12 June 2008
Debates of the Senate (Hansard)
2nd Session, 39th Parliament
Volume 144, Issue 69
Thursday, June 12, 2008
Canadian Environmental Protection Act, 1999
Bill to Amend—Second Reading
On the Order:
Resuming debate on the motion of the Honourable Senator Brown, seconded by the Honourable Senator Nancy Ruth, for the second reading of Bill C-33, An Act to amend the Canadian Environmental Protection Act, 1999.
To listen to Senator Mitchell's speech, please click below:
Hon. Grant Mitchell: Honourable senators, it is with great pleasure as well as some trepidation that I rise to speak to Bill C-33. The pleasure comes from a number of considerations which I will note in a few moments. The trepidation comes from the fact that I find myself having to support this bill. The last time I did that, which may be the only time I have actually supported a government bill this aggressively and with some enthusiasm in this chamber, it turned out I had made a terrible mistake.
Therefore, I have been questioning, as I note some of my honourable colleagues do, my own judgment in these matters, particularly when Senator Murray came to me after that horrible event. He said he was thinking of pointing that out to the members of the Senate. However, he has shown mercy on me.
I do this humbly and with great trepidation, but I do feel that this bill and what its implications are for both economic policy and environmental policy is what a future-looking environmental policy should embrace. It is very interesting that I still feel there is a strong residual, if not explicit, belief amongst members of the government that somehow being aggressive about climate change policy, even pursuing Kyoto in an aggressive way, is inherently a cost on the economy. It will inherently drain the economy, reduce economic activity, damage jobs and hurt the quality of life of Canadians.
This bill and the issue it addresses is absolute fundamental proof that this is not the case. It is very interesting to me how the government's view of these things seems to be a "disconnect." On the one hand, members of the other side will argue over and over again for spending billions of dollars on military aircraft, on helicopters, et cetera. Yet they never argue that will damage an economy.
At the same time, when it comes to being aggressive about providing moral suasion for or encouraging and stimulating a futuristic environmental policy to provide leadership on climate change in the world, they say implicitly that that will hurt an economy.
It is important to note that we fundamentally restructured our economy between 1939 and 1945 to win that unfortunate war — as all wars are — and it did not hurt our economy. In fact, for the wrong reasons, it created a modern industrialized economy that has sustained this country as one of the prominent western industrialized nations in the world, and it did not damage our economy in any way, shape or form.
I argue vehemently that if we demonstrate leadership and do what must be done to address climate change, first, it would cost much less than people imagine. Second, it would stimulate and, in fact, create the next economic revolution that the world will face — and should be able to enjoy — that is, a green revolution. It would be a clean economic revolution unlike any we have seen before. Third, it would create jobs and a better quality of life.
The irony is that the government is not grabbing this ethanol 5 initiative — one would hope they would grab the ethanol 10 or ethanol 15 initiative — and use that as a prominent policy to demonstrate the kind of leadership they actually could provide. The government should be taking some credit for this, except that I would argue they are not actually going far enough.
At the same time that members of the other side neglect to grab this initiative as an example of what is possible in an enlightened, futuristic environmental policy, they never show us any examples of how good environmental policy has ever hurt an economy or how a good environmental initiative has ever hurt any kind of business. We can see all kinds of examples where exactly the opposite is true. Bad environmental policy and disregard for the environment by businesses will absolutely hurt economies and hurt business and businesses.
This bill addresses the issue of bio-fuel mixed fuels. I know that Senator Spivak and others will likely disagree, but I believe there is a great deal of evidence that the ethanol mixed fuel initiative is environmentally sound and economically productive. I would argue that the downsides attributed to the initiative are not as significant as suggested. With time and progress, the evidence will become better on both economic and environmental fronts.
I wish the government would grab this initiative and use it as a show case policy. It is an example of how much more they could do and, relatively, how easily it could be done.
This bill would give the federal government the power to regulate mixed fuels, ethanol, biodiesel and, perhaps, other bio-fuels. The problem now is that we have three provinces — Manitoba, Saskatchewan and Ontario — with certain standards and British Columbia is about to implement standards. However, that means that we will have a patchwork of mixed fuel standards across the country.
That creates huge problems for business, individuals and regulators to adjust. This bill gives a well-intentioned government the powers it needs to deal with this important issue properly.
There are various criticisms generally levelled against this initiative, the first of which is that it is, perhaps, immoral and unethical to burn food. The implication is that by producing ethanol from corn, which is a food product, we push up food prices in the world. I argue that we should be very careful not to jump immediately to the conclusion that ethanol is the reason that food prices have increased. A much more powerful argument can be made that food prices have gone up because fuel prices have gone up. There is ample study demonstrating that food prices track almost exactly the trajectory of fuel prices. Therefore, it is not immediately obvious that ethanol is the culprit.
More to the point, I argue that climate change is the basis of a great deal of the pressure on food prices. Clearly, crops are failing around the world either because of drought or massive flooding. Even where crops such as rice and soybeans are growing, we are frequently finding that the yields are down. That creates great pressure on food prices.
What is interesting to me is that at a time when farmers get a chance to be paid a true market value for the work they have done on behalf of Canadians and the people of the world, people turn and say it is the farmers' fault that food prices are rising and farmers should be responsible for reducing food prices.
However, no one says that maybe oil companies should be reducing their prices because fuel prices are pushing up food prices. No one says the multinational fertilizer producers, who increase their prices as commodity prices go up, should restructure their markets so that food prices would be reduced. No one is saying to the auto industry that it should stop making SUVs because that would reduce the demand for oil and gas and then food prices would drop as a result. No, people turn immediately to farmers and say it is their fault. As a Western Canadian, I am very happy that Canadian farmers are finally getting paid for their product.
Some Hon. Senators: Hear, hear!
Senator Mitchell: If we want to deal with food prices, let us deal with food prices. However, let us deal with it as a society and as a world community. Let us not simply pick on farmers to say those are the ones who have to do it.
I argue against the case that it is somehow farmers who are pushing up prices. There is a great deal of evidence that ethanol and bio-fuels are not pushing up food prices.
One corollary to that argument is that somehow ethanol has eaten into the supply of what would normally have been corn for food. That reduces the supply of corn for food, thereby increasing its demand and relative price. There is a great deal of evidence that the amount of corn actually being applied to ethanol production has been equal to the increased production of corn. It may be that there is actually no net reduction in corn for food. Certainly there are studies that support that.
The second argument is — and this is a serious argument — that somehow ethanol production is not good for the economy. Not many people argue that it actually has net greater carbon emissions than conventional gasoline would have, but people do argue that, at best, it is about equal, and then they layer on the problem of food prices and say, ergo, "Why do it."
I would say, everything else being equal, if it just does what gasoline does, at least it is helping farm and rural communities; it is sustaining and diversifying those economies and those regions and that in itself would be justification.
However, there are a couple of things to keep in mind. I would like to step back and say that some of this criticism of ethanol comes down to this idea, and is used by people who want to discourage really aggressive environmental activity. They use the same mode of argument when they talk about carbon credits in Europe and they say it was a disaster; they sold it way too cheap. You know what? They did originally set that program up with carbon credits too inexpensive. However, these are complicated matters which had never before been confronted.
We have to start somewhere with climate change and allow human creativity, the human condition, and the drive of markets and goodwill to find a better way to do things. Until you take that first step on something as big and as complex as it is to deal with climate change, you cannot perhaps get to the point where it can be done perfectly or far better.
I want to address that point and say there is a great deal of evidence that perhaps only marginally or incrementally — I think it is more significant — corn-based ethanol reduces the carbon footprint BTU for BTU by about 13 per cent. There are studies that indicate that cellulose-derived ethanol is far more environmentally sound and reduces CO2 far more. There are estimates that it might actually reduce it 85 per cent over conventional oil and gasoline.
My point is that I do not know how we get from corn-based to cellulose-based unless we take the first step, unless we start to work at it. Maybe it is an interesting comparison with the oil sands. When they started the oil sands, those were hugely uneconomic and non-commercial; the costs were so high. However, due to the diligence of Albertans, business people and engineers and the like in Alberta — even without these astronomical prices — it has become economic. I argue we should apply that same kind of creativity, drive and entrepreneurship to developing the ethanol fuels in that way until we know that it is not marginal but there is a huge advantage.
Senator Nolin makes a very good point. There is the self-correcting factor: As food prices rise, there will be a great deal of pressure on ethanol producers to find other sources. There are huge investments, money being put into other forms right now. Iogen is noted for looking at agricultural waste products. There is another firm, GreenField Ethanol, which is looking at a process using municipal waste. It is a good Quebec firm. Is there a bad Quebec firm? I do not think so.
I want to say it is a myth to be critical, on these bases, of ethanol. I think this allows enlightened activity and initiative on the part of government, if only we could get a government that would feel it wants enthusiastically to embrace enlightened initiatives.
Here is the "but." The problem is this approach avoidance. About the time that ethanol looks like it will work, the government takes the excise tax exemption off ethanol. Is it not interesting that the oil sands have had tremendous tax advantages, tremendous tax holidays that have fuelled — if I can use that term — their development. However, ethanol — again an advantage to farmers, not to oil companies — seems not to get the same kind of sustained tax advantage. I think that is not a coincidence. I think that is a question of who is more powerful to this government in this political system.
The second thing is that the government is really locked on ethanol 5, which is 5 per cent, and has not embraced the idea of ethanol 10 or even ethanol 85. One hundred per cent of cars on Canada's roads today can use ethanol 10 without any modification. There are a good deal of cars that can use ethanol 85, which is the inverse of ethanol 15. The CO2 reductions actually increase geometrically from 5 per cent to 15 per cent. It is important that government embrace this and drive it even more aggressively.
It is of concern to me that somehow at some level the government does not really want to embrace this, despite the fact that it is almost, in my mind, a perfect example of the possibilities of doing great environmental policy that can literally contribute to saving the world, and economic policy that can literally contribute to driving the next successful industrial revolution.
I have racked my brains over and over again to try and determine why it is that this government — which prides itself in being conservative, business oriented, economically oriented — somehow cannot see that strong environmental policy is strong economic development policy. Correct me if I am wrong, but I think it is an ideological issue. I do not mean that in a negative way, although there could be that implication. It is an ideological issue.
The fact is that this Conservative government does not really see much of a role for government in society. period, except perhaps for building militaries and putting people in jail. This government does not see that it could be the catalyst, provide the leadership to lead Canada and lead the world in this important area.
The implications of that ideology and that perspective are like saying, "If individuals want to fix climate change, individuals will fix climate change." That is very much like saying, "If individuals want to win the Second World War, individuals can go out and win the Second World War." It does not work that way.
There is a role for government sometimes to be a catalyst and to be a leader. If ever there was a need for it, there is a need for it now.
Honourable senators, I ask that the government not only act positively with this bill and do what can be done under this bill, but go beyond that, and understand that it is on the verge of finally — in my estimation — actually, maybe, possibly, closely, perhaps, doing something right on the environment. What a day it is!