Bill 97- Natural Gas Superhighway Act, 2013 – Official Transcript of Debate
SUPERHIGHWAY ACT, 2013 /
LOI DE 2013 SUR L’AUTOROUTE
DU GAZ NATUREL
Mr. Bailey moved second reading of the following bill:
Bill 97, An Act to encourage the purchase of vehicles that use natural gas as a fuel / Projet de loi 97, Loi visant à encourager l’achat de véhicules utilisant du gaz naturel comme carburant.
The Deputy Speaker (Mr. Bas Balkissoon): Pursuant to standing order 98, the member has 12 minutes for his presentation.
Mr. Robert Bailey: I’m honoured to rise in the House today and discuss what I believe is a very important bill, Bill 97, An Act to encourage the purchase of vehicles that use natural gas as a fuel or, as I am calling it, the Natural Gas Superhighway Act, 2013.
I would like to begin by recognizing the guests who have joined us for the debate today. They are seated in the members’ west gallery. Joining us are Mr. Tim Egan, president and CEO of the Canadian Gas Association; Murray Logan and Wayne Blenkhorn, of Faromor Energy Solutions; Ryan Shaw and Paul Ungerman, from Union Gas; and Mr. Ritchie Murray, Mike Tremayne and Rohan Service, from Enbridge. Sending regrets is Ms. Alicia Milner, president of the Canadian Natural Gas Vehicle Alliance. Please give them a warm round of applause.
Mr. Speaker, my guests are here today because they care about the direction of our province, as we all do. They believe, like you and I do, that natural gas as a transportation fuel is an opportunity to do what is right for both our natural environment and our business environment. In his recent 2012 report, A Question of Commitment: Review of the Ontario Government’s Climate Change Action Plan Results, Ontario’s Environmental Commissioner reports that because of the sheer volume of cars and trucks on the road today, Ontario’s transportation sector continues to be the largest source of greenhouse gas emissions in the province.
Almost nine million vehicles were registered in the province in 2010, and because of increased trade, the development of supply chain management systems and just-in-time delivery models, the number of large freight vehicles on the road has doubled since 1990. Not surprisingly, this sector has witnessed a significant increase in its emissions. Today, of those nearly nine million vehicles on the road in Ontario, medium- and heavy-duty vehicles make up just 3% of that traffic, yet they contribute almost 30% of greenhouse gas emissions that come from on-road sources.
If the government of Ontario is serious about reducing greenhouse gas emissions, then it is time that we, as legislators, look at offering real alternatives to those who operate medium- and heavy-duty vehicles in our province. One way we can do that is by leveraging the ongoing development of North America’s vast gas deposits.
Interest in natural gas as a transportation fuel isn’t new. Past support from federal, provincial and private sector initiatives led to over 35,000 light-duty natural gas vehicles, like buses, being put on the road in Canada many years ago. Unfortunately, because of previous market conditions, the critical market uptake needed to grow that market did not occur. But as we are all aware, in the last five years access to the supply of readily available natural gas in North America has changed that outlook dramatically. New opportunity is being created across this continent. Canada and the United States have been given the opportunity to dramatically shift their current energy supply makeup and, at the same time, stimulate their slow-growth economies. Even in his 2012 State of the Union address, United States President Barack Obama stated just that: “We have a supply of natural gas that can last America”—this continent—“nearly 100 years…. Experts believe this will support more than 600,000 jobs by the end of the decade.”
Don’t let this message be misconstrued. Natural gas is not going to be the be-all and end-all of energy supply. Rather, it will be a very significant piece of that puzzle, an extremely abundant, safe and affordable piece which has yet to be recognized for its full potential.
Research and product development in the area of natural gas procurement and use is leading to innovative new technologies and product design that have the potential to reshape conventional thinking in many areas, including as a reliable, heavy-duty transportation fuel. In fact, in its assessment of the resource, Natural Resources Canada identified medium- and heavy-duty on-road transportation as the greatest value proposition for natural gas transportation fuels moving forward.
New, reliable truck engine technology that utilizes natural gas is giving North America’s hard-hit cargo transportation sector a shot in the arm, reducing emissions, lowering transportation costs and delivering those critical cost savings to industry’s bottom line. Heavy-duty manufacturers of trucks like Freightliner, Kenworth, Peterbilt and Volvo have all recently developed product lines to utilize liquefied natural gas, otherwise known as LNG.
The Natural Gas Superhighway Act, 2013, aims to promote the use of liquefied natural gas as a freight transportation fuel in Ontario by accommodating its advanced engine technology and providing that incentive designed to stimulate private investment in proven lower-emission medium- and heavy-duty vehicles.
Specifically, this bill calls upon this Legislative Assembly of Ontario to enable the Lieutenant Governor in Council to make regulations prescribing higher weight limits for vehicles that use liquefied natural gas as fuel. Current road limits restrict vehicles to a gross weight of 63,500 kilograms. The equivalent required to run this cleaner, cheaper fuel can add as much as 1,500 kilograms to the weight of a truck using that fuel, versus trucks using the more traditional fuel.
