I. April 12, 2002 Letter to The Honourable David Anderson, Minister of the Environment (attachments: response to Minister Allan Rock?s Innovation Strategy No Time to Lose, So Much to Gain: Acceierating the Innovation Agenda April 10, 2002 Letter to The Honourable Allan Rock, Minister of Industry thanking him for his remarks to the Spring General Meeting in Montreal on April 9th April 3, 2002 Letter to The Honourable Pierre S. Pettigrew, Minister pf International Trade declining invitation to join the visit to Madrid and Toledo on May 8 and 9 March 25, 2002 Letter to The Honoura?t?e Raph Klein, Premier of Alberta, RE INVITATION TO MEET WITH IN CALGARY, SEPTEMBER 30 OR OCTOBER 1, 2002 March 25, 2002 Letter to The Honourable John Manley, Deputy Prime Minister (attachment: RE THE KYOTO PROTOCOL A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA March 25, 2002 Letter to Ste hen Harper - congratulations on the vote for the leadership 0 the Canadian Alliance March 25 2002 Letter to The Honourable Ernie Eves, Premier Designate for Ontario, congratulations on decisive victory March 25, 2002 Letter to_Stockwell Day re disappointment at loss of leadership of the Canadian Alliance March 14, 2002 Letter to ?le Honourable Jean Charest RE DETAILS CONCERNING YOUR ADDRESS TO THE SPRING GENERAL MEETING OF THE March 14, 2002 Letter to The Honourable Allan Rock, Minister of Industry RE ADDRESS TO THE MONTREAL MEETING, APRIL 9, 2002 (attachment: List of members) February 19, 2002 Letter to The Honourable John Manley, Deputy Prime Minister - asking for a meeting re forward strategy on global climate change February 18, 2002 Letter to Honourable Ser io Marchi, Ambassador, Permanent Representative to the Of we of the United Nations and to the World Trade Organizauon - congratulatlons January 25, 2002 Letter to The Honourable John Manley, Deputy Prime Minister enclosing a cop of a letter which was sent to the Prime Minister on the su ject of global climate change. January 25, 2002 Letter to His Excellency Paul Cellucci, Ambassador of the United States to Canada re his address on the subject of the oto Protocol (attachment: letter to Prime Minister retien re the Kyoto Protocol January 21, 2002 Letter to The Honourable William Graham, Minister of Foreign Affairs re congratulations on appointment CONSEIL CANADIEN DES CHEFS . CANADIAN COUNCIL OF CHIEF Thomas d'Aquino President and Chief Executive President et chef de la direction April 12, 2002 The Honourable David Anderson, P.C., MP. Minister of the Environment Les Terrasses de la Chaudi?re 10 Wellington Street 28th Floor HULL, Quebec KIA 0H3 MJMZ, Earlier this week, Indust Minister Allan Rock spoke to the members of the Canadian Council of Chic Executives at our Spring General Meeting in Montreal. At that time, he challenged us to put forward speci?c ideas for reinforcing the federal government?s Innovation Strategy. . Attached is the Council?s initial res onse to the Minister. The memorandum focuses on the importance 0? the business and regulatory environment in providin a competitive base for participation in the global economy. It also identi ies specr?c areas for attention in encouraging innovative behaviour by Canadian enterprises and reinforces the need for both prudence and creativity in ?scal policy. The recommendations expressed here are not intended to be ?nal answers to the guestion posed by Mr. Rock at our meeting. They are, however, an in ication of the a enda that will be pursued by the Council?s National Policy Committee in months leading to the lanned National Summit this autumn, and I am therefore taking the iberty 0 sharing it with the Prime Minister and members of the Cabinet as well. It is clear that the Council and the government now share both amb1t10us goals for our country and an urgent desire to move forward. We therefore look forward to working closely With you in the months ahead. 501? Royal Bank Centre - 90 Sparks Street - Suite 806 - Ottawa - Canada KIP 584 Centre Banque Royale 90. rue Sparks a bureau 806 - Ottawa - Canada K1 584 Telephone {613) 238-3727 T?l?phone - Facsimile (613) 236-8679 T?l?copieur E?mail address leaders@ceocouncll.ca Courrier ?lectronique Web Site Site internet 7 formerly Business Council on National Issues boat; CANADIAN COUNCIL CON SEIL CANADIEN DES CHEFS OF CHIEF EXEC Thomas cl'Aqutno President and Chief Executive President et chef de la direction April 12, 2002 The Honourable Allan Rock, P.C., MP. Minister of Industry House of Commons Room 441-8, Centre Block OTTAWA KIA 0A6 J/?m Thank you again for joining the members of the Canadian Council of Chief Executives at our Spring General Meeting in Montreal on April 9. At that time, you challenged us to put forward speci?c ideas for stren thening the federal Innovation Strategy. As promised, attached is a memoran um outlining our initial thoughts. The memorandum focuses on the importance of the business and regulatory environment in providing a competitive base for participation in the global economy. It also identi?es speci?c areas for attention in encouraging innovative behaviour by Canadian enterprises and reinforces the need for both prudence and creativity in ?scal policy. What you will ?nd here are not ?nal answers to the question you posed at our meeting, but an indication of the agenda that will be pursued by the Council?s National Policy Committee in the months leading up to the planned National Summit this autumn. Given the importance and reach of this agenda, I am therefore taking the liberty of sharing these thoughts with the Prime Minister, your colleagues in the federal Cabinet and with other Canadians interested in the innovation challenge. Allan, our members were greatly encouraged by your presentation this week. It is clear that the Council and the government now share both ambitious goals for our country and an urgent desire to move forward, and we look forward to working with you closely in the months ahead. Royal Bank Centre - 90 Sparks Street - Suite 806 - Ottawa - Canada 534 Centre Banque Royale - .90. rue Sparks - bureau 806 - Ottawa - Canada 554 Telephone (613) 238-3727 T?l?phone - Facsimile {613) 236-8679 T?le?copieur E-mall address leaders@ceocounctl.ca Courrier ?lectronlque Web Site Site lnternet formerly Business Council on National Issues Clan CANADIAN COUNCIL CONSEIL CANADIEN . OF CHIEF DES CHEFS April 12. 2002 MEMORANDUM FOR THE HONOURABLE ALLAN ROCK, P.C., M.P. MINISTER OF INDUSTRY NO TIME TO LOSE, SO MUCH TO GAIN: ACCELERATING THE INNOVATION AGENDA At your meeting with members of the Canadian Council of Chief Executives in Montreal on April 9, 2002, you expressed a strong desire to reinforce the Innovation Strategy outlined by the federal government in February. You acknowledged the importance of robust economic growth in maintaining and improving the quality of life of Canadians and to this end, you asked members of the Council for speci?c advice on actions that could be taken in the short term that would make a real difference in improving the environment for business and economic growth. . While last year?s economic slowdown a pears to be giving way to recovery, the war on terrorism did force the federa government to shift priorities in the December 2001 budget and defer consideration of many promising ideas for improving Canada?s competitiveness. Neither the economic cycle nor periodic crises, however, need de?ect Canadians from a continuing and shared commitment to innovation, and we see much that Canada can and should do to accelerate progress even in the short term. Today, we would like to offer some initial thoughts in this respect, to highlight some key areas for rapid action that we think warrant more detailed examination in the months leading to the government's planned National Summit on innovation this autumn. ECONOMIC AMBITION IS THE KEY TO SOVEREIGNTY Two years ago, the members of what was then known as the Business Council on National Issues warned that Canada stood at a crossroads. As we wrapped up the ?rst phase of our Canada Global Leadership Initiative, we ex ressed great con?dence in Canada?s ability to become ?the best place in the wor din which to live, to work, to invest and to row.? But in a statement entitled Global Champion or Falling Star: The Choice anada Must Make, we said that if Canada failed to match its strategies to the acceleratin pace of global change, it would fall short in meeting the economic and social go 5 that Canadians share. Royal Bank Centre a 90 Sparks Street - Suite 806 - Ottawa - Canada KIP 584 Centre Banque Royale - 90. rue Sparks . bureau 806 - Ottawa . Canada KIP 584 Telephone {613) 238-3 727 T?l?phone - Facsimile {613) 236-8679 T?l?copteur E-matl address leaders@ceocounctl.ca Courrter ?lectrontque Web Site Site tnternet *formerty Business Council on National Issues MEMORANDUM FOR THE HONOURABLE ALLAN ROCK, P.C., M.P. APRIL A Our message was widely seen at the time primarily as a call for ma'or tax cuts. While we did see tax cuts as a precondition for ra id progress, our ocus was in fact on the vital role of innovation in every sector 0? our society, on the need to be leaders rather than followers, both as enterprises and as a country. We therefore were impressed by the ambitious goals laid out by the federal government in its innovation strate and we congratulate you and your department for the paper Achieving Excel ence: Investing in People, Knowledge and Opportunity. Its conclusions show clearly that we and the government now share a real sense of urgency about the need to improve Canadian productivity and competitiveness. As Achieving Excellence makes clear, the Council and the federal government agree that Canada has a strong foundation for growth, that Canadians can stand tall within an open lobal economy and that it is time to push our collective efforts to a new level. also agree that without vigorous action to move forward, Canada risks an out?ow of talent and capital that could reduce the standard of living and quality of life of all Canadians. As you observed in unveiling the innovation strategy, it is only by creating an environment in which Canada?s best is also the world?s best that we will be able to ?make our own decisions, for our own future, in our