Cablegate: Canada's Clean Air Act Faces Tough Sledding

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DE RUEHOT #3423/01 3202232
ZNR UUUUU ZZH
R 162232Z NOV 06
FM AMEMBASSY OTTAWA
TO RUEHC/SECSTATE WASHDC 4449
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
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RHEHAAA/WHITE HOUSE WASHINGTON DC
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UNCLAS SECTION 01 OF 03 OTTAWA 003423

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STATE FOR OES, EB, AND WHA
WHITE HOUSE FOR CEQ
EAP FOR OFFICE OF THE ADMINISTRATOR AND INTERNATIONAL
AFFAIRS
DOE FOR POLICY AND INTERNATIONAL AFFAIRS

E.O. 12958: N/A
TAGS: SENV ENRG ECON CA
SUBJECT: CANADA'S CLEAN AIR ACT FACES TOUGH SLEDDING

REF: OTTAWA 3182

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1. (U) Summary: Less than two weeks after its introduction in
the House of Commons the Tories' highly anticipated
"made-in-Canada" environmental plan, the Clean Air Act, has
been derailed from the standard parliamentary pathway. The
bill will likely be subject to a massive redraft in an ad hoc
"Legislative Committee" where opposition MPs will outnumber
Conservatives seven to five. The shape of the committee
debate to come may have been foreshadowed during a November
14 press conference at the Nairobi UNFCC meeting when federal
Liberal and Bloc Quebecois MPs characterized the Conservative
approach to climate change as "scandalous" and "idiotic."
The Liberals and New Democratic Party already have their own
"climate change" bills before the House of Commons; and
Quebec insists it has a viable plan to "meet its Kyoto
obligations." (Quebec, as a province, technically has no
Kyoto obligations.) Ironically, senior government
bureaucrats have told Embassy they find the Conservative's
policy on clean air and climate change an effective and
targeted approach they are quite pleased with. End summary.

2. (U) On October 19, Canadian Minister of the Environment
Rona Ambrose introduced in the House of Commons Bill C-30,
the government's long-anticipated legislation to address air
pollution and climate change. The Bill, known as Canada's
Clean Air Act, has three main goals: 1) to change Canada's
Environmental Protection Act to enable the federal government
to regulate air pollutants and green-house gases; 2) to
clarify federal regulatory power to set standards in Canada's
Vehicle Fuel Consumption Act; and 3) to amend the Energy
Efficiency Act to allow the GoC to address manufactured goods
as part of a national energy efficiency strategy (reftel).

3. (U) While the broader business community signaled its
approval of the Tory approach, environmental NGOs and
opposition parties who have been attacking the Conservatives
on climate change since the Spring, seized on the
introduction of the legislation to move their discontent into
high gear.

Government to Send Bill to "Legislative Committee"
--------------------------------------------- -------
4. (U) In the last days of October, NDP leader Jack Layton
leveraged a meeting with Prime Minister Harper by threatening
to bring down the Conservative minority government on a
confidence vote unless Harper agreed to meet with him to
discuss the Clean Air Act. After the Harper-Layton meeting
on October 31 the government surprised many observers by
agreeing to Layton's proposal to send its draft legislation
(C-30) directly to a "legislative committee" rather than
subject the bill to the standard legislative pathway of
debate, floor votes, and referral to the House Standing
Committee on the Environment and Sustainability for review.

5. (SBU) According to Rob Taylor, Director of Parliamentary
Affairs for the Conservative House Leader in the Commons, the
four parties' House leaders have agreed in principle to
establish the ad hoc legislative committee and are now
negotiating the details of its mandate, structure and
composition. The committee will, Taylor explained, have a
broad mandate to study the legislation and make changes that
Qbroad mandate to study the legislation and make changes that
could fundamentally alter its scope. The committee will be
comprised of 13 MPs: 5 Conservatives; 4 Liberals, 2 Bloc
Quebecois (BQ), and 1 New Democratic Party (NDP) MP, along
with a chairman appointed by the Speaker of the House who
will exercise a vote only in instances of ties. Taylor
thinks it is a "crap shoot" on how the draft legislation will
evolve (hard GHG targets vs. soft; short timelines vs. long)
and whether the legislation's pollution control aspects will
get lost in the posturing and redrafting of the climate
change portion. He remarked too, that the choice of Liberal
Party leader in December will be key to how the Liberal
members contribute within the committee. Front runner
Michael Ignatieff is no Kyoto fan, whereas second-place Bob
Rae is more supportive. Taylor continued that the
Conservatives still hold some cards. If the legislation that
comes back from committee is unacceptable, the government can
choose to not submit it for second reading and consequently

OTTAWA 00003423 002 OF 003

kill it. Ironically, senior government bureaucrats have told
Embassy they find the Conservatives' policy on clean air and
climate change an effective and targeted approach they are
quite comfortable with, and at least some officials profess
to being less skeptical as to the bill's fate in the
legislative committee.

NDP and Liberals have their own Clean Air bills
--------------------------------------------- --
6. (U) There are, in any case, competing climate change bills
already before parliament. Just hours before meeting PM
Harper on October 31, NDP leader Jack Layton introduced a
private member's bill (C-377) called the Clean Air
Accountability Act. The seven-page bill calls for reducing
greenhouse gas emissions to a level 80 percent below 1990
levels by 2050 (with interim targets for 2015-2045). Shannon
Haggarty, Senior Advisor to Environment Minister Ambrose,
told Embassy that Layton's bill is "not (too far) out in left
field" and in fact has significant similarities to the Clean
Air Act's measures on reducing emissions, and on targets and
timelines. Given that its first target is not until 2015,
the Layton bill does not address the Kyoto commitment period,
leading the Liberals and Bloc Qubcois to accuse the NDP too
of abandoning Kyoto. Layton insists he has not abandoned
Kyoto's targets and continues to support another private
member's bill (C-288) tabled by Liberal MP Pablo Rodriguez
that calls on Canada to meet its Kyoto commitments on
schedule.

7. (U) The Rodriguez bill, the Kyoto Protocol Implementation
Act, proposes a compressed timetable that would "ensure
Canada takes effective and timely action to meet its
obligations under the Kyoto Protocol." The bill would allow
the government to make, amend or repeal regulations to enable
Canada to reduce by 2012 its total GHG emissions to a level 6
percent below 1990 GHG emissions, including by establishing
emissions caps, restricting permits to emit GHGs, allowing
trading and so on. Both the Layton and Rodriguez bills
propose establishing offences and penalties so that violators
would be subject to indictment or summary conviction and
liable to fines or imprisonment.

8. (U) The Rodriguez (Liberal) bill was introduced in May,
has passed its second vote in the House, and is currently
before the House of Commons Standing Committee on Environment
and Sustainability. The Layton (NDP) bill has been placed
high on the "Order of Precedence" and can expect second
reading at some point in the coming months.

Domestic Critics Assail Conservatives at UNFCCC Conference
--------------------------------------------- -------------
9. (U) During a November 14 press conference at the Nairobi
UN Climate Change meetings, Federal Liberal MP John Godfrey,
Bloc Quebecois MP Bernard Bigras, Quebec's Environment
Minister Claude Bechard, and Canadian environmentalists
openly mocked Ambrose and derided the government's climate
change stance as "scandalous," "idiotic," and "ridiculous."
Bechard, whose comments were less vitriolic, said he hoped
Ambrose would acknowledge Quebec's Kyoto plan at the
Conference this week. "We can't say that Kyoto is impossible
in Canada when one of the provinces, Quebec, has a plan to
meet Kyoto with minimum participation from the federal
government," he said. Bechard also announced that Quebec
Qgovernment," he said. Bechard also announced that Quebec
plans to host a high-level meeting next February that will
bring together environment and energy ministers from Canadian
provinces and U.S. states that support more aggressive action
on climate change. (Quebec is not, of course, party to the
Kyoto Protocol and has no separate Kyoto commitment. But it
does have a plan, announced in June, to reduce emissions by 6
percent, matching Canada's Kyoto target. The province is
demanding C$328 million from federal coffers )- promised to
it by the previous Liberal government -- to help implement
the plan.)

Kyoto Commitment Still Alive?
-----------------------------
10. (U) During her own address to the UN Climate Change
Conference on November 15 and subsequent press questioning,
Environment Minister Ambrose stressed Canada's commitment to
the UN process on climate change and the Kyoto Protocol, and
did not entirely rule out the possibility Canada could meet
its Kyoto emissions reduction goals. (Five months earlier,

OTTAWA 00003423 003 OF 003

in May, Ambrose had declared the targets unachievable.) In
Nairobi Ambrose said experts "tell me that it will be very,
very difficult for Canada to reach the Kyoto target,"
nevertheless "we're moving forward very aggressively to put a
plan in place to make progress on our Kyoto targets. Canada
remains strongly committed to Kyoto." Possibly in direct
reaction to the harsh opposition and NGO criticism leveled at
the Clean Air Act -) and her personally -- in preceding
days, Ambrose repeated her charge that the previous Liberal
government is to blame for leaving the country so far behind
schedule that it effectively has no real prospect of meeting
the Kyoto targets. Ambrose also charged the opposition with
using Kyoto to try to divide the Canadian electorate (which
may face national elections in the spring of 2007) and vowed
the Conservative government would ensure that individuals,
industry, and all levels of political subdivisions worked
together toward the Kyoto targets.

11. (U) Ambrose's Nairobi statement enumerated specific
measures contained in the Clean Air Act, such as targets for
renewables and mandatory vehicle fuel efficiency standards.
She promised industry would have short-term emissions targets
by early next year and did not rule out Canada buying carbon
credits to aid progress toward the target. She stressed the
crucial role of technology in addressing climate change, and
put federal government commitments for new actions on climate
change this year at C$2 billion.

Comment
-------
12. (SBU) The heated present domestic debate on Kyoto, and on
the Harper government's strategy and timetable to reduce
emissions, falls squarely in the category of political
theater (and feeds on pre-election posturing at the federal
and provincial levels), with provinces, opposition parties,
and environmental NGOs seemingly bent on outdoing one another
in charging the government with abandoning Canada's
obligation as an environmental steward. In fact, the speed
with which the opposition targeted the Clean Air Act's
climate change provisions derailed the government's initial
strategy for rolling out the Act and its overall
environmental strategy. Perhaps sensing climate change was
too much of a lightning rod, officials at the political and
bureaucratic levels had told Embassy the government's
strategy during the rollout would be to play to the Act's
expected health benefits (i.e., its air pollution control
measures) rather than climate change. But being on the
defensive from the day the bill was introduced, they just
never had the chance.

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