Proceedings of the Standing Senate Committee on
Energy, the
Environment and Natural Resources
Issue 13 - Evidence
OTTAWA, Thursday, February 20, 1997
The Standing Senate Committee on Energy, the Environment and Natural Resources, to which was referred Bill C-29, to regulate interprovincial trade in and the importation for commercial purposes of certain manganese-based substances, met this day at 8:05 a.m. to give consideration to the bill.
Senator Ron Ghitter (Chairman) in the Chair.
[English]
The Chairman: Good morning, ladies and gentlemen. We will reconvene our hearings into Bill C-29. We have with us today Minister Marchi.
Thank you for attending. Please proceed.
The Honourable Sergio Marchi, P.C., M.P., Minister of Environment: Thank you, Mr. Chairman. It is a pleasure to finally have the opportunity to give you some background on the government's commitment to Bill C-29, the manganese-based fuel additives act. I have two officials with me at the table, my deputy minister, Ian Glen, and the director of transportation systems division, Frank Vena.
Let me first share some brief history with you. Seven years ago, leaded gasoline was banned in this country. It was a terrible fight. It did not matter that lead was toxic. It did not matter that Canadians were worried about what lead was doing to their children's health. Many big corporations were against banning lead, as were some politicians. Ethyl Corporation was the loudest complainer against the ban on lead in gasoline. It was a tough fight; however, in the end, lead was banned.
Today, we are considering another heavy metal -- manganese. Government wants it out of gasoline, and here we are again in the middle of another tough fight. Health boards want it out. Parents are worried about their children's health. All the major car manufacturers say it will clog up air pollution devices, and yet some things never change. Ethyl Corporation, together with a few politicians, want the status quo to continue.
Canadians are telling us that they do not want to be back here in seven years, banging on Parliament's door, pointing at the health record and saying, "I told you so." Personally, I think those Canadians are absolutely right.
The legislation before you is primarily based on three essential arguments: first, the health of Canadians and their environment; second, the issue of Canadian fuels in the larger North American context; and, third, the issue of economic impact.
As Minister of the Environment for Canada, the single most important argument in favour of Bill C-29 is that any fuel additive which has the potential to cripple pollution monitoring devices in cars will indirectly harm the health of Canadians. I will not take chances with people's health or the air that they breathe, nor should I.
This is a precautionary principle that I and this government stand by. We do not want sick kids or sick air. We do not want pollution devices clogged, jammed, or shut down. If it might be dangerous, we should get it out, period.
After all, transportation, specifically the automobile, is the single leading source of air pollution. We have some 14 million vehicles in Canada, each spewing out some five tonnes of pollutants every single year they are on the road.
When 21 auto manufacturers -- the companies that produce every single car that is sold in Canada -- are convinced that MMT clogs their pollution monitoring components, it becomes clear that a government must respond to such a serious concern.
Let me ask my friends in the Senate the same, simple question that I asked my colleagues in the House of Commons: Do you want to gamble with pollution monitoring devices? I would hope not, especially when air pollution is linked to some very deadly health issues.
As for the additive MMT, we have also received, as have you, representations from a great number of environmental organizations, parents of children with learning disabilities, Sierra Club, and the City of North York public health department. All of these and others are advocating discontinuing the use of MMT because the margins of safety are simply too narrow.
Can we simply dismiss or ignore these appeals out of hand? Ultimately, what is the point of pushing for new car technology and new car emission standards if, as the manufacturers say in such a unanimous and unprecedented voice, MMT-laced fuel will gum up their technology? Obviously, if there is any potentially serious health threat, there should be a concern in government.
Let me give an example of why I think this government and indeed all Canadians should have some reason for concern. In Toronto, the city that I have the privilege of representing, in 1994, the last year for which results were fully tabulated, there were approximately 40 days when air quality was only moderate or poor. Most of those days were during the summer. During those days, asthmatics, especially asthmatic children and seniors, are particularly vulnerable.
In fact, a recent Ontario-based study done by Ontario showed that each day from May to August, a full 5 per cent of all hospital respiratory admissions in Ontario were associated with ground level ozone.
This report talked about the deaths that occurred as a result of respiratory failures. It indicated that 15 per cent of infant respiratory admissions are associated with ozone sulphate pollution.
We need to recognize, without being overly dramatic about it, that we are now living in an age when hazardous air pollutants are poisoning infants and mimicking hormones.
If MMT can cause problems with the technology that helps prevent air pollution from one of the leading sources of pollution in all of our major cities, then I do not think we can ignore such a threat.
We should also remember that concern over MMT is not a new phenomenon. It dates back to 1978, when unleaded fuel was first introduced. By the mid-1980s, the refining industries had been warned repeatedly that MMT was a going concern to vehicle manufacturers.
The point I am trying to draw here is a simple one: These two industries have known about the problem for many years and have not been able to arrive at a solution.
In the spring of 1996, after taking on this portfolio, I personally asked the refiners to provide Canadians with a choice of fuels: A pump with MMT additive, and a green pump without the chemical additive. They flatly refused. The same was true with my predecessor, and the same was true with departmental efforts exercised for two years between 1993 and 1994.
In fact, I have read testimony where the president of GM talked about an agreement made with CPPI in 1994 and never lived up to.
The government, at some point near the end of the day, had to make a decision -- to adjudicate, to call in the judgement. After all, that is the often the business of governing.
Let us be clear that the government and others have made clean air a priority, certainly for my department. The legislation on MMT, then, is but one part of an overall strategy. We have already announced tougher standards for vehicle emissions starting with the car models in 1998. We have also identified a tougher standard and a higher threshold for car models coming out in the year 2001. We have already brought in regulations insisting on low sulphur diesel for cars. We are working towards capping the benzene content of gasoline later this spring. Lastly, we have announced plans to regulate low sulphur gas.
Honourable senators, it was the Canadian Council of the Ministers of the Environment that issued a report on cleaner vehicles and fuels, not the federal minister of the environment. They recognized and advocated that fuels and emission control technology should be treated as an integrated system to reduce motor vehicle emissions for the betterment of people's health and their environment. I believe that Bill C-29 is very much consistent with that approach and that appeal made by the CCME, and I would urge the provinces in the name of positive and progressive harmonization, and for the sake of moving towards cleaner fuels and renewable fuels, to follow this lead.
The approach brought forward with this legislation is in keeping with government-wide policy designed to encourage the development of renewable fuels such as ethanol and ETBE. In the end, it is this government's policy, and surely this country's sovereign right, to encourage and facilitate alternative, renewable, and, above all, cleaner fuels.
The second argument is the issue of Canadian fuels in the larger North American context. I am sure that everyone in this room is fully aware of the importance that the U.S. administration places on clean air and environmental matters.
Carol Browner, head of the United States Environmental Protection Agency, said that she did not think that the American public should be used as a lab test when it came to MMT. I am here to say that Canadians are not lab rats either. From a continentalist approach, there has always been an argument that Canada's MMT legislation should be in harmony with American legislation and that the two should be part of a level playing field.
It makes good economic and trade sense that automobiles and trucks be built with emission controls that work across the North American continent. Let us make no mistake: When we look at it from this larger North American context, it is clear that the trend for cleaner fuels of the future is away from the additive MMT and not towards it.