own way. And that is the true meaning of sovereignty." We would extend this observation by applying it to the private sector. It is only by ensuring that Canada?s best companies are also among the world?s best that Canadians can prevent what has been called the ?hollowin out" of our economy. Whether through foreign takeovers or as a result of the glo a1 growth strategies of Canadian enterprises, a si i?cant number of our country?s head of?ce jobs have been migrating abroad. ese decision-making 'obs are 1mportant not just for the salaries and tax revenue they generate directly, ut for their im act on everything from growth opportunities for smaller businesses to the healt of the voluntary sector in Canadian communities. Any successful strategy for maintaining Canada?s economic sovereignty therefore must include a focus on attracting and retaining the decision-making that accompany the head-of?ce operations of globally competitive companies. We would emphasize that the nationality of ownershi is not the issue here. Canadian and foreign ?rms operating multinationally ace similar ressures in forming their strategies. What matters to Canada is the extent to whic companies and then decision?makers see this country as a compelling location for operations serving the North American and global market. Innovation is driven by global engagement, by 'ex osure to the relentless worldwide competmon for ideas, peo 1e and capita. In order to compete effective] Within the global economy, anada must welcome international ?ows in both irections. But as industries consolidate worldwide, size has become MEMORANDUM FOR THE HONOURABLE ALLAN ROCK, P.C., M.P. APRIL 12, 2002 PAGE 3 increasingly important. Too often, restrictions within Canada have left Canadian companies unable to seize important op ortunities for growth and turned them into sellers rather than buyers. If Cana a is to become the home of choice for competitive global enterprises, we must enable our companies to achieve the size and stature needed to compete on the global stage. Your department?s discussion paper has identi?ed man of the key goals and targets at Canada will have to meet in order to fu ?ll bold ambitions for economic prosperity and sovereignty. In particular, we agree on the need to continue ramping up investment in research and development and to ensure that more of the ideas developed in Canada evolve into successful enterprises serving the global market. We agree on the goal of developing the most skilled labour force in the world by increasing the supply of graduates with advanced degrees, by modernizing the nnrnigration system and by brandng Canada as a destination of choice for skilled workers. We support the government?s desire to see the evolution of new clusters of innovation 1n communities across Canada. We also recognize that an ambitious agenda requires resources. The government has worked hard to forge ahead with its innovation a enda despite the economic slowdown and the demands of the war on terrorism. iscal constraint, however, is no excuse for inaction. As you observed during our meeting this week, ?drift is not neutral.? Innovation is a process driven by a burning desrre to do better, and a period of tight resources should be a time to ocus even more urgently on how to make the most of what we have. We see many opportunities for innovative policies to make a real difference even without the ability to commit signi?cant new resources. Today, we would like to ut on the table some preliminary thoughts on where the federal government could oost the impact and momentum of its Innovation strategy even in the short term. CREATING GLOBALLY COMPETITIVE CANADIAN INDUSTRIES Canadians have good reason to be proud of our country?s progress to date. Despite the unexpected ?scal demands of the past ear, the federal government is still on track for continuing budget surpluses. n?ation remains ?rmly under control as increased competition has pushed consumer prices lower in man sectors. Tax rates have come down signi?cantly as well, leaving families with more to spend and businesses with more to invest. Canadians continue to sell more to the rest of the world than we buy, leaving both our current account and merchandise trade balances comfortably in surplus. And the Canadian economy has become si i?cantly more diversi?ed, with natural resources now accounting for less than 3 percent of all exports. MEMORANDUM FOR THE HONOURABLE ALLAN ROCK, P.C., M.P. APRIL an": We are con?dent that Canadians can overcome the challenges that lie ahead, but past_progress is no guarantee of future _rosperity. _To ensure that Canadians continue to enjoy their superb quality of 1fe and a rismg standard of we need to work together mtensrvely in building a steadily more competitive economic base. Canadians trying to build global] competitive enterprises still face a daunting range of impediments that ?ow om public policy. The many tax breaks and regulatory exemptions for small business, for instance, hel entrepreneurs to survive but can be a signi?cant barrier to ra id growth. For eir part, Canada?s largest companies tend to be relatively smal players on the global stage, and yet can ?nd their ability to grow hampered by competition policy and other regulatory measures that focus on Canada?s modest market. In some sectors, governments limit the growth of Canadian enterprises either through direct ownership or by im osing restrictions on the private ownership of corporate shares. And across a wi range of issues from environmental approvals to corporate mergers, Canadian enterprises are subject to staggering uncertainty and costs through complex and regulatory processes that cry out for greater transparency and predictability. Canada?s regulatory framework also remains highly fragmented. This is especially damaging in capital markets, imposing unacceptab costs not only on the ?nancial services sector, but on companies in all industries as they ow and seek access to ca ital. More broadly, much can and must be done to bu1 on the rincijples embo ied in the Agreement on Internal Trade and to ensure that ana ian enterprises are able to function ef?ciently from coast to coast. Undoing policies that harm Canada?s growth is just the beginning. Other countries go much further, working consciously to im rove their business environments and to help their businesses compete more ectivel abroad. We need to see governments and industry working together in exten ing the Team Canada concept used to enhance our trade missions abroad. The team that Canada needs now is an alliance of governments and industry that is committed to building a fundamentally more competitive business environment at home. While many regulatory and legislative impediments to competitiveness affect businesses across all sectors, it is important to note that each in ustry faces unique challen es in the global marketplace. If Canada?s goal is to build lobal leaders, it also wi 1 be necessar for governments and business to work toge er to re?ne our strategy on a sector- y-sector basis. This is not a matter of reviving an old-style industrral policy of ?picking winners?, but rather of identifying and addressing the challenges and opportunities related to business growth within each industry. MEMORANDUM FOR THE HONOURABLE ALLAN ROCK, P.C., M.P. We acknowledge that the bulk of new investment and action to improve competitiveness must be made by the rivate sector. In lar ?rms and small, from coast to coast, the decisions 0 individual sharehol ers, managers and emplo ees will determine how quickly our economy grows. At the same time, it is vit to recognize that business strategies are heavily in?uenced by government policies. Public policy cannot create globally competitive enterprises, but if we want Canadian enterprises to compete effectively, governments must encourage their ambitions and enable them to achieve the necessary stature and level of expertise. Above all, therefore, we would reinforce the government?s recognition in its innovation strategy of the importance of improvin the business and regulatory environment. In fact, we would suggest that is is really the single most important element in a national strategy to create a culture of innovation that permeates Canadian society. The starting point for such an agenda must be a commitment to collaboration between governments and industry in identifying and eliminating Canada?s remaining barriers to global competitiveness. ENCOURAGING BUSINESSES TO GROW THROUGH INNOVATION Governments cannot effectively encourage innovation in the private sector without a fundamental commitment to innovation within their own policies and programs. We see the otential for a process of creative renewal that could be pursued within the next ew years regardless of ?scal circumstances. This review would focus on the key federal drivers of innovation. In recent years, the federal government has increased substantially its commitment to research. The provision of more money to fund both direct and indirect costs of research and to develop and retain top talent in Canada?s universities and colleges marks an important start to the rocess of accelerating innovation. The federal innovation strategy makes it ear that additional public investment will be forthcoming as resources allow. The government also has facilitated a growing ?ow of private funds to post- secondary institutions, most notably by improving the tax treatment of donations of publicly traded securities. Combined with direct government support, further improvements in tax rules and a growing ?ow of corporate investment in university research and infrastructure should ensure that Canada?s post-secondary iililstitgtions are well equipped to function as of innovation in the years a ea . Qur concern is that too little attention hasbeen paid to the next stage in the innovation process, that of turning Canadian ideas into growing global businesses. MEMORANDUM FOR THE HONOURABLE ALLAN ROCK, P.C., M.P. APRIL 12, 2002 PAGE 6 Universities and colle es are making determined efforts to improve the ?ow of ideas into the marketp ace, but the rules covering the ownership and marketing?f intellectual roperty developed with