VZCZCXRO0159
RR RUEHGA RUEHHA RUEHQU RUEHVC
DE RUEHOT #3561/01 3421218
ZNR UUUUU ZZH
R 081218Z DEC 06
FM AMEMBASSY OTTAWA
TO RUEHC/SECSTATE WASHDC 4585
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
RUEAEPA/EPA WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RHEHAAA/WHITE HOUSE WASHINGTON DC

UNCLAS SECTION 01 OF 04 OTTAWA 003561 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR WHA, OES AND EB 
EPA FOR OFFICE OF THE ADMINISTRATOR AND INTERNATIONAL 
AFFAIRS 
DOE FOR POLICY AND INTERNATIONAL 
WHITE HOUSE FOR CEQ 
 
E.O. 12958: N/A 
TAGS: SENV ENRG PINR CA
SUBJECT: NEW LIBERAL LEADER DION LIKELY TO PUSH 
ENVIRONMENTAL INITIATIVES 
 
REF: A. MONTREAL 1205 
 
     ¶B. OTTAWA 3423 AND PREVIOUS 
     ¶C. MONTREAL 826 
 
Sensitive but unclassified.  Please protect accordingly. 
 
¶1. (SBU) Summary.  The victory of former Environment Minister 
Stephane Dion in the federal Liberal leadership battle seems 
certain to keep the environment and especially the Kyoto 
Protocol squarely in the center of domestic political 
discourse.  As Environment Minister, Dion was closely 
identified with the Kyoto Protocol.  He has consistently 
criticized the Conservative government's decision to abandon 
Canada's Kyoto commitments as unachievable and just as 
regularly insisted that his own climate change and energy 
program, outlined at length but missing many specifics, would 
allow Canada to meet those commitments if implemented by 
"early 2007."  Even though Dion received generally good 
reviews as Environment Minister, his record is not without 
blemish, particularly since the Martin Liberal government 
made little progress in reducing greenhouse gas emissions.  A 
Dion-led government seems certain to focus greater attention 
on the environment and to pursue its environmental objectives 
aggressively.  End Summary. 
 
¶2. (U) Stephane Dion's victory in the December 2 federal 
Liberal Party leadership race (ref a) heightened focus on 
Canada's already vocal environmental debate, specifically on 
whether a Liberal victory in the next federal election 
(expected in 2007) would see a re-commitment to the Kyoto 
Protocol commitments Canada assumed in 1997.  In any event, 
Dion's rise seems certain to maintain the rhetoric on the 
environment at a high level, perhaps highlighting the 
Conservatives' relative lack of success in selling the 
Canadian public on their own environmental and climate change 
program. 
 
¶3. (U) The environment was not Dion's sole focus during the 
leadership campaign ) he says economic prosperity and social 
justice shared equal billing ) but his tenure as federal 
Minister of the Environment from July 2004 to January 2006, 
and his regular campaign criticism of the Conservative's 
Clean Air Act, seem to link him more closely to the 
environment than these other elements of his platform.  He is 
strongly identified with Canada's commitment to the Kyoto 
Protocol, and his campaign rhetoric on the environment was 
notable for its focus on the Harper government's admission in 
May that the Kyoto target was not achievable.  He 
consistently charged the Harper government with betraying its 
"responsibility to live up to its international treaty 
obligations" (i.e., the Protocol), and the first paragraph of 
his Liberal leadership campaign's energy and climate change 
plan, for example, accuses the Conservatives of having "cut, 
postponed or simply abandoned every meaningful federal 
initiative to combat climate change and increase energy 
efficiency." 
 