Despite a U.S. court ruling, largely on a procedural rather than substantive point, which ordered the Environmental Protection Agency to allow MMT to be marketed as a gasoline additive, at least 15 petroleum companies have indicated that they do not intend to use MMT. The petroleum companies which have decided to opt out of MMT are the big league companies: Amoco, Anchor, ARCO, B.P., Chevron, Conoco, Exxon, Hess, Marathon, Mobil, Penzoil, Philips, Shell, Sun, and Texaco. When you add it up, those petroleum companies represent 85 per cent of the American gasoline market.
Since the U.S. court decision, virtually no one is rushing or lining up to put MMT in U.S. gas. In fact, Canada is the only G-7 country still to have MMT in general use in its auto gas.
We should also remember that, despite the court rulings, health tests on MMT have been ordered by the Environmental Protection Agency in the American marketplace. As well, approximately one-third of the U.S. market will still use what is called reformulated gasoline in areas which suffer from acute air pollution. By law, as you know, under the U.S. Clean Air Act, MMT is not allowed in reformulated gasoline. Indeed, the State of California, which is recognized as a trend setter in emission controls, expressly prohibits the use of MMT additive in its fuels.
This means that MMT is going the same way as leaded gasoline. It is a substance that might once have had a place in our fuels, but no longer. This page of history is being turned.
The third and final argument to remember is the economic impact on jobs and the consumer. The car makers insist that MMT harms their product, forcing them to adopt practices which would ultimately raise prices? Who pays those prices? It is the consumers -- the men and women who drive the cars.
As car dealers have told you, gummed-up on-board diagnostic equipment adds extra warranty expenses. I am sure you remember the testimony of the car dealer who came before you and said that MMT was good for his business because his service bays were much busier than those south of border thanks to MMT. As well, the auto dealers association expressed similar concerns about MMT and the associated car warranties.
This legislation will allow the best car emission monitoring and control equipment in the world to operate as it was designed to operate. It will also save unwarranted and significantly higher costs being passed on to the car owner in the operation of their car vehicles.
Of course, there are also economic impacts on refiners, but they are not quite as horrific as you might think or as been suggested. A study commissioned by the Canadian Council of Ministers of the Environment concluded that the impact on Canada's refining industry would not be excessive. That report estimated that the cost to refiners to remove MMT for all of Canada would total $150 million in capital expenditures, plus $50 million a year in added operating costs. Yes, that adds to an increase in the cost of gasoline. In pennies, it translates to an increase in operating costs of 0.2 cents a litre for the refiners. Consumers, on the other hand, recognize that the price of gasoline jumps by at least 0.2 cents, and certainly most of the time much more, on almost every long holiday weekend we have in this country when people want to get in their cars and on the move.
By the way, that 0.2 cents a litre translates to an increase of about $5 a year to the average motorist -- a far cry from the estimates of hundreds of dollars that have been deposited as testimony before your committee in terms of possible tune-ups for malfunctioning equipment.
Finally, the dollar benefits must be factored into this economic equation. In this regard, let us not forget the 1994 study commissioned by the same Canadian Council of Environment Ministers which estimated that health benefits would be up to $31 billion over a 23-year period if cleaner fuels and more stringent vehicle emission standards were put in place in the Canadian marketplace.
Put another way, the cost to Canadians in extra health costs would be pared down by almost $1.5 billion a year. That is above and beyond the incalculable value of avoiding human suffering and pain related to air pollution.
Adding it up in terms of the economic impact, if this debate was simply an economic ledger sheet, taking MMT out of gasoline is an economic plus, an economic bonus, and is a rationale for this bill.
Mr. Chairman, some people would have you believe that this legislation, and the debate which has surrounded it, is only about that economic ledger sheet and some kind of bottom line on a balance sheet. They would make it into an economic battle. After all, this bill has been depicted as a clash of titans. If you believed all the hype and press reports, this would read like a Hollywood movie script: King Kong versus Godzilla, auto versus petroleum.
Mr. Chairman, you and I know that this legislation is not Hollywood, nor is it just about dollars and cents. Instead, more than anything else, this bill is about common sense. It is about the common sense of leading rather than following. It is about the common sense of looking after Canada's environment and people's health. It is about the common sense of listening to all interested parties and then doing the right thing.
Ultimately, it is about the common sense of understanding that Canadians have the right to breathe clean air and that this should not be made a matter of choice.
The Chairman: Thank you, Mr. Minister.
Senator Kinsella: Minister, I took note of and found very interesting your statement in the earlier part of your presentation when you advised us that your position had been that it would be good to have fuel pumps with gasoline without MMT and pumps with gasoline with MMT. If one were looking for a compromise solution to this problem, perhaps one could build upon that.
I am interested in that comment because it seems to me -- and I invite your comment -- that this bill is an all-or-none situation. This bill would have the effect of banning MMT in Canada. Your earlier proposal would not ban MMT. There would be gasoline pumps with MMT and gasoline pumps without it.
What is the science base upon which you have progressed from your compromise situation to the situation of this bill?
Mr. Marchi: Senator, the offer that I made, and that my predecessor made, was made in the hopes of trying to come to some kind of agreement not only between the two industries but between all concerned in this general phase-down. It was also intended to determine if there was any interest, intent or sensitivity on the part of CPPI to offer that choice to Canadians, because, once offered that choice, I think the decision for most Canadians would be very clear.
Equally clear was the answer that I and my predecessor obtained, which was a clear and unequivocal "no". That is simply part of the history which has been repeated during the 20-year debate -- there has been a concern registered and then a failure by the industry to deal with it. There have been offers, there have been agreements signed between CPPI and the car manufacturers, and there has been no solution or compromise solution.
Yes, this bill is take it or leave it, very much in the same way as the response I received from the CPPI. At the end of the day, the business of governments, failing a solution coming from the marketplace, is to decide and to intervene. That is what we are doing with Bill C-29.
Senator Kinsella: Minister, from the standpoint of public policy for which you have responsibility, what is the responsibility of you as minister as distinct from the oil industry on the one hand and the automotive industry on the other hand? Speaking as the minister responsible and charged with guarding the public interest, it was in the public interest in your judgment to have pumps with MMT and pumps without MMT. Whether the oil industry agreed with it or whether the automotive industry agreed with it, you had a position in terms of the public interest. That position obviously was not based upon all the data we have been hearing that MMT is bad; otherwise you would not have taken that position.
I am confused. What is the science base which enabled your ministry to say MMT is okay when there are also pumps available without MMT, or, on the other hand, saying that MMT is fine but we will not let you transport it? Where is the science base or the policy base for making this shift? Surely it is not just that industries cannot agree on things. What is the role of government?
Mr. Marchi: I do not think I have shifted on that. I made the request and the offer to first determine if there was any position available to government other than the one we have taken through this legislation. I wanted to see what the reaction of the CPPI people would be. Even had they agreed and we had two pumps, I still would have advocated that an MMT additive was bad. I am sure that Canadians would not have picked the pump with the MMT. It would have gone the way of lead through a process of osmosis.
If the CPPI had come back to my predecessor or myself and actually challenged us to have the two pumps, I am not saying that that would have been a change of heart by the Government of Canada. We still would have been advocating MMT-free gasoline. Canadian consumers would have chosen at the pump, and the retailers pumping the gas would have also chosen.
When you say that it was take it or leave it, that very much was the attitude of the CPPI. You cannot have your cake and eat it too.
Senator Kinsella: The evidence before this committee is conflicting. It stands not only in contrary opposition but in many instances in contradictory opposition, particularly around the question as to whether MMT gums up the OBDs.