ublic money remain fragmented. De process of i entifying, protecting and inding markets for intellectual property 18 com lex and requires ighly specialized skills that are in short supply across Nort America. The result in Canada appears to be a proliferation of spin-off companies but relatively few examples of rapid business growth. Improving Canada?s erformance in this area requires more than money. It requires at the very east even stronger collaboration between universities to dee en institutional expertise in the commercialization process. Comparisons wit models used in other countries also su gest that researchers, universrties and the country would bene?t from creation 0 a national framework to govern the ownership and commercialization of intellectual pr0perty created through federally funded research. At the next stage in the innovation process, the government has recognized the importance of continuing to build the pool of venture capital, but its proposal to consolidate federal efforts through the Business Development Bank of Canada (BDC) is unlikely to be suf?cient. Canada la 5 the performance of the United States in two aspects of venture capital. ne is the supply of angel investors, the number of successful entrepreneurs able and wi mg to invest their expertise as well as money in the next generation of enterprise. Only improvements in the tax system and business environment can address this gap over time by enabling more entrepreneurs to succeed and reap the substantial profits required for personal investment in high- risk start?up ventures. The second is in institutional venture capital investment by pension funds. American pension funds are major players in venture capital. Canadian funds, on the whole, invest only miniscule amounts of their capital in this area. Instead of enabling entrepreneurs to tap into this vast pool of existing capital, Canada opted many years ago to offer large tax credits to individuals willing to invest in Labour- Sponsored Venture Capital Corporations. These funds now account for about half 0 the entire supply of venture capital in Canada and the tax credits on contributions cost the federal treasury $260 million in 2000 alone. Yet there has never been any review to determine if this is in fact a cost-effective way for governments to help entrepreneurs get access to venture capital. The. ovemment. also continues to devote large sums of money to business sub.31 res. Despite decades of investment in for human resource and regional development, Canada?s small and medium-Sized enterpnses continue to MEMORANDUM FOR THE HONOURABLE ALLAN ROCK, P.C., M.P. APRIL lag both large domestic enterprises and their global counterparts by almost every measure of technological innovation and roductivity. Here, we would suggest that goals and programs based on the num er of jobs to be created or maintained in the short term are at best of limited value and at worst counterproductive. The relatively slow pace of adoption of new technologies in Canada is reinforced by the country?s labour market policies. These policies restrict the ?ow of eople into and within Canada, delay recognition both of formal credentials and in ormal learning and encoura companies to maintain existing patterns of relatively low- skill or seasonal emp oyment instead of investing in new technology and worker skills. Both Achieving Excellence and the companion innovation pa er from Human Resources Development Canada, Knowledge Matters: Skills and arning for Canadians, recognize many important elements of this challen e, especially in terms of investment in training, recognition of skills and the nee to improve the immigration process. To enable Canada to make the best use of its formidable pool of human talent, federal and provincial overnments must launch a 'oint assault on the remainin barriers to labour mobi ity within the countr . In a dition to 'oint actions througlgi means such as the Agreement on Intern Trade, this wil require a renewed commitment to effective reform of the Employment Insurance system at the federal level. The 2010 deadline in the innovation paper for com leting a review of Canada ?s most important business and regulatory regimes is or too modest. We think it is possible within the next three years to review and change where appropriate the regulations, policies and programs that are the key federal drivers of innovative behaviour. By 2005, the government should consider in particular: 0 Adopting a national framework for the commercialization of intellectual property created with federal support; 0 Improving access to venture capital through pension funds and carrying out a critical review of the e?ectiveness of Labour Sponsored Venture Capital Corporations; 0 Reviewing all business subsidies from a zero-base perspective, maintaining only thoSe that have a transparent and demonstrable impact in encouraging innovative behaviour and increasing productivity, especially in small and medium-sized enterprises; and Reforming the Employment Insurance system to remove incentives for both employers and provincral governments to maintain existing patterns of MEMORANDUM FOR THE HONOURABLE ALLAN ROCK, P.C., M.P. relatively low-skill or seasonal work at the ex ense of investments in new technologies that would create more highly ski led and better-paidjobs. COMBINING PRUDENCE AND INNOVATION IN FISCAL POLICY In the public and private sectors alike, leadership in a world of change reiuires constant efforts to anticipate and adapt to emerging challenges. ome developments, like the war on terrorism spawned by the attacks of September 11, are abrupt and unexpected. Others, such as steadK escalation in the cost of public health care and the need to address climate ange and other environmental issues, require long-term strategies. But no matter what challenges preoccupy us in the years ahead, there will be constant pressure to ?nd new and better ways of achievmg our continuing goals as a country. This world of heightened risk and uncertainty reinforces the need for prudence in ?scal policy. Canadians already have learned the hard way that ratcheting up public spending, especial] with borrowed money, is a recipe for economic decline. The pace 0 spen ing growth projected in the December 2001 budget is clearly unsustainable. The burden of public debt still wei hs on our country?s future prospects, diverting resources to paying interest and eeping tax rates too high. We continue to encourage the federal government to plan for budget su luses and set aside signi?cant contingency funds so that at worst, Canadians wil not plunge back into the deadly cycle of de?cits, and at best will reduce quickly the burden of public debt. No matter how ambitious, new government initiatives to encourage innovation need not and should not involve net new expenditures. Almost by de?nition, they should seek ?rst to make better use of existing resources. Certainly none of the suggestions that we have made here would require government to grow overall. Indeed, one of the conclusions that is likely to ?ow from an effectlve review of federal initiatives is that the innovation agenda would be served better through Changes to the tax system and regulatory regime than through program spending. The bulk of the investment that will drive innovation must come from the private sector. It therefore is critical for the country?s tax structure to provide the right incentives for businesses to invest not just 1n research, but in the adoption and marketing of the results of that research. The improving economic outlook suggests that there will be room for some targeted tax measures in the next federal budget. Even if the ?scal room for net tax cuts remains limited in the short term, there remains plenty of opportunity for innovation within Canada?s tax structure. MEMORANDUM FOR THE HONOURABLE ALLAN ROCK, P.C., M.P. APRIL The economic evidence is quite clear in terms of what forms of taxation do the most damage both to innovative behaviour and to economic growth. Quite aside from the impact of the overall size of the tax burden, Canada?s existing structure discourages innovation by leaning more heavily on business capital and income than on payrolls and more heavily on personal savings and income than on consumption. No form of taxation is more damaging to innovation than capital taxes, because they penalize directly business investment in assets such as new machinery and equipment. As its top ?scal priority, the federal government should announce that its capital tax will be eliminated by 2005 and encourage provincial governments to do the same. Even if slower growth persists, elimination of capital taxes should proceed as part of a broader review of the tax structure at both the federal and provincial levels. As you acknowledged at our meeting this week, there is more to the goal of tax competitiveness than sim ly tracking other countries and trying to stay in the same ballpark. Canada 5 ould be looking at ways of using its tax structure to create a meaningful advanta over its major competitors. There is no realistic prospect of mate in United tates tax rates on personal incomes, for instance, but Canada already of ers lower payroll taxes and is, at least in some provinces, becoming quite competitive in corporate income tax rates. Regardless of the course of the economic cle, the focus of tax policy in the short term should be on consciously shaping anada?s tax structure to create a real incentive for Canadian and foreign businesses alike to choose this country as their base for serving the North American market. A SHARED COMMITMENT T0 ACCELERATING INNOVATION The list of ideas and priorities that we have laid out here does not respond fully to the request you made at our meeting this week. As we indicated at the outset, our intention is to build on this framework and offer detailed recommendations in the months leading to the National Summit this autumn. Our main oint at this stage is to emphasize how much more could be done without de ay to accelerate the pace of innovation in Canada. As you put it so well in unveiling the government?s strategy papers in February, there is indeed ?no time to lose and so much to