about the atmospheric chemistry and the changing composition of gases in the atmosphere. There is a natural greenhouse gas effect that is caused by the so-called greenhouse gases. What we're really looking at is an enhanced greenhouse gas effect caused by increasing concentrations of those gases in the atmosphere and the changing chemistry of the atmosphere.
The most significant greenhouse gas is carbon dioxide, which is associated primarily with the combustion of fossil fuels. Hence, addressing climate change is primarily, while not exclusively, an issue about energy policy. It is about how we produce energy, how we transport it and, particularly, how we use it every day in Canada - how we use it in our industrial structure and how individual Canadians use it in terms of what kinds of homes they live in, how far from the city they are, what transportation modes they have, and all those things that use energy on a daily basis.
There are a number of greenhouse gases. While you will often hear most of the discussion surrounding carbon dioxide, there are others. I want to draw those to your attention as well.
As I've said, the largest or most significant one in terms of changes occurring from man-made sources is carbon dioxide. The other two important ones are methane, which accounts for about 13% of Canada's greenhouse gases, based on an equivalence to carbon dioxide, which is calculated in terms of the potency of the gases in the atmosphere.... Methane emissions are associated with landfill sites. There are some associated with the processing of natural gas and its transportation through pipelines, and they're associated significantly with agricultural practices, particularly with livestock.
Nitrous oxide is a significantly smaller greenhouse gas, but nonetheless an important and quite potent one, which is associated primarily with chemical production, one of the big sources being nylon production, and with fertilizers.
If you're looking at these numbers and trying to add them up, you will notice that about 2% isn't accounted for in this chart. Those come from the gases that are now being used to replace CFCs. Really, chlorofluorocarbons are related to the ozone layer. They're not related to greenhouse gases. Their production is controlled by what is known as the Montreal Protocol, which deals with the ozone layer. However, as we are introducing things to replace chlorofluorocarbons, we have some new gases that have greenhouse gas effects.
I thought it would be worth while also to talk briefly about what is known as the sink side of global climate change. We are concerned about emissions of gases and the sources of those emissions. One of the other things discussed in the climate change convention that was signed in Rio is net emissions. That is because you can use things such as forests and crops to absorb carbon dioxide. So there is not only an emission side of the equation, there is also an absorption side, known as sinks.
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In Canada, some of the things that might be particularly important are agricultural practices such as reducing summer-fallow, changing soil tillage and going to lower tillage practices, and improving crop yields.
On the forestry side - and I've singled out forestry on the slide because that is also a responsibility of the Department of Natural Resources - you see some of the possibilities that could be used to enhance Canada's sinks, such as increasing forestation of marginal agricultural land and improving our forest management practices.
Having given you some idea of the backdrop of what the climate change issue is about, I had hoped next to go on to Canada's situation and the challenges that are posed in addressing this issue for Canada. Again, as this is a natural resources committee, I will be looking particularly from that angle. Because I work for the Department of Natural Resources on the energy policy side, obviously that's going to influence the comments that I have to make on the challenge.
In terms of looking at the challenge, it may be useful for those of you who haven't seen it before to talk about what commitments Canada has actually made to date. The first, labelled the international one, refers to the climate change framework convention that was signed in Rio at the Earth Summit in 1992. That involves a commitment from Canada and from the other signatories to that convention to work towards stabilizing our net greenhouse gas emissions at their 1990 level by the year 2000.
There are a couple of things to point out in that. One is the aim towards language that came out of the negotiations at Rio. Rather than being a hard and fast target, what countries were prepared to do at that time - and there were over 150 signatories - was to aim in that direction. This stabilization refers to returning greenhouse gas emissions - and this is the whole suite of greenhouse gases, not just carbon dioxide - to 1990 levels by the year 2000.
In all developed countries, which are those that have undertaken this commitment, there are increasing emissions of greenhouse gases at the moment, so we are trying to return to the level of 1990 from what would have been an increase in those gases. It refers to the whole range of gases and it is on a net basis, dealing with the sinks I have already mentioned.
On the domestic side, the commitment that you see labelled there as the domestic commitment comes from a meeting of energy and environment ministers, federal and provincial, this past February. There have been several such meetings and numerous discussions as to what could be done on a national basis, what Canada is prepared to commit to domestically. What you see here is a reflection of the communiqué of that meeting, where all energy and environment ministers, federal and provincial, agreed that as a national commitment we would stabilize emissions and that we would start looking at developing options for further progress.
They were not prepared to set any specific targets or schedules for anything beyond stabilization. In fact, I would say that, at this meeting, to have all the ministers even agree that they supported stabilization as a national objective was quite a breakthrough, quite a change from what we have seen in previous discussions.
But it is a national objective, and one of the things that has been included in virtually all previous communiqués was to say that this was a national objective and that it did not apply to individual sectors or regions. In fact, none of the provinces have signed on to individual provincial stabilization commitments, in the context of those federal-provincial meetings. Some of them have done so outside. Quebec has just released its plan, in which it says it expects to achieve stabilization, and B.C. has made a lot of statements about its intention to do more than that. But in terms of the overall federal-provincial consensus, what you have seen is an agreement from all provinces to stabilize and to look at other options.
In terms of the challenges, I would like to focus on what Canada's circumstances are. Greenhouse gas emissions, particularly CO2 emissions, are really related to levels of economic activity. So some of the key drivers are population growth and economic growth. Canada does have one of the fastest-growing populations in the OECD. It's one of only three OECD countries that are not expecting population to either stabilize or reduce, and that contributes to the pressures or to the challenges in terms of Canada being able to meet these commitments.
.1120
In the Canadian circumstance we also have a heavily energy-dependent industrial structure that has built up over the years, based in part on past comparative advantages associated with energy and with its abundance and cost.