In a day and age when transportation companies must maximize the use of their equipment to stay competitive, this small variance in weight allowance is enough to keep companies from taking advantage of this lower-greenhouse-gas-producing natural gas transportation fuel. Moreover, the Natural Gas Superhighway Act, 2013, would require the Minister of Transportation to table a progress report to this Legislative Assembly of Ontario annually until those regulations are made that support the use of LNG.
Mr. Speaker, we ask for this because we understand that not everything can be done overnight. But all that industry is asking for is that the government—this government—recognize the importance of natural gas as a transportation fuel. With that show of support by this government and this Legislature, I have heard from many private operators who believe the heavy-duty LNG vehicles are the logical choice for their companies. These same companies tell me that they are eager to make investments in Ontario by building the infrastructure such as refineries, refueling stations and maintenance facilities needed to support this next generation in transportation fuels and vehicles.
For an example, one needs look no further than my own riding of Sarnia–Lambton, where Royal Dutch Shell is building Canada’s largest LNG facility to support the use of liquefied natural gas as a transportation fuel initially for Ontario’s hard-working Great Lakes freighters. They’ve got one company currently, Interlake shipping, that’s going to convert their fleet over time to natural gas. Anyone looking at this should be able to recognize this incredible opportunity that exists in the on-road transportation fuel sector, and marine and rail as well.
This Natural Gas Superhighway Act also proposes to provide for a non-refundable tax credit of half the HST, or 4%, for seven years to those taxpayers and fleet owners who would purchase these vehicles—trucks, ships and trains—that use natural gas, or LNG, as a fuel. This credit is intended as a small incentive to help those fleet owners and fleet operators to transition their fleets from traditional fuels to the new cleaner-burning natural gas, building that critical mass in the industry and speeding the reduction of greenhouse gases from traditional fuel sources.
Thanks to similar incentives and with an expected fuel cost savings of up to 25% to 30%, major American trucking companies are already making this transition. Moreover, the province of Quebec has taken early action by offering fiscal incentives to encourage their commercial fleets to purchase natural gas vehicles. The one main fleet there is Robert trucking. These tax measures include an accelerated capital cost allowance on new trucks; a program for improving energy efficiency in road, rail and marine transportation which would fund up to $15,000 per truck for alternative fuels; and investing in the infrastructure for what they call in Quebec the “blue corridor,” which is essentially the Quebec portion of the significant Windsor–Quebec City transportation and manufacturing corridor that also runs through Ontario—the Macdonald-Cartier Freeway.
In addition, Alberta has updated their highway regulations to allow increased weight allowances for LNG trucks on that heavy-haul route from Calgary to Edmonton to keep their oil industry afloat.
British Columbia has also made many investments to reimburse up to 80% of the price differential between a natural gas vehicle and a diesel-powered vehicle.
Robert trucking, as I’ve talked about, has invested in over 180 LNG trucks over three years; those trucks run from parts of Quebec into Toronto already. There’s a company in Alberta that has made a big investment. Waste Management has invested in trucks in both Coquitlam in BC—and 20 in Ottawa. Gaz Métro has invested in five LNG stations along the blue corridor in Quebec. Shell, Encana and Ferus are all making developments. I just heard, as early as an hour ago, that one of the rail operations could run all of their freight operations across all of Canada with, I think it is, five or six refueling stations. So it’s not a matter of, “Will this happen and can it happen?” It’s going to happen. Ontario needs to be at the table and we need to be a big part of that.
All told, these private companies’ efforts represent more than $350 million of investment in this sector of the market. The business community is ready to step up and do their job. We as government and this Legislature need to step up and do our part.
The main artery of Ontario’s manufacturing economy, the Windsor–Quebec City corridor, has virtually no share of that investment, despite having the largest marketplace and the largest number of industry players ready to take advantage of this. If Ontario doesn’t take steps soon to open its borders to this same type of innovation and investment, it risks being left behind, and our businesses will fall further behind as they lose their ability to get their products to market at competitive prices.
I’ve heard from Loblaws as well; they’re willing to get behind this.
The time is right for the province of Ontario to seriously look at the promotion of natural gas as a transportation fuel. I believe that, after hearing the response of the Minister of Energy this morning in question period to a question I put to him, he also believes the same thing.
I ask members that are here today to support Bill 97, the Natural Gas Superhighway Act, 2013. By doing that, we as a Legislature can move this important piece of legislation to committee, where we can hear from all of the industry stakeholders about the importance of opening the Ontario market to investment and opportunity. It comes with a clean, abundant and North American energy source.