gain?. The members of the Canadian Council of Chief Executives are committed to building innovative and successful global enterprises in this country. Given the importance of the innovation agenda, we are taking the liberty of sharing these . MEMORANDUM FOR THE HONOURABLE ALLAN ROCK, P.C., M.P. APRIL 12, 2002 PAGE 10 initial thou with the Prime Minister, with your colleagues in the Cabinet and w1th other anadlans who share amb1t10us goals for our country?s future. We look forward to working with you and with the government to accelerate the process of mnoyation in Canada 1n the pubhc. and private sectors alike and to create the necessary to ensure an 1mprovmg quality of llfe for all Canadians. Morgan Gordon M. Nixon Co-Chairman Co?Chairman National Policy Committee National Policy Committee Attack, Jean C. Monty Thomas d?A uin Chairman President and Chie Ex cutive ?ou "t CANADIAN COUNCIL OF CHIEF CONSEIL CANADIEN DES CHEFS Thomas d'Aquino President and Chief Executive President et chef de in direction April 10, 2002 The Honourable Jean Charest, P.C. Leader of the Of?cial Opposition and Leader of the Liberal Party of Quebec 1 Place Ville Marie SuhelSlS MONTREAL, Quebec H3B 2B5 me, Thank yo so much for joining the members of the Canadian Council of Chief Executives once again at our Spring General Meetmg in Montreal on April 8. You gave us a masterful tour ?horizon covering everything from health care, education and tax policy to national unity, the environment and reform of labour laws. It testi?ed to the intensity that you have brought to the role of Leader of the Liberal Party of Quebec and to the price that has been paid by you and your family, but I have to say that you left all of us feeling much more optimistic about the future of Quebec and of Canada. As we both know, there are no certainties in life, but you made it clear that the ?rst year of a Liberal government would see a whirlwind of activity and I have the strong feeling that the province will soon be in excellent hands! Thank you again, Jean. I know that all of us at the Council look forward to continuing to work closely with you as you take on the mighty challenges that still lie ahead. Royal Bank Centre- 90 Sparks Street- Suite 806 - Ottawa- Canada KIP 584 Centre Banque Royale- 90. rue Sparks - bureau 806- Ottawa - Canada KIP 534 Telephone {613) 238?3727 Telephone- Facsimile (613} 236-8679 T?i?copieur E-maii address ieaderng.-ceocouncii.ca Courrier ?lectronique Web Site Site internet *jormeriy Business Council on National Issues C100 CONSEIL CANADIEN DES CHEFS CANADIAN COUNCH. OF CHIEF EXECUTIVES Thomas d'Aquino President and Chief Executive President at chef de la direction April 10, 2002 The Honourable Allan Rock, P.C., MP. Minister of Industry House of Commons Room 441-S, Centre Block OTTAWA KIA 0A6 3m ?/Am Thank you for rovoking and engagingthe members of the Canadian Council of hief Executives at our pring General Meeting in Montreal on April 9. I had urged you not to restrict your remarks to the federal Innovation Strategy, and what you gave us was indeed a masterful summary of the key issues confronting our country. You also challenged us to tell you plainly what actions could make the greatest difference in the short term in improving Canada?s prospects. We will not let you down. The Council will send you a formal memorandum short with our initial thoughts, and our National Policy Committee will be working hard in the months ahead to develop more detailed proposals for accelerating innovation and growth. Your performance demonstrated the kind of bold leadership that our country will need in confronting the challenges ahead. It also is clear that we agree on the need for a strong working partnership between business and government if we are going to succeed in improving the quality of life of all Canadians. Thank you again for a highly productive session together. I look forward to continuing to work with you in the months leading to the National Summit this autumn. <5 . Royal Bank Centre- 90 Sparks Streeto Suite 806- Ottawa- Canada KIP 534 Centre Banque Royaie- 90. rue Sparks- bureau 806- Ottawa. Canada 584 Telephone {613} 238?3727 T?ie?phone- Facsimile (613) 236-8679 T?i?copieur E-mail address ieaders@ceocouncii.ca Courrier ?iectronique Web Site Site internet *formeriy Business Council on National Issues CANADIAN COUNCIL CONSEIL CANADIEN OF CHIEF DES CHEFS Thomas d'Aqutno President and Chief Executive President et chef de la direction April 3, 2002 The Honourable Pierre S. Pettigrew, P.C., MP. Minister for International Trade House of Commons Room 507, Confederation Building OTTAWA KIA 0A6 9m 2m 3 Thank you for your very kind invitation to join with you and the Prime Minister on the occasion of your visit to Madrid and Toledo on May 8 and 9. Regrettably, I will be in Japan on those particular dates engaged in bilateral business meetings with our Japanese counterparts. I am particularly disappointed in being unable to join you because I regard Spain as an attractive partner for Canada, and Canadian-Spanish business opportunities, in my View, have very con51derable potential. The other reason for disappointment is that I will not be able to be resent on the margins of the anada-European Union Summit. As on know, share your and that of the ane Minister to the idea at the Canada-European Union relationship needs to be shaken out of its relative torpor in favour of a more dynamic enterprise. Upon your return from Spain, I look forward to discussing the Canada- European Union challenge with you and to sharing with you some of the thinking of the Canadian Council of Chief Executives on this subject. I wish you and the Prime Minister every success in this important Warmest regards. c.c. Mr. Alain Dudoit Ambassador of Canada to Spain Royal Bank Centre 90 Sparks Street - Suite 806 - Ottawa - Canada KIP 584 Centre Banque Royale 90. rue Sparks bureau 806 - Ottawa 0 Canada KIP 584 Telephone {613) 238-3727 Telephone - Facsimile (613} 236-8679 T?l?copieur E-mail address leaders@.ceocouncil.ca Courrier ?lectronique Web Site Site internet formerly Business Council on National Issues opd't CANADIAN COUNCIL CON SEIL CANADIEN OF CHIEF EXEC DES CHEFS Thomas d'Aquino President and Chief Executive President et chef de la direction March 25, 2002 The Honourable Ralph Klein, M.L.A. Premier Government of Alberta Le islature Building 10 00 - 97th Avenue Room 307 EDMONTON, Alberta T5 2B7 INVITATION TO MEET WITH CANADIAN COUNCIL OF CHIEF EXECUTIVES CALGARY, SEPTEMBER 30 OR OCTOBER 1, 2002 3m At the beginnin of this year, a re-engineered Business Council on National Issues was re- orn as the Canadian Council of Chief Executives. Powered by a fresh mandate that focuses on Canada, North America and the world, the Council and its member CEOs are deeply engaged in a variety of initiatives that are vital to Canada, to our citizens, wherever they live, and to our enterprises. Over the years, we at the Council have been fortunate to enjoy frank and constructive dialogue with you and members of your government on a wide variety of issues including ?scal, trade, competitiveness, energy, health, environmental and federal-provincial areas of concern. Later this ear, on September 30 or October 1, we invite you to be with us once again in algaiy. The occasion will be the general meeting of the full Council CEOs from across Canada, leaders of the country?s largest enterprises, We will convene on Monday evening, September 30, for a reception and dinner. We will reconvene the next morning, Tuesday, October 1, from 8:30 am. through lunch. We would be honoured if you would be our 5 ecial guest at dinner on September 30. Alternatively, we would be pleased i you would join us at lunc the following day. Royal Bank Centre - 90 Sparks Street - Suite 806 - Ottawa - Canada KIP 534 Centre Banque Royale - 90. rue Sparks - bureau 806 - Ottawa Canada KIP 584 Telephone (613) 238-3727 Telephone - Facsimile (613) 236-8679 T?i?copieur E-mail address leaders@ceocouncii.ca Courrier ?lectronique Web Site Site internet *formeriy Business Council on National Issues The Honourable Ralph Klein, M.L.A. March 25, 2002 Page 2 You will remember from ast meetin with us, Premier, that a formal address is not required. Inform remarks fo lowed by roundtable discussion and questions and answers is the traditional approach. Our meetings are normally private and off-the-record with no media present. As to subject matter, the choice is yours, of course. I do know that our members would welcome our perspectives on lgey current and ant1c1pated issues that are at the top 0 your agenda as Prermer of Alberta. I am enclosing details pertainin to our current membership. I also am taking the liberty of identifying our Al erta-based chief executives. You will be pleased to know that Councrl members from Alberta are laying an important role in our organization and in the shaping of vita policy positions on issues as varied as ?scal and tax reform, health, the future of North America and the Kyoto Protocol on global climate change. Premier, 1 very much ho that you will favour us with a positive reply. You will be among friends and promise you an informed and productive two- way exchange. To ensure that this invitatlon reaches you in a timely fashion, I am sending a copy to Peter Elzinga who knows us well. All the best for now. Attachment c.c. Mr. Peter Elzinga Chief of Staff Of?ce of the Premier of Alberta ALBERTA-BASED MEMBERS CANADIAN COUNCIL OF CHIEF EXECUTIVES Ron A. Brenneman President and Chief Executive Of?cer Petro-Canada Patrick D. Daniel President and Chief Executive Of?cer Enbridge Inc. N. Murray Edwards President Edco Financial Holdings Ltd. Tim W. Faithfull President and Chief Executive Of?cer Shell Canada Limited Jim G. Gardiner President and Chief Executive Of?cer Fording Inc. Richard L. George President and Chief Executive Of?cer Suncor Energy Inc. Ross A. Grieve President and Chief Executive Of?cer PCL Construction Group Inc. Kevin J. Jenkins President and Chief Executive Of?cer The Westaim Corporation Hal Kvisle President and Chief Executive Of?cer TransCanada PipeLines Limited Ronald N. Mannix Chairman Coril Holdings Ltd. Jeffrey J. McCaig President and Chief Executive Of?cer Trimac Corporation Morgan President and Chief Executive Of?cer Alberta Energy Company Ltd. J. Edward Newall Chairman Newall Associates Eric P. Newell Chairman and Chief Executive Of?cer Canada Ltd. David P. O'Brien Chairman and Chief Executive Of?cer PanCanadian Energy Corporation Robert J. Ritchie President and Chief Executive Of?cer Canadian Paci?c Railway Vince J. Smith President and Chief Executive Of?cer Dow Chemical Canada Inc. Ron D. Southern Chairman and Chief Executive Of?cer ATCO Group John M. Van Brunt President and Chief Executive Of?cer Agrium Inc. Gov 54w Mug-Ltd CONSEIL CANADIEN DES CHEFS . CANADIAN COUNCIL OF CHIEF Thomas d'Aquino President and Chief Executive President et chef de la direction March 25, 2002 The Honourable John Manley, P.C., M.P. Deputy Prime Minister Government of Canada Canada Four Comers Marshall Building 14 Metcalfe Street, 3rd Floor OTTAWA KIA 0A6 THE KYOTO PROTOCOL RE VISI TED A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA JIWW At the meeting on March 7 between you and your colleagues and members of the Canadian Council of Chief Executives a meeting that in our view was timely, frank and productive -- we offered to share with you our ideas on a ?made in Canada alternative to the Kyoto Protocol on global climate change. Attached is our a er which re?ects extensive consultations among our CEO membership.