The Environment ) Important in Domestic Politics, 
but not all Good News for the Liberals 
--------------------------------------------- ---- 
¶4. (U) Polling data consistently provide evidence of the 
importance Canadians attach to the environment, and one poll 
taken early last month found that Canadians, for the first 
time since 1990, claimed to be more concerned about the state 
of the environment than (perennial front runner) their own 
health.  That data also point out regional differences, with 
respondents in Alberta and Quebec, which has its own climate 
Qrespondents in Alberta and Quebec, which has its own climate 
change strategy (ref c), the most likely to cite the 
environment as their greatest concern; and some aspects of 
the environment, for instance climate change and energy 
conservation, regularly claim greater attention from the 
public.  A mid-November survey of British Columbians, for 
example, found that 72 percent agreed they were "desperately 
concerned" that climate change required "dramatic action." 
Analysis noted this figure was substantially higher than the 
63 percent of respondents across Canada polled two months 
earlier, probably due to "increased media coverage of this 
issue in the last few weeks."  (Note: That increased media 
coverage was almost certainly the spate of publicity, much of 
it negative (ref b), surrounding the tabling of the Clean Air 
Act by the Conservatives in late October.) 
 
 
OTTAWA 00003561  002 OF 004 
 
 
¶5. (U) While most observers give Dion good marks on the 
environment and expect this issue may benefit from greater 
focus in the government agenda if the Liberals win the next 
election, Dion's credentials as Minister of the Environment 
and the most visible face of the Liberal's past environmental 
stewardship, are not entirely positive, and he has come in 
for some criticism for being too focused on the Kyoto 
protocol.  The apolitical Commissioner for the Environment 
and Sustainable Development (the CESD is part of the office 
of the Auditor General of Canada) in a report released in 
September 2006 noted a stark contrast between Dion's vision 
of a green Canada and what the Liberals actually implemented 
during their reign in power.  That report noted at the 
"government-wide level, our audits revealed inadequate 
leadership, planning, and performance," and "(t)he federal 
government has done too little and acted too slowly on 
Canada's commitments to address the challenge of climate 
change".  In a line sure to be used by Dion's adversaries in 
the next election, CESD stated "(e)ven if the measures 
contained in the previous government's 2005 plan had been 
fully implemented, it is difficult to say whether the 
projected emission reductions would have been enough to meet 
our Kyoto obligations."  (Note.  More tellingly, Canada's 
greenhouse gas emissions in 2004 stood at 27 percent above 
their 1990 Kyoto base year level (and 35 percent above 
Canada's Kyoto target).  Emissions increased at a fairly 
constant rate from the early 1990s through 2004, the last 
year for which official figures are available and years when 
the Liberal Party was in power (1993-2006).  Dion certainly 
does not bear individual responsibility for the whole of the 
Liberal Party's record on emissions, but that record ) if 
examined critically ) seems unlikely to provide his next 
campaign with much comfort.) 
 
¶6. (SBU) The CESD report on Climate Change also remarked on 
the federal government's inability to act on its own in this 
sphere and suggested that achieving success on a complex and 
pervasive problem such as climate change requires "bringing 
various players onside and in mobilizing concerted action." 
While CESD was referring also to private sector stakeholders, 
this concern is especially evident in provincial-federal 
relations; the two levels of government in Canada share 
responsibility for the environment and constantly wrangle 
over who has jurisdiction (and who will pay the bills).  Thus 
there is no guarantee a Prime Minister could implement 
effectively a vigorous and robust green agenda in the face of 
provincial opposition.  (Note.  Typically national 
environmental standards would be set by consensus among the 
14 federal, provincial and territorial environment ministers 
sitting as the Canadian Council of Ministers of the 
Environment (CCME).  The CCME cannot impose its conclusions 
on provinces since it does not have the authority to 
implement or enforce legislation, and each jurisdiction 
decides whether or not to adopt CCME proposals.)  The 
Conservative government was reminded of this in October when 
Ontario's Liberal Premier Dalton McGuinty, in response to the 
Clean Air Act's push for tougher standards for vehicles by 
2010, angrily exclaimed, "(t)he one thing we will not abide 
is any effort on the part of the national government to 
Qis any effort on the part of the national government to 
unduly impose greenhouse-gas-emissions reductions on the 
province of Ontario at the expense of our auto sector."  (The 
Clean Air Act proposes to require tougher fuel efficiency 
standards, not tougher emissions standards.  Perhaps McGuinty 
misunderstood.  In any event, the Conservatives seem to have 
learned their lesson on this score from their relative lack 
of success in rolling out the Clean Air Act, and are devoting 
considerable attention to consulting with provinces and 
industry stakeholders on the overall concepts of the Act.) 
 
