ENVI Committee Meeting

37th PARLIAMENT, 2nd SESSION

Standing Committee on Environment and Sustainable Development

EVIDENCE

CONTENTS

Tuesday, February 25, 2003

Â

1205

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

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

The Chair

Mr. Bernard Bigras

The Chair

Mr. Paul Szabo (Mississauga South, Lib.)

The Chair

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

The Chair

Â

1210

Mr. Bob Mills (Red Deer, Canadian Alliance)

The Chair

Mr. Bob Mills

The Chair

Mr. Bob Mills

The Chair

Mr. John Herron (Fundy—Royal, PC)

The Chair

Mr. Bob Mills

The Chair

Mr. Bernard Bigras

The Chair

Â

1215

Mr. Paul Szabo

The Chair

Hon. David Anderson (Minister of the Environment)

Â

1220

Â

1225

The Chair

Mr. Bob Mills

Mr. David Anderson

Â

1230

Mr. Bob Mills

Mr. David Anderson

The Chair

Mr. Bernard Bigras

Â

1235

Mr. David Anderson

Mr. Bernard Bigras

Mr. David Anderson

Â

1240

The Chair

Mr. Joe Comartin

Mr. David Anderson

Mr. Joe Comartin

Mr. David Anderson

Mr. Joe Comartin

Mr. David Anderson

Mr. Joe Comartin

Â

1245

Mr. David Anderson

Mr. Joe Comartin

Mr. David Anderson

Mr. Joe Comartin

Mr. David Anderson

The Chair

Mr. John Herron

Â

1250

Mr. David Anderson

Mr. John Herron

Â

1255

The Chair

Mr. David Anderson

Mr. John Herron

Mr. David Anderson

The Chair

Mr. Julian Reed (Halton, Lib.)

Mr. David Anderson

·

1300

Mr. Julian Reed

Mr. David Anderson

Mr. Julian Reed

The Chair

Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.)

·

1305

Mr. David Anderson

Mr. Bob Mills

Mr. David Anderson

·

1310

Mr. Clifford Lincoln

Mr. David Anderson

The Chair

Ms. Hélène Scherrer (Louis-Hébert, Lib.)

·

1315

Mr. David Anderson

The Chair

Mr. Alan Tonks (York South—Weston, Lib.)

Mr. David Anderson

·

1320

Mr. Alan Tonks

Mr. David Anderson

Mr. Alan Tonks

Mr. David Anderson

The Chair

Mr. Gary Lunn (Saanich—Gulf Islands, Canadian Alliance)

·

1325

Mr. David Anderson

Mr. Gary Lunn

Mr. David Anderson

Mr. Gary Lunn

Mr. David Anderson

Mr. Gary Lunn

·

1330

Mr. David Anderson

Mr. Gary Lunn

The Chair

Mr. Roy Bailey (Souris—Moose Mountain, Canadian Alliance)

Mr. David Anderson

·

1335

The Chair

Mr. David Anderson

·

1340

The Chair

Mr. Roy Bailey

Mr. David Anderson

Mr. Roy Bailey

The Chair

Mr. Bernard Bigras

·

1345

The Chair

Mr. John Herron

Mr. David Anderson

Mr. Alan Tonks

The Chair

Mr. Bernard Bigras

The Chair

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CANADA

Standing Committee on Environment and Sustainable Development

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NUMBER 018

l

2nd SESSION

l

37th PARLIAMENT

---

EVIDENCE

Tuesday, February 25, 2003

[Recorded by Electronic Apparatus]

  (1205)  

[English]

    The Chair (Hon. Charles Caccia (Davenport, Lib.)): We'll call the meeting to order.

    We have an administrative item we can deal with before the minister arrives. On instructions received at the last meeting of this committee, the clerk has prepared a budget for two members to travel to London on March 24 to 27 to appear before the environment committee of the British House of Commons on sustainable development, combining this with an invitation that has been extended to the Canadian Commissioner for Sustainable Development, who raised this item at our last meeting. Having prepared a budget for a sum of $6,624.62 that would permit two members of this committee to travel, we need a mover, and then there may be some questions. Then we'll put it to a vote and take it from there. The choice of two members is in order to keep balance between the government side and the opposition side. The matter is before the members of this committee, and I would entertain a motion to adopt this motion prepared by the clerk.

    Monsieur Bigras.

[Translation]

    Mr. Bernard Bigras (Rosemont—Petite-Patrie, BQ): You will understand that I am not moving the motion of course, but I would like to discuss it. So, I suppose that means someone has to second it. Are we in fact debating the motion? I find it somewhat paradoxical...

[English]

    The Chair: Mr. Szabo has moved it. Now we can proceed.

[Translation]

    Mr. Bernard Bigras: I would ask for your attention and for your consideration of the following, Mr. Chairman. I find it somewhat paradoxical to be told today that only two members of the Environment Committee would be going to Britain. I don't know if that's how things are usually done, but I think that this is quite an interesting meeting the Commissioner for the Environment and Sustainable Development, among others, has invited us to attend. She suggested that the committee travel, not just two of its members, namely a government member and a member of the opposition.

    Therefore, in all fairness, I feel that, in order to ensure greater transparency and sharing of information among committee members, more than one member should be attending that meeting. Otherwise, I would have considerable difficulty supporting such a motion. I think the number has to be expanded. When there are opportunities for travel, I think there are usually more than two members travelling. This would mean that the Chairman would be going to Britain with a member of the opposition. I feel that the number should be expanded.

[English]

    The Chair: That's a fair comment, and if it is the wish of the committee to enlarge the number, as Mr. Bigras suggests, that can be done. It can be four, so there are two and two, or even a larger number, provided there are people willing to travel, because usually, when it comes to the crunch, people are not available or prepared to travel. But certainly, we can expand the number in question.

    Mr. Szabo.

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

    I think the member raises a good point. The decision to have the delegation of two I'm sure was based on some factors of which we are aware. The liaison committee deals with funds available for travel. This is also probably another consideration, and I wonder if the chair or the clerk could assist with regard to the status of the funding available. I've heard some mixed stories.

    The Chair: The funds available are to be determined by the liaison committee. There is a meeting at 1 o'clock today, and it is my understanding that each committee has to put forward a request, in addition to the normal budgetary base. So if the amount that is being requested is finalized by this committee, it will be for the liaison committee to make the next decision.

    Mr. Comartin.

[Translation]

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

    I agree with Mr. Bigras that it would be more appropriate to have a member from each party and, if need be, another government member, but in a situation like this, given the invitation which was extended to us, it would be more appropriate to have at least one representative from each party. I don't know if this is the proper time to move something like this.

[English]

    The Chair: If there is a determination that each opposition member is prepared to travel, that would simplify the matter. It would mean four members on the opposition side, hopefully, four members on the government side, and we can amend the budget accordingly, to make it into a delegation of eight persons instead of two.

    Mr. Mills.

  (1210)  

    Mr. Bob Mills (Red Deer, Canadian Alliance): I have a problem with four and four. On one of the major issues, Kyoto, we would represent a position I think the British should hear as well, why Kyoto won't work and why we'd be better off with a North American plan. To have seven against one I don't think would be very favourable for our position. So if we're going to do that, because we represent the official opposition, I would propose that we need to have at least two members.

    The Chair: Look, it's not a meeting on Kyoto, it is a meeting on sustainable development. There may be discussion on a wide range of items. Sustainable development and its implementation and Johannesburg provide the main purpose of the invitation, as I recall it. So I don't think the Alliance party needs to be particularly worried.

    Mr. Bob Mills: But there have been meetings with the European Union in the past, and they've been very productive in Washington and so on--

    The Chair: This is not the European Union, this is with the British Parliament.

    Mr. Bob Mills: But the British are part of that union. I think they would like to hear another point of view, and I feel that having four government members and seven to one is not really the way I would like to see it go.

    The Chair: The vote in the House of Commons was three to one, so it is not actually an unfair representation of the vote in the House of Commons. Therefore, one voice out of eight is not that unreasonable, because it would deny other members participation.