* elieve it offers the basis for a sensible, workable and innovative response to the climate change challenge that can serve our national interests, while also pointing the way for a more effective and long-term global strategy. We greatly ap reciate your commitment and leadership in facing this critical issue which, i handled wisely, can advance Canada?s national and lobal objectives in very important ways. Conversely, we are convinced that if Canada proceeds to rati?cation of the Kyoto Protocol, the economic and political consequences could be incalculable. . Royal Bank Centre a 90 Sparks Street 0 Suite 806 - Ottawa - Canada KIP 584 Centre Banque Royale - .90. rue Sparks . bureau 806 - Ottawa a Canada KIP 534 Telephone {613) 238-3727 T?l?phone - Facsimile (613) 236-8679 T?l?copieur E-mail address Courrier ?lectronique Web Site Slte internet formerly Business Council on National Issues The Honourable John Manley, P.C., M.P. March 25, 2002 Page 2 At the March 7 meeting, we pledged our willingness to engage in a constructive dialogue that will ensure that Canada achieves the goal that the Council aspired to in the Canada Global Leadership Initiative: that our country be ?the best in the world in which to live, to work, to invest and to grow.? To us, global environmental leadership is a critical element in the attainment of this ambitious goal. . We are ready to work with you, with your cabinet colleagues and with senior of?ctals 1n the advancement of our dialogue. To this end, we trust that the attached paper W111 us in our endeavours. In the anticipation of hearing from you, please accept my kindest regards. s1an Attachment c.c The Honourable Paul Martin P.C., M.P. Mr. Kevin Minister of Finance Deputy Minister of Finance The Honourable David Anderson P.C., M.P. Mr. Alan Nymark Minister of the Environment Deputy Minister of Environment The Honourable Allan Rock P.C., M.P. Mr. Peter Harder Minister of Industry Deputy Minister of Industry The Honourable Herb Dhaliwal P.C., M.P. Dr. Peter Harrison Minister of Natural Resources Deputy Minister of atural Resources Mr. Edward Goldenberg Senior Policy Advisor to the Prime Minister of Canada Council member, Tim Faithfull, the President and Chief Executive O??icer of Shell Canada Limited, is not a signatory to the attached paper. HE OTOCOL REVISTED A gee DYNAMIC ALTERNA TE NADA bythe Chief Executives CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA THE NEED TO REVISIT THE KYOTO PROTOCOL The stated intention of the Government of Canada to ratify the Kyoto Protocol on global climate change has prompted serious concerns on the part of enterprises, large and small, across Canada. It also has triggered alarm in most of the provincial capitals of the country. At the heart of these concerns is the fear that the Government of Canada will proceed with ratification and implementation of commitments based on profoundly inadequate assessments Of the costs to consumers, enterprises, and to the overall health of the country. Proceeding on this basis would have severe political as well as economic consequences. Very few Canadians really understand the facts and the dynamics of the global climate change issue. Ratifying the Kyoto Protocol and imposing far-reaching lifestyle changes on Canadians without their prior consent therefore risks a serious political backlash. Five years after negotiation of the Protocol, it has become clear that it represents an unachievable target for Canada, for the following reasons: 0 The size of the challenge is insurmountable. While Canada?s commitment would require a reduction in emissions from the 1990 baseline, the country?s total emissions have in fact continued tO grow, fueled by economic growth, higher exports and increases in population. Indeed the gap between the target and the federal government?s own forecast of emissions on a business-as-usual basis is some 240 million tonnes of CO2 equivalent annually. Achieving the target would require a 30 percent decrease in emissions in a very short time (six to ten years) and would present an insurmountable challenge for a country with an energy- intensive economy, a cold climate, large transportation distances and a population that continues to grow through immigration. With no breakthrough technologies on the horizon, this essentially represents a limit on the size of the Canadian economy. 0 The Protocol ?ies in the face of continental realities and Canada?s competitiveness globally. Canada?s most important economic partner has declared the Kyoto Protocol ?fatally flawed? and has chosen to follow a uniquely American response to the global climate change challenge. Canadian Council of Chief Executives Page 1 CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA Should Canada ratify the Kyoto Protocol and follow a course widely divergent from that of the United States, the costs to Canadians would be far more severe than Canada might have anticipated when it signed the Protocol. Given the extent of Canada?s dependence on energy-intensive exports and of its integration with the United States economy, ratification would have an immediate and significant impact on its competitive position relative to the United States and on its ability to attract investment and to maintain and create jobs in enterprises serving continental and global markets. On a broader basis, Canada would be the only country in its hemisphere to accept emission limits. As well, Canadian firms would be placed at a disadvantage relative to competitors in Asia, Eastern Europe and the Oil-producing nations of OPEC, none of which would face the same constraints. The Protocol is ineffective as a global strategy. At the same time that the Protocol would impose significant costs, it will do almost nothing to slow the global build-up of greenhouse gases. With the withdrawal of the United States, and the lack of any reduction obligations on the part of developing countries, the Protocol would cover at best one-third of current global emissions. Canada's contribution to global reductions is not fully recognized. Some of Canada?s exports to the United States Of hydroelectricity and natural gas replace more GHG-intensive fuels in that country, and yet under the structure Of the Protocol there is no credit for Canada's contribution to lowering global emissions. The scale and timing of the Kyoto Protocol commitment would require significant changes in consumer behaviour. More than 80 percent Of the greenhouse gas emissions associated with fossil fuels come from the end-use consumption of energy. Yet the nature of the challenge has never been explained to Canadians nor have they been informed of how they would be affected. Other countries, for instance, have demonstrated a variety of strategies for reducing emissions from transportation, from fuel taxes and road tolls to alternate-day driving restrictions. Whatever path Canada chooses, chopping overall emissions by 30 percent is sure to disrupt significantly the day-to?day lives of Canadians in many ways as well as increasing the cost Of goods and services. Canadian Council of Chief Executives Page 2 CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA 0 Investment, credit ratings and the currency will be hit hard. Canadian companies already are coping with the challenges of an economic downturn, a relatively small capital market and global overcapacity in key industries such as steel, petrochemicals, oil, automobiles and forest products. Any commitment to emission targets that creates uncertainty about the ability of Canadian-based companies to grow will have an immediate impact on investor perceptions of risk. A signal that Canada has consciously limited its growth prospects will persuade both foreign and domestic companies to shift planned capital investments to other countries and risks a further outflow of head offices from Canada. Credit ratings will suffer and the cost of capital for Canadian enterprises will rise. These factors will accelerate the damaging decline in the value of the Canadian dollar. 0 Adherence to the Protocol will undermine key social priorities. Largely due to immigration, Canada is one of the few industrialized countries whose population is growing. Because the Kyoto Protocol target is expressed as a cap on total rather than per capita emissions, Canada might be forced to reduce flows of immigration in order to meet its commitment. Pursuit of the Kyoto Objective would also restrict further development Of Canada?s substantial energy and resource endowment, thereby constraining economic opportunities for aboriginal peoples and for those in economically disadvantaged regions of the country. Canada's energy sector is the largest single source of new capital investment, a significant contributor to export earnings and a major source Of tax revenue. 