To reiterate, the intent of the natural gas bill is to ask the Lieutenant Governor in Council to make regulations about weight limits as well as require the Minister of Transportation to make a progress report every 18 months, and to provide for a non-refundable tax credit of half of the HST for seven years to those taxpayers who would purchase those vehicles.
Mr. Speaker, I want to thank you for the time you’ve allowed me today and I want to thank all of my colleagues who are here today that are going to speak on this bill. I look forward to the rest of the afternoon and a very fruitful debate. Again, I want to thank all the stakeholders that showed up here today. I look forward to the rest of the debate.
The Deputy Speaker (Mr. Bas Balkissoon): Further debate?
Mr. Jonah Schein: I’m happy to rise today to speak to Bill 97, the Natural Gas Superhighway Act, 2013. I want to commend the member, first of all, for the title of this act. It’s one of the better ones I’ve heard; it reminds me of a rock-and-roll album or something.
Speaker, Bill 97 attempts to enable regulations prescribing higher weight limits for vehicles that use liquefied natural gas as a transportation fuel. It would also require the Minister of Transportation to table a progress report to the Legislative Assembly annually until these regulations are made. Bill 97 would also provide for a non-refundable tax credit in the amount of half of the Ontario portion of the HST, which is 4%, for seven years to taxpayers who purchase vehicles like trucks, ships and trains that use natural gas as fuel.
This is an interesting bill. I think it’s interesting in part because, typically, private members’ bills do not have financial implications. I’m curious about this one and what the financial implications are, because it seems to me that there actually would be lots of revenue here.
I do agree with some of the environmental principles behind this bill, but I also have some questions about the feasibility of the incentives that Bill 97 proposes.
Let’s talk about the environmental considerations first. We know that the transportation sector in 2010 was responsible for the largest volume of greenhouse gas emissions province-wide. This sector has also witnessed a significant increase in emissions since 1990, while other sectors—electrical and industry—have seen a decrease.
Medium- and heavy-duty vehicles make up only 3% of the vehicles on the road today, but they contribute 27% of the greenhouse gas emissions from on-road sources. As a transportation fuel, natural gas represents a cleaner alternative to traditional fuels, especially diesel, for medium and heavy trucks, trains and ships. And so, in principle, I believe we need to support the transition to cleaner technologies from traditional fuels like diesel.
As many of you might know, the World Health Organization recently declared diesel-engine exhaust as a group 1 carcinogen—along with arsenic, asbestos and tobacco—and it has now been proven, without a doubt, that exposure to diesel exhaust causes lung cancer. As you know by now too, Speaker, this is one of the main reasons that I and members of my community have serious concerns about the use of diesel trains on the Union Pearson Express air-rail link.
Just to bring the audience into this discussion here, I represent a riding just west of Queen’s Park, and it’s a riding that could definitely use better transit. The good news is that there is transit coming, and there is transit coming that is going to take people from the airport down to Union Station—
The Deputy Speaker (Mr. Bas Balkissoon): Order.
Mr. Jonah Schein: Thank you, Speaker.
But the train that’s being built is a train that is not going to serve our communities at all. In fact, our communities are going to—
The Deputy Speaker (Mr. Bas Balkissoon): I will ask the speaker to speak to the Chair rather than the audience. If I could have a little bit of quiet in the room, I would be able to hear what he’s saying.
Mr. Jonah Schein: Thank you for the reminder. Speaker, through you to members present today, just to let people know: This is a transit plan, but it’s the wrong kind of transit plan. We’re having a discussion here about cleaner fuel technologies, and yet the government of the day is moving forward with a transit plan that is not going to reduce greenhouse emissions and is not going to improve air quality. In fact, it’s going to make people in the west end of Toronto sick, and it is a colossal waste of money. When we are able to build new transit using clean technologies, the government of the day is choosing a diesel fuel. That is just the wrong path.
In our case, in Davenport and in the west end, where cleaner technology does exist through electrical energy, we should move to use it. I will be curious to see how the government votes on this bill today, when they are clearly on the wrong path when it comes to the diesel trains that they are building right now.
Anyway, getting back to the bill, Bill 97: There are various options for the conversion of heavy transport vehicles to natural gas, and they should be seriously considered. Options should also be considered for the critical importance of on-road freight transportation to our provincial economy. In Ontario alone, the number of heavy-duty on-road diesel vehicles more than doubled between 1990 and 2008. Within the greater Toronto and Hamilton area, between 70% and 90% of freight is moved by truck.
Unlike most other sectors of the economy, the transportation sector relies almost exclusively on a single energy source, which is crude-oil-based fuels, to meet the vast majority of its energy needs. Meanwhile, the price of diesel fuel in Toronto has increased by 165% since 1990, which is another reason why we should not be creating new diesel trains in this situation.
Liquefied natural gas vehicles generate a fuel cost savings of 20% to 30% for heavy transport operators. Those lower transportation costs could mean savings to Ontario businesses along the supply chain. So there are definite reasons to explore options for the use of natural gas.
