Environment minister summons carmakers

Toronto Star
Oct. 2, 2006. 06:22 PM

OTTAWA — Environment Minister Rona Ambrose has summoned Canada’s big car manufacturers to a meeting late Tuesday, where government and industry sources say she’ll lay out plans for Canada’s first stab at regulating car emissions.

The move is a major component of the Conservative government’s promised environmental plan.

It marks the first time carmakers will face regulations. To date, Canada has either had a written voluntary agreement with the industry to meet emissions goals or an understanding that carmakers would follow U.S. standards.

The ultimate goal, say insiders, is to bring Canada in line with North American-wide standards after 2010, that will most likely adopt California’s pioneering clean-air laws.

“They don’t want Canada to become a dumping ground (for inefficient cars) in North America,” said one Conservative insider familiar with the file.

“Canada has to have regulations that are valuable, enforceable and implementable — to do what they’re supposed to do.”

Sources say the government is also considering a new tax break for consumers who buy hybrid cars, such as the Toyota Prius. Ontario and British Columbia have a similar program.

In 1981, the Canadian government legislated emissions regulations, but never proclaimed the law. The car companies insisted they would follow the Corporate Average Fuel Economy (CAFE) standards in the U.S., and politicians backed off.

The Liberal government came close to imposing regulations two years ago, but eventually agreed to a voluntary memorandum of understanding that would see the total industry’s emissions reduced by roughly five per cent by 2012.

Canada’s environment commissioner last week complained there is no independent verification of whether the agreement with carmakers is achieving results.

“The bar is on the ground despite all the hot air from the Liberal party,” said the Conservative source.

Ambrose will deliver a formal notice of an intent to regulate, but as one senior government source put it, “This type of thing doesn’t happen overnight. It takes a lot of consultation and working on legislation.”

The car companies, meanwhile, say they’ve only heard whispers of what the government is planning, and will arrive in Ottawa for the meeting with some trepidation. One source said the industry is already drafting a statement that says it will hold the government to its 2005 voluntary agreement, which is supposed to run out in 2010.

The expectation is that Ambrose will agree to live with the current situation until 2010, but will require the industry to come up with even better reductions in emissions in the meantime.

Mark Nantais, president of the Canadian Vehicle Manufacturers’ Association, warned that Canada should not fall out of step with the United States.

“Any adoption of a unique requirement in Canada would cause us consternation because we lose the economies of scale that provide real benefit in terms of cost reductions for consumers.”

But John Bennett of the Sierra Club of Canada said Canada could actually move all of North America to a new, stronger emissions standard if it simply adopted California’s new high bar.

Ten other states, representing 30 per cent of the car industry, say they’ll follow California’s lead, but are waiting for it to win a court challenge brought forward by the manufacturers. Canada doesn’t have that problem, he argues.

“Under Canadian legislation, there’s no way for the car companies to legally object to it,” said Bennett.

“The car companies couldn’t sue them to delay it or anything, and if they had to meet these standards in Canada they would probably just give up in the States, because it would be 40 per cent of the market.

“We could be the catalyst.”