    Mr. Herron.

    Mr. John Herron (Fundy—Royal, PC): I think it should be expanded beyond the chair and the vice-chair and should include representation of at least one party member. I think that would be a more appropriate, egalitarian approach. I would ask the chair to reflect on the size of the delegation that we had for Johannesburg. That was essentially one member from each party and, I believe, two government members. That might be a track for us to follow for this effort as well.

    The Chair: There was no rationale with the Johannesburg delegation. It was an ad hoc happening, as you may recall.

    Mr. Mills.

    Mr. Bob Mills: Simply because it's not a political issue, then, it's not going to be anything to do with politics, five would seem the best number, a member from each party.

    The Chair: Monsieur Bigras.

[Translation]

    Mr. Bernard Bigras: I didn't want to start a debate, even if that seems to be what we're getting into, but I simply wanted to bring to the attention of the committee that it would be rather unusual to have only two members travelling to this meeting. So, I would suggest that the motion be reworded to provide for travel by a representative from each party. What I am saying isn't that complicated: either we have a representative from each party travelling to that meeting, or we have no one going. It's really not complicated. We cannot possibly recommend anything else today.

[English]

    The Chair: Merci.

    Perhaps we should modify the approach by indicating that the amount to be requested from the liaison committee will be such as to reflect the intent of any member of this committee who wishes to travel and will be able to make time for that event. Thereby it will be open to every member of this committee. You may have two or three Alliance, two or three Liberals, and so forth, but every party has the potential of being represented. It often happens that at the last moment people withdraw or change their plans, so we are discussing a very hypothetical situation.

    Mr. Szabo, would you be willing to move a motion to that effect?

  (1215)  

    Mr. Paul Szabo: I would withdraw the previous one. I think Mr. Bigras has raised a good point. Given that this is not a major encounter, with broad representation of views, in the spirit of cooperation, a representative of each party plus the chair, to make sure everything is coordinated, probably would be a reasonable compromise. I think we have to go to the liaison committee with a firm dollar figure, Mr. Chairman. That would be six people, and I think it's a reasonable request for fair representation to ensure that the work is done properly.

    The Chair: You heard the motion by Mr. Szabo. Is that acceptable?

    (Motion agreed to)

    The Chair: Thank you.

    Mr. Minister, we hope decisions in cabinet are made as efficiently as at this committee level. We welcome you. The floor is yours.

    Hon. David Anderson (Minister of the Environment): Thank you, Mr. Chairman.

    Yes, sometimes efficiency does occur, both at cabinet and in committee, and it's always a pleasure to see. So congratulations on your recent decisions.

    What I'd like to do is make a few brief remarks before going on to questions. I have also prepared responses to the Commissioner for the Environment and Sustainable Development's questions before you, and I can table them, or if you wish, we can go over them one by one or just the specific ones that interest you. It's up to you entirely.

    Our government came into office in 1993 with a red book commitment to reduce greenhouse gas emissions. It's clear that we've been investing in climate change measures ever since. Drawing on some years of consultation in Canada with partners in other levels of government, in business, in the non-governmental sector, and among experts, we have created a Canadian-made climate change plan that will work for all parts of the country. Now we are investing in concrete actions to put the plan in motion and to meet our commitment to achieve our climate change objectives.

    In budget 2003 there was an investment of $2 billion over five years, which brings our total investment in climate change actions through the various budgets since 1997, the year of Kyoto, to $3.7 billion. That is in addition to some other measures, which members of this committee will have noticed in the budget, designed to complement our actions on climate change, for example, the granting councils and agencies that are required to report on their climate change measures. We're clearly mobilizing the instruments of government to meet the climate change commitment. The budget 2003 investment allows us to increase our support by $300 million for science, research, and development activities, which are funded through two foundations, the Foundation for Climate and Atmospheric Sciences, which you will recall had $60 million when it was set up and is now getting another $50 million, and the Sustainable Development Technology Canada Foundation, which received $100 million when it was set up and now will receive an extra $250 million. I should add that the second foundation's first $100 million is not yet completely spent. I imagine it's about 50% spent, or perhaps even less. In addition, there will be some $200 million dedicated to further investment in long-term climate change technology, and those investments will help drive our creativity and support our desire to do things more smartly, more efficiently, and more effectively.

    To reflect the increased strategic importance of climate change to the country, government programs, particularly those in the industry portfolio, such as Technology Partnerships Canada, the granting councils, and the regional development agencies, have been asked to report on how their contribution to Canada's climate change objectives can be improved within existing resource levels.

    The comprehensive strategy we have for tackling climate change will also be evident as we continue to integrate our actions on climate change with our urban agenda, because we realize global competitive advantage in the future will be measured by livable cities, a clean environment, and sustainability.

    For the remainder of the $1.5 billion of that total $2 billion figure, the budget notes that we'll consider all the possibilities, renewables and alternative energy technology, such as wind power and ethanol, building and housing efficiency retrofits, and increased vehicle fuel efficiency. The climate change plan contains the details and lays out thoughtfully the best thinking on how to achieve our 240 megatonne reduction in greenhouse gas emissions. In addition, we have the climate change plan I tabled in Parliament in November, and now we have the funding to support that plan.

  (1220)  

    We're going to use the mechanisms for funding partnerships to be responsive to diverse Canadian interests, and we will be results-oriented, pursuing actions that provide the most cost-effective means of reducing our greenhouse gas emissions, while taking into careful consideration other criteria, such as the overall funding, leveraging, and environmental and public policy co-benefits. I should add here that throughout this work we will be cooperating fully with territories and provinces. For example, in the technology area many of the provinces and territories have exciting and important contributions to make, and we wish to partner with them.

[Translation]

    There are a few other areas that I should briefly mention before moving on to your questions.

    In partnership with large industrial emitters, we are developing a three-pronged approach that would include the following: first, covenants with large emitters providing for a regulatory or financial backstop, as well as targets totalling 55 megatons in reductions; secondly, access to domestic emissions trading, including domestic offsets and international permits; thirdly, other measures such as shared-cost investments in innovative technologies.

    Our provincial, territorial and municipal government partners are also addressing climate change. They are developing the strategies for their jurisdictions and implementing emission reduction measures. This plan builds on those efforts, suggests ways to stimulate further action, and makes clear the willingness of the Government of Canada to help with implementation.

    In fact, we have recently launched consultations with each provincial and territorial government at the officials level to identify ways to implement some of the proposals outlined in the plan.

    There is considerable interest among Canadian firms in the opportunities offered by the international carbon market. They are now looking to the Government of Canada for assistance. We will consult industries on how the government can facilitate access to green and inexpensive carbon permits on the international market, possibly through a public-private partnership.

    The plan also contains measures to support and enable action by individual Canadians and challenges every Canadian to reduce their personal emissions. An average reduction of one tonne per person is within reach and would eliminate emissions of 31 megatons.

  (1225)  

[English]

    The plan and our budget 2003 investments towards the plan's implementation demonstrate this government's resolve to achieve our Kyoto target. They show that Canada can meet its international commitments while continuing to expand our economy. Our budget 2003 investment is just the latest step, important as it is, for Canadians to become the most sophisticated and efficient consumers and producers of energy in the world, and also the leaders in the development of new and cleaner technology. Over the coming years this government will continue to ensure that resources are adequate to achieve our goal, and we will do so in a fiscally prudent manner, aligning existing programs in support of climate change objectives and phasing in new spending over several budgets.

    Mr. Chairman, I'm in your hands for questions.

    The Chair: Thank you, Minister.

    Mr. Mills.

    Mr. Bob Mills: I thank the minister for being here. We need you here a lot more times, because of the number of questions we have.

    With the $1 billion in the budget for the environment and sustainable development, you see a figure like $175 million over two years for contaminated sites. We also read in the paper today that $477 million will be needed to clean up the tar ponds alone. So obviously, we have a budget problem there.