In terms of challenges for Canada, we also believe that the fact that there are very significant differences from one region to another poses a tremendous challenge in terms of how, as a country, we need a stabilization or whatever commitment.
Speaking now from the federal perspective, the fourth point is that our constitutional authority is limited. What we are really looking at in order to meet this challenge is a federal-provincial partnership. I would add that we are also very strongly looking at an industrial partnership, which I will talk about a bit later. When we look at the sources of greenhouse gases, particularly CO2, the big ones are the transportation sector and our production and generation of electrical power. These are areas where we need to be working very closely with the industrial sector.
In terms of meeting the commitments we have made, there are a few factors that are worth drawing to the committee's attention.
International cooperation we believe is absolutely critical, because this is a global issue. Greenhouse gases circulate freely in the atmosphere, so you don't have gases situated over Canada. You're not talking about things such as urban smog, which are really regional or local problems. You're talking about a global problem where it doesn't really matter where you reduce the emissions. In the end, they all affect the atmosphere.
Because this is an issue that goes so much to economic development and trade, countries in the developed world are quite concerned about competitiveness impacts and so on. So international cooperation, partnerships, and staying in step have been issues for virtually all developed countries.
In terms of where we are internationally, countries have been putting forward their action plans on what they intend to do to reduce emissions. Roughly, Canada is in the middle of other developed countries, in terms of both the level of increases of our actual emissions and what we have put forward to date concerning what we think we should be able to do to meet this challenge. This is particularly in terms of comparison with the United States, because a lot of these issues go to trade and most of our trade, energy, and energy-intensive products are with the United States. The approach we are looking at is quite similar to the one being following south of the border.
[Translation]
I would now like to talk a little bit about the situation in Canada, and especially in the various provinces. In order to understand exactly what happened in Berlin, it is important to understand exactly what has been done at the federal-provincial level.
As far as Canada is concerned, we are talking about projections of energy related emissions. Based on our forecasts, carbon dioxide emissions will be 12% higher in the year 2000 than they were in 1990. This gives us an indication of the important challenges we are now facing, because under the Rio Convention we are required to stabilize emissions, which means that there must be no increase. So, according to our estimates, if nothing is done, emissions will increase by approximately 12%.
There are a number of important issues linked to this, such as economic growth, the price of energy, and so forth. This is a basic projection developed by the Department of Natural Resources in a scenario where we would continue to do things exactly as we are now. In other words, if we do nothing and if there is no change in policy, there is likely to be a 12% increase in emissions.
To really understand what CO2 is, it is important to have a clear idea of the kind of pressure we are facing. As I already pointed out, our expanding population is an important source of pressure as our economic growth and per capita income. These are the kinds of pressures that lead to an increase in CO2 emissions.
.1125
There are two things that can be done under an appropriate energy policy: first of all, we can use fuels with a lower carbon content, and secondly, we can reduce the degree of energy consumption.
In cooperation with the provinces, the ministers of Energy and the Environment have developped a national action plan. This is the document we provided to other countries in Berlin to give them an idea of exactly what steps Canada had taken thus far. I have copies of that paper if you would like one.
This is something we have discussed with the provinces. The document I refer to reflects the consensus that exists in Canada regarding our overall situation and the kinds of things we can do. It really provides an overview of the problem. These are things that we have discussed with the provinces, and provincial governments have indicated that they are prepared to support these measures.
One of the most important ideas explored in the document has to do with forming a partnership with the private sector to implement a voluntary emissions reduction program for industry as a whole. Another important component deals with the underlined philosophy, namely that this document should be updated frequently to reflect the results of any reviews that have taken place. Is there a need to do more? Do we believe the programs in place are effective? And that sort of thing.
This action plan was developped through a process involving a great many different people. It all began with a mandate from the federal and provincial ministers of Energy and the Environment. In keeping with that mandate, a working group was put in place with a substantial number of representatives of industry, environmental groups, towns and municipalities and people generally interested in the problem. In 1994, we prepared a long list of options and measures to be put in place - in other words, things that can be done to try to reduce greenhouse gases.
At the end of the process, we held five separate consultations in different cities in each of the provinces of Canada. Many people came forward to present their views. In November, once all this information was available, the ministers met and established a working group of federal and provincial officials. This group went on to draft the program that was approved by the ministers of Energy and the Environment in February and was made available to other countries in Berlin.
One of the most important ideas explored in this document involves putting a national program in place to encourage organizations, and particularly industry, to take whatever voluntary measures they can to reduce greenhouse gases, especially as regards energy efficiency.
If that idea is accepted, successful implementation will depend on four key elements that sometimes conflict with one another.
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First of all, it will be important to ensure that as many organizations as possible get involved.
Secondly, we will have to ensure that governments lend their support to this kind of voluntary approach. That will mean making sure that we have enough time to ascertain whether this kind of approach is effective or not.
Thirdly, it is extremely important that available data be complete and relate to issues that environmental groups in particular are able to verify. In addition, there will be a need to follow up on whatever action is taken, to determine whether that action is adequate and to see whether it is really making a difference in private organizations.
Fourthly, we will have to try and achieve results in a very short span of time. The ministers of Energy and the Environment will be meeting again in November. We are seeking to produce a report by that date that will explain exactly what has occurred through that voluntary program.
As I mentioned, we believe that the success of this program will depend in a large extent on the broad voluntary involvement of the private sector. We will also must to ensure that the approach to be used is one that all levels of government consider suitable and are willing to support, and that the latter are prepared to work together on this initiative.
And lastly when it comes time to assess the program, we will have to find a strategy that reflects Canada's fundamental interests, particularly in the area of international trade. At the same time, we think it is very important that the government take action. For instance, the government can take steps to ensure that its own buildings and vehicles are more energy-efficient than they have been in the past.