A suggestion was made to the Government of Alberta and the Government of Nova Scotia when they were here. What if we were to submit this data and research to an independent third party -- which typically one would have thought would have been the Ministry of the Environment in the past -- to adjudicate this matter? Perhaps we could submit it to the Royal Society of Canada and have them assess the data. With the greatest of respect to my colleagues on this committee, we are not capable of technically assessing those arguments. However, the Royal Society of Canada could do it within three months. The cost associated with such a study was suggested to be approximately $50,000. Such a study would be very helpful to your ministry, it seems to me. What do you think of that idea?
This is what it boils down to. We are being asked to make an assessment on a piece of legislation built on government policy, and we do not know the science base. It is contradictory. The Prime Minister used the Royal Society of Canada and its work with asbestos in his discussions with the Government of France. What do you think of that idea?
Mr. Marchi: When you ask if the government could adjudicate, I believe we are adjudicating through this legislation. This is not something born three weeks ago or three months ago or three years ago. This has a history and a track record of some 20 years. Through those 20 years, we have been unable to resolve the issue, despite the fact that the concern has increased, not diminished, and despite the fact that MMT internationally is not a going commodity. Canada is the only country in the G-7 -- and some would argue in the OECD -- to use MMT widely. The concern has increased; yet, solutions have been far at hand.
The offer made in a letter to me from the CPPI last week before I came to this committee was asking to, "Please, hold on a second. Let us have an independent study. It will only take three or four months." Transport officials gave testimony before you that it would take at least a year.
Senator, I am concerned that yet more study and more delay and more procrastination will not bring a solution closer to hand. Ultimately, the Minister of the Environment is in the business of protecting people's health and, through that, their environment. Health and environment are the same as far as I am concerned. You cannot delink the two.
I think there is enough evidence and enough concern for this government and this minister to respond. I have mentioned also the precautionary principle that we agreed to back in 1992 in Rio at the Conference of Nations.
The new CEPA bill, which is still not through the House of Commons, embodies the precautionary principle. The modern lingo of environmental policy embraces the precautionary principle that we should not wait for the pipe to burst at the end. If we see it getting bigger and it looks like it will burst, then just maybe government should initiate rather than react to the downside of any environmental health risk. That is what Bill C-29 is doing.
We believe that there is enough testimony and evidence to indicate that MMT is gumming the on-board diagnostics which control and monitor the pollution devices which governments have pushed the car industry, through regulations, to put into vehicles. We would be defeating that technology, those advancements, and the protection of pollutants coming out of the cars.
In the 1998 model, we will be able to increase by 60 per cent the elimination of nitrogen oxides and increase by 30 per cent the elimination of hydrocarbons over the current circumstances. If we are to make those advances, then the machinery must work. If there is risk -- and we think the evidence points to enough risk -- that MMT would undermine that technology, then that is something for a Minister of the Environment, supported by a Minister of Health, to move on. That is what Bill C-29 represents to us.
Senator Kinsella: Minister, do you not think that all the other provincial governments which have expressed opposition to this bill would not have the same kind of public interest concerns as you have? Many of them are opposed to this bill. The testimony we heard was that a study can be done in a short period of time. Do you not think that ought to be done?
Mr. Marchi: Senator, I am as equally puzzled as you on why some eight out of ten provinces seem to be opposed to Bill C-29. That is the same number as was opposed to the repatriation of the Constitution some time ago.
I am not saying that we have a monopoly on virtue. I am only saying that the same provinces, as members of the Canadian Council of Environment Ministers, have advocated cleaner fuels and alternate fuels. They have pushed for greater efforts to be made for pollution monitoring systems on automobiles. Bill C-29 puts our money where our mouth is. We are actually doing something about it.
It is also noteworthy that the two provinces which have supported the Government of Canada account for approximately 40 per cent of the problem we are trying to address. Southern Ontario and the Fraser Valley of British Columbia have the worst smog problems in the country, and both of those provinces are supportive of this legislation. Ontario has the giant automotive industry and the refining industry and is home to Ethyl. Ontario has made a very important decision.
We work very closely with our provincial counterparts. In fact, the Deputy Minister just returned from Winnipeg yesterday where he attended a meeting of deputies on the issue of environmental harmonization. We want to do the right thing for the environment.
Based on the precautionary principle, Bill C-29 is good environmental policy that errs on the side of higher standards rather than lower standards.
Senator Taylor: Are you aware that Alberta has retracted its opposition on the basis of health and is now opposed only on the basis that it interferes with interprovincial trade?
Mr. Marchi: Certainly that was one of the arguments advocated strongly by the Alberta government. I understand that this committee heard some interesting testimony last evening on the constitutionality of this bill with regard to interprovincial trade. Unquestionably, the law is on the side of the legislation.
The question was raised about the politics of the bill when a majority of the provinces are not on side. That is a fair argument. However, politics is one thing and the letter of the law is something quite different.
The Chairman: In fairness, Senator Taylor, the government of Alberta also said, as did other provinces, that it is concerned about the movement away from the protocol which had been put in place by the ministers of environment of the land. They advised us that they did not feel they were consulted. They provided us with information on the protocols that had been established. They showed us information which stated that MMT had never been a priority issue at their meetings. They told us that, for some reason, the federal government determined to bypass the process and not work with them on this basis. They felt that was inappropriate considering the cooperation and harmony that had been enjoyed until this time.
Would you like to comment on that, minister?
Mr. Marchi: My predecessor announced her intentions on behalf of the government to move on MMT in the summer or fall of 1993. The task force of federal-provincial ministers and their officials on cleaner fuels and alternate fuels started in the fall of 1994. The fact that the federal minister had expressed the conviction of the federal government before the task force was struck may have caused some misunderstanding. However, that was done because we believe in what we are doing.
In fairness to the minister of the environment from Alberta, as far as I recall, he is the only minister of the environment who has ever raised with me personally the issue of MMT. The others have done so, of course, through correspondence. However, if this were an issue about which they were deeply concerned, I believe that at least one of them would have spoken to me about it at some time during our many meetings on harmonization.
Senator Nolin: Perhaps we should have our witnesses under oath. We are hearing conflicting evidence. The representatives of Nova Scotia and Alberta told us that they repeatedly asked, at the CCME meetings, to have MMT put on the priority list and that it was refused by your department.
Mr. Marchi: Were they under oath when they said that?
Senator Nolin: No, but perhaps we should have our witnesses under oath since we are receiving conflicting evidence from ministers and high officials of their departments.
Who is telling the truth? Is it true that they asked and were refused?
Mr. Marchi: Senator, I will allow my officials to respond. You said "department". I told the committee that the only minister I can recall raising the issue with me personally was the minister from Alberta. I do not recall the minister of the environment from Nova Scotia ever talking about that to me.
I will ask my deputy to respond to what has happened between officials in departments.
Mr. Frank Vena, Director of Transportation Systems Division, Environment Canada: As the committee was told, we have received letters from ministers of the environment on the issue of MMT requesting independent study and requesting that MMT be rolled into the CCME task force on vehicles and fuels. Letters from environment ministers to Minister Copps and Minister Marchi are on the record.
I am not privy to whether the issue was discussed openly or between ministers at their CCME meetings. I can only tell you that they did make requests in letters. That is a matter of record, and I believe that those letters were put before the committee. However, I cannot comment on whether there were open discussions at the CCMI meeting or between ministers.
Senator Nolin: Did they ask for MMT to be put on a priority list for thorough examination and study?
Mr. Vena: They focused their comments on a number of issues. Alberta mentioned the concern with respect to internal trade. They also indicated that, given the evidence, further study would be desirable. They also indicated that we do have a process in place with respect to fuels, whether studying sulphur in gasoline, sulphur in diesel, or capping benzene, and that MMT should be part of that suite of issues that we may consider.