    Second, I see $40 million for air quality, including the B.C., Washington state, and Great Lakes airshed. As you're aware, the public hearings begin on May 26 for Sumas. The federal government has had no response on that at all, other than your personal involvement with Governor Locke. It seems to me this would be a great opportunity to show the federal government's interest in the second most contaminated airshed in Canada.

    When it comes to Kyoto, we've spent close to $2 billion, and our CO₂ levels have been rising. we have to show substantial reductions by 2005. With the $1.7 billion cookie jar and with the potential of the $15 cap being much higher than that, I just wonder how that's going to be administered and how you can tell Canadians there won't be the same misuse of funds we've seen in so many other departments. How can we possibly, without giving major incentives to Canadians, get to that 20% reduction we've been talking about?

    Mr. David Anderson: Starting with the $175 million for contaminated sites, these are specifically federal sites. The tar ponds are not technically a federal site. In the budget--undoubtedly you read the budget very carefully, as you read the plan very carefully, Mr. Mills--you will discover that there is a separate section there with respect to the tar ponds. So the two things would have to be funded separately, you're quite right. The $175 million is not adequate to deal with all the federal sites--it's over two years, you're correct there. My expectation is that this funding program will continue, and it will probably take anywhere from 12 to 20 years to clean up federal contaminated sites. This is in addition to some that, as I said, are not under the full responsibility of the federal government and some where we have cost-sharing agreements with the province, which would probably be the case on tar ponds. But the basic point you're making is correct. The $175 million in the budget is not for the tar ponds.

    Environment Canada has been very active on the Sumas file for a long time. Contrary to your comment about there being no response, we have in fact provided all the basic scientific information on the impacts of the Sumas 2 development in the United States on the Canadian airshed. We have, as I have pointed out, opposed it, but we have also provided the fundamental straight science material. We have taken more than simply an advocacy role. We have shown that there will be an increase in airshed loading in that area by reason of Sumas 2.

    You mentioned my conversations with the Governor of Washington. I've had conversations with him on a number of occasions. Let me just repeat to you what I have repeated elsewhere. It is sometimes difficult to persuade the Americans on their side of the line--and you will understand this--to eliminate a project. Our regulations are weaker than theirs. When you have in Canada similar plants in Campbell River and perhaps in Nanaimo at Duke Point with many times the emissions of the American plant, you do have a credibility problem with our American friends. So we have to clean up on our side of the border, we have to make sure our standards are just as high.

  (1230)  

    Mr. Bob Mills: But there are eleven proposed plants. This is just one.

    Mr. David Anderson: That's right, it is one, but that's the one we're dealing with. There are others, you're quite right, but I don't know whether any of them will come forward to the permitting stage. Because of the concern over air quality generally in the Fraser Valley, we have made that a special area of concern. As you correctly point out, we have money in the budget for transboundary cooperation with the Americans on such places as the airshed of the Fraser Valley, Strait of Georgia, Puget Sound area. We intend to pursue that vigorously. I've had a number of meetings with the administrator of the EPA on that, I've discussed it with the Governor of Washington. We have Whatcom County and Seattle County involved as well, along with, on our side of the border, the Government of British Columbia, the Greater Vancouver district, and the Fraser Valley regional district. We're trying to put together a regional airshed mechanism that can handle the type of thing you're talking about. It has been a very active area, but it is important to make sure provincial standards on facilities that are very similar to the Sumas one on the Canadian side are at least as stringent as they are on the American side.

    With respect to Kyoto, we all know the best performing economy in the western world, which is Canada, has incurred an increase in CO₂ levels. That's the downside. The upside is that because we are performing so well, because we've got such a successful economy in so many ways, we also have the wherewithal to take steps to deal with the problem. We're not strapped for cash, and you see $2 billion in this budget.

    As for whether the potential of a $15 cap is too low or too high, futures on carbon are still well below $15, so I do not think it likely that we will have to come in to support a price that is higher than that.

    Your final comment is on misuse of funds. Mr. Mills, again, you're dealing with a government that has been the most successful in the western world with the economy, top of the G-7, top of the OECD. It happens to be the government you're facing across the House of Commons every day. I don't want to brag, but I'm saying, if there's any other government in the world that is likely to do better, tell me about it, because we're doing pretty well.

    The Chair: Thank you.

    Monsieur Bigras.

[Translation]

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

    The Quebec parliamentary commission on implementation of the Kyoto Protocol, which Mr. Fauteux participated in, I believe, has only just begun its hearings, and already it has become quite clear that industry organizations in particular have rejected outright the sectoral approach that you are favouring. Everyone, from the Centre patronal de l'environnement du Québec to the Association des manufacturiers du Québec, is agreed that what is needed is a territorial approach. This is understandable, since your approach, by the way in which it defines large emitters, creates unfair distortions for Quebec industry.

    You said, Minister, that you were in favour of bilateral agreements with the provinces, particularly with Quebec, for implementing the Kyoto Protocol. On February 20^th and 21^st, in response to questions on the subject, you told us that you were holding talks. Yesterday, February 24^th, you mentioned consultations with the provinces. What I would like you to understand is that the provinces, including Quebec, don't want to discuss, they want to negotiate. What they want are negotiations.

    So, I would ask you the following question. When will you appointing negotiators? I can understand that your two negotiators are the deputy ministers of Natural Resources and Environment respectively, but when will you give them an official—and I do mean official—mandate to negotiate a bilateral agreement with the Government of Quebec and with those provinces willing to negotiate?

  (1235)  

    Mr. David Anderson: First, we intended to eliminate or to reduce unfair distortions as soon as possible when we implemented a system with the industrial sectors, because otherwise, it could happen that an industry based in Ontario, next to Quebec, has a level very different from that of the neighbouring province. Thus it would be possible to have an unbalanced situation which would favour either Ontario plants or Quebec plants. So, this is why we tried to ensure that each industrial sector, each plant and each company has the same burden, the same treatment, in whatever province they might be located.

    Yes, we held several bilateral discussions with the provinces. The Prime Minister said in the House of Commons that he is ready to conclude agreements with all the provinces if they wish to do so. The policy has not changed at all.

    As to whether or not these two ministers are formally appointed to negotiate, this is not the point. The point is that we are continuing our talks with the provinces so as to create as efficient a system as we can. I know that there may be elections in Quebec province in a few weeks or months, but there is no question of changing the whole system of dialogue with deputy ministers and their counterparts because of this. As soon as there is clearly a need, we will formally appoint not only a deputy minister, but a negotiator as well. I wonder whether you have more information regarding time when we will go ahead with these formalities.

    Mr. Bernard Bigras: Mr. Anderson, this has nothing to do with the Quebec elections. The true is that you are currently negotiating with the industry and that you are holding talks and discussions with the provinces. There is a difference between negotiating and discussing; if I may remind you of that.

    When, on December 18, you wrote a letter to the Canadian Association of Petroleum Producers telling them that their share in the reduction would be limited to 15% and then, after the holidays, you stated that the automobile industry would be exempted from the implementation of this protocol and that the association... Besides, the oil sector is the economic base of the West; the automobile sector is the economic base of Ontario. You have not made any commitment to the manufacturing sector. The manufacturing sector, Mr. Minister, if I may remind you, is the economic base of Quebec. Now we are asking you whether you could make a commitment today, because the meeting held by your deputy ministers, like the one from February 14—and you know this well—were held with the industry. The provinces did not even have observer status at these meeting on last February 14, or St-Valentine's day. Mr. Chairman, we are asking the minister to show some partnership with the provinces. With a system and an approach like the one the minister is now using... With such partners, Mr. Chairman, I am sure with can do without marriage.

    So does he intend to hold more formal negotiations with the provinces, and not to go over the provinces' heads by negotiating with industry? That would be true Canadian partnership, but it is not what the federal government is currently doing.