[English]
Now I would like to turn to the Berlin conference, because it is topical and I assume is what prompted your greatest interest in having this discussion today.
Just to remind you, on an international basis our commitment started from the Rio Convention, when over 150 countries signed to work towards stabilization. Under that convention, developed countries were required to develop reports on the actions they are taking to work toward that aim.
Canada has done so, and in fact we have done so twice. We prepared a national report that met our legal commitment. Although I have fewer copies of that, I do have some. It provides considerably more background information, so members of the committee who have a particular interest in probing this issue in some depth may want to have a look at it. We also have the government-to-government report that I just finished speaking about, the national action program. That has been tabled as well.
The convention that was signed in Rio also mandated the signatories, when they met for their first meeting of the ``conference of the parties'', which is a kind of technical term after you have enough ratifications and so on to review whether the commitments that had been made in Rio were adequate to meet the overall objective of the convention.
The objective of the convention is not just to stabilize emissions but to stabilize concentrations of these gases in the atmosphere, which is a considerably greater challenge. It would take considerably more effort and more reduction to meet that. So what we have now is a first step in that direction in terms of the commitment toward stabilization.
What we have in the convention as well is something that involves only developed countries needing to report on the actual actions they are planning to take. The largest growth in emissions is expected to come from countries such as China and India and some of the other developing countries, whose commitments under the convention call for them to develop inventories but do not call for them to do the same sorts of things as we are doing.
With all that by way of backdrop, the first convention of the parties did take place in Berlin and was just completed on April 7. It did its review of the adequacy of existing commitments at that time.
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In terms of the key outcomes, the overall conference of the parties decided that existing commitments were inadequate, based in part on their level at the moment compared to the overall objective and based in part on their comprehensiveness in terms of who was included in them.
What we ended up agreeing to in Berlin is the following. For developed countries, we agreed to launch another negotiating process, another round of negotiations aimed at looking at further commitments. We set a deadline for ourselves to have those negotiations completed by 1997.
The form those are likely to take is a protocol. Normally, in these negotiations you first sign a framework convention that gives broad direction and broad commitments, and then you sign one or more protocols, as we did with the Montreal Protocol on ozone, for example, to give more specific commitments and add to what you have started with.
The developed countries also, in the course of their discussions, set out a mandate for those negotiations, which is referred to on this chart. It says they agreed to elaborate policies and measures, as well as set quantified limitation and reduction objectives. That's a fairly important development. On this issue in the past we have set strict targets and timetables for ourselves, for stabilization or whatever.
Now people are starting to say that those commitments are very difficult to meet. All countries are having difficulty meeting them, and perhaps you could get more people on board and more actual support for what you were trying to do if you looked at combining that with some other approach that talked about what you are prepared to do: what kinds of measures you are prepared to take; whether you are prepared to look at internationally harmonized efficiency standards; whether you are prepared to look at internationally harmonized taxes. Is that an easier or harder discussion than a target discussion where you don't necessarily know what it is or what the implications necessarily are of what you might sign up to do?
We had lengthy and difficult discussions with developing countries in Berlin. We ended up with no new commitments for them during this next round of negotiations, which will be finished by 1997. But we have ended up with their agreeing to accelerate the existing commitments they made in Rio.
One specific issue you may have heard about or may hear about if you call some other witnesses is something called joint implementation. This refers to the ability of one country to take actions elsewhere and include them as part of what it is doing to address the overall climate change problem.
In Canada a number of industries are interested in this. We would basically be doing a form of technology transfer where you might look at investing in a coal-fired generation plant in China, for example, and putting in technology that would make it more efficient than it otherwise would be. You would look at that difference and say it is part of Canada's overall contribution to reducing global emissions and to addressing the problem.
This is something that has been under discussion for a long time. In Berlin we had a bit of a breakthrough in that we agreed to launch a pilot project on this subject, so we'll now be able to see whether there are real benefits or not, how it might work, what some of the concerns of the host countries in the developing world might be, and so on.
One of the very lengthy discussions has been over the issue of ``credits''. If you undertake these sorts of investments, does it mean you can then do less at home because you're doing more abroad? We've now agreed to a pilot phase that does not address this crediting issue. So anyone who is undertaking these sorts of things is doing so for commercial reasons to get some experience, to get a foot in the door, to enable us to see how it works, hopefully to lay the groundwork for something down the road, but not because they are going to get some credit in terms of doing less in Canada.
In concluding, as I said at the outset, I just want to give you some of the key upcoming dates, because they may influence your deliberations, if you continue to have them on this subject.
Domestically, there's a key date in November 1995 when federal and provincial energy and environment ministers will be meeting again. At that time they will be doing two things. Each jurisdiction will be reporting on what it has done and what it has under consideration that it thinks holds promise. They will also be looking at what developments have taken place so far in terms of this voluntary program with industry.
We expect that at that time we'll have the beginnings of industry signing up and that we'll start seeing the kinds of things they're proposing to do. But we will not yet be at a stage at which we'll have had a couple of years' experience and we can actually say they've reduced by this amount.
.1140
What we'll be able to say is: these are the actions they're looking at; these are the commitments they've undertaken; and these are the results they expect. But we won't know whether we'll achieve those or not.
In addition, another key date is the following year, the end of 1996. If you look at our domestic national action program, which we've developed now with the provinces, the final chapter of that talks about the review and assessment process. There's a commitment in there to have a review of the action plan by the end of 1996.
As a milestone to get there, we're looking at having the details of the review process ready for ministers to look at during this November 1995 meeting. It would talk about how the review will be done, what kind of indicators will be examined, who will do it, all those kinds of things. We would expect the review itself to be completed in 1996.
The other one is this international date, which I referred to earlier, of 1997. That is when we expect that a protocol might be ready for signature on post-2000 commitments.
I've brought a couple of supplementary slides, which I'll show you again just for background, but I don't propose to discuss them unless I think they may be a good lead into any questions you might have.
This first one gives you some idea of what the major sources of emissions are and where they come from.
The main thing I would draw to your attention is the transportation sector, which I believe is going to be a quite difficult one to come to grips with. Power generation is quite a large one, and you'll see that the industrial sector overall is about 16%.
Some of you may wonder what this other number is. That is basically what we call ``own use of energy'' by energy producers. It takes quite a bit of energy to produce energy. This is what is associated with their own use.
This next and final graph gives you some idea of the distribution of emissions by province or territory. This sometimes is portrayed as an Alberta issue. It's obviously an issue that is of keen interest to Alberta, because it is so associated with energy. But because it is associated more with energy use than with energy production, you'll see that the largest source of emissions in terms of provinces and territories is Ontario. That's where we would have to come to grips the most with the emissions that are being produced at the moment.
Thank you very much.
I'll be pleased to answer any questions.
The Chairman: Thank you, Ms Kirby.
We'll go right into some questions, starting with Mr. Reed.
Mr. Reed (Halton - Peel): In witnessing this presentation, we've hit the mother lode in inaction, in terms of our responsibilities in this country. We have now witnessed two branches of the Department of Natural Resources pulling in the traces in opposite directions. We have a branch here that is desirous of getting on with the job of reducing greenhouse gases. We have another branch of the same ministry that is resisting every practical move that can be made. I find it very disconcerting to bear witness to that.
I take you back to the ethanol issue of last year, when there was a big push. It finally succeeded by last December. That was fought every inch of the way.
We now have a bill before the House, S-7, whereby the ministry appears not to be content with shooting for a target of 75% conversion of the national fleet to alternate fuels by the year 2004, which is almost a decade hence. Apparently they feel it's too ambitious.
I have to express that frustration, because if we're going to move ahead in practical terms, the lead ministry is the Department of Natural Resources. That's where it all has to reside.
I can appreciate the difficulties that have been stated about power generation and transportation in terms of making those conversions, but the tools are already in place for that. Ford Motor Company and General Motors are marketing cars that will burn up to 80% ethanol right now. I've driven one and it's excellent.
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The other is in power generation. We have some forms of power generation available to us that are not being supported by governments. I'm not talking about financial support, I'm talking about bureaucratic resistance. It takes place. I know whereof I speak; I'm very much involved in this myself. It takes place at the provincial level, in the regulatory process, and inhibits the development of those power generation sources that could be contributing to a reduction in greenhouse gases and a reduction in global warming.
I'll tell you that this presentation is a classic, because it shows that out of the same ministry, we have one body that wants to go in this direction and another body that's pulling in the other direction, and as a result, the movement is zero.
The Chairman: I don't know whether you want to make any comments to that effect, Sue.
Ms Kirby: Could I offer just one technical clarification before we get into what's true or what isn't true, if the committee wishes to do that. I would not wish to get into that myself.
In terms of the technical clarification on the transportation side, the discussion here is on global climate change. All of these air issues do interrelate, and the solutions at times interrelate. But when we're talking about alternatively powered vehicles, those are really a solution more to problems such as urban smog and so on.
When we're looking at global climate change, what really makes a difference in terms of greenhouse gas emissions is the efficiency of the vehicles themselves. That's part of why I pointed this out as a difficult area.
Again, I think a lot of the difficulties may well be institutional ones, but I just wanted to offer that technical clarification. There are different solutions for different problems. In terms of the climate change difficulties on transportation, the big one is your transportation systems as a whole: how you design your urban transportation system; how you design your inter-urban transportation; and the efficiency not only of cars but of transportation modes overall.
Mr. Reed: I am very pleased to hear you acknowledge the problem of the ground-level ozone, which you referred to indirectly, because during the past 12 months we've been told it's not a problem in Canada. While we've been told it's not a problem, ground-level ozone warnings have actually been issued around Metropolitan Toronto and the Niagara Peninsula. So in fact it is indeed a problem.
Ms Kirby: In terms of whether it's a problem or not, I suspect the data that was used to provide you with that answer was that, overall, in terms of forecasts, it's expected that actions are under way that would enable us to take the commitments we have agreed to in terms of ground-level ozone, which are different from those on climate change.
That does not stop there being instances of exceeding levels, by any means, nor does it say it is not a significant problem, and in that case, a significant health problem. It's one of the big differences in the two issues. Climate change is not a health problem, but ground-level ozone definitely is.
Mr. Reed: Climate change is not a health problem?
Ms Kirby: It's not a direct threat to human health. The impacts of climate change will be on whether we can grow the same kind of crops in the same areas, whether sea level will rise, and so on. But it's not a direct human health problem the way ground-level ozone is a considerable problem for people who have respiratory illnesses, and so on.
Mr. Reed: Yes, of course.
The Chairman: Mr. Reed, you have to remember where you're coming from here. Now, we're hoping it warms up in northern Ontario. So it depends which side of the issue you're on.
Mr. Reed: You keep your clean air. You have some of the greatest air in the world.
The Chairman: I'll go to Mr. Pomerleau.
[Translation]
Mr. Pomerleau (Anjou - Rivière-des-Prairies): Personally, I tend to agree with Mr. Reed. Canada has not fulfilled the commitments it made in Rio. All I can see here is the climate challenge program, which is being presented as of the coop program. But all this key program does is to encourage organizations to take voluntary measures. What sort of incentives do you provide?
Ms Kirby: There are other things in the program.
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For example, there are various regulations etc., but no financial incentives for the voluntary program. There is no guarantee. Industry is encouraged to take measures that make sense, not only environmentally but also economically, especially with regard to energy efficiency. We believe that many things could be done that are not being done presently. If organizations tell us they are willing to look at the various means in their field, we are certain that many options would be there to follow.
The department supports these organizations. For example, if they so require, we go their premisses to help them find ways to increase energy efficiency. We're asking industries to strive to look for ways that make sense for themselves and are good for the environment. Nowadays, many companies want to be seen as environmentally friendly. That's what you were asking, we do not provide them with financial incentives.
Mr. Pomerleau: That wasn't my question. In other words, you say you encourage companies, if they chose to do so, to improve the environment. That's the aim of the program.
Ms Kirby: That's the goal of the program. Industries prefer to be able to determine themselves what is in their interest rather than having to comply with regulations or being taxed, for example. Many people say that in order to reduce the use of energy, a tax could be imposed. But the Prime Minister said that Canada wouldn't do it. However, industries know that there are other ways than voluntary programs and they would rather be able to do things voluntarily. This is why they are doing it.
Mr. Pomerleau: Mr. Reed mentioned the ethanol issue. Unless I'm very mistaken, I heard that in California a percentage of cars will have to be electric from now on. Have we considered following suit in Canada?
Ms Kirby: It's possible but allow me to put this discussion in the context of climate change. What's important in this area is the way electricity is being produced in Quebec. Maybe we could use hydro electricity as a source. But other provinces generate power from a carbon-based source. So the problem is more the source of the power. It is a thing that we may look at. I'm not an expert in this area but I believe we are now assisting the United States with their program.
Mr. Pomerleau: Thank you.
[English]
Mr. Morrison (Swift Current - Maple Creek - Assiniboia): Madam, before you began your presentation, you did state that you are not a scientist. If my line of questioning is unfair, I am sure the chairman will cut me off very quickly.
I am disturbed that your entire presentation starts on the basic premise, which is not addressed anywhere in your paper, that human activity is actually affecting the world's macro-climate. Now, I have yet to see any hard scientific data to support that. We have a lot of repetitious statements to the effect that we are causing global warming through our carbon dioxide emissions, but I don't know where the research has been done. This is what I am going to be asking you about, to establish a causal relationship.
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We know that industrial man is increasing his emissions of what you refer to as greenhouse gases. We know that we are in a period of climatic change. We also know that historically there have been much more pronounced climatic changes on the earth long before the industrial age began. I'm not talking about millions of years in geological time, I'm talking about within historical time.
Now that I've had that huge preamble, my question is this: is the Department of the Environment or anyone else, any institution in Canada, actually doing research, or have they done any research, to establish a causal relationship between these two phenomena, or is everybody just taking this wild leap and assuming the two are related?
Ms Kirby: As I said, I'm not a scientist, but my understanding of the science is exactly as you have expressed it, that what we do know scientifically is that concentrations of greenhouse gases are increasing in the atmosphere. We do not know for certain if there is a causal link to climate change.
Nonetheless, the actual premise in my presentation - and because it was implicit rather than explicit, it might not have been obvious - is that Canada has made certain commitments. We have signed an international treaty, and we have through federal-provincial and other discussions at the national level indicated that we are committed to stabilizing greenhouse gas emissions. So I start from the premise that we have made obligations and that we are working toward fulfilling them and had wanted to base my presentation on what are the possibilities of doing that and what are the challenges to doing that.
As I understand the science, there is still uncertainty surrounding it. Nonetheless, in Canada we have pursued what we call a precautionary principle, as have a number of other countries, saying that if the science does prove out in the way some scientists tell us it will, we can't afford to wait until all scientific evidence is in. We really need to start taking action now that is in the right direction. We need to do it on the basis of action that makes sense, not only environmentally, while we're waiting for the science to prove that, but also in terms of economics, in terms of finding new ways to use energy more efficiently, and in terms of finding new ways to develop and use alternative fuels. We believe we should be doing all these things in any case, and that is why we are undertaking those actions.
In terms of scientific research, the main body internationally is the International Panel on Climate Change, to which Canada has contributed significantly.
Domestically, Environment Canada does do quite a bit of research, most of it based on modelling efforts and on global circulation models. Our own department does this well, and we have done quite a lot of geological research based on ice course and so on, with which you are probably familiar.
Mr. Morrison: Thank you. I appreciate your frankness, and I do understand your position.
I won't ask you another question. I would just like to make a probably biased comment for the benefit of the rest of the panel. I just thought of an analogy here while I was listening to the reply to this causal relationship potential between the emission of greenhouse gases and climatic change.
I wear woollen socks, and I'm going bald. It follows quite logically, using the same type of science that has been used in developing the series on global warming, that warm feet lead to hair loss.
Thank you.
The Chairman: I'm not sure if we'll get a comment on that, or if we're looking for one.
Colleagues, I just wanted to ask a few questions of my own. In the presentation, you suggested it was agreed to aim towards elaborate policies and measures in the international scene. Can you tell me what Canada's position is, then, as to what kinds of policies we're reviewing? Obviously, it suggests that possibly we're going to have a protocol as early as 1997 on that particular issue. This means there has to have been some discussion as to what we are intending to suggest to the rest of the world when the international community gets together, and saying that we will have a tax or we will do something of some magnitude as it relates to what kind of forestry practices we will have, or items of that nature.
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Are you familiar with or aware of where we're at with that? Is there a draft proposal or suggestions the government will be making? Who will vet those through the system?
Ms Kirby: This is quite a new idea that has arisen in the international forum. Until this point, the entire discussion had been focused on the targets and timetables approach, which we had followed. So it's only very recently that this possibility of a ``combined approach'' has come to the fore.