0 A focus on costly cuts to emissions in the short term could divert resources from more effective approaches that would have greater long-term impact. Real progress must be global and can only be made over several decades through new generations of technology and the development of widely available and cost?effective forms of low or non- carbon energy. We acknowledge that governments and businesses alike make decisions every day based on imperfect information. But in considering how far to go in imposing real costs on businesses, consumers and taxpayers, Canada must take into account the degree of uncertainty that still surrounds the science of climate change. As Professor Richard Lindzen of the Massachusetts Institute of Technology, one of the world's foremost climate change authorities, puts it: Canadian Council of Chief Executives Page 3 CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA ?We are not in a position to confidently attribute past climate change to CO2 or to forecast what the climate will be in the We simply do not know what relation, if any, exists between global climate changes and water vapour, clouds, storms, hurricanes and other factors." On the other hand, there is broad scientific consensus that the Kyoto Protocol will have very limited impact on the global growth of greenhouse gas emissions. This leads to another question, the extent to which limited resources should be allocated to emissions reduction rather than to measures to mitigate and adapt to the impacts of climate change. The above factors all dictate that Canada?s approach to the climate change issue must reflect maximum prudence and common sense. This is not, however, an excuse for inaction. The Canadian Council of Chief Executives (formerly the Business Council on National Issues) was the first national business organization to endorse vigorous industry action aimed at curtailing greenhouse gas emissions and promoting energy efficiency as an essential element of company and country competitiveness. The Council?s commitment to national and global environmental goals goes well beyond the issue of global climate change. We believe that the promotion of clean air, clean water and sustainability must be key components of Canada's economic, social and developmental agenda. This requires casting off the shackles of the Kyoto Protocol in favour of a broader, more innovative and demonstrably more constructive agenda that will bring benefits to Canadians and to citizens around the world. We do not pretend to have all the answers at this stage, nor do we wish to preempt what must become a frank and inclusive national discussion. What we offer here is simply a framework of principles and action items that we hope will be seen as a constructive contribution to the shaping of a positive climate change strategy for Canadians. A CLIMATE CHANGE STRATEGY Objective: A strategy that combines responsible action to address greenhouse gas emissions with policies that enhance the country's quality of Canadian Council of Chief Executives Page 4 CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA life and economic competitiveness as well as its ability to play a leadership role in devising a longer-term global solution to the risk of serious climate change. The development of a made-in-Canada strategy on climate change should be guided by the following principles: Public engagement. The first step must be meaningful engagement of the Canadian public. Before proceeding further, Canada needs to establish a solid consensus on what is appropriate and achievable for Canada, what performance targets the country should set for itself, what policy choices and behavioural changes will be needed to meet those targets, what costs the public is prepared to pay and how progress will be monitored. Balance and equity. Canada?s strategy must be balanced and equitable. Whatever targets for action we adopt as a country, no sector or region should bear an undue share of the burden. Short- and long-term action. An effective strategy must both include prudent and cost-effective action in the near term and contribute to lasting solutions over the longer term. For instance, Canadian-led fuel cell technology offers great promise, but cannot possibly contribute meaningfully to reducing Canadian emissions within the Kyoto Protocol timeframe. Overall societal benefits. Rather than a strategy focused solely on greenhouse gases, Canada must fashion an approach that maximizes environmental, health and social benefits domestically, and that contributes to broader economic and environmental progress internationally. in particular, domestic policies should focus on improving important indicators of quality of life such as air quality in urban regions. North American integration. Continental economic integration and shared environmental space require a coherent approach to reducing emissions on a North American basis. Canada can play a leadership role among its continental partners in forging a more innovative and sensible North American response. Canadian Council of Chief Executives Page 5 CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA 0 Economic competitiveness and growth. Global leadership in any field flows from economic strength. To ensure that Canadian governments and enterprises maintain their capacity tO develop and deploy innovative emission-reducing technologies, it is essential to foster a sustainable business environment that encourages economic growth and leads to more jobs, rising personal incomes and a stronger tax base. 0 Global champions. The strategy must strengthen Canada as a base for innovative and competitive global champions that can create economic advantage at home while also developing technologies and practices that contribute to global environmental solutions. Canadian action to deal with climate change must be broadly based, engage governments, industry and citizens in meaningful actions and ensure maximum bene?t for each dollar expended. The most important elements of a Canadian action plan are: 1. Public involvement and education. Meaningful progress in understanding and managing the risks of climate change is not possible without broadly based public support and a willingness to act. Such a strategy requires: 0 A common understanding of the issue of climate change and the potential effectiveness of alternative approaches; 0 A meaningful public debate about the most effective policies, what the necessary measures will cost and who will pay the price; 0 A longer-term and much expanded public education campaign on responsible citizen action, similar to the one that built broad support for the fight against government deficits in the 19905; 0 Development of indicators to measure citizen engagement and progress on issues of environmental sustainability; A committed business community that can contribute through employee information and support of public education and action programs. Canadian Council Of Chief Executives Page 6 CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA . Strategic investment in the development and adoption of energy- efficient technologies. In order to change behaviour and reduce emissions of greenhouse gases, governments will have to devote a much larger share of their resources to environmental purposes. These resources should be targeted to areas where Canada has a particular advantage and partnered with industry wherever possible. Governments could: 0 Increase public investment in research in potential breakthrough technologies in a wide range of energy sources, which offer the potential to dramatically reduce global greenhouse gas emissions; 0 Increase the share of renewable energy and lower emitting technologies by offering tax credits or other incentives; 0 Offer an accelerated capital cost allowance for business investment in advanced technologies and emissions-reducing machinery and equipment; 0 Support further development of fuel cell technologies and the refueling infrastructure; 0 Provide additional incentives and innovative financing for energy retrofits of buildings; 0 Adopt a national building code with strong energy efficiency criteria; 0 Expand energy audit programs for houses, commercial buildings and public facilities; 0 Set new energy efficiency standards for appliances; 0 Enhance support for research and development in clean coal and hydrogen technologies; 0 Reduce the fiscal and regulatory barriers to greater use of co- generation in industrial plants; 0 Intensify research into and demonstration of carbon dioxide capture and storage; and 0 Expand Canada?s world-leading efforts in carbon sequestration through measures such as tax incentives for reforestation; improved Crown forest land management; restoration of marginal land with tree- planting, shelter belts and green spaces; and tax incentives and Canadian Council of Chief Executives Page 7 CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA education to improve agricultural practices with respect to carbon retention in soils. 3. A stronger commitment by industry. While energy use by consumers has continued to grow rapidly, Canadian industry has made considerable progress in improving energy efficiency, enhancing both its competitiveness and its ability to contribute to lasting technology?based solutions. Emissions from the mining and manufacturing industries overall already have been stabilized at 1990 levels, despite production increases of 35 percent, which represents an improvement in emissions intensity of 1.4 percent annually. As well, technology improvements in the oilsands industry has led to a 45 percent decline in GHG emissions per barrel of oil since 1990. Industry-government partnerships in programs such as the Canadian Industry Program for Energy Conservation (CIPEC) and the Voluntary Challenge and Registry (VCR) have resulted in enhanced performance and reporting of emissions. Nonetheless, businesses need to remain focused on investigating new technologies and other opportunities to continue to reduce emissions per unit of output. . Agreements entered into between government and industry sectors can set appropriate performance goals and monitor performance. In order to encourage the growth of globally competitive firms, these goals should focus on lowering the emissions intensity of production. In addition, such agreements would need to recognize the rate of capital stock turnover and technology development, as well as the nature of the resource base and production processes in different sectors. 