    Mr. David Anderson: Mr. Chairman, clearly if we had chosen a sector other than petroleum and natural gas, the honourable member would complain that we had chosen the automobile sector, the concrete sector or some other one. We are just beginning. We do not have a very large bureaucracy. We are beginning with experts in different sectors. We cannot do everything at once. We are holding talks with the provinces, and if the negotiations begin with a view to reaching a formal agreement, I would be very happy, but it would be wrong to say that because we chose one sector over another, this is indicative of a major policy shift. We will hold talks with each sector in turn and I hope that we will reach agreements, but we do not have hundreds of negotiators, we do not have hundreds of public servants for these talks, we have a few, and we are dealing with the sectors one by one.

  (1240)  

    The Chair: Thank you, Mr. Bigras.

    Mr. Comartin.

[English]

    Mr. Joe Comartin: So Mr. Bigras doesn't think you're particularly favouring the auto industry, you are on record as saying the real thrust of the department, as far as Kyoto is concerned, is to encourage the auto industry to reduce their emissions at the tailpipe, rather than at the manufacturing level of the vehicle. Do you have a specific schedule in mind and a specific reduction in emissions? I think generally in the environmental community it's felt that they will require a 25% reduction in tailpipe emissions. Is that the department's aim, and if so, what is your schedule to achieve that reduction?

    Mr. David Anderson: That very much is our target, Mr. Comartin, 25%. As far as timing goes, there is the complication of a lawsuit in the United States of the automobile manufacturers against the State of California, which the United States federal government has joined in, surprisingly, on the side of the automobile manufacturers, rather than the State of California.

    Mr. Joe Comartin: That is not surprising.

    Mr. David Anderson: Disappointingly, maybe, is a better word.

    That case is obviously important to the overall discussions, so I can't really give you a timeframe for that. What we are trying to do is signal as early as possible to the industry that this is our objective and we want them to pay attention to it and if they have concerns with that, to come up with their objections as early as possible, so they can be dealt with. They may have concerns that are valid in certain sectors of their lineup of vehicles, in which case, fine, we'll be listening to them, but we do want to make sure this debate begins as soon as possible. However, as I said to the previous questioner, we have limited personnel, and we did start with the oil and gas sector and have not moved on to the other sectors yet.

    Mr. Joe Comartin: Is it your department's understanding that the 25% reduction can be achieved somewhere between 2010 and 2012, given the existing technology or what we still need to develop?

    Mr. David Anderson: In our view, it can be achieved by then. What it does mean is that the automobile manufacturers themselves will have to look at their lineups, as they had to do the first time the corporate average fleet levels were put out to them. They had to look at their lineups, and they had to make some adjustments to their lineups. We think that's important. We think the manufacturers can meet those requirements, particularly in Canada. It may be more difficult in the United States. As today's newspapers point out, the Canadian consumer is more likely to choose a smaller car than his American counterpart. We're one whole range down in size of vehicle from the American consumer. We have a different market, in other words, in many respects from the United States.

    Mr. Joe Comartin: Implementing that part of Kyoto, getting the emissions down by 25%, is of minimal or no cost to the federal government, correct?

  (1245)  

    Mr. David Anderson: We don't see major costs to it. We think it would be self-financing, probably within the parameters of the existing system.

    Mr. Joe Comartin: There have been a couple of articles in the media in the last week about how few of the hybrid vehicles particularly are being purchased. Is there any plan by the federal government to institute a purchasing program so that we convert all of our vehicles with the federal government to hybrid vehicles or vehicles using alternative sources?

    Mr. David Anderson: Yes, there is an effort to achieve that. I, the President of the Treasury Board, and the Minister of Public Works will be working on the details of it. There is no question that in certain applications people who work for the federal government will need larger vehicles. In certain applications they will need four-wheel drive, they'll need SUVs. But in the vast majority of others they don't need that type of vehicle. We hope to have a much more efficient federal fleet. I can report that the Minister of National Revenue has recently decided, enthusiastically, to buy an alternative fuel Prius vehicle.

    Mr. Joe Comartin: I just got the data on all the vehicles in the federal service. I think much fewer than 10% would at present be considered green vehicles. Do you have a timeframe within which you will bring those vehicles into line?

    Mr. David Anderson: The timeframe is as soon as possible, but we're dealing with government.

    It's a fascinating area. I once spoke to the fleet vehicle managers of the federal government down in the Conference Centre across the road, and they were telling me of the innumerable factors they must take into account as they purchase a vehicle. There are about 40 different requirements they have to touch on to make sure this or that potential use or potential concern is addressed. They were saying, look, we could do a much better job if our hands were freed up from the restrictions that are currently on us. We have not managed to eliminate all those restrictions. So I in no way blame the fleet managers, who I found to be very responsive, imaginative, and good people in achieving this objective. I do think, however, we ministers have to make sure they have an easier time in dealing with this primary requirement.

    The Chair: Thank you, Mr. Comartin.

    Mr. Herron.

    Mr. John Herron: Thank you, Mr. Chair.

    First, as the minister is well aware, the Progressive Conservative Party was not an advocate of ratifying the Kyoto protocol without having a provincial consensus or provincial agreement in place beforehand. The driving rationale is that it's extremely difficult to implement an accord of this nature without the active participation of the provinces. Given the fact that the Government of Canada has chosen to ratify the accord in advance and put our international word at stake, our party will support the government in achieving the full implementation of the accord, in order to ensure that our international reputation is preserved. But we still need to have active participation of the provinces.

    My first question is this. I'm heartened by your remark that you've now entered into bilateral discussions with provincial governments at the official level, but I think the Kyoto project was such a case study about how not to do intergovernmental relations because we didn't have a serious level of political engagement between provincial governments and the federal government until the last two years. Is the government actively pursuing bilateral agreements with all provinces in the same spirit as with the acid rain protocol, which was why we were able to get the active participation of the provinces to implement that accord? It was a very worthy approach and paid huge dividends.

    My second question is this. I know the minister is aware--he touched on the issue in California--that there are now essentially five or six major regimes developing in the United States with state-driven approaches to addressing climate change. Is the Government of Canada approaching the U.S. government at a federal level to develop what we're calling for, a Kyoto annex, given that our economies are so integrated, so that we'd have one climate change regime for North America to help develop a more progressive approach with the United States in addressing climate change?

  (1250)  

    Mr. David Anderson: We certainly are pursuing agreements with provinces. There are areas in the climate change puzzle that are entirely within provincial jurisdiction. They can handle those, obviously we cannot, and so for us to only use the federal areas would be more expensive and less efficient. So we want to have that cooperative approach. I would point out that we did have a very cooperative approach with the provinces year after year. It was only last summer that the Province of Alberta decided to pull out of co-chairing the work on climate change. We had certain developments over the fall, but it was through no lack of desire on the part of the federal government to work with the provinces. We tried hard and continue to try hard, but there seemed to be a belief out there that the Canadian public could turned away from support for climate change measures and support of Kyoto. I think history has shown that belief failed. Interestingly, the opposition parties who voted for ratifying Kyoto appear to have gone up in the polls recently. Yours and the Alliance do not appear to have moved in a positive direction. I appreciate the statement that the PCs will support the government's implementation of Kyoto, but in no way do I agree that the problems of last year were attributable to a lack of desire on the federal government's part to work with provinces. We had been working with them, and we intend to continue to work with them.

    Second, there are many states in the United States, and I guess, if you disunite the United States and take each one separately, you find states that are interested in doing climate change things, some with very vigorous programs. But as for having one climate change regime for North America, the answer is no. We have chosen the international course, which we feel is the most important, because we feel this is a global problem, and although we've noticed some recent references to the importance of climate change by the United States federal government, they haven't yet come on board as we would like. If you recollect, the President changed his mind after the election on this issue, and he hasn't yet changed it back to the position he was at when the election took place.

    So I don't think there's a possibility of an overall climate change plan for North America per se, because we're following different paths, but we have a very important agreement with them to cooperate fully on development of technology, such things as clean coal, carbon sequestration, many other areas. We certainly expect fuel cell technology development. We will be working with the United States on the basis of a bilateral agreement I signed with the Under Secretary of State for Global Affairs, Paula Dobriansky, in March of last year. So we already have an agreement in place to work with them, and we're having various meetings under the aegis of that signed agreement.

    Mr. John Herron: Adopting the international approach within the Kyoto context is admirable, but it doesn't preclude the capacity to have a bilateral arrangement with the two different nations to have a more progressive strategy. So I would encourage the government to maintain that concept.

    I have a very short third question. As you know, the government has to provide demonstrative evidence that it's on track towards achieving its Kyoto targets of 240 megatonnes by 2008-2012. By 2005 that demonstrative evidence has to be produced. Will we see a year-by-year submission to Parliament on how we're doing leading up to 2005, so that we don't get a rude awakening at that point?

  (1255)  

    The Chair: There is a commitment to produce a yearly report on page 54 of the plan, which answers your question.

    Mr. David Anderson: We certainly want to make sure people are fully informed, but if you check the pages of the plan, you'll see the commitment there: “biannual reports will be made”.

    Mr. John Herron: What is the target you're hoping to hit by 2005 to have that demonstrative evidence?

    Mr. David Anderson: Demonstrative evidence I think is a bit of a misnomer. This is not an interim reduction required by the United Nations. It's an indication that we have a plan that's operating, adequately funded, adequately supported, that measures have been taken with the various partners, provinces and industry, and that we appear to be on stream. It isn't a question of trying to hit any number, but a question of whether the country that's reporting is doing what appears to be necessary to achieve its target in the years 2008-2012.

    The Chair: Thank you.

    Mr. Reed.

    Mr. Julian Reed (Halton, Lib.): Thank you very much, Mr. Chair.

    I want to bring to the attention of the committee and all of us the fact that this is a very difficult file for the Minister of the Environment, inasmuch as there is more than one key player here. There's Finance, there's NRCAN, there's Environment. Occasionally, the three have not come together with their opinions and attitudes. It may be an unfair question I'm about to ask, but you mentioned co-benefits in your opening statement, Minister, and certainly, co-benefits are incredibly important in decision-making on some of these technologies we're trying hard to introduce, but the co-benefit things are not necessarily recognized by other ministers. I'll give you one example, ethanol. You and I stand together in our belief in the future of ethanol, and yet I get lines from my moles in another department where the statement is that it's a very expensive way to subsidize a farmer and the cost per tonne of CO₂ saving is out of sight anyway. I won't go into the kind or the accuracy of information that's being used to arrive at those statements, but the fact is that the co-benefit of ethanol is being ignored, when you have another department that says they're going to wait until cellulose ethanol comes on stream and we're not going to go ahead with grain ethanol, because of the cost per tonne of offset that is far too high. But therein is an enormous co-benefit, and maybe we have to do a little attitude adjusting in some other departments.

    Mr. David Anderson: No organization is better at attitude adjusting than the Liberal caucus, so I tremble at the prospect of what you're going to do.

    You're quite right with respect to co-benefits. The difficulty with co-benefits is sorting out their value. A good project, let us say an urban transit project, has climate change benefits, but it has many other benefits, more liveable cities, less time wasted, the economy of the city functions better, because people and goods get in and out better. When the proposal comes, I deal with the co-benefit of climate change, others deal with the economic aspects that will flow from it as well. Sometimes there is a feeling that with a large amount of money for climate change, everything should be on the climate change account and the co-benefit should come for free to the other sectors of the economy. So there are some difficulties in accounting, and we have to make sure we're fairly rigorous and the climate change money gets the best bang for the buck.

    It's always difficult to work out co-benefits. The co-benefits of many government programs are only discovered later. It's the law of unintended consequences, its beneficial side. So I think we have to work a lot more together. You've named a number of departments, and there are probably as many others you didn't name that we could add to the list. We do have, of course, a reference group of ministers. We have a committee that is working on that, but we will be looking also to the caucus committees to assist the government and this committee to assist Parliament on ideas in that regard.

·  (1300)  

    Mr. Julian Reed: My second question has to do with your comment about innovative technology. There's a misleading notion that all this climate change accomplishment is going to be because of new technology that is being invented or is going to be created, but there is old established technology that's not being fully utilized. I wonder if you have any comment about that. I realize there's difficulty. I'm thinking particularly of electric power generation. I can get you 50 megatonnes by exploiting the 11,000 megawatts of small hydro across Canada, but small hydro is more expensive to manage and operate, even though the installation may be fairly linear in its capital cost. I'm wondering if there's any recognition being given to that sort of thing, because that technology is well established, well developed, its development is improving all the time in the control systems, all that sort of stuff, but it's not going anywhere until it gets a financial return that will make it worthwhile.

    Mr. David Anderson: I entirely agree that the first step for new technology is to look at existing technology, and this is really important to us in the short term. It's fine to talk about sequestration of CO₂ underground, it's fine to talk about clean coal technologies, and we should certainly talk about fuel cells, but we don't know at what stage these will cut in to make major differences to emissions. So it's really important to see what we can get in the short term.

    With respect to the small-scale hydro electric schemes you've talked about and some of the other renewables, I'm really now beginning to poach in the area of the Minister of Natural Resources, who handles energy. But I think we're going to have some opportunities for fairly sympathetic effort, analysis, and, I hope, implementation of pilot projects that allow the demonstration of things we haven't really bothered about to date, because of the mindset of the big dam, the big hydroelectric central. I think we will be looking more on the edges of the energy field, and small-scale hydro is clearly in that view.

    Mr. Julian Reed: I'll go for big hydro too, if that's....

    The Chair: Thank you, Mr. Reed.

    Mr. Lincoln.

    Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.): I've three questions, which I'll put to you together. The first one relates to the management of the process. You've expressed the feeling that with all this money available, different ministers will come up and maybe take away some of the money for their pet projects or hobby horses. You've also expressed the feeling that maybe several ministries should manage the process at arms length; you mentioned the Treasury Board, the finance ministry, and yourselves. Don't you agree that there should be one manager, one institution in charge? Should that be you, should it be the PCO? But shouldn't there be one boss, rather than three or four, which will precipitate what you suggest, ministries working for their hobby horses and pet projects?

    My second question relates to large industrial emitters, and it follows on the line of questioning of Mr. Bigras. Shouldn't there be a process to make this completely transparent, to enable other stakeholders to be present when covenants are being negotiated? The action plan is very heavy on covenants negotiated with large industries. I mean provinces, NGOs, other stakeholders. In regard to covenants, your action plan mentioned that Alberta had suggested a backstop of financial penalties and/or regulations as consequences in case of non-participation. What is going to be the backstop? Is it going to be CEPA? What kind of backstop are you going to use?

    Finally, Japan has legislated 10% ethanol by 2008, and it calculates that once this comes into force, it will represent fully 1% of the total 6% of its Kyoto target. Why can't we do the same?

·  (1305)  

    Mr. David Anderson: The management of the project is going to be very important. We must make sure this has integrity, and the comments I have made are all in line with making sure we get the best cost-benefit analysis for climate change objectives. This is where the discussion with Julian about co-benefits comes in. There are others who have perfectly legitimate issues to raise, but we have to make sure that with the climate change funding, we don't get distracted into too many different areas and that if there's a project that has a bundle of benefits, the funding comes from a bundle of sources and we do not find climate change, simply because it happens at the moment to have a little bit of money in the kitty, to be the one that picks up the full bill. We have to watch for it, there's no question about that. It's perfectly straightforward, no one is surprised by anyone suggesting we need to spend money carefully.

    With respect to having only one government department, be it PCO or Finance, as the final arbiter, that's a good point, as long as you have disinterested ministries that do not have constituencies within their own departments or clients of their own department--

    Mr. Bob Mills: And they're not politicians.

    Mr. David Anderson: Well, the world isn't run in democracies without politicians. You have to remember that, Bob.

    I do think it's important to make sure departments that have constituencies at least are not entirely giving the final word. Finance, for example, is a more disinterested department, perhaps, than my own or NRCAN or Agriculture or something like that. PCO's another possibility, but the organization of this is going to have to be done carefully, and I don't know whether there's really some benefit in one department, as opposed to a group. Inevitably, it seems to me, you're going to have to set up some sort of task force approach for something that crosses so many lines of government departments. We're trying hard to make Environment a horizontal department, and I don't think, if we singled out climate change to be under a single department, we'd necessarily achieve the advantages we'd like.

    On large industrial emitters, again, there isn't some great problem of secrecy so far. It seems to me totally open and transparent. Everybody was talking to everybody else inside and outside the rooms. Basically, each sector will know what the other is getting, and the discussion will take place. It would be extremely foolish of federal negotiators to start making special deals that lead them into deep trouble the next time they come to the table. We could set up mechanisms, but as for management, sometimes it is important to have discussions that limit the debate to the specific technical areas. The industry associations and the industry reps are very talented and knowledgeable people. Perhaps having so many different groups all in the same room at the same time will lead more to confusion than to clarity. I don't think we have any trouble, but I'll bear that in mind if there's any problem developing from the approach we take.

    Finally, on the issue of backstop, we could have new legislation, but I'm sure the committee would quail at the thought of new legislation to handle some of the climate change things. It might take a long time to get in, it might take a great deal of hard work. We have CEPA, which is quite adequate. The Supreme Court has commented on the specific provisions we think would be appropriate. There's no question that this is a global problem only the federal government can truly handle ultimately. We have the possibility of using other existing regulations or other existing legislation. I can't at the moment list all the other ones there would be, but basically, that's the same as using CEPA; we would use the range of the government tool box.

    With respect to what lies behind your question, Clifford, you're dead right, people are unlikely to negotiate effectively in a zero-sum game situation unless there is a worse case alternative, a sort of default case, if they don't come to a decent agreement. So you do have to say, look, there will be some other method used, perhaps less attractive to you, if we can't work out something between ourselves by way of a covenant or agreement.

·  (1310)  

    Mr. Clifford Lincoln: With ethanol, I mentioned the example of Japan.

    Mr. David Anderson: Sorry.

    We have put down the figure of 35% of the gasoline stream having 10% ethanol. That works out to about 3.5%. That's in the plan now. My effort is to work on the plan before we start revising it. There are some who would like to start rewriting it right away, but my belief is that we should achieve that goal and move on from there. The plan has many good goals in it, which I think we should really get down now to implementing, rather than discussing changes.

    The Chair: Thank you, Mr. Lincoln.

    Madame Scherrer.

[Translation]

    Ms. Hélène Scherrer (Louis-Hébert, Lib.): Thank you very much, Mr. Chairman.

    When I look at the sums that were set aside in order to attain the Kyoto objectives and as I listen to your speech today, I feel that a substantial part of the sums is being invested in new technology and, consequently, in ways of reducing greenhouse gases, by adjusting the carbon dioxide or the other gases or by redirecting them. However, if I draw an analogy with the health sector, I feel that this is only a way of dealing extensively with the side-effects, without dealing with the disease as such.

    Maybe I am wearing my sustainable development hat today as I raise this matter, but I had hoped that the budget would reflect the firm political will of the government, and perhaps of other departments as well, to demonstrate that they intend to achieve the goals set by Kyoto by addressing in a very concrete way the habits of Canadians, for instance.

    I have one example to give you with regard to the habits of Canadians. In transportation, I still see substantial investments being made to build new highways so as to allow people to use their cars more easily, whereas I would have hoped that all in all, the ratification of the Kyoto Protocol would not only be your concern exclusively, but a matter of concern to everyone. For instance, I was hoping you might succeed in convincing your colleague from the Department of Transportation or your other colleagues to say that this year and over the coming years, your focus will be first and foremost on developing public transportation.

    This is what I mean when I say that we can very well offset the current pollution with new technology, but this is like sending out a message that we will continue, that all the industries will continue, that everyone will continue along the present course, because you cannot stop the progress of science. Emission levels will continue to be an issue. The government has merely committed to reducing emission levels, but basically, we are not getting to the root of the matter. We do not want to force Canadians to change their daily lives. Nonetheless, this is what I had hoped to see in a general way. I would have liked to see more of a “green” budget and to see departments refrain from announcing pilot projects to address specific emission problems.

    I want us to get back to basics and to show some political will that could rub off on other departments. I mentioned public transportation, but we could also deal with health, we could deal with other matters involving sustainable development. Perhaps we could succeed in this endeavour with only one manager, but I am sorry to say that if we do decide to achieve the goals set out in the Kyoto Protocol, in transportation, for instance, we will have to promote marine transportation and railway transportation and see to it that the Kyoto Protocol also has a role to play in these sectors.

    In your plan or in your high technology investments, are there any measures designed to get people to change their habits, rather than just Band-Aid solutions?

·  (1315)  

    Mr. David Anderson: You are quite right, Hélène. Unfortunately, one of the problems with a $2 billion project is that many Canadians, ordinary men and women, think that this is something far too complicated, too sophisticated for them, and that this involves big expenses for the industry but that it has nothing to do with their daily lives.

    Unfortunately, this is the problem we have at this time. If I get support from my colleagues on the Cabinet Committee on Government Communications, we will make some announcements on television and on the radio regarding what Canadians can do personally in their daily lives, and I hope to be able to do just that to show that this issue not only involves big industry, that this is not merely an issue for debate between the Government of Alberta, the Government of Ontario, the federal government and the Government of Newfoundland. This is an issue that affects our daily lives. This is why we have set a target of one tonne for each Canadian and this is why on page 47 of the plan, we have drawn up a list of things to do. We are not the only ones doing this, even churches are acting on their own to show parishioners how to reduce greenhouse gas emissions. Companies are doing the same thing as well as schools, universities and other institutions.

    I am entirely in favour of an approach that emphasizes the importance of individual action and I agree with you. I regret the fact that for the past four or five months, the debate has focused too much on large institutions, like government and industries. I do hope to shift this balance somewhat.

[English]

    The Chair: Merci.

    Mr. Tonks.

    Mr. Alan Tonks (York South—Weston, Lib.): Thank you, Mr. Chairman.

    We had the Commissioner for Sustainable Development appear before the committee, and I sense the tone of the questioning is a direct result of her observations with respect to the lack of horizontality, if you will, and the frustration in resolving the kinds of issues where there are cross-interests. There's a confluence of possibilities based on technologies or whatever, but there's an inability of this committee to hold anybody accountable with respect to whether those differences are being resolved at the ministerial or departmental level. Mr. Reed has given you an example, as has Mr. Lincoln, with respect to ethanol, an agricultural perspective opposed to an industrial perspective, and there's a sense that there isn't any accountability through this committee to have a resolution of those different interests, thus getting on with the implementation of a budgetary allocation, a policy decision, or whatever.

    As a result of the World Summit on Sustainable Development, the development of an implementation plan, and the evolution of a mechanism, which is your deputy ministers coordinating committee for sustainable development, do you see any role for this committee and other committees to develop a methodology that would look at Kyoto commitments and budgetary allocations and start to wire the implementation plan through the committees in a more accountable way?

    Mr. David Anderson: Yes, I think the committee could do that. I think it would be a challenging task for the committee, in the sense of being very time-consuming. There would be a lot of analysis and a lot of listening to differing points of view before, at some point, you make your decision as to where the balance is. It would not be an easy task for the committee, I would recognize that. In addition, of course, you would have to make sure the committee paid attention to the very concerns that have been talked about with respect to co-benefits and with respect to the difficulty Clifford Lincoln mentioned a moment or two ago in making sure this is indeed spent entirely on climate change measures. I expect--and this is simply advice, worth as much as you're paying for it--you would want to discuss that quite closely and embark upon it knowing it's going to take a fair commitment of time. This is, after all, $3.7 billion; that first $1.7 billion hasn't yet all been spent. It's a big program. It covers every department. The committee would be kept hopping to stay on top of it.

    Yes, it could be done. I would certainly welcome that, and I would welcome coming back to this committee at any time to report on successes and--I hope this is rare--failures. You'd want to decide yourselves, rather than having me indicate to you what should be done. There's a big time commitment in doing this.

·  (1320)  

    Mr. Alan Tonks: The committee at its last meeting spent a little time with the witnesses talking about the possibility of developing a methodology that would be applied through the committee structure to wire together the implementation plan with some sort of carriage on the part of the committee. I take it from your answer that you would be open to exploring that search for a methodology.

    Mr. David Anderson: Certainly, and I would welcome the involvement of the commissioner as well. I think this is an area where the commission can play a very important role across a number of departments. The commissioner can report on a single subject, as she did with respect to contaminated sites. On the other hand, most of the things she reported on are within the knowledge of the department already. It's a question of priorities: do you put clean water, clean air, and biological diversity ahead of contaminated sites or don't you? That's very much a political decision. Here I think she could have a very interesting and very useful time, because of her ability to delve in every department of government as she sees fit.

    Mr. Alan Tonks: With respect to the $300 million for science, research, and development, it was mentioned in the budget that the Canadian Foundation for Climate and Atmospheric Sciences and the Sustainable Development Technology Canada Foundation would have some role to play. How do you see the accountability loop where we're relying on foundations or arm's-length entities such as that? How do you see that being activated, Minister?

    Mr. David Anderson: The question's a good one. How do we coordinate that also with other existing entities that grant money within Natural Resources Canada or elsewhere? We rely on those two specific ones. They have excellent private sector boards, and we rely on the competence of those boards. We rely also on the chief executive officers being called in from time to time for discussions. We probably will meed to have some linkages on the boards between NRCAN, Environment Canada, maybe Finance. That would have to be considered, but I think an independent board, perhaps with some representation, perhaps with reporting provisions, would be a successful vehicle for making sure we get appropriate money spent.

    By the way, the first one you mentioned will be handing out a great deal of money to universities for scientific work. We have a lot of experience with arm's-length organizations supporting science and research. That's been done with a lot of government money, generally with little difficulty.

    The Chair: Thank you, Mr. Tonks.

    Mr. Lunn.

    Mr. Gary Lunn (Saanich—Gulf Islands, Canadian Alliance): Thank you, Mr. Chair.

    You talked about the environmental regulations being much stricter on the U.S. side of the border. I'm referring specifically to Sumas 2. Ironically, I was speaking with one of the other ministers from British Columbia, and we talked about the much higher automobile emission standards in California, which I think is pretty widely recognized, than we have in Canada. So it's just an observation that a country that is not ratifying Kyoto can still have its own plan and try to move forward with high standards.

    I want to go to a specific question, following up on Mr. Mills' earlier question with respect to Sumas. The Minister made reference to discussions with the Province, the Regional District of Vancouver, the Regional District of Fraser Valley, yet all those levels of government, every single one you mentioned, have to date been vehemently opposed to Sumas 2. In this year's budget there's a line item of $340 million specifically referring to a clean air agreement between Canada and the U.S. I would like to know if, with that agreement you're pursuing or that money, we would be able to stop a project like this. How would the mechanics work? Because it's very controversial when the Americans are going to build this large a plant right on the border. It's going to have an impact on the air quality. It's coming back to your comments earlier that it's important that we get results with the money we're spending.

·  (1325)  

    Mr. David Anderson: We're hoping for very substantial improvements in nitrous oxide, sulphur dioxide, particulate matter. We hope to have very substantial improvements in the contaminants that come across the border in the airflows. To do that, of course, we have to work with the people on the other side, and that's why we have set up this process to work on a regional basis with the various authorities in the United States of America and other levels of government in British Columbia. We started this in 2001 in discussions I had with Ms. Whitman, the Administrator of the EPA; she has been very supportive, and we're proceeding on that. There will undoubtedly be opportunities there, as also in southern Ontario and the Maritimes, for transboundary agreements to improve air quality. It may be that some of that money would be used for reducing in Canada the sources of contamination.

    To get back to the issue of Sumas 2, the specific co-generation proposal there, remember that various options have been put forward--what fuel it uses, for how many days of the year, etc. We have to recognize that for co-generation plants on the Canadian side of the border, regulated under the British Columbia government, we have not had the levels the Americans have had. It just makes my discussions that much more difficult as I try to negotiate a change of mind in the Americans. You must understand that.

    Mr. Gary Lunn: Yes, some of the co-generation plants we have on our side of the border have that problem, but they're old. You know they're old, I know they're old.

    Mr. David Anderson: The one in Campbell River is brand new, Gary.

    Mr. Gary Lunn: Okay, I wasn't referring to that.

    Mr. David Anderson: It has four times the pollution of the American proposed plant.

    Mr. Gary Lunn: I wasn't aware of that; I'll have to follow up on it. I appreciate that answer.

    But again, this is being built right on our border. The Campbell River one, obviously, is not going to have an impact on their air quality. That's the problem, as you know. The Fraser Valley, the Vancouver basin, is very heavily populated by our standards in Canada and British Columbia, the second highest density in Canada. When they build that large a co-generation facility, much larger in megawatts than Campbell River, it's going to have an impact on the air quality in that region. That's why there's such a huge opposition.

·  (1330)  

    Mr. David Anderson: That's why Environment Canada has put out all the information you people and the people who are opposing it are using. We've done the studies, we've pointed out these very facts. The dilemma is that when you're facing a regulatory system that is different on either side of the border, your arguing position is not as strong if you don't have the same standards as they do. I'm not suggesting that therefore this is acceptable, absolutely not. I have opposed this for a very long time. My department has put forward the very information you're quoting right now, we've done those studies, we were the agency producing the figures, but that doesn't mean to say it's acceptable. It's not acceptable, we don't like it. The difficulty is succeeding in persuading the Americans when they look at it from their point of view and say, on your side of the border you don't have the strictest standards, and you don't appear to be concerned about these plants unless they happen to be in the United States. That's the argument I get back. I don't say it's right, I don't think it's right, but that's the argument I get back, Gary, and we have to recognize that we have to clean up our act as well as asking them to clean up theirs.

    Mr. Gary Lunn: I'm not arguing, I'm looking for solutions, and that's where I ask how that $340 million is going to specifically help in a situation like this, because it is a great concern, as you recognize and as I recognize. If we need to pursue that, I guess we should pursue it more vigorously.

    Thank you for your answer.

    The Chair: Thank you, Mr. Lunn.

    Mr. Bailey.

    Mr. Roy Bailey (Souris—Moose Mountain, Canadian Alliance): Thank you.

    With regard to what Julian and Alan said, I have a new ethanol plant supposedly under construction very quickly and another to the northeast of me. My disappointment in ethanol comes from the results I have been reading from various tests: they have not been positive. We're just into this, we're not far enough into it to explore all the tests, but on the two tests I read about this weekend, I wouldn't put any money into an ethanol plant, I can tell you that.

    I had the opportunity going home from Toronto last week to sit beside a technician and an engineer coming back to Saskatchewan from Port Hope. He works in northern Saskatchewan, near Uranium City, so you know where our topic is headed. I was fortunate enough to ask this young scientist and engineer question after question for almost three hours. Of course, finally, when I told him I sat on the environment committee, you can understand what his questions would be. So I'll just throw this question at you. In the realm of air control and so on, has any thought been given to a study of the atomic facilities as generating electricity? The thing that most excited me about this young fellow was this. He claims there is waste. I said that was a big problem, he said, no, it's a minor problem if you want to use it over and over again, but it's cheaper to mine it now than it is to use over. Naturally, that particular group would like this group to understand something about nuclear energy.

    Mr. David Anderson: I won't comment on anybody's investment strategy. I don't think I should comment about where money would be well invested. I'm glad you enjoyed the three hours. It proves a point to me, that one of the great virtues and joys of being a member of Parliament is that everybody seems willing to talk to you and give you the benefit of the career experience they have.

    With respect to nuclear facilities and the aspect of waste, as I understand this--and again I'm treading directly into the territory of the Minister of Natural Resources--there have been dramatic improvements in the CANDU system that do substantially reduce the waste product, by about 40%. Also, there are improvements in costs. Your informant, I think, is quite right in this regard. Whether this justifies going to the nuclear I don't know, because I don't have the basic figures and I would be just guessing at this point. I will say the government has not ruled out nuclear. If we develop a nuclear facility in Canada, a new one--though we haven't for years--or if we reactivate those that exist now, in Ontario for example, we get the benefit of the climate change improvement, the CO₂ reductions that come from having a nuclear rather than a fossil fuel plant. We don't get that overseas under the mechanisms of Kyoto; that was something Canada argued for, but lost in the international discussions. I suggest you'll find Mr. Dhaliwal an enthusiast to answer that question as to where the current nuclear industry is in its cost efficiency, also with regard to waste. I'll defer to him, and I think it's a good question to follow up on.

·  (1335)  

    The Chair: Thank you, Mr. Bailey.

    Mr. Minister, I have three brief questions.

    First, are there efforts under way within the government system to deal with taxation so as to enhance the treatment of renewable sources of energy far above the treatment they are given now and to eliminate gradually perverse subsidies, with respect to tar sands, for instance, an industry that is enjoying taxation assistance that encourages greater greenhouse gas emissions?

    The second question has to do with something that was raised earlier. On page 54 of the plan there is an indication that the government will report on the results of climate change efforts next year. Can we, then, expect before the end of the year a report, as indicated on page 54?

    Finally, as you know, on page 45 of the plan there is this very imaginative and creative and unique invitation to Canadians to reduce by one tonne their emissions, and if this invitation is accepted, it would lead to a reduction of some 30 megatonnes. Do you plan to call a meeting of all the House of Commons MPs who supported the ratification of Kyoto and invite them to mobilize public opinion in their respective ridings to implement recommendations in chapter 4, on page 45?

    Mr. David Anderson: On the issue of taxation, there have been some alterations with respect to incentives; biodiesel, I think, is an example recently. As you will understand, I have to pass that question over to the Minister of Finance in respect of what he's doing internally in analysis of sectors. The only change I know of is bringing the natural resources sector to the same level of corporate tax as other sectors of the economy over a period of years, from 28% to 28.1%, but you'll have to ask Mr. Manley that one.

    With respect to the second question, the answer is, yes, before the end of the year we hope to have that report in your hands, and indeed, this committee would be an excellent one to spend a couple of hours looking at it and seeing whether you wish to go further in investigation.

    With respect to the 31 megatonne challenge, I am very excited by it. As I mentioned to Hélène, I'm uncomfortable with this constant emphasis on big industry, governments, institutions, billions of dollars, because it's tended to mask the fact that achieving our goal is quite simple if it can be done on a human, individual scale. Hélène's comments are very much on point.

    Your suggestion that we mobilize MPs I would be very happy to accept, as being a very positive one. I would extend it beyond those who voted for the Kyoto accord and say perhaps all MPs in the House might like to take part. It's a challenge with enormous co-benefits, particularly in the health area. Co-benefits here are where we really can see some things pay off. It blows the mind to have people drive 300 metres or 600 metres to their exercise club. It's one of those things that seems contradictory to me. It's little things like that, getting people to understand that feet can be used for walking instead of treading on pedals. For co-benefits and health, I really think we're into a very important area. It goes back to Hélène's comments about education for young people and things like that as well. They have to know it, and so we'll need some advertising, and hopefully, we'll have some school programs, if the provinces wish, which will sensitize younger people to the importance of climate change measures.

·  (1340)  

    The Chair: Thank you.

    Mr. Bailey.

    Mr. Roy Bailey: I note as I travel around, and I've been in several schools lately, that there are positive things happening, not necessarily because we MPs have done anything, but it is catching on, almost a spontaneous thing. I notice even adults saying things now they wouldn't have said two years ago. So even without the legislation, this is happening, and I think it's very positive.

    Mr. David Anderson: I can only agree. It's sometimes salutary for MPs to realize that many good things happen without our ever knowing about them.

    Mr. Roy Bailey: That's right.

    The Chair: Monsieur Bigras.

[Translation]

    Mr. Bernard Bigras: Thank you. I do have another question, in addition to the two already asked. And let me remind you that earlier, some people put three questions.

    With regard to sharing the burden, you have to know that in Quebec, industries have managed to reduce their emissions by 4.5% since 1990. Quebec needs to focus primarily on transportation, and your approach, which grants licences on a sectoral basis, penalizes Quebec industries and companies.

    Just now, I asked a question about the importance of signing a bilateral agreement with Quebec. At issue is not only the question of sharing the burden, but of financing initiatives as well. Can you make a further commitment to sign a bilateral agreement with Quebec on the funding issue?

    We know that in the last budget, $1.7 billion were set aside for partnership agreements based on climate change. The best way of maximizing emission reductions is not to come up with a Canadian action plan that funds cuts by industry when in fact in Quebec, we need to focus our efforts not on the industrial sector, but on the transportation sector. Do you not believe that a bilateral agreement on funding which would transfer funds to Quebec, and thus allow the Quebec government to allocate sums to the sectors that need to be targeted, would be more efficient in terms of meeting emission reduction goals?

·  (1345)  

[English]

    The Chair: Thank you.

    We have Mr. Herron, Mr. Lincoln, Mr. Reed, Mr. Mills, Mr. Comartin, and then we can let the minister go to question period.

    Mr. John Herron: The next time I see you in the gym, I trust I won't see your car down at the bottom of the Confederation Building if you're saying we should be walking to the gym.

    My question is on the demonstrative evidence that we're on track to hitting our Kyoto target by 2005. We're around 22 months away from having to submit that kind of report. You said it wouldn't be based on targets, you said it would be based on budget etc. Can you elaborate about what we will actually see in that report? Because the government has been accused of not getting things done in a timely fashion on this file, and you're 22 months away. What demonstrative evidence are you going to be showing to the EU to say that Canada is on track?

    Mr. David Anderson: We wish to clearly present our programs, our systems, our mechanisms, our relationships, the accords we've signed with provinces, and the covenants we have with industry, so that it is clear to those who read it that we have a process that will lead to our achieving our goal, and we expect other countries to do the same. This 2005 is not meant to see every single country proving it can reach the target. It's a question of honestly putting forward the information, and then we'll find that we get suggestions from the British, we'll find the Italians saying, you've mentioned such and such, we did it somewhat differently, and we can learn from one another in that method. There's no great check list, it's honestly describing the measures we are taking and how we expect these measures to achieve our goal. That's how the report will be done in 2005. The hurdle is 2008 to 2012, the Kyoto period. This is an indication that you're on track, but there are no great penalties one way or another, other than criticisms, if you don't appear to be succeeding in 2005.

    Mr. Alan Tonks: On a point of order, Mr. Chairman, the meeting was scheduled to go until 1:30, and I had another very important thing to do. I need it, and I think the minister does too, and he has offered to come back. Could I suggest that we adjourn the meeting now and that those members who wish another question could have their turn at another time?

    The Chair: A motion to adjourn has been made. It takes precedence.

    Monsieur Bigras.

[Translation]

    Mr. Bernard Bigras: First, let me thank the minister for answering our questions, even if he did not provide complete answers. I think that if we want an overall view, it might be good to hear from the Minister of Natural Resources as well as from his deputy minister and officials, because we cannot be content with an incomplete picture of the situation.

    The Chair: Mr. Bigras, the clerk already put this question to the minister.

[English]

    Those in favour of the motion by Mr. Tonks please so indicate.

    (Motion agreed to)

    The Chair: The meeting is adjourned.