Canada has supported that, in general terms, and has in fact been one of the countries putting it forward on the basis that it should give us some more flexibility, that we could combine the two. The idea that has been discussed internationally so far is that there would be a long list of a menu of potential measures and countries could choose from those.
But we are just entering negotiations following Berlin. There has not been a negotiating session. There has not been a need to have a detailed Canadian position on what we favour or wouldn't favour to this point, because this whole idea of this combined approach was only approved in Berlin. We will need to do that as we go down the path in these negotiations.
The date for the first negotiation is not yet set. There has been some discussion of a negotiating session as early as July. That was not agreed to in Berlin, but I understand that Germany, in particular, will want to put that forward again and may in fact do so at the G-7 environment ministers' meeting coming up later this month.
In terms of other possible dates, October has been suggested because there is a meeting already going on then, so that would be the first real negotiating session. Even then, we wouldn't need to have a definitive position, but we'd need to know the direction we're going in. The normal process is that we would go through a cabinet process to get a negotiating mandate and that as we go down the track of negotiations and the issues become clearer, we keep going back to refresh the mandate as is required by the course of the negotiations themselves.
We also would be continuing in our consultations with the provinces. We have a mechanism that operates with them on a regular basis, called the National Air Issues Coordinating Mechanism, where we meet with them quite regularly to discuss all of these issues. We normally have the developing international positions as one of the items on those agendas.
Similarly, we have had a number of stakeholder meetings and forums. At the moment we're in the process of looking at whether we wish to change that to make it more efficient than what we've been doing.
In any event, I think there is sufficient interest in this issue that it's fair to say there will be a lot of those discussions, but in the end, the final approval of any Canadian positions would be through cabinet.
The Chairman: Okay.
I want to jump into the issue of jurisdiction. Throughout your presentation it's very obvious that our position could arguably be described as somewhat wishy-washy, because we don't have the jurisdiction and we need this cooperation with the provinces and therefore the only way we can get that is if we don't try to pass laws, but make it voluntary, in effect. We'll get more participation with that. I can understand that jurisdictional issue.
But I want to go little further past that to deal with the outreach document our committee will be getting. It deals with what your department's role will be in the new, revamped Department of Natural Resources. Of course, if you have followed the budget and the minister's reaction to the changes we've had in the Department of Natural Resources, the direction suggests to us that it will have more of an international approach, getting involved in that particular arena because of our federal mandate.
Can you tell me if the department is becoming more actively involved in these kinds of issues and alternative sources of energy, because this is the direction we see ourselves getting into and being involved in?
Ms Kirby: I think the short answer is yes. I don't think our federal-provincial discussions are going to decrease to any extent. It's not only that it means we can come up with a position because of voluntary discussions and so on. Even if we look at, for example, regulatory domains, the federal government can come up with suggested building standards. The provincial governments have to adopt and implement them.
So in terms of what we actually do at home, that need for cooperation is going to continue. I don't see that lessening any, if I understood the first part of your question correctly. If we are going to continue to actually advance and to take new initiatives in the domain of energy efficiency and alternative energy we are going to continue to have to work in that cooperative fashion.
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However, on the international scene we see these issues continuing to build, and in a lot of ways there have been times when the international pressures have been what's really driving the issue. Because climate change especially, but also some of the other issues, goes very much to the heart of energy policy, in my view there has to be increasing attention to that from the Department of Natural Resources.
The Chairman: I want to follow up on the part of your presentation that dealt specifically with forestry resources. In fact, one of the things that has been suggested is the issue of improving harvesting. Those of us who are on this committee on a regular basis know that we just did a study on the methods of harvesting, particularly clearcutting.
There has been a lot of discussion nationally and internationally about the kinds of harvesting and the recommended types of harvesting that we would use. It has been suggested to us by many that selective harvesting is the way to go, the best approach. In fact, it's almost non-existent in Canada.
Based on your interest and the international view, and the importance of forests to CO2 emissions, are we going to be actively pursuing that particular policy of suggesting, through cooperation with the provinces, that they should dramatically change their forestry harvesting practices?
Or is Mr. Reed somewhat correct in that we're talking a good show, but really we're not going to follow this up very closely, because it would take one hell of a leap of aggressiveness from the federal government to make someone change policies as they relate to an industry such as forestry? I think that's where he's coming from, but he didn't hit the nail right on the head. I'm trying to find out if that's the direction in which the new natural resources department is heading.
We're going to do the estimates in the outreach document, and I'm trying to put those two together because, if that's the direction in which the new department is heading, we need to get some background from your perspective and from the international scene of what you expect we will be suggesting domestically to meet those obligations.
Ms Kirby: I'm not a forestry expert either, so I'll answer the question in general. I can't talk about specific new directions of policy there.
From my perspective on this issue, the main thing is that forestry is an opportunity area. Because of the comprehensive approach we've taken, we can do some trade-offs; we can choose to do more on energy and less on forestry.
One of the reasons why Canada was a huge supporter of the comprehensive approach in the lead-up to Rio was so we can give ourselves some flexibility and take advantage of pursuing whatever opportunities we can wherever we find them, so we can put in place the most cost-effective solutions and the ones that go to the heart of our interests as a country in terms of our trading relations with others, and so on.
From my perspective, it would be unfortunate if we weren't pursuing those opportunities across the board, wherever we can. I would say that forestry is obviously one of the important possible components of a solution, and it would be unfortunate not to pursue that, just as it would be in other areas.
I consider this issue to be a very difficult one in terms of the commitments we've already made. If we're going to advance in those, then I don't think there are many areas we can afford not to at least examine closely to see if we can get the cooperative arrangements necessary to move forward.
Mr. Solomon (Regina - Lumsden): I have a request I'd like to make of the committee.
The Chairman: Is it based on this submission? I'll let the witnesses go if we are getting into past business.
Mr. Shepherd will speak first, and then we'll go back to what you are into, John.
Mr. Shepherd (Durham): The concept of renting air space has been experimented with in the United States. Has that been successful in reducing CO2 emissions in some of the industries, specifically in the southern United States?
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Ms Kirby: It hasn't really been applied to CO2 emissions very effectively at all. Most of what has been done so far is with either SO2 emissions or NOx emissions. Both of those are more easily defined, more local and so on. They go more to urban air quality than they do to climate change, which has so many sources it's very difficult to put into place a system that would allow you to deal with that. It has been very successful in the United States in dealing with urban air quality problems. In Los Angeles and in California, they believe it has enabled them to reduce the costs of regulation considerably without losing out on the benefits to the environment.
While in Canada we haven't done as much of that, what pilot work has been done, which has been primarily in B.C. and Ontario, would verify that for the Canadian circumstances as well, when you're talking about urban air quality issues.
When you're talking about CO2, it's a very widespread and complex problem. We are not yet at the stage where we've really done the design work that would be necessarily, either in the United States or in Canada, to test that out. I was talking earlier about joint implementation being one of the things that came out of Berlin. If you were to pursue that to its fullest extent, one of the things you would get into is trading across countries in terms of their ability to take the least-cost solutions.
Mr. Shepherd: A tax administered by the United Nations?
Ms Kirby: It could have the same effect.
The Chairman: Ms Kirby, I thank you and your colleagues very much, on behalf of the committee, for coming and for making your presentation today. It's a very complex issue and not something that we expected to resolve this morning. But we wanted to get at least an update of where we're at, because it does affect some of the things we'll be doing in the future as a committee.
Ms Kirby: Thank you.
The Chairman: Mr. Solomon, you may make your submission.
Mr. Solomon: Thank you.
In the last few days in Canada, we've seen a number of significant increases in the price of gasoline. For example, in Saskatchewan it has been 6¢ a litre over the past 10 days; in Toronto it has been 5¢ or 6¢ a litre; in other places as much as 10¢ a litre. What this means is that in the past 11 months we've had over six different increases in the price of gasoline, totalling an increase of over 20% to consumers and over 40% increase in revenues to the oil companies. The price of crude has remained relatively constant in the last 12 to 16 months and the profits of the oil companies have been increasing year after year over the past three years.
We've seen in my district, in particular, in Saskatchewan a great deal of outrage with respect to the latest increases, which were basically unjustified by the oil companies. They made some reference to increased costs. I'd like to have those who make these sorts of comments appear before this committee in a quasi-judicial manner and justify them.
The committee has agreed to do a preliminary study of gas pricing in late June or some time next fall. I'm asking, because of the recent alarming increases, that the committee consider moving up on their agenda a review of gas pricing, or energy pricing, whatever format you wish it to be.
I think it's really important for our committee to undertake this investigation as quickly as possible, if for no other reason than to have all of the stakeholders, not just the oil companies but also transportation companies, users, businesses and so on, appear before our committee and explain why these prices are being charged to consumers, in my view and in the view of thousands of Canadians, in a rip-off fashion.
Just by way of support on this, my office phone has been ringing off the hook the last two days. We had over 30 calls yesterday from consumers who are outraged by this type of increase. Open-line shows I've appeared on the last couple of weeks have indicated 95% support for an energy price review, in particular, a gas price review, right across the country.
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So I'm asking the committee not to wait until the end of June, but to move up on the agenda the review of gas pricing, maybe in the next week or two, and also to undertake a fairly comprehensive review and to carry it out as long as it takes to come to some conclusions.
The Chairman: Colleagues, have you any comments?
[Translation]
Mr. Pomerleau: Has the Chairman made commitments to certain groups concerning a timetable?
[English]
The Chairman: Yes, I'll lay it out for you as per the discussions we've had in the last number of weeks.
We're all set to go. We do have a timeframe on the estimates, as you all know, by House order. If you're not done with the estimates by the end of May, then of course you can't report your findings.
I want to make it very clear to members of the committee that I take reviewing the estimates as probably one of the most important, if not the most serious, jobs this committee has. Under the previous regime of the last government, nobody looked at the estimates. The Conservatives were not at all interested in looking at the estimates, because of course they being in government, they obviously assumed they were doing everything perfectly, and therefore we didn't have to look at the estimates.
I can assure you that I as a chairman, and I think a lot of the members I've talked to, take the estimates very seriously. We want to look at them in depth, and at the outlook document.
In comment to what John is asking for, this is what I would recommend. We have set the agenda. It's not the end of June we're going to look at it, but the beginning of June, which is roughly a month away. We have four weeks to get really quickly into the estimates, get heavily into that issue, make some sort of report, and look at the outlook document. Then we'll get right into this issue of energy pricing in the first two weeks in June.
I understand prices have gone up in Ottawa, about 4¢ or 5¢ in the past couple of days, and it's on its way down again as of today. In fact, there have been some significant changes across the nation.
We have committed ourselves, but we can't change our agenda every time there's a hiccup in the economy somewhere, or a change. I think it would be very difficult at this stage. We've now set up when the minister and all the officials are coming. We have worked all that out in the last number of days. We'd have to cancel all that and then try to convince somebody to come and talk to us about energy pricing, because we haven't completely set that up yet. We're still working on those. You have to understand that these things take time.
Lastly, the input I would give as it relates to this study is that in all the studies we've done in the last 20 years on this issue, the same result has occurred, the same recommendations, and the same perception has come forward out of the recommendations of those reports, which in a nutshell is that the market is reacting the way it should and there's nothing wrong. Now, if we go into this issue full speed ahead, without making sure we ask the right question through our terms of reference, we'll end up with the same result and another study that everybody else has had for the last 20 years. It would just collect dust.
I would caution the members to be careful and not be so quick to move, and to make sure when we end up with the terms of reference that it's the appropriate one, that we ask the right questions. I'm convinced that if we ask the wrong questions - and obviously some of these reports must have, because they mirror each other for the last 20 years. Either that, or we are chasing an image that will not appear, which is that somebody has their hand in the cookie jar, as is being suggested by some consumers and/or certain advocates out there.
I just want to caution you about that. I'm serious that I would like to look at this issue, but I do not want this committee perceived as being out on a witch-hunt somewhere because it's politically sexy to do so.
This is a very complex issue that can be very volatile. There are two jurisdictions involved here, provincial and federal. We have to make sure we know why we're doing this and what we expect to get out of it. That's where the terms of reference come in.
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So as your chair I recommend that we should stay on the course we've taken and make sure, when we go ahead with this, if we do, by the fall, that we know why we're doing it.
John, I'll give the last word to you, since I basically told you no.
Mr. Solomon: I think it's a mistake to delay this much longer. I understand the viewpoints of certain segments and certain sectors in Canada that have vested interests in this issue.
As well, there are vested consumer interests in agriculture right now. These prices are being jacked up right at the commencement of seeding time in western Canada. Farmers are in the process of purchasing their bulk fuels. It will cost them millions of dollars more on these new prices alone.
Keep in mind that agriculture has just been subjected to the elimination of the Crow benefit, which will cost Saskatchewan farmers $320 million a year from here on, which is half of their total net income last year.
This is a very timely issue. I don't think it's a witch-hunt. It's the responsibility of government and committee. When an issue is injuring or perceived to be injuring consumers, it's our job as politicians, who are elected to be the balance of the economic powers that run the country, to keep certain segments and certain sectors honest.
I commend the committee for undertaking to initiate some sort of review down the road. It's important for us to do that. It's a move in the right direction.
This is not a knee-jerk response. This is the sixth increase in the last eleven months overall, across this country. We've had eleven months in which to act, but we've done nothing in that time. That is not fulfilling our obligations as elected members of Parliament. In my view, and in the view of others, it's being negligent.
I also want to point out very clearly one point that the chairman has raised. This has nothing to do with the provinces. This is not a provincial jurisdiction. The setting of gas prices is a national responsibility in terms of consumer legislation and in terms of energy. I can tell you this firsthand, because when I was a provincial member we undertook a study and the conclusion was that it is a federal jurisdiction, because the provinces have no control or influence in terms of the marketplace when evidence is provided that a rip-off is being undertaken by certain organizations or certain businesses.
I won't debate the issue now, but we should think very closely and should consult with our constituents and others who believe this is an important issue. I ask you to keep it on the agenda, and if we can move it up, in any shape or form, that will be beneficial to everybody.
The Chairman: I appreciate that, John.
I want to make it very clear for the record - since we are out of camera range here and in the public domain - that I totally disagree with you that it's not a provincial jurisdiction. Quite frankly, we know that there is a jurisdictional issue here as it relates to the provinces' role. I want to make it quite clear that one of the reasons why I'm very concerned and careful and suggesting caution to the committee is that we know that a provincial election is coming that is directly related to this issue. Parties have run on this issue on a number of occasions, both in your province and in mine, who have suggested -
Mr. Solomon: This is not true, Mr. Chairman.
The Chairman: Yes, it is.
Mr. Solomon: In Saskatchewan they have not run on this issue at all.
The Chairman: They have said this on continuous occasions and have used it in their brochures to suggest that it's not their problem, that it's a federal problem, when in fact we know that the truth is very different.
I do not think this committee wants to get involved in that kind of political shenanigans, and that's why I have cautioned everyone to take their own sweet time to make sure that we shall deal with this issue for the right reasons, not for the wrong ones. That's why I think this proposed timetable is the best one.
Mr. Solomon: Mr. Chairman, with all due respect, you're playing politics with this issue, which I'm not trying to do.
Mr. Arseneault (Restigouche - Chaleur): On a point of order, unlike the member across the way, I didn't receive any phone calls. I am aware of it because I've read in the paper that there have been price increases. Nor have I been out drumming up those phone calls on television and in talking about the issue. The more you talk about the issue, I guess the more attention you can get as an individual, and then you tend to build on that.
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This committee has quite clearly indicated we are interested in looking at that issue. As everyone will admit, it's a very complex issue.
If we decide to move up the schedule until next week, who's going to appear in that short time? If we do get some witnesses who do appear, after a while our study and our recommendations will not carry any weight in the end. They'll say they didn't really have time to prepare, that we didn't call the right witnesses and that we didn't have the right agenda.
I agree with the chairman that the steering committee has discussed the issue. We have put forth a work plan in the committee, and I would go so far as to say, Mr. Chairman, that the reason for this meeting today was clearly spelled out on the agenda and the whole subject is out of order.
The Chairman: Quite frankly, I think we have a consensus, so unless someone else wants to disagree with me, I sense the committee as a whole agrees with the agenda we've set for ourselves, and we'll follow through on that.
Mr. Rideout (Moncton): Mr. Chairman, I want to make one little point. Perhaps John should approach the chairman of the industry committee -
The Chairman: He has.
Mr. Rideout: - where it properly lies and ask him to see what their agenda is like to see whether it could be dealt with there.
From a natural resources point of view, we can look at certain aspects of pricing, but it's really a consumer protection issue, which falls within the mandate of the industry committee. You might more properly approach it there.
The Chairman: Thank you.
I just want to make it clear that we have committed ourselves to looking at this issue in the preliminary phase and we will carry out our commitment as per the committee's request and agreement a number of weeks ago.
I want to thank you very much for your attendance and we'll see you next Thursday, same time.
The meeting is adjourned.