British Columbia, Alberta and Quebec—these provinces have already adopted legislation to promote natural gas as a transportation fuel, as well as American jurisdictions, such as New York, Pennsylvania, Maryland, West Virginia, Wisconsin, Colorado, California, Texas, Oklahoma and Louisiana. But the mechanisms that they have used are different than the ones in Bill 97.
There are other considerations with Bill 97. Natural gas still does produce greenhouse gas emissions, just not as much as diesel fuel. While the cost of natural gas right now is lower, we do not know if the cost of natural gas will remain so.
Interjection: Diesel used to be cheaper, too.
Mr. Jonah Schein: That’s right.
Fracking technology is primarily responsible for the current low prices in natural gas, and there are real environmental concerns about the use of fracking technology.
Serious questions remain about the potential environmental impacts of shale gas exploration. Concerns include massive water extractions, potential contamination of drinking water and watersheds and significant greenhouse gas emissions. These concerns have been raised by respected individuals such as Dr. David Suzuki and Ontario’s own Environmental Commissioner, Gord Miller.
In 2011, Quebec put a moratorium on fracking until the province has conducted a detailed environmental assessment. New York state has a moratorium, which they are currently debating extending until July 2013, to allow for environmental studies to occur.
In the fall of 2011, Niagara regional council passed a moratorium on shale gas exploration—
The Deputy Speaker (Mr. Bas Balkissoon): The Minister of Rural Affairs, I’m having difficulty hearing the speaker.
Mr. Jonah Schein: Thank you, Speaker.
In 2011, in the fall, Niagara regional council passed a moratorium on shale gas exploration due to environmental concerns. The Environmental Commissioner of Ontario has raised concerns about fracking—as I mentioned; so has the Council of Canadians and others who are campaigning for a moratorium across Canada due to dangers to water, increased greenhouse gas emissions and dangers to wildlife.
So with these outstanding environmental concerns, we believe that these should be addressed before we go forward with this technology when it comes to shale gas.
In addition to these environmental concerns, it’s also not clear if Bill 97 uses the appropriate financial mechanism. In British Columbia, for example, they have taken another route. The government passed a regulation that allows utility companies to deliver natural gas transportation programs until March 2017.
Under this regulation, the utility companies can offer incentives to transportation fleets that use natural gas, such as buses, trucks or ferries. Companies can build, own and operate compressed natural gas fueling stations or liquefied natural gas fueling stations. They can upgrade these facilities to provide training to safely maintain natural gas vehicles.
The non-refundable tax credit of half of the Ontario portion of the HST—this would require federal amendments to the tax act to make this incentive operational, and we have not traditionally seen a great deal of co-operation when it comes to the provincial government of Ontario and the federal government of Stephen Harper, and we would need to see that co-operation if this was actually to occur. So even if this bill was passed, it would not—from my understanding, anyway—actually be possible without co-operation from the federal government.
Also, the nature of this bill seems to make it a money bill, as I mentioned, which generally is not something we allow in private members’ business.
That said, I think it’s worth getting this private member’s bill to committee, and so we will be supporting it. We definitely want to hear from experts on how the details of a natural gas conversion financial incentive might work and should work.
I think it’s somewhat ironic to hear from the other two parties—well, we haven’t heard from the government yet at this point—but parties that are all too willing to subsidize some of the energy sector. So when it comes to our nuclear facilities, the real costs of nuclear energy are tremendous. We’re going to feel that for generations. It’s highly, highly subsidized. We have a government that is paying for an exceptionally expensive fuel when it comes to diesel, a very costly fuel when it comes to the health of the community, with this expansion of the air-rail link, and they have no problems paying for that.
We have an opposition party that resists any kind of support for green energy, and we have both parties, the provincial government here and the federal Conservative Party, that have cut back the most sensible energy plan of all, which is to actually not use energy in the first place. It’s to conserve it; to make sure that we’re using it wisely. Instead of making the necessary investments when it comes to energy conservation and supporting home energy retrofits, both the federal government and the provincial government have cut those things. That is disappointing, Speaker. Now they’re willing to subsidize another energy source here, but as I said, I think there are worthy environmental implications of doing this.
Ultimately, I’ll support and agree that there is a benefit for the environment and to our economy in converting from heavy diesel transport to natural gas, so I look forward to the comments from the other parties. I’ll stop there.
The Deputy Speaker (Mr. Bas Balkissoon): Further debate?
Mr. Kevin Daniel Flynn: It’s a pleasure to join the debate on Bill 97, which is An Act to encourage the purchase of vehicles that use natural gas as a fuel. I congratulate the member from Sarnia–Lambton for bringing this bill forward. When he told me he was bringing forward a bill that involved the use of natural gas as an alternate fuel for vehicles, I was quite encouraged by that.