0 Companies should make energy efficiency a standard benchmark of corporate competitiveness. Companies should strengthen their focus on continuous improvement in product and process design, recycling and management of materials through their lifecycle, and examine opportunities to lower the carbon intensity of their operations. 0 Smaller and medium sized enterprises lag significantly in the development and adoption of innovative technologies. Larger companies therefore have an opportunity to demonstrate leadership within the private sector by encouraging adherence to voluntary codes Canadian Council of Chief Executives Page 8 CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA and sharing best practices and information programs on energy management. 4. A Canadian program on science and adaptation. Canada should advocate internationally and carry out domestically a balanced approach of research, mitigation and adaptation. The Kyoto Protocol will make no appreciable difference to the global growth of greenhouse gas emissions, especially as long as the United States remains outside. A responsible strategy, therefore, must include measures to prepare for the potential impacts of climate change. 0 Canada can contribute to improving the world?s scientific understanding of the climate system and the extent of human influence on the climate. 0 Canadian research priorities should include the potential impact on the Arctic, the Great Lakes and fragile ecosystems, as well as effects on agriculture, forestry and resource development. 0 Canada can also participate in the global effort to develop strategies for . managing and adapting to the longer-term risks of climate change, particularly for vulnerable regions and people in developing countries. 0 Canadian industry should contribute resources and expertise to this research effort. 5. Inter-governmental collaboration in transportation and urban design. The transportation sector in particular is a large and growing source of emissions and must be a focus of any effective strategy to reduce Canadian emissions: 0 Federal, provincial and municipal governments must coordinate policies to enhance transportation systems and urban design, reduce traffic congestion and improve air quality in the country's most heavily populated regions. 0 Significant additional investment in urban and inter-city public transit will require federal as well as provincial and municipal participation. 0 Vehicle fuel efficiency standards should remain harmonized on a North American basis as they continue to evolve. Canadian Council of Chief Executives Page 9 CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA 6. Action at the community level. There are a number of opportunities to integrate climate change actions with local efforts to revitalize communities. Among other things, municipal governments could: Set targets for reductions in per capita GHG emissions; Enhance land-use planning; Investigate community energy planning and green power purchasing, with an aim to ensure such purchases optimize results for taxpayer dollars; Accelerate the capture of landfill gas for use in electricity; Improve management of municipal solid waste, including diversion from landfill; Improve municipal water and sewage infrastructure. 7. A fiscal and business environment that encourages energy-ef?cient growth. Any serious measures to reduce emissions inevitably will constrain the growth of Canada?s energy-intensive economy. These measures therefore must be Offset by determined efforts to improve Canada?s tax and regulatory regimes and ensure robust business investment and job creation. The potentially substantial new public investments in areas such as research, renewable energy and public transit will require difficult choices among fiscal alternatives. However, an effective made-in- Canada climate change strategy should not add to the overall share of government in the economy. Higher spending on environmental measures may reduce governments? ability to address growing needs in other areas such as health care and education. The test of their commitment to addressing climate change lies in the trade-offs that must be made between competing priorities. Incentives to stimulate new investment must be carefully designed to ensure efficient attainment of program objectives and effective use of public resources, and be neutral as to choice of technology or sector. Canadian Council of Chief Executives Page 10 CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA 8. Canadian leadership internationally. A made-in-Canada approach would also seek to provide leadership in developing a truly global strategy for managing climate change. 0 While continuously improving its own emissions performance, Canada?s international development strategy should focus on helping developing countries to increase economic growth while becoming more efficient in energy use, so that they can be part of the global effort to reduce emissions over the long term. Bringing major emitters such as China and India and the key energy?exporting members of OPEC into the global effort to reduce emissions would do far more for the global climate than any measures Canada could hope to make within its own borders. 0 Reducing emissions will have an impact only over the very long term. Investment in alternative priorities such as the alleviation of poverty, provision of clean water and improvement of health care would have a much greater impact in meeting the broader goal of improving the quality of life of the world?s poorest people. Meeting these objectives could bring the world to a position of economic strength from which it would be better able to address global issues such as climate change. 0 Canada should address climate change issues as an essential element in its strategy for managing North American integration. Economic integration imposes some real constraints on Canadian policy choices, but also offers important opportunities and points of leverage. In particular, energy security remains a priority for the United States within the context of increased integration with Canada and Mexico. This provides an opening for Canadian leadership within North America that could lead to a more comprehensive, innovative and sensible response on climate change through a coherent continental approach. Canada can play a leadership role in managing the transition to a more sustainable future both at home and abroad, but only if we have a "made- in-Canada? strategy that has broad public support and reinforces the creative energies of our governments, our enterprises and our citizens. Canadian Council of Chief Executives Page 11 CANADIAN COUNCIL OF CHIEF EXECUTIVES 90 Sparks Street Suite 806 Ottawa, Canada K1 584 Telephone (613) 238-3727 Facsimile (613) 236-8679 E-mail address ieaders@ceocouncii.ca Web Site CONSEIL CANADIEN DES CHEFS 90, rue Sparks Bureau 806 Ottawa, Canada K1 534 T?l?phone (613) 238-3727 T?l?copieur (613) 236-8679 Courrier ?lectronique global@bcni.c0m Site internet 034222.402. CANADIAN COUNCIL OF CHIEF CONSEIL CANADIEN DES CHEFS Thomas d'Aqut'no President and Chief Executive President et chef de la direction March 25, 2002 The Honourable John Manley, P.C., M.P. Deputy Prime Minister Canada Four Corners Marshall Building 14 Metcalfe Street, 3rd Floor OTTAWA KIA 0A6 THE KYOTO PROTOCOL RE VISI TED A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA I 5 Jam 796mg ?ns/5194: At the meeting on arch 7 between you and your colleagues and members of the Canadian Council of Chief Executives -- a meeting that in our view was timely, frank and productive -- we offered to share with you our ideas on a ?made in Canada alternative to the Kyoto Protocol on global climate change. Attached is our paper which re?ects extensive consultations among our CEO membership. We believe it offers the basis for a sensible, workable and innovative response to the climate change challenge that can serve our national interests, while also pointing the way for a more effective and long-term global strategy. We greatly appreciate your commitment and leadership in facing this critical issue which, i handled wisely, can advance Canada?s national and global objectives in very important ways. Conversely, we are convinced that if Canada proceeds to rati?cation of the Kyoto Protocol, the economic and political consequences could be incalculable. Royal Bank Centre - 90 Sparks Street - Suite 806 - Ottawa - Canada 534 Centre Banque Royale 0 90. rue Sparks 0 bureau 806 0 Ottawa - Canada KIP 584 Telephone (613) 238-3727 T?l?phone Facsimile (613} 236-8679 T?l?capt?eur E-mail address leaders?t ceocounctha Courrt?er ?lectrontque Web Stte Stte tnternet formerly Business Council on National Issues The Honourable John Manley, P.C., M.P. March 25, 2002 Page 2 At the March 7 meeting, we pledged our willingness to engage in a constructive dialogue that will ensure that Canada achieves the goal that the Council aspired to in the Canada Global Leadership Initiative: that our coun be ?the best in the world in which to live, to work, to invest and to grow.? To us, global environmental leadership is a critical element in the attainment of this ambitious goal. We are ready to work with you, with your cabinet colleagues and with senior of?ctals in the advancement of our dialogue. To this end, we trust that the attached paper will ass1st us in our endeavours. In the anticipation of hearing from you, please accept my kindest regards. Attachment c.c The Honourable Paul Martin Mr. Kevin Minister of Finance Deputy Minister of Finance The Honourable David Anderson Mr. Alan Nymark Minister of the Environment Deputy Minister of Environment The Honourable Allan Rock Mr. Peter Harder Minister of Industry Deputy Minister of Industry The Honourable Herb Dhaliwal Dr. Peter Harrison Minister of Natural Resources Deptlity Minister of atural Resources Mr. Edward Goldenberg Senior Policy Advisor to the Prime Minister of