So what might a Dion Environment Plan Look Like? 
--------------------------------------------- --- 
¶7. (U) Dion called his campaign platform on the environment 
(but covering energy and climate change more specifically) 
"Building a Sustainable Future for Canada."  The plan, 
largely a repeat of the Project Green he pushed in 2005 while 
Environment Minister, lays out aggressive targets for 
emissions reductions throughout the Canadian economy, but 
provides little detail on proposed programs and no estimates 
of the costs needed to implement them.  (His overall plan for 
environmental sustainability also includes shorter elements 
addressing health, clean air, and clean water.) 
 
 
OTTAWA 00003561  003 OF 004 
 
 
¶8. (U) Dion's energy and climate change plan promises 
programs to provide individuals with tax credits for home 
energy efficiency improvements and purchases of fuel 
efficient vehicles, as well as committing Canada to matching 
the most stringent vehicle emissions standards in the U.S. 
(specifically California).  On the energy side, Dion would 
support research, development and deployment of green 
technologies (by Canadian companies), make more stringent 
efficiency standards for appliances, and mandate 10 percent 
ethanol content for gasoline and biodiesel by 2010.  Dion 
would also adjust preferential cost recovery rules for oil 
sands to promote "zero net impact development."  Industry 
would immediately face caps on emissions and trading, but the 
price for verified reductions would be capped initially at 
C$15 to ensure manageable compliance costs during the first 
Kyoto commitment period (to 2012). 
 
¶9. (U) To promote renewable energy, the plan would provide 
incentives for wind and other renewable power production and 
establish, in consultation with the provinces, renewable 
portfolio standards.  Owners of commercial buildings would 
receive accelerated depreciation allowances for energy 
efficiency investments, and communities would be eligible for 
a variety of funds to support mass transit, weatherization, 
and urban renewal.  The government would not escape: Dion 
would set targets for the federal government and crown 
corporations to use at least 20 percent renewable energy 
immediately, moving to 30 percent by 2010 and 80 percent by 
¶2020.  (Note. This ambitious target only makes sense if the 
plan includes large scale hydro and nuclear in the renewables 
category, which often is not the case.  In 2002 hydro and 
nuclear supplied 70 percent of Canada's electricity.  Other 
renewables, including biomass, solar, and wind, accounted for 
a very small share of Canada's electricity that year. 
Generation from these sources is expanding rapidly, but from 
a very low base.) 
 
¶10. (U) And certainly, Kyoto played prominently in Dion's 
plan, which claims that enactment of all of its measures by 
early 2007 would still put Canada on track to meet its Kyoto 
Protocol commitment to reduce greenhouse gas emissions by 6 
percent from their 1990 level by 2012.  Dion estimates his 
plan would cut greenhouse gas emissions by between 238 and 
308 million tons by 2012, enough to meet those targets.  In 
Dion's words, "the Kyoto Protocol is the only credible 
international tool to fight the coming climate crisis, and 
Canada must honor its commitments under the agreement, while 
leading the negotiations to extend it past 2012." 
 