As the minister said, the MMT issue predated the establishment of that task force. Decisions and conversations were already ongoing between the minister of the day and both industries.
Senator Nolin: In the summer of 1993, Ms Copps was not Minister of the Environment.
Mr. Vena: It was Minister Copps in 1993. She started to deal with both CPPI and MVMA on the issue of MMT in the late summer and fall of 1994.
The Chairman: Senator Nolin, to add one final comment to this: I recall seeing a letter from the chairman of the CCME. I think he was from the Northwest Territories. I believe it was directed to the minister stating he was very concerned on behalf of the group of ministers of the environment. I remember that letter. You must have received that letter.
Mr. Vena: That letter was a letter from the energy ministers, Senator Ghitter. They held a meeting in the Northwest Territories in the fall. A letter was sent to Minister McLellan and was copied to, I think, the Prime Minister and Minister Marchi, Minister Eggleton, and Minister Manley. It came from the Chair of that committee of the energy ministers, and it was signed on their behalf.
That letter quoted a number of energy ministers, I think eight in total. Some were deputy ministers as well. It came from the ministers of energy, not the ministers of the environment.
The Chairman: The federal Minister of Energy has refused to appear before our committee. This is the only minister we will hear, so I think it is fair to ask these questions to the minister.
Senator Buchanan: I have sent for my binder to refresh my memory, but I recall distinctly letters from, for instance, Wayne Adams, Vaughn Blaney and letters from at least three other ministers of the environment of the provinces, to the Minister of the Environment -- maybe not to you, sir, but to the former Minister of the Environment, and letters to the Prime Minister.
You say you have not had contact with them. If the letters are there, surely they were there for the new minister, yourself, to read.
Mr. Marchi: Do not even try to get your binder, senator, because you are right. I did not deny that letters existed both to my predecessor and to myself.
The only comment that I made in the context of ministerial meetings at the CCME was to say that, to the best of my recollection, the only minister who raised it personally with me verbally was the minister from Alberta, the Honourable Ty Lund. I cannot recollect any other minister making a point with me verbally on the question of MMT, apart and aside from representations that we have had through correspondence. That is the only comment that I made.
Senator Buchanan: That is fair. I know Wayne Adams sent at least two letters from Nova Scotia. I believe Vaughn Blaney from New Brunswick sent at least two letters.
The Chairman: May we move on?
Senator Spivak: Mr. Minister, one of the criticisms opponents to this bill have made is that it has come in as a trade bill, not as a bill banning MMT on the basis of health and the environment. I think I understand the reasons for that.
We heard a presentation from Mr. Appleton, an expert in the laws of NAFTA. He mentioned something that the Council of Canadians has discussed for a long time -- the infringement of sovereignty. He pointed out that the national treatment for investments is not, under NAFTA, treated in the same way as trade in goods.
National treatment for investment means that the defence of a country having, under its sovereign capability, to legislate for health does not apply. The only issue is compensation and how much compensation. We have heard that there will be dire consequences to this bill through lawsuits, among other things. Do you have any light to shed on this issue? What is your opinion about national treatment for investment? That was one of the issues raised by the legal people.
Mr. Marchi: Personally, as I mentioned in my preliminary remarks, I believe it is legitimate to have the national policy as well as, obviously, the sovereignty that goes with it to promote alternate cleaner fuels just the way the United States of America may be doing.
Both NAFTA and the WTO have clear provisions which allow governments to enforce regulations and pass laws with a view to protecting their people's health and their own environment. Within the investment chapter, articles 1106.6 and 1114 refer specifically to the ability of states to enact measures for the protection of the environment. We feel that, on those grounds, we are on safe and solid grounds to pursue this policy.
As far as national treatment is concerned, we would be treating an American company -- in this case, Ethyl -- the same way as any other Canadian company wishing to perhaps manufacture or trade in MMT as well. National treatment is protected and safeguarded.
Senator Spivak: According to what I heard during my conversation with the lawyer, the investment provisions were written into NAFTA later. Canada had to make some sort of representation or some sort of action before 1994. Otherwise, there was an error. You are saying that does not apply.
In your opinion, from your legal advice, both national treatment for investment and national treatment for trade in goods have the same protection, and there is a legal defence?
Mr. Marchi: There are environmental provisions attached to NAFTA. We have a side agreement on the environment as well as within the investment chapter per se. I will defer to officials to give a more specific, technical, legal response to that, if you desire, because I do not pretend to be a lawyer.
Senator Spivak: That is fine. I will obtain that later. Thank you.
Senator Nolin: Mr. Minister, you referred to a breach in an agreement between the car manufacturers and the CPPI. Could you explain to me what the deal was, in what way that deal was breached, and when?
Mr. Marchi: I mentioned that, senator, in reference and in context of this 20-year history, a history of inability of two sides of a many-sided argument to come together with some kind of satisfactory solution. I mentioned the attempts that ministers and departments of the environment have made, and I simply alluded to the testimony given to this Senate committee by the president of GM that, in her estimation, they had a written agreement in 1994 with the CPPI on the whole question of proceeding with car emission controls that would not be hampered by substances in gasoline like MMT.
I was using that reference in the context of the difficulty that has handicapped this issue for 20 years. She said -- I did not say it -- that a written deal with CPPI was broken.
Senator Nolin: I asked that question because last night the president of Ultramar Canada and the senior vice-president of Sunoco told us that there was a deal in 1994, but the car manufacturers refused to get on with it. I am puzzled by it.
Mr. Marchi: Your question brings us to the very point. For 20 years, if it is not one company, it is the other's fault. If not that one, the other one. It has been a game of volleyball. The time has come to bring down the nets, throw the volleyball away, and get on with it.
Senator Nolin: CPPI offered that they would support an independent, monitored study by the Royal Society. We could argue the length of three or four months, but at least in a short period of time. CPPI would agree to the finding of that study and even be supportive of your bill if their conclusion is that MMT should be banned.
We have not heard from you if you have received that offer formally and what your stand is on that.
Mr. Marchi: I did say that I received that offer. I mentioned to you that I did receive their letter at the beginning of the week just in advance of my arrival to this committee this morning.
My ministry is always open to any advice, study, and science that comes our way to obviously make our public policy making that much better. Certainly, if they want to do a study, I will be all eyes and ears.
However, the government has made a determination to proceed. The bill has passed the House of Commons. It is now before you for sober second thought. Our position is that this is the adjudication on the part of the Government of Canada after 20 years of this file being aired out.
If they want to engage in other studies, and there are studies going on in the American market as well, we will certainly take note of those studies.
What we are doing through Bill C-29 is good public policy for the environment, given where this situation has been for the last 20 years.
Senator Nolin: With particular focus on the last four years, what are the studies that your department has commissioned or undertaken to help you in taking the stand of trying to ban the importation of MMT in Canada?
Mr. Marchi: I will allow Frank Vena to respond. Obviously, he has been associated with this issue far longer than the minister. Suffice to say, senator, that we believe that there is evidence based on many studies done by both sides.
I was impressed with the petroleum industry, and I was aware of their position before they came to the committee. The 21 car manufacturers came before this committee in an unprecedented way, when most of the time not even the big three are in the same room singing the same hymn sheet, let alone all their foreign competitors. As the manufacturers of every single car in this country from all quarters of the globe, in their estimation, and after their research they are convinced, MMT undermines their on-board diagnostics. That is something that should not be discarded as readily or as easily as some would advocate.