I will say at the outset that I personally plan to support this bill. There are some issues, I think, with the bill. I’m not sure if the approach that’s being taken with the changing of some of our weight allowances is the right way to go, but I don’t think as a Legislature we should let that stop us from investigating this bill further because in some other regards, it’s got an awful lot of merit.
When you look at the comparison, the potential we have for natural gas vehicles, when you compare to the fuel that’s being used, either gasoline or diesel, it emits about 20% to 30% less C02 and 70% to 90% less carbon monoxide. Nitrous oxide emissions can be reduced almost up to 100%. PM, particulate matter, can be reduced by 90%, and VOCs can be reduced by 90% as well. When you compare those two fuels together, I think any jurisdiction would be foolhardy to not take a serious look at using it as an alternate fuel.
When we compare ourselves with the United States and with other jurisdictions around the world that have natural gas-powered vehicles, we’ll see that the entire country, in my opinion, isn’t doing what it should be doing. In the States, for example, depending on what you classify as a vehicle, they claim that anywhere from 120,000 to 260,000 vehicles are used in the United States today that are powered by natural gas. If you look across the continent, and that’s primarily in the United States, you’ve got about 1,000 filling stations that provide the network to provide the fuels for those.
So why would you use natural gas? Well, right from the start, I think, you’ve got to look that it’s cheaper. It’s about 50% cheaper when you start to use some of the costs. It’s cleaner, as I said earlier; it’s got about 80% less particulate matter, 20% to 25% less greenhouse gas emissions. Also, we’re finding there’s an increased supply. Ontario is well positioned. The storage capacity we have and the market we have will be attracting natural gas from the south, from Pennsylvania and also from the west, where we’ve traditionally received our supply from. So it’s not like we’re short of natural gas.
Certainly, when you look at oil, when you talk about peak oil, you start to realize that we do need to go a different way on this. This brings us less soot, less smog, and when you look at the pollution that comes off our highway system, quite often we blame industry for pollution in our society and we kind of forget it’s often our own cars and vehicles that are providing the majority of that pollution and of the degradation to our air quality.
It’s quite simple, when you look at it. I’m not a scientist or a chemist, but when you look at natural gas, it simply has less carbon than the other fuels. Natural gas is CH4: one carbon atom and four hydrogen atoms. Diesel fuel, by comparison, is C15H32. Gasoline is C8H16. So you’ve got many more carbon atoms, much higher carbon content in the other fuels when you compare them to natural gas.
I’m suggesting that by supporting this bill, we keep this conversation going. In the province of Ontario, we need to get more natural gas vehicles on the road. The way we do that, I think, is to ensure that we’ve got a supply route—a supply along the existing trucking routes—and encourage our transit systems to use natural gas as an alternate fuel.
That infrastructure does not exist today. I know there is the one trucking company that stands out above all others in this regard, Robert, and they’ve put in their own system between Quebec and Ontario that their own trucks use privately. I think they’re hoping to expand that.
I think there’s enough potential that we need to keep this conversation going. As an individual, I will be supporting this bill; I think some of my colleagues will as well. Once again, I want to thank the member from Sarnia–Lambton for bringing forward what I think is a very good bill.
The Deputy Speaker (Mr. Bas Balkissoon): Thank you. Further debate?
Mr. Michael Harris: As PC environment critic, I’m pleased to rise again today to support yet another private member’s bill that will help improve our economy and, of course, our environment. I’d like to thank my colleague the member from Sarnia–Lambton for the work he’s done in the preparation of this bill, and I hope everyone in this House will join me in moving this bill past second reading today and into law.
Like I always say, good environmental policy should also be good economic policy. Bill 97, An Act to encourage the purchase of vehicles that use natural gas as a fuel, follows this rule. Technology is getting more sophisticated every day, so government must keep up with these changes in order to stay competitive. The recent development of vast shale gas deposits in North America has driven up the demand for this low-cost fuel source: natural gas.
Estimates suggest that natural gas will last us well into the next century at a lower cost than oil. On average, natural gas vehicles use 20% to 40% less fuel than conventional vehicles. That’s why American trucking companies are transitioning their fleets to run on natural gas. They understand the significant opportunity for cost savings, which can amount to as much as 40%.
Ontario must not fall behind. We need to create the right conditions to encourage Ontario consumers and companies to make the switch. To do that, Bill 97 would alleviate the financial risk of investing in new cars and trucks by offering a time-limited, non-refundable tax credit for the purchase of vehicles that use natural gas as a fuel. Those who wish to make this investment would receive a tax credit that is equal to half of the HST the purchaser paid on that vehicle. Purchasers would then have to ensure that they pay back the HST on the truck in seven years.
If implemented, this sound policy change would not only stimulate economic activity, it would also produce real results for our environment. According to the Canadian Natural Gas Vehicle Alliance, natural gas vehicles produce 20% to 25% less CO2 emissions than conventional vehicles. In fact, the alliance also states that one in five trucks is more than 20 years old.
If you take both of these numbers into consideration, one in five trucks will have to be replaced in the near future, so why not encourage companies to choose vehicles powered by natural gas? That just makes sense. In fact, it makes more sense than penalizing Ontario drivers by forcing them to get a flawed and unnecessary Drive Clean test under a program that has become nothing more than a government cash grab.
As we look five years down the road, natural gas vehicles will be able to operate on renewable natural gas produced from biogas from organic matter. In fact, according to Natural Resources Canada, using 100% renewable natural gas will reduce 85% to 90% of our carbon emissions. It is crucial that Ontario takes the lead and starts powering its transit, buses and transport trucks with natural gas.
I think we can all agree that this is a very practical approach to keep Ontario competitive in a global economy and keep our air clean. That is why I would encourage every member in this House to vote in favour of Bill 97.
I’d like to thank the member for Sarnia–Lambton for bringing forward this very crucial and important piece of legislation.
The Acting Speaker (Mr. Paul Miller): Further debate?
Hon. Tracy MacCharles: It’s great to stand up and talk in a supportive way about this bill from MPP Bailey from Sarnia–Lambton, my good friend, with mutual friends in Chatham and Oil Springs and our deep connection to a former minister under Bill Davis, Lorne Henderson. His daughter is my best friend. See? We can get along; I’m best friends with Lorne’s daughter.
Anyway, I’m up, happily, to talk about Bill 97, An Act to encourage the purchase of vehicles that use natural gas as a fuel. Like the member from Oakville, I am supportive. I think there are some things we need to work through on this, and a conversation that needs to keep going, but in principle, the PMB that encourages the purchase of vehicles that use natural gas as a fuel by amending the Highway Traffic Act and subsequent regulations, and the Taxation Act, is a PMB that I think is worthy of future consideration and work.
These amendments would address weight issues associated with both compressed- and liquefied-natural-gas vehicles and provide a tax credit or subsidies to the purchasers of such vehicles.
As the Liberal government has made some progress in this area, I think it’s important to highlight what some of those are. We have reformed weight laws that took into consideration maximum weights which we could allow on roads while doing the least amount of damage to our infrastructure and maintaining safety. We’ve made some progress as an Ontario government on this issue.
As we all know, natural gas is indeed safer and cleaner for burning fuel, and good for our environment and good for air quality. It generates significantly fewer greenhouse emissions, particularly fewer carbon monoxide and nitrous oxide chemical components that are very harmful to our health, so I think that’s something else we can all agree on.
It is important to note that natural gas vehicles are attracting greater interest, both for intercity and intra-city applications, because of the cost savings around it. However, this kind of technology that we are talking about is still evolving, so there are some issues around reliability, cost, fuelling, infrastructure, dealer support and so on that do require some further research and examination.
Ontario is really, though—it’s important to remember—a leader in clean technology. We have a Premier who sees the world and where it’s headed going forward in the new economies of the 21st century. With our government’s clean initiatives, we are positioning Ontario for the future, ensuring we have that infrastructure in place, be it a smart grid, a sufficient power supply or changing infrastructure. We all want to make sure that Ontario is in front of this and is not left behind.
Overall, I think this is a worthy bill. I know the member from Sarnia–Lambton has put a great deal of work and thought into this, so I applaud him for that. I think—well, I know—that I can be supportive of this, and I hope others will be too.
The Deputy Speaker (Mr. Bas Balkissoon): Further debate. The member for York–Simcoe.
Mrs. Julia Munro: A point of order, Mr. Speaker: I just wanted to draw the attention of the assembly that we have with us a former parliamentarian, David Turnbull.
The Deputy Speaker (Mr. Bas Balkissoon): Thank you, and welcome.
Mrs. Jane McKenna: I’d also like to commend the member from Sarnia–Lambton, who has done a wonderful job on this. I am pleased to rise to speak to Bill 97, the Natural Gas Superhighway Act. This bill seeks to encourage the purchase of vehicles fuelled by natural gas. It proposes to do this by way of a tax credit to taxpayers who purchase certain vehicles fuelled by natural gas. The purchase price for natural gas vehicles can be higher for operators, but the life cycle savings make switching attractive. This credit would lower the cost of entry.
Switching to natural gas offers broad benefits to public and private operators. The trucking sector is a key one, as this bill suggests. Transit is another.
Roughly one in six buses in Hamilton’s transit fleet is now powered by compressed natural gas—CNG, for short. That city was an early adopter, starting in 1985. At peak, half of its buses were running on natural gas. But Hamilton began shifting over to diesel and hybrid diesel-electric models since 2004, because of concerns with early CNG technology. The buses were costly to run and repair, which was burning a hole in the balance sheet.
Across the bay, my home riding of Burlington had about a third of its buses running on early CNG systems in the late 1990s. These were retired between 2002 and 2005 for the same reason as Hamilton.