Canada HE OTO COL REVISTED RESPONESEEQE rugs; DYNAMIC 457mm C. NA DA by the Chief Executives 20, 2002 CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA THE NEED TO REVISIT THE KYOTO PROTOCOL The stated intention of the Government of Canada to ratify the Kyoto Protocol on global climate change has prompted serious concerns on the part of enterprises, large and small, across Canada. It also has triggered alarm in most of the provincial capitals of the country. At the heart of these concerns is the fear that the Government of Canada will proceed with ratification and implementation of commitments based on profoundly inadequate assessments of the costs to consumers, enterprises, and to the overall health of the country. Proceeding on this basis would have severe political as well as economic consequences. Very few Canadians really understand the facts and the dynamics of the global climate change issue. Ratifying the Kyoto Protocol and imposing far-reaching lifestyle changes on Canadians without their prior consent therefore risks a serious political backlash. Five years after negotiation of the Protocol, it has become clear that it represents an unachievable target for Canada, for the following reasons: a The size of the challenge is insurmountable. While Canada's commitment would require a reduction in emissions from the 1990 baseline, the country?s total emissions have in fact continued to grow, fueled by economic growth, higher exports and increases in population. Indeed the gap between the target and the federal government?s own forecast Of emissions on a business-as-usual basis is some 240 million tonnes of CO2 equivalent annually. Achieving the target would require a 30 percent decrease in emissions in a very short time (six to ten years) and would present an insurmountable challenge for a country with an energy? intensive economy, a cold climate, large transportation distances and a population that continues to grow through immigration. With no breakthrough technologies on the horizon, this essentially represents a limit on the size of the Canadian economy. a The Protocol ?ies in the face of continental realities and Canada's competitiveness globally. Canada?s most important economic partner has declared the Kyoto Protocol ?fatally flawed" and has chosen to follow a uniquely American response to the global Climate change challenge. Canadian Council of Chief Executives Page 1 CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA Should Canada ratify the Kyoto Protocol and follow a course widely divergent from that of the United States, the costs to Canadians would be far more severe than Canada might have anticipated when it signed the Protocol. Given the extent of Canada?s dependence on energy-intensive exports and of its integration with the United States economy, ratification would have an immediate and significant impact on its competitive position relative to the United States and on its ability to attract investment and to maintain and create jobs in enterprises serving continental and global markets. On a broader basis, Canada would be the only country in its hemisphere to accept emission limits. As well, Canadian firms would be placed at a disadvantage relative to competitors in Asia, Eastern Europe and the oil-producing nations of OPEC, none of which would face the same constraints. The Protocol is ineffective as a global strategy. At the same time that the Protocol would impose significant costs, it will do almost nothing to slow the global build-up of greenhouse gases. With the withdrawal of the United States, and the lack of any reduction obligations on the part of developing countries, the Protocol would cover at best one-third of current global emissions. Canada?s contribution to global reductions is not fully recognized. Some of Canada?s exports to the United States of hydroelectricity and natural gas replace more GHQ-intensive fuels in that country, and yet under the structure of the Protocol there is no credit for Canada?s contribution to lowering global emissions. The scale and timing of the Kyoto Protocol commitment would require significant changes in consumer behaviour. More than 80 percent of the greenhouse gas emissions associated with fossil fuels come from the end-use consumption of energy. Yet the nature of the challenge has never been explained to Canadians nor have they been informed Of how they would be affected. Other countries, for instance, have demonstrated a variety of strategies for reducing emissions from transportation, from fuel taxes and road tolls to alternate-day driving restrictions. Whatever path Canada chooses, chopping overall emissions by 30 percent is sure to disrupt significantly the day-to-day lives of Canadians in many ways as well as increasing the cost of goods and services. Canadian Council of Chief Executives Page 2 THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA 0 Investment, credit ratings and the currency will be hit hard. Canadian companies already are coping with the challenges of an economic downturn, a relatively small capital market and global overcapacity in key industries such as steel, petrochemicals, oil, automobiles and forest products. Any commitment to emission targets that creates uncertainty about the ability of Canadian-based companies to grow will have an immediate impact on investor perceptions of risk. A signal that Canada has consciously limited its growth prospects will persuade both foreign and domestic companies to shift planned capital investments to other countries and risks a further outflow of head offices from Canada. Credit ratings will suffer and the cost of capital for Canadian enterprises will rise. These factors will accelerate the damaging decline in the value of the Canadian dollar. 0 Adherence to the Protocol will undermine key social priorities. Largely due to immigration, Canada is one of the few industrialized countries whose population is growing. Because the Kyoto Protocol target is expressed as a cap on total rather than per capita emissions, Canada might be forced to reduce flows of immigration in order to meet its commitment. Pursuit of the Kyoto objective would also restrict further development of Canada?s substantial energy and resource endowment, thereby constraining economic opportunities for aboriginal peoples and for those in economically disadvantaged regions of the country. Canada?s energy sector is the largest single source of new capital investment, a significant contributor to export earnings and a major source of tax revenue. 0 A focus on costly cuts to emissions in the short term could divert resources from more effective approaches that would have greater long-term impact. Real progress must be global and can only be made over several decades through new generations Of technology and the development of widely available and cost-effective forms of low or non- carbon energy. We acknowledge that governments and businesses alike make decisions every day based on imperfect information. But in considering how far to go in imposing real costs on businesses, consumers and taxpayers, Canada must take into account the degree of uncertainty that still surrounds the science of climate change. As Professor Richard Lindzen of the Massachusetts Institute of Technology, one of the world?s foremost climate change authorities, puts it: Canadian Council of Chief Executives Page 3 THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA "We are not in a position to confidently attribute past climate change to CO2 or to forecast what the climate will be in the We simply do not know what relation, if any, exists between global climate changes and water vapour, clouds, storms, hurricanes and other factors." On the other hand, there is broad scientific consensus that the Kyoto Protocol will have very limited impact on the global growth of greenhouse gas emissions. This leads to another question, the extent to which limited resources should be allocated to emissions reduction rather than to measures to mitigate and adapt to the impacts of climate change. The above factors all dictate that Canada's approach to the climate change issue must reflect maximum prudence and common sense. This is not, however, an excuse for inaction. The Canadian Council of Chief Executives (formerly the Business Council on National Issues) was the first national business organization to endorse vigorous industry action aimed at curtailing greenhouse gas emissions and promoting energy efficiency as an essential element of company and country competitiveness. The Council's commitment to national and global environmental goals goes well beyond the issue of global climate change. We believe that the promotion of clean air, clean water and sustainability must be key components of Canada?s economic, social and developmental agenda. This requires casting off the shackles of the Kyoto Protocol in favour of a broader, more innovative and demonstrably more constructive agenda that will bring benefits to Canadians and to citizens around the world. We do not pretend to have all the answers at this stage, nor do we wish to preempt what must become a frank and inclusive national discussion. What we offer here is simply a framework of principles and action items that we hope will be seen as a constructive contribution to the shaping of a positive climate change strategy for Canadians. A CLIMATE CHANGE STRATEGY Objective: A strategy that combines responsible action to address greenhouse gas emissions with policies that enhance the country's quality of Canadian Council of Chief Executives Page 4 THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA life and economic competitiveness as well as its ability to play a leadership role in devising a longer-term global solution to the risk of serious climate change. The development of a made-in-Canada strategy on climate change should be guided by the following principles: Public engagement. The first step must be meaningful engagement of the Canadian public. Before proceeding further, Canada needs to establish a solid consensus on what is appropriate and achievable for Canada, what performance targets the country should set for itself, what policy choices and behