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Federal feebate program 'penalizing consumers'

From Thursday's Globe and Mail

Motor vehicle manufacturers get very nervous in a year like this when environmental concerns are an election issue. Politicians have already set arbitrary fuel-economy standards and the promise-making season is just getting started.

The automotive industry employs about half a million Canadians and is a major force in the economy. That, of course, doesn't give any industry the right to pollute, but the car makers point to the progress they're making and state that, based on Environment Canada Tier 2 emissions standards, a vehicle produced today is 12 times cleaner than one produced in 1993 and 99 times cleaner than one built in 1970.

The Canadian Vehicle Manufacturers' Association (CVMA) is the national trade association representing the common interests of DaimlerChrysler Canada Inc., Ford Motor Co. of Canada Ltd., General Motors of Canada Ltd., and International Truck and Engine Corp. Canada.

Mark Nantais, appointed CVMA president in January, 1994, has the responsibility for the development of policy and the overall strategic direction of the association.

Vaughan: When politicians talk about pollution and greenhouse gas they generally point at your industry first.

Nantais: It's fine to point to us, but probably it shouldn't be first.

Today, the 19 million passenger vehicles that Canadians drive account for less than 13 per cent of Canada's total greenhouse gas and less than 10 per cent of smog. That's from all cars and trucks, including the ones that are 20 years old.

Many politicians, government regulators, consumers and even environmental groups are surprised to learn that 2007 model-year cars and light-duty trucks produce less than 1 per cent of Canada's smog and greenhouse gas emissions.

New technology is having an impact and will continue to do so in the future.

But the argument is that the automotive industry doesn't improve standards unless government regulations force them to.

The greening of new automobiles is an "inconvenient truth" for those trying to position the automobile as the centrepiece for all regulatory plans to reduce smog and greenhouse gas emissions through arbitrary fuel-economy standards.

Any regulatory plan that focuses heavily on the automobile, without looking to the emission sources across all major industries, will fail to achieve our country's broader environmental goals of cleaner air and reduced greenhouse gases.

All right, you mentioned fuel-economy standards; what do you think of the federal program of cash incentives on fuel-efficient cars and financial penalties on guzzlers?

The federal government should be commended for its budget proposals that support the retirement of older vehicles and the production of renewable fuels such as ethanol, particularly the ethanol that comes from cellulosic processes.

But every effort must be made to schedule a phase-out of the ecoAuto/Green Levy program. It is ill-conceived and is nothing more than a feebate.

A number of governments, industry experts and institutions, including the National Roundtable on the Environment and the Economy, have expressed great concern about the cost and environmental ineffectiveness of feebate programs.

Data indicate that a feebate program diminishes new-vehicles sales, delays fleet turnover and therefore delays environmental benefit - not to mention penalizing consumers who have legitimate vehicle needs.

Okay, how does it do all those bad things? I thought it was encouraging people to go out and buy small cars.

Some people think ecoAuto is about "free money."

Let's be clear, these are "feebates" and the fees take the form of a large new tax of tens of millions of dollars a year that is being imposed on families and small businesses who legitimately need to buy larger vehicles.

Despite the new tax, consumers have shown, as predicted by experts, that they still buy the vehicle that meets their utility needs. No one is going out shopping for a vehicle for their family of four or more and coming home with a subcompact.

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