But the fuel market has changed dramatically in recent years, and so has engine technology. New emissions standards benefit natural gas engines more than diesel engines, because natural gas is cleaner, and life cycle carbon emissions for natural gas buses are about 20% lower than their diesel counterparts. Enormous natural gas reserves have been tapped or identified across North America. The Geological Survey of Canada estimates that our own Arctic region contains a reserve of 97 trillion cubic feet of natural gas.
In response to all of this, the market has grown by leaps and bounds. A quarter of all new bus orders in the United States are for CNG vehicles. Major American trucking companies are beginning the transition to natural gas as a fuel source, and a more efficient generation of CNG vehicles has arrived.
Diesel, on the other hand, is not looking its best. Diesel prices have climbed by about a third in the last four years and are projected to climb further yet over the next four years. In that same time, CNG prices have tumbled by about a third and are expected to decline further until 2017, then climb modestly. Diesel prices are much more volatile than natural gas prices. On a life cycle basis, CNG-powered vehicles have become competitive with gasoline-powered vehicles.
Trucking and transit operators in the United States have responded accordingly and, slowly, Canadian operators have as well. This year, Hamilton has taken a serious second look at shifting its fleet back to CNG. In doing so, it joins Calgary, which plans to purchase 200 CNG buses in the next decade.
It’s not just dollars-and-cents equations. Natural gas vehicles promote energy security, reduce greenhouse gas emissions and cut pollution and noise at street level, all of this in addition to more predictable operating costs. These are changes we should be encouraging, and I am pleased to support Bill 97.
The Deputy Speaker (Mr. Bas Balkissoon): Further debate?
Hon. Jeff Leal: It’s a delight to have the opportunity to get a few words on the record this afternoon in support of Bill 97, as presented by my good friend the member from Sarnia–Lambton.
I just want to say I have a long-standing relationship in my part of Ontario, the Peterborough area and eastern Toronto, with Enbridge Gas, who do such a terrific job in terms of providing a great service to both businesses and residents in my riding of Peterborough. I just want to thank them for the great job they do.
One of the leaders of the gas industry in Ontario, I was told, was in Toronto last night, a man who has affectionately been called, over the years, the Duke of Kent, the Honourable W. Darcy McKeough, who represented the riding in southwestern Ontario for many years.
When Mr. McKeough completed his very distinguished political career here at Queen’s Park—a minister with Mr. Robarts and Mr. Davis, of course—he was chair of the board of Union Gas for a number of years. Of course, Union Gas was headquartered in Chatham, Ontario.
For those who are interested in political trivia, the Honourable John Robarts was the godfather for at least one of the McKeough children of Darcy and Joyce. That was a long-standing relationship.
I guess I’d better get to the bill here.
Interjection: We’re not going to object.
Hon. Jeff Leal: They’re not going to object, of course.
The Peterborough Petes are playing tonight at the Memorial Centre, and of course we want to wish them well.
Mr. Steve Clark: Tickets are available?
Hon. Jeff Leal: Tickets are available. I hear the member from Durham. I could get him a box seat, if he wants to take the opportunity—
Hon. Jeff Leal: —and my good friend the member from Oshawa. They could both be there in the box seats together, getting a great view of the Peterborough Petes.
Sorry, Mr. Speaker. I’ve got to get back to the bill here.
I think this is a great opportunity for extensive use of natural gas in vehicles. Just this afternoon I took a look at that extension of the 407, right at Lake Ridge Road. They’re doing a tremendous amount of work there, and as they extend that eastward it would be a real opportunity to have vehicles that are powered by natural gas.
It’s interesting, of course, that supply has decreased significantly, particularly from the American Midwest. They’ve found all this shale gas due to fracking. There’s more gas coming into the market, so we’ve got to look at innovative ways that we might be able to use that product to help us fuel the economy in the province of Ontario.
The member from Sarnia–Lambton, I think, has hit upon a very good idea that we need to explore further. I want to congratulate him. He was one of the leaders, along with the member from Hamilton East–Stoney Creek, with the One Call system that’s being accepted right across Ontario. That was a partnership with Union Gas, Enbridge and many other utilities to make sure that we don’t do unnecessary digging, but get it right, improve safety and protect citizens right across this great province.
Bill 97 is very consistent with what the member has been doing since he arrived here in 2007—Mr. Bailey, is that correct?
Mr. Robert Bailey: I should have been here much sooner.
Hon. Jeff Leal: He should have been here much sooner.
I still see him as one of the progressive members of that caucus over there, and you can see that with this legislation that he’s bringing forward.
The Deputy Speaker (Mr. Bas Balkissoon): Further debate?
