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McGuinty warns Ottawa not to cripple auto sector

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CTV.ca News Staff

Date: Tue. Oct. 3 2006 11:27 PM ET

Ontario Premier Dalton McGuinty is warning Ottawa not to cripple his province's auto sector with upcoming plans for more stringent vehicle emission standards.

Federal Environment Minister Rona Ambrose summoned representatives from Canada's big car manufacturers to Ottawa Tuesday.

She is expected to roll out a plan to reduce emissions that will likely include new requirements for auto manufacturers.

But McGuinty said Tuesday that his province won't succumb to pressure from Ottawa to take on the brunt of meeting the new standards.

"One thing we will not abide is any effort on the part of the national government to unduly impose greenhouse-gas emission reductions on the province of Ontario at the expense of our auto sector," McGuinty said.

He said the industry was already plagued by enough challenges and that Ottawa shouldn't risk the "good, high-paying jobs" that the auto sector provides in Ontario.

The meeting, which could mark the first time automakers will face regulations, is part of discussions leading to the Conservative government's promised environmental plan that is to be unveiled within weeks.

It's a meeting packed with heavyweights. CTV's David Akin has learned that Finance Minister Jim Flaherty, Industry Minister Maxime Bernier and several other cabinet ministers will attend with Ambrose.

Canadian Auto Workers President Buzz Hargrove, who will also attend the meeting, voiced his disapproval over the plans on Tuesday.

"This idea of putting in stiff regulations that the companies have to meet or face a penalty is going to cause major damage to an industry that's already on its knees," Hargrove told The Canadian Press.

Auto industry insiders have been troubled by reports that Ottawa is not going to implement similar restrictions on Canada's oil and gas industry.

"They're not going to do anything that's going to cause a detriment to Alberta, so if they hit Ontario I'm not sure that's the smartest political move," said Hargrove.

Ambrose is expected to deliver a formal notice of intent to regulate the industry, but as one senior government source explained, "this type of thing doesn't happen overnight. It takes a lot of consultation and working on legislation.''

The auto industry has been operating under a voluntary emission reduction plan that will end in 2010.

Ambrose is not expected to spell out specific targets the industry will be forced to meet but she has said that the government will impose new standards that will go further than the voluntary plan.

So far, Canada has either had a written voluntary agreement with the industry to meet emissions goals or an understanding that car manufacturers would follow American standards.

John Bennett, senior policy adviser on the atmosphere and energy for the Sierra Club of Canada, said it's impossible to speculate on what the parties will discuss.

"This government prefers to speak to industries rather than speak to the public or to organizations that have been working on these issues for a long time," he told CTV Newsnet on Tuesday.

On the "hopeful" side, Bennett said the Canadian auto industry could be headed towards adopting California standards for greenhouse gas emissions that would require vehicles to reduce emissions by 30 per cent between 2009 and 2015.

Echoing Bennett, Conservative insiders told CP that the ultimate objective is to bring Canada in line with North American-wide standards after 2010.

"They don't want Canada to become a dumping ground (for inefficient cars) in North America,'' one source familiar with the file told CP.

"Canada has to have regulations that are valuable, enforceable and implementable -- to do what they're supposed to do.''

Mark Nantais, president of the Canadian Vehicle Manufacturers' Association, warned that it was important that North American automakers share common environmental standards.

"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," he told CP.

Sources also told the wire agency that 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.

"On the downside," said Bennett, "we could be talking about minor improvements to the air pollutants that come out of cars."

These include nitrogen oxides and carbon monoxides, which would amount to only minor improvements in reducing air pollution, and would add up to "a lot of hot air."

In 1981, the Canadian government legislated emissions regulations, but never proclaimed the law.

Politicians did not push the issue when car companies promised they would follow the Corporate Average Fuel Economy standards in the U.S.

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.

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