¶11. (SBU) Dion's ambitious plans (including the 2005 Green 
Plan) have taken their share of criticism.  On one hand, Dion 
is criticized by some environmentalists for borrowing heavily 
(and in many instances word for word) from the work of David 
Suzuki, one of Canada's leading and most vocal environmental 
personalities.  On the other, Dion has never made a secret of 
his plan's reliance, at least in the initial stages, on the 
purchase of credits internationally (either from transition 
economy "hot air" or from actual reductions from Joint 
Implementation or Clean Development Mechanism projects), 
prompting charges that Canada could spend as much as C$5 
billion yet see no benefit domestically.  Then too, Dion's 
Qbillion yet see no benefit domestically.  Then too, Dion's 
plans have provided little detail on project specifics or 
costs to implement or sources of funds. 
 
Does it Differ from the Conservative's Clean Air Act? 
--------------------------------------------- -------- 
¶12. (U) Certainly the Conservative Clean Air act also lacks 
detail on program specifics, at least partly because the 
government is still in the process of consulting with 
provinces and industry.  (This extensive round of 
negotiations, in fact, draws criticism from both the 
political opposition and some environmentalists who claim it 
only delays effective action, since the Liberals had already 
done "enough" consulting.)  And, the Clean Air Act does have 
longer time frames than Dion's plans.  It envisions absolute 
reductions in greenhouse gas emissions of 45-65 percent (from 
2003 levels), but not until 2050.  On the other hand, the 
Tory legislation does contain specifics on a number of 
programs to regulate pollutants, to gain provincial support 
through enhanced use of "equivalency agreements" that focus 
on outcomes rather than specify technology, and to set 
mandatory fuel economy standards and efficiency standards for 
 
OTTAWA 00003561  004 OF 004 
 
 
appliances. 
 
¶13. (SBU) However, the Harper government's ability to 
implement its own clean air and climate change plans is 
complicated by the Clean Air Act's status in Parliament (ref 
b).  Not only are there two other competing climate change 
bills before the House, but the Clean Air Act has been 
assigned to an ad hoc drafting committee for revision before 
it comes back to the House for a second reading.  GOC 
contacts will not (and really cannot) speculate on the form 
of the bill that will be reported out by the drafting 
committee, but they do expect required short-term targets for 
emissions reductions will feature prominently. 
Interestingly, they believe the re-worked bill may not call 
for meeting Kyoto commitments.  What sets the Tory plan apart 
though, is the degree to which it relies not on the passage 
of new legislation, but on the existing Canadian 
Environmental Protection Act of 1999.  With respect to air 
pollutants ) but not greenhouse gases ) the Clean Air Act 
would enhance the GOC's ability to regulate, but the legal 
authority to do so derives from CEPA and thus does not depend 
on the new legislation. 
 
What if? 
-------- 
¶14. (SBU) There seems to be little doubt that a Dion-led 
government would focus greater attention on the environment, 
and likely on climate change specifically.  Certainly this is 
what the public expects (another poll in taken in early 
November found that 70 percent of Canadians think the Clean 
Air Act is not tough enough), and Dion himself in his first 
press conference as Liberal leader, stressed the 
environment's importance to him on a personal level.  He 
announced that he would pull together the best environmental 
plans from the party to develop "the best for energy and 
climate change that you can have in Canada." 
 
¶15. (SBU) And how would he approach pursuing his 
environmental goals as prime minister?  Dion himself 
acknowledges a "rather willful temperament" and was regarded 
as very aggressive when he was Environment Minister, both on 
issues and in promoting Environment Canada's bureaucratic 
interests.  He had the reputation among some of pursuing his 
objectives without too much regard for balance and for 
discrediting the arguments of those who disagreed, and 
sources report that he was surprisingly not always well 
briefed on environmental issues and ignored facts that did 
not support his position.  And, he was known to display 
remarkable insensitivity to U.S. views on most environmental 
issues.  While it is far from certain that Dion will be 
Canada's next prime minister, the odds of him gaining the 
office at some point are in his favor, since every Liberal 
Party leader since 1896 has served as Canada's prime 
minister.  The exact environmental and climate change 
programs a Dion-led government would pursue are also 
uncertain, of course, but expect their pursuit to be 
energetic and assertive. 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
WILKINS