OTTAWA - The cost of meeting Canada's Kyoto commitments would be an economic downturn to rival the worst recessions of the past 60 years, spiralling energy costs and the worst unemployment in several generations, John Baird, Minister of the Environment, said yesterday.

Appearing before a Senate committee studying Bill C-288, the Liberal bill that would force the government to comply with Kyoto, Mr. Baird painted an apocalyptic portrait of a country economically hobbled by the wrenching changes Kyoto would require.

Home heating costs would spiral; joblessness would soar; and Canada's economy would slow by 4.2%, equal to the worst recession since the Second World War.

Liberals and other opponents immediately accused the government of scaremongering.

"This minister has put forward no analysis on the related, positive economic benefits. In fact, he deliberately ignored those benefits that come from better energy efficiency, lower energy use and jobs related to the benefits of emissions reductions," said Liberal environment critic David McGuinty.

"Why did he do so? Because that story is too positive, too positive for Canadians to know."

Mr. Baird stood his ground, and was backed by Prime Minister Stephen Harper.

"You cannot reduce greenhouse gas emissions by one-third in less than four years and have a positive effect for the Canadian economy," Mr. Harper said.

"We will bring forward a plan that will result in real reductions in a reasonable time frame and it will result in long-term growth for the Canadian economy. This party has no intention of doing anything that is going to destroy Canadian jobs or damage the health of this economy."

Kyoto calls for Canada to cut its greenhouse gas emissions to 6% below 1990 levels by 2012. Since the Liberals agreed to the pact, however, emissions have worsened, forcing the government to cram compliance into the next five years if targets are to be met.

"Based on what we already know, Bill C-288 with its deep reduction in emissions beginning in January is not the answer we're looking for," Mr. Baird told the Senate committee. "The economics just don't add up."

He said the government had asked several economists, from in and outside the government, to examine the bill. "They give you cause for sober second thought on this bill," he said.

If C-288 became law, every Canadian family, business and industry would have to reduce their greenhouse gas emissions by onethird starting in eight months.

"There is only one way to make this happen: The government would need to manufacture a recession," Mr. Baird warned.

Electricity bills, heating and gas prices would soar and businesses would have to scale back or cease production, which would lead to huge job losses.

"Our analysis shows that by 2009, over 275,000 Canadians working today would lose their jobs and become unemployed ? I believe this is a massive and unacceptable cost for Canadian families," he said.

Mr. Baird said electricity bills would jump by 50% after 2010, prices at the pump would shoot up by 60% and natural gas prices for heating homes would double.

"Clearly, we need to proceed with care, mindful that whatever course we follow must strike the right balance between economic prosperity and environmental protection," Mr. Baird said.

He called the Liberal-initiated bill "reckless" and said his government is taking a realistic and responsible approach to reducing greenhouse gas emissions and protecting the environment. The Conservatives have already taken considerable action in recent months, he said, and will "soon" be unveiling the industrial regulation component of their plan. The government has promised to impose greenhouse gas emission reduction targets on industry.

Despite his warnings of economic ruin, Mr. Baird said Canada remains committed to the principles of Kyoto. "Don't take my criticism of [Bill C-]288 as a condemnation of Kyoto. We accept our international obligations and we'll make our best efforts."

His report was attacked by some Liberal members of the Senate committee. "This is a rigged study and the one thing that it demonstrates is how effective you are at spinning the media," Senator Grant Mitchell said. "In fact, I want to say that if we could just capture that spin, we'd actually have an alternative energy source."

Senator Colin Kenny requested an explanation of the Tory figures. Mr. Baird referred him to a document he handed to the committee, but committee chairman Liberal Tommy Banks said the document did not contain the math to justify Mr. Baird's claims.

The report acknowledges it provides only a partial view of the costs of Kyoto because it did not examine economic benefits.

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HIGHLIGHTS OF REPORT

Environment Minister John Baird released a report yesterday that predicted the economic consequences of meeting Canada's Kyoto commitment to reduce greenhouse gas emissions to 6%below 1990 levels by 2012. The report assumed no immediate technological breakthrough that would make reducing emissions easier, and it assumed that the economic benefits of a more environmentally sustainable society would not be recognizable in the short term. Some highlights of the report: - To reduce greenhouse gas emissions to 6%below 1990 levels, between 2008 and 2012, Canada's GDP would decline more than 6.5% from expected 2008 levels. - Such a reduction in GDP would create a recession comparable to that of 1981-2 - the worst recession in Canada since the Second World War - when real GDP fell 4.9%between the second quarter of 1981 and the fourth quarter of 1982. - A recession of similar scale would imply a one-year net loss of national economic activity of about $51 billion relative to current levels. - Unemployment would rise by 25% with about 275,000 Canadians losing their jobs by 2009. - The cost of electricity would rise by 50% after 2010. - The price of gasoline would rise by 60%. A litre of gas would cost about $1.60, taking into consideration current average price/litre.

 

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