We have also received information and studies within our department that we have not released because of the privacy laws, confirmed by the information commissioner who ruled that those were of such a commercial nature that they should not be released.
We have released everything else, and we are convinced, on that information, that there is enough evidence to move on this additive and to employ that precautionary principle so that we are not sorry about not having done that in the years to come.
Senator Nolin: Before your officials answer, if I understand, the mind-set of your government echoes the scope of principle15 of the Rio Declaration; am I right?
Mr. Marchi: The precautionary principle is a principle that we are employing.
Senator Nolin: It is written. Countries have agreed to a principle.
Mr. Marchi: It is not put into motion in a vacuum. You cannot have a precautionary principle without having established a ground floor of evidence that you can clearly put the principle into use and apply it.
Senator Nolin: That is what I am saying. Before Mr. Vena starts his answer, will you tell us the reason your department, your predecessor, and your government are using the precautionary principle?
Mr. Marchi: Our basic principle, when you talk of the different reasons, is that we are convinced that there is enough evidence and concern, based on what the people who should be in the know are convinced, that this MMT additive undermines the functioning of air pollution devices.
If that is the case, then I cannot be in the business of pushing the car manufacturers to give us better pollution control devices. I cannot push consumers to pay more money for repairs. I cannot push for stuff to come out of the exhaust pipe that will worsen the air quality rather than decrease it.
The health and environmental risks emanate from MMT undermining car technology, and that is why we are acting in such a fashion.
Mr. Vena: In trying to assess the body of knowledge on the question of MMT and its impacts on emission control technologies, whether that be catalysts or even coating of the spark plugs, and looking at the last eight or nine years since that is where many of the studies have taken place, Mr. Hicks mentioned with respect to Ethyl and their application to obtain a waiver through the EPA that they conducted testing on 1988 vehicles and on 1992-93 vintage vehicles. That is part of his testimony. They ran tests on vehicles with and without MMT.
One of the points to remember about those vehicles is that very few -- to my understanding, probably three models -- in the 1992-93 vintage had functioning on-board diagnostic systems because those were not part of the technology of the day. The data put forward indicated that, with respect to catalysts and the meeting of emissions standards, MMT met the burden of proof with respect to those standards. We must recognize that those were 1988 standards.
Senator Nolin: What does that mean?
Mr. Vena: The wording in the waiver application is such that if you want to put an additive in fuel that is different from what is in our gasoline, you must be able to show that it does not cause or contribute to the failure of the emission control devices to meet the standards of the day. That testing from the EPA perspective put that question to bed. They did say they had still not resolved the question on on-board diagnostics and that the data were inconclusive. That is where we started our analysis from.
Data were provided to us and put forward to the committee from car manufacturers with respect to physical evidence as to what MMT could do to spark plugs. We have data that was provided to us by CPPI in a test program where they looked at 206 vehicles with 6.5 million kilometres.
Their own consultants said they could not prove or disprove the question of the impact on on-board diagnostics. This question of on-board diagnostics is important to us because, as the minister has outlined, we are considering at a number of strategies to reduce emissions from vehicles. You can tighten standards. You can bring the tailpipe standards lower. You can improve fuel quality, as we have done by taking out lead and by bringing the level of sulphur in diesel down. All those things are excellent at the regulatory level.
A vehicle in the marketplace will degrade over time. Its performance degrades over time. The particular leg of a control strategy for vehicles in use is very important. As a matter of fact, the only jurisdiction in the country which has what is called an inspection maintenance program, where they inspect vehicles and, if they fail certain emission tests, they must have the vehicles fixed, is the Lower Mainland of B.C. They have found that, by running this program for three years, they have reduced pollution in that area by over 166,000 tonnes. I have that report.
I am trying to underscore that on-board diagnostics is a very important tool. It came out in California. We know some of the problems they had. They started in 1989 where it was basically pass or fail. Now they can even monitor the performance of the equipment in a performance band with respect to ensuring these vehicles perform well in the marketplace, and that is critical to any pollution control strategy. Again, I stress that, in the Lower Mainland of B.C., it is recognized as the most important function that they have conducted so far.
We must make a judgment. We looked at the data set. At that particular point it was important for us to indicate that the precautionary principle could apply and that if we made a mistake, we would make it on the side of protecting the environment and human health.
Mr. Marchi: I also read testimony where Ethyl claimed before your committee that, somehow, the systems in California were running into problems, and they queried how they can be running into problems if California is MMT-free. I am saying that that claim made by Ethyl is, in fact, incorrect. We have a report we wish to leave with you, if you wish, dated October of 1996 from the State of California, indicating that OBD-II systems have proven to be very effective in detecting emissions related to the problems in use. Furthermore, the same California report indicates that several manufacturers have acknowledged that the systems have been a tremendous help in improving the overall vehicle quality.
As well, Ethyl made the claim that California gave the auto companies the option of either having these systems or not. Again, that is factually incorrect. We have a second report from the State of California dated August of 1996 which confirms that it is not a question. It clearly says that there is no waiver of compliance for automobile companies to have OBD-II.
As you are looking for those reports and that science, I wanted to make that intervention, because those claims, in the California context, are simply not true.
The Chairman: May we have copies of those reports? I have not seen them. They would be very helpful.
I understand from some comments that we may have those reports. We will check our records and determine that.
Senator Cochrane: Mr. Minister, we appreciate your appearance before us this morning. You mentioned all the studies that you have received over the last years. Has Environment Canada carried out any of its own studies to determine the validity of these conflicting claims between the manufacturers and the refineries? Have you done any in your own department?
Mr. Marchi: I will ask Mr. Vena to respond to that.
Mr. Vena: We have relied largely on information from the U.S., again because they are engaged in a legal process of understanding the impact of this particular additive. We have vehicles in this country which have standards that are harmonized with those of the U.S., so we have the results of whatever testing is going on there to indicate the impacts of fuels on these standards.
We have obtained information from nearly all of these parties in trying to assess the impacts of MMT.
Senator Cochrane: That might be fine for you, but I think the department should actually have carried out their own studies, especially since some of the evidence that the minister has just mentioned from California does not agree with other information we have received. Why have you not done your own studies?
Mr. Vena: Again, I think that the knowledge base is available. The studies are complex. They are fairly costly. We can gain an advantage by letting the private sector or other organizations do the tests, senator, and that is what we have done. In this particular instance, it was a judgment call as to what was out there. The vehicle manufacturers were doing testing. The EPA was assessing some of that testing. Information was being provided to us, and we simply used that knowledge base to arrive at a decision.
The Chairman: If you are depending on outside sources, as Health Canada did, and dropping the ball and not doing the study independently, you must rely on the EPA, but the EPA said that, from the point of view of the on-board diagnostic system, MMT did not have a negative impact. Who are we to believe?
Mr. Vena: The EPA said that they did not have conclusive evidence on the question of on-board diagnostics.
The Chairman: They allowed it; right?
Mr. Marchi: It was a court decision based on a legal point. It is still debatable whether substantively the EPA believes that MMT is a good additive in gasoline. Never mind the EPA. What about the 15 petroleum companies? The jury is still out.
The Chairman: I must say they did make that ruling.
Senator Nolin: We understand, after the question from my colleague Senator Cochrane, that this is the basis of your decision. You based your case on that. When did you base your case, and, since that date, have you undertaken or commissioned even one study to obtain your own findings?