Mr. John O’Toole: I’m very privileged to be filling in this afternoon for our energy critic, Mr. Fedeli from Nipissing; by the way, he’s our finance critic as well. I want to congratulate Mr. Bailey from Sarnia–Lambton as well because he was very diligent in picking out the right people to comment on this bill. It’s been, quite seriously, unanimously supported. It seems like the NDP is somewhat warm to this issue, as well as the Liberal caucus, from their comments.
If you put it into perspective, it is simply the right thing to do. Some of the background that Mr. Bailey has provided for us is convincing evidence, and he’s done a great job on a couple of other bills that are non-partisan and have received support of the House. I’m sure we’ll hear more about that in the next while under the Local Food Act.
I can only say, too, that this past week I had the privilege of meeting with a number of people who work professionally. I met with the Canadian Association of Petroleum Producers’ Mr. Dave Collyer, as well as the Canadian Energy Pipeline Association’s Dr. Brenda Kenny. Dr. Kenny was talking to us about the important advantages—natural advantages, I might say—of natural gas. The Canadian Natural Gas Vehicle Alliance is a non-profit organization espousing the use of natural gas and liquefied natural gas, as it is a much cleaner fuel. It is 20% to 30% cheaper and it is actually very friendly to the environment.
You can look at the implications of the alternative for the trucking industry, which is diesel. Diesel itself creates a 77% greenhouse gas increase and 71% growth in energy use; 3% of vehicles but emit 24% of the greenhouse gases from on-road sources; 40 tonnes of greenhouse gases per year if a truck drives 125,000 kilometres. The evidence is clear that we need to provide some leadership for the alternative, the alternative being liquefied natural gas, which Mr. Bailey’s bill espouses.
In the detailed part of it, it isn’t a huge subsidy or support for the industry, but what it does is allow you, over time, to receive a portion of the HST for the purchase of a vehicle. Companies, I’m sure, want to do the right things by having cleaner vehicles on the highway. There have to be a couple of amendments: one to the Highway Traffic Act, because liquefied natural gas is heavier, as well as the tax credit that you can get over time.
I commend Mr. Bailey from Sarnia–Lambton for the work he’s done on this by reaching out and educating the members of all caucuses. I was very encouraged earlier today. Mr. Bailey asked a question of the Minister of Energy, and it was my impression—you can interpret it sometimes; what they say and what they do are often different things—that he did support Mr. Bailey’s question in his response. I think people could look at Hansard to see that doing the right thing actually is the right policy, and the right politics is simply doing the right thing.
Again, this has been a very cordial afternoon and it sounds to me like this will receive unanimous support. I’ll certainly be supporting it, and I commend Mr. Bailey and the stakeholders that are here today. Doing the right thing is the right policy.
The Deputy Speaker (Mr. Bas Balkissoon): The member for Sarnia–Lambton.
Mr. Robert Bailey: Thank you, Mr. Speaker, and it’s a pleasure. Right now I want to thank all of the legislators that are here, members of the Legislative Assembly that spoke today. Particularly I want to thank the members for Davenport, Burlington, Durham, Kitchener–Conestoga, Oakville, and the Minister of Consumer Services and the Minister of Rural Affairs, who also spoke in support of this bill—or at least general support, if not full support. It was a pleasure to hear their remarks.
I look forward, if this bill is passed and moved on to committee, to where we can take those improvements, we can bring people from industry, bring people in from the general public and get their ideas to make this a better bill, if it’s to pass, and do the right thing for the province of Ontario.
I also want to commend the Minister of Rural Affairs. He mentioned the gas stored at Dawn township; we call it the Dawn hub. The member from Lambton–Kent–Middlesex and I share that. He’s got part of it in his riding; I’ve got part of it in my riding. It’s certainly a well-known industry in our area and they’re doing a great job there. There’s Enbridge as well. They share the province in the work they do in gas and safety. It was a pleasure to work with them on the One Call bill as well.
Also, I want to mention that 50 years ago today the Robarts government was elected. There were a number of members that came to this Parliament from all three parties. What changes we’ve made. Just before I conclude, I had a chance to look through that, and it’s amazing how society has changed. I looked through it and there was only one woman elected 50 years ago today, so what a great improvement in this Legislature. We have all these lovely women from all three caucuses that are here with us today, and I think it has made the Legislature a better place. I hope my wife was watching back home when I said that.
Anyway, thank you, Mr. Speaker, again. I won’t belabour the afternoon. I know everybody has had a long week and it has been tiring. I know the Liberal Party is going to Hamilton. They’re going to have a great big convention this week. I’d like to go down there and see what they’re up to. Anyway, thank you again to everyone who has spoken in support of my bill. I want to thank my executive assistant, Anthony, who put a pile of work into this, and into helping me, and my former assistant, David Donovan, who has gone on to bigger and better things with the feds.
Thanks again, Mr. Speaker, for the opportunity to be here today, and thank you for your support.
The Deputy Speaker (Mr. Bas Balkissoon): The time provided for private members’ public business has expired.