Mr. Vena: We have brought the two industries together over a number of years to address this particular issue. We did assess the data that we had at the time. We brought in some independent consultants to help us look at the data set. One of those consultants was a gentleman by the name of Steven Carter, who has been used by both the vehicle manufacturers and the Canada Petroleum Products Institute to assess the knowledge base.
Their assessment of the situation was very similar to what we have been hearing here. Much of the data is inconclusive and sometimes contradictory. However, having to make a judgment on the value of that information and what would be best from the contexts of public policy, clear air, and the environment, they indicated to us that it was probably prudent to take MMT out of gasoline. We have brought in outside consultants to look at the data set. One of those was used by both.
Senator Cochrane: Motor vehicle manufacturers contend that the use of MMT damages the operation of spark plugs, oxygen sensors, and the OBD-II system. Mr. Minister, you said the same thing this morning.
Much of the argument is based on comparisons of the warranty data in Canada where MMT has been used and the U.S. where until recently it was banned. They say any differences must be because MMT is used in Canada.
Has your department tested the effects of gas-line antifreeze on spark plugs, oxygen sensors, and the OBD-II system? I would suggest, Mr. Minister, that Canadian drivers are much more likely than drivers in the U.S., especially in the southern states, to use gas-line antifreeze in their fuel.
Mr. Marchi: Do you know of a study on gas-line antifreeze indicating that it undermines that technology?
Senator Cochrane: Has your department tested the effects of gas-line antifreeze?
Mr. Marchi: I thought you might have some information, since you raised it.
Mr. Vena: We have done work with respect to mixtures of gasoline and ethanol. Sometimes that is used as gas-line antifreeze. We were assessing that particular mixture and how it performed with respect to emissions. When you add oxygenates to fuels, we are interested in seeing what happens. Generally, for your information, hydrocarbons are improved and CO is improved. However, I do not believe we looked explicitly to determine if that had an impact on on-board diagnostics equipment.
Senator Cochrane: What about the spark plugs? You have not examined at that at all.
Mr. Vena: Tests were designed largely in that case to understand the emission impacts, not whether there were impacts on spark plugs.
Senator Cochrane: In other words, there has been no testing on the MMT. There has been no testing on this antifreeze. Really, all you are doing is basing your assumptions on all these other outside reports; is that correct, Mr. Minister?
Mr. Marchi: Again, I do not know the point you are trying to make on antifreeze, if you are picking that substance or whether we are picking other substances. It has not been brought to my attention that there are any antifreeze science, studies, or reports to lend credibility to that substance undermining the systems. However, I have had information, studies, and evidence corroborated by the 21 manufacturers of cars throughout the world that MMT is very much a concern. We are the only country in the G-7 which uses MMT. Mercedes Benz talked about all the cars they produce throughout the world. The only ones on which they have problems with the diagnostics are the 5,000 cars they sell in Canada per year.
There is enough evidence for me, senator. You may disagree and dispute it. You may say that it is not Canadian authored or that it is American or it is this or that. That is your full right. However, I also have a right as the Minister of the Environment at some point to say there is enough evidence to warrant a public response on the part of Canadians. We have done that. We defend that, and we are proud to do so.
Senator Cochrane: I mentioned the issue of gas-line antifreeze because I am looking at what other things could affect these spark plugs and the OBD sensors. We should be looking at other things. Why are we just labelling the one thing, the MMT? We should be looking at all the factors.
Mr. Marchi: With respect to the 21 automotive manufacturers that came before you, it is in their interests to have their technology work. They spend millions of dollars as a result of government regulations. They have been coming forward for almost 20 years, saying, "Listen, someone, MMT is a cause of concern." If the gas-line antifreeze was and is a legitimate problem, why would the North American and foreign auto manufacturing people not articulate in the same vein? Their interest is to have the machinery functioning.
They do not want warranties or complaints. They do not want governments to say, "Look, you must reduce by 60 per cent your nitrogen oxides in the 1998 model, and we want you to reduce the hydrocarbons by 30 per cent." They are saying to the Government of Canada, "Fine, we will live with those restrictions on the 1998 car models, but not if our machinery and our equipment cannot work." Then we say, "We have a higher threshold for you, as California does, in the year 2001." They are saying they will play ball and give us lower emissions from those exhaust pipes.
We have almost reduced over 92 per cent of the junk that comes out of the car. The problem is that we are putting more cars on the road, so we must make those regulations tighter. Their interest is to live up to government regulation, but not if we also tie one hand behind their diagnostic systems.
As Minister of the Environment, senator, I would expect that if other substances prevent car technologies from working the way they should, I should know about them and I should be told with as equal passion as I have been told on MMT. That has not been the case, and I will not force them to look for substances when they feel there are no problems until science and studies tell them that.
Senator Milne: Mr. Minister, I should tell you that this is the first time I have been on this committee. I am here as a replacement today for a senator who had to be away. I am unaware of the previous testimony before the committee.
I must tell you that my main concern is for the health of Canadians. I personally prefer to breathe air that does not have heavy metal floating around in it. I greatly prefer that my grandchildren from the moment of their birth do not have to breathe this air.
I understand that, with the different additives and the ethanol that will be used in gasoline to replace the MMT, there will be an increase in emissions of NOx. I believe that is nitrous oxide. What does the department plan to do if that becomes a problem? Certainly nitrous oxide has nothing to do with heavy metals, but it is also something else we are putting into the air.
Mr. Marchi: I will certainly defer to Mr. Vena, but I think there are also suggestions and some would say reports that the NOx content is diminished by using MMT. It is important not to isolate the different components coming out of the tailpipe. We can do it, and it is legitimate, but I feel, as the Minister of the Environment, that at the end of the day we must be concerned with the collective emissions that will be of danger to your grandchildren and others.
We not only have NOx. We also have carbon monoxide and hydrocarbons. You have had testimony from the car people indicating, "Yes, maybe the NOx level comes down, but what about the carbon monoxide level and the hydrocarbons going up?"
At the end of the day, the Minister of the Environment must be interested in the individual components and how we address them as best we get. However, you cannot separate the interaction of these three components as you can in theory because, in practice, they come out of the tailpipe. While you may have less of one, you have more of the other. The question is, at the end of the day, what helps us get out the most noxious fumes for the betterment of our health and environment?
I will ask Mr. Vena to comment on the component of NOx vis-à-vis ethanol and other alternatives that may be coming onto the marketplace.
Mr. Vena: With respect to a number of these other additives, there is a cooperative program underway now called the auto-oil program. It involves the three largest manufacturers of vehicles in the U.S. and I believe 14 oil companies. They are looking at various constituents in fuels and how they impact on emission and air quality. Ethanol is one of those. Their analysis indicates that there could be an increase in NOx, nitrogen oxides, one of the components of smog. They have also found there is a decrease in hydrocarbons, another component of smog. More important, they have also found that the non-methane components of that hydrocarbon, which are the more reactive constituents that form smog, also come down.
There is no panacea with respect to fuel. We are looking at choices and overall benefits. On the question of ethanol and other additives, there may be other considerations such as whether it is renewable or what it does. It would be nice to say that we have the best fuel and the cleanest fuel, but you trade off situations in many of these.
Senator Milne: I understand that the Ethyl Corporation is, in effect, threatening Canada that they will seek over $200 million in compensation under NAFTA if this bill goes through. What is the government's response to that?
Mr. Marchi: The government's response is that everyone is entitled to seek whatever remedies are available to them under the law. Essentially, we have not responded. If they thought that that in fact, as you said, was a threat which would move us to do anything, it probably just galvanized us to do exactly what we are doing. They have their right, and we are saying that the Government of Canada has the right to do what it is doing in Bill C-29 for the reasons that we are doing it.
The Chairman: I believe I speak for everyone on our committee when I say that we respect and support everything you are doing from the point of view of the protection of our environment. Your department has made some very major strides, as you have enumerated, with respect to air emissions and cooperation with the provinces.
However, I am bothered in that you come to us today supporting a trade bill and not an environmental bill. That tells me you must be uncertain as to what you are saying. I would be much more comfortable if it was not in the cloak of a trade bill but rather was an environmental bill where you simply ban it. Several types of legislation are available if the supporting evidence were there.
It comes as a trade bill, and the Minister of Trade refuses to attend our meetings. I sent you a letter requesting that you urge him to appear, because I thought it was important.
I look at the letter from Mr. Eggleton to yourself of February 23 of 1996. I will not read it, as I am sure you are aware of it. He indicates that an import prohibition on MMT would be inconsistent with Canada's obligations under WTO and the NAFTA and would constitute an impermissible prohibition on imports, particularly if domestic production, sale, or use is not similarly prohibited.
We have a unique situation of you telling us that this is an environmental situation coming before us as a trade bill and the Minister of Trade saying not to do it as a trade bill because he is concerned about NAFTA. That gives me a great deal of trouble, and I would be happy to hear anything which would clarify my concerns.
Mr. Marchi: I am not as troubled as obviously you are with respect to trade and environment and economics. That is, in fact, the new textbook. We must harmonize the two. That is why we have an environmental side agreement in the deal that we signed with the United States and Mexico in terms of NAFTA. If it was purely and exclusively a trade technical matter, we would not have any business putting in an agreement on environment. When we signed the free trade deal with Chile, again we embodied the whole context of environment within the trade context. We say you cannot separate the two. A good economy is also a good environment, and a good environment does not stand in the way of a good economy.
At the time that the government introduced this bill in 1995, the existing CEPA did not have the ability of provisions. We are correcting that, but nonetheless they did not have the provisions to do what Bill C-29 is doing. The Government of Canada availed itself of the best means to address the problem at hand, and that is what we have in Bill C-29.
With respect to the trade minister and your request for him to appear, obviously that is a matter between you and he. On the other hand, tradition is that there is a minister who appears at both the House of Commons committee as well as the Senate committee. In terms of representing the government, I am the sponsoring minister. When I speak, senator, I speak on behalf of the Government of Canada in my capacity as minister of that government.
You make reference to the letter that was infamously leaked. That does not come as a surprise whenever you introduce legislation or regulatory changes. Many issues, including the environment, are horizontal in nature. Many ministers write many letters about many concerns that some of their officials may identify. They are brought into the mix. We have also had letters on other bills where people say, "Are you sure about this? Are you sure about that?" I do the same thing with my colleagues the Minister of Trade, the Minister of Natural Resources, and the Minister of Agriculture in terms of environmental policy. At the end of the day, that is one letter of many which goes into the mix before making the right decision for the right reasons.
I do not deny that letter's existence. I do not deny he had an initial concern. However, at the end of the day, we have accounted for that concern, together with other concerns and the benefits of the bill. On balance, the government feels that it has done through this legislative bill the best it can to protect health and the environment, which is at the heart of the intent of this piece of legislation.
The Chairman: Perhaps you would again urge Minister Eggleton to attend.
Mr. Marchi: I believe he is off to Israel to build on the free trade agreement we have signed.
The Chairman: We will be here on his return, I can assure you.
Senator Buchanan: I have here a collection of letters, and I will not read them all, but they are from eight provinces. Approximately half of them are from ministers of the environment. There are letters here from premiers to the Prime Minister and to ministers of the environment. I wish to table these so we can have them all on the record.
Senator Spivak: They are on the record.
The Chairman: You may do so unless someone has an objection.
Mr. Marchi: Senator, I acknowledged those letters and love notes. All I said was that, aside from the correspondence unit being busy with the provinces and ministers, to the best of my recollection, the one minister that did make a point of raising it with me personally was Ty Lund. That is all I said. I did not deny their existence.
Senator Buchanan: I am not suggesting for a minute that what you are saying is not correct, but I think they should be tabled.
I am intrigued by the federal-provincial situation here. In many areas in this country, under our constitution, federal and provincial governments are supposed to be treated as equals under our system. I sincerely believe that. Because of my 30 years in political life, 24 of those as a provincial politician, perhaps I lean that way more than I should. However, in the 13 years I was a premier, I do not recall many occasions when ten premiers unanimously agreed on anything or when even a majority of the premiers unanimously agreed on something. If they did, something happened later on to disrupt the situation. Here we have eight out of ten provincial governments, eight out of ten premiers, opposing this bill at the present time.
Senator Taylor: Did you not lead a group of eight that was fairly famous?
Senator Buchanan: I was a member of the group of eight in 1981. However, on not too many occasions did we see that happen. When I was involved, it did happen.
Here you have eight out of eleven governments, if you include the federal government, which is about 70 to 75 per cent of the governments, opposing this bill for basically two reasons. First, they say it is a violation of the Interprovincial Trade Agreement; and second, that there is insufficient evidence for them to come to a conclusion that MMT should be banned.
As a minister of the Crown, does it not give you some concern that eight out of eleven governments, approximately 75 per cent of the governments, oppose this? The federal government pushed ahead when, as you will notice from the letters, all the Ministers of Environment and the premiers are saying, "Look, slow down a bit. Let us have a definitive study, and, once that is done and we are part of it, if the results come out that this is a danger to the environment and health, we will be the first one to say to get it out." CPPI said the same thing. Does that not concern you as a minister of the Crown?
Senator Nolin: Respect the due process.
Mr. Marchi: You referred to premiers. As you know, three premiers have written: Nova Scotia, Saskatchewan, and Alberta. In fact, four have written when you include the Premier of Ontario who supports the bill. When you speak of premiers being unanimous, only three premiers who are opposed have expressed themselves directly to the Prime Minister. Premier Harris has written in favour. There have also been letters both my colleagues the ministers of the environment and the ministers of energy.
Does it concern me that so many provinces are not yet supportive of the bill? I suppose the truthful answer is yes, but not to the point of insecurity on our part. I hope I do not sound arrogant; I do not want you to draw that conclusion. I am concerned it has taken so long to mobilize that many ministers of the environment to do the right thing for the environment and to place the environment first and interprovincial trade second, notwithstanding the fact that I think, constitutionally and legally, it is not an issue on which the Government of Canada is offside with respect to interprovincial trade.
I am concerned because it runs contradictory to the very mandate that the CCME has set for itself on clean air, together with an integrated system on increasing and enhancing those car monitoring devices. It does concern me because I think if we were to harmonize, we should harmonize around doing something rather than harmonizing around inaction and asking for more time.
Senator Buchanan: This has been in the hopper now since 1995. Why has your own department not conducted an independent study or their own definitive study on MMT and its effects on the environment? They told us they have not had such a definitive study; yet I have letters going back into 1995 showing that this matter has been in the hopper. Why has your own department not conducted such studies? I would agree that if it is a hazard, it should go, but Health Canada said it is not a hazard.
We talked a moment ago about automobiles and what the EPA said. EPA concluded that MMT does not cause or contribute to the failure of vehicles to meet applicable emission standards required by the U.S. Clean Air Act. It was not just that they have inconclusive studies. They said that it does not. That is right here. I just read it. I simply cannot understand why, after two years, there has not been a definitive study to clear this up once and for all and get rid of it by a proper bill.
You say this is such a great concern for Canadians. I am a Canadian, as are all Nova Scotians. We could build an MMT plant soon as this bill passes. It is not banned. We could use it in Nova Scotia. Any of the provinces could. It might not make economic sense to do that, but it is not banned. I find it hard to believe that this is supposed to be an environmental bill or a health bill. It is a trade bill which does not ban the product anywhere in this country except if it is being transported across interprovincial boundaries.
Mr. Marchi: You talked about the issue being around since 1995 and asked why have we not done this or that. The issue goes back some 20 years. You may say that is all the more reason for Canada to have done something. We feel assured by the evidence that is in. You may want more. You may want to have a Canadian study.
Senator Buchanan: Not me, but eight provinces of Canada do.
Mr. Marchi: We are saying the Government of Canada is sufficiently concerned by the evidence and the studies that have been furnished over the last 20 years to take action.
Senator Buchanan: Why not ban it, then?
Mr. Marchi: You also said that Health Canada has classified MMT as non-toxic or safe. I think the Health Canada official who came before you said that their department is supportive of Bill C-29 and admitted that the studies they have conducted have not included the possibility of MMT gumming up the air pollution devices on cars and thus leading to a health risk for Canadians. They were clear in saying that their study did not deal with that.
There was also testimony by an earlier official who said yes, that MMT or manganese was not one of the 25 substances under CEPA as a toxic substance but that it is neurotoxin and it is, like 23,000 other chemical substances, dangerous in its own right. For the purposes of listing under CEPA, it is not one of the 25, but that does not mean that it is not a health risk, particularly with the possibility of gumming up the on-board diagnostic systems. We should be careful about what Health Canada did say and what they did not say.
Senator Buchanan: All I know is what they did say.
In the State of California, there has not been a request by Ethyl for a waiver, so they do not use it in California. It is very strange that in California the automobile companies have asked to have a delay until the year 2003 because of problems they are having with their OBD-II systems. Those problems could have nothing to do with MMT at all, because they do not use it. Yet the automobile industry in California has said, "Look, we are having great troubles with our OBD-II systems. Therefore, please, let us have until the model year 2003 for deficiencies in vehicles, not because of MMT but because of other problems we are having with the OBD-II systems."
Mr. Marchi: Earlier in my testimony, senator, I made reference to reports from California. That is when it was mentioned by someone that they had provided the reports. I referred to those claims and have brought copies of the report dated October of 1996 from California, stating that those systems have not malfunctioned the way it has been claimed. There is also a report from August of 1996 confirming that there will be no waivers granted to automobile manufacturers and that it is not a question of either\or. I offered to table those reports. I am told you may already have them. Those reports certainly take a very different position from what you are implying.
Senator Buchanan: The one I have in front of me is from two months ago, December 12, 1996.
Mr. Marchi: I have one dated August, 1996 and one dated October, 1996.
Senator Buchanan: The report from the California Air Resource Board is dated December 12, 1996.
Mr. Marchi: We have two reports as well.
Senator Buchanan: You do not have this one.
Mr. Marchi: I quoted the October report in terms of the OBD-II systems in terms of functioning and the August report in terms of the issue of whether car manufacturers will be waived the necessity of the car systems.
The Chairman: I would suggest you provide a copy for the minister, and perhaps his department can look at it.
Senator Kenny: Minister, you dealt with Senator Milne's question regarding the health of Canadians. Could you enlighten the committee as to whether you have any studies regarding costs to Canadians in the event this bill goes through? In particular, I would be interested to know if you could provide the committee with any information as to the likely additional costs to Canadians over the course of the year in the event that MMT was banned in terms refuelling their vehicles and the likely additional costs to Canadians in the event they had to get them serviced due to malfunctions.
Mr. Marchi: For clarification purposes, Mr. Vena suggested that the December report is part and parcel of the same reports that I referred to, but I will allow you to decipher the reports.
In terms of costs, the cost of leaving MMT in is a far greater cost socially, on the environmental health front, as well as economically in the pockets of car owners and operators.
We have also looked at the report done by the CCME that, on the health benefits, referred to incredible sums of money that are currently or would continue to be incurred in terms of admissions to hospitals with relation to respiratory problems caused by the levels of smog and ground-level ozone.
Therefore, we feel that if this was primarily an issue of costs, both social and economic, then the testimony is quite clearly in favour of getting the MMT out as opposed to incurring those greater social and economic costs incurred by leaving it in.
Senator Nolin: Mr. Minister, Senator Buchanan raised the issue of provincial governments, official and counterparts, trying to convince you and the federal government to wait. Are you aware that not only the provincial government in Quebec but the National Assembly of Quebec, in May 1996, unanimously adopted a motion to wait until further and credible study? What is your reaction to that? Did the minister in Quebec not discuss that with you?
Mr. Marchi: To the best of my recollection, he never raised the question with me.
My reaction to the resolution at the time was to obviously accept the verdict of the Quebec legislature in so far as a resolution is concerned. I read the parts of the resolution, and we responded to them in kind. I feel that we had the answers to address the basic tenets of the resolution which were by no means new or innovative. It was an expression of the legislature. I respect that. However, I did not see any reason, based on the arguments portrayed in the resolution, to substantially alter the confines of Bill C-29.
Senator Nolin: They were begging for an independent and credible study.
Mr. Marchi: I am not sure they were begging. They were affirming the will of the legislature at that particular time. I also recall that there were three or four other resolutions passed by the Quebec legislature on other matters. I am not sure that those other matters were altered in their course by the fact of the resolution either. It does happen from time to time that legislatures pass resolutions.
Senator Nolin: It is always politically expeditious to not create disharmony with the provinces.
Senator Cools: In response to Senator Nolin, I wish to say that ministers of the Crown are under oath at all times in respect of Her Majesty's business. A minister of the Crown is under oath at all times in committee proceedings or parliamentary proceedings. No special oath must be administered to a minister. I say that because this business of the privileges of Parliament preoccupies me from time to time.
Out of respect to Mr. Marchi, I would like to say that we see many ministers come before these committees, and Minister Marchi is regularly and consistently gracious and respectful.
Mr. Marchi: I would officially thank the senator's generosity.
In response to Senator Nolin, I know he was tongue in cheek when he was suggesting that we are courting disharmony with the provinces. It needs to be said, above and beyond a resolution that may be passed by legislators in the heat of any moment, that Quebec vis-à-vis the federal-provincial harmonization on environment has played an incredibly useful role. We have had a time in this country where the environment seat for the province of Quebec at federal-provincial meetings has been vacant for up to two years.
Not only is it filled now, but it is filled very ably in the person of David Cliche who, above anything else, is a good environmentalist. The role that Mr. Cliche has played at the federal-provincial table, whether on CEPA, endangered species, or NAFTA, has been a healthy one and probably one of the unknown unheralded success stories about governments getting it right and working together well. That is not well known, and it ought to be.
Senator Nolin: If you respect your partners so much, why did you not pursue the MMT issue with them within the due process of the CCME?
Mr. Marchi: I am not sure there was a request to do it within the CCME.
Senator Nolin: There was a request.
Mr. Marchi: I was responding to your suggestion that we are trying to court confrontation with the Province of Quebec when, if the truth be known, there is more cooperation on environment than there is disharmony.
Senator Nolin: The government of which I was a part created the CCME process.
The Chairman: Mr. Minister, I thank you for being generous with your time and for being with us. We will adjourn for ten minutes and then resume in camera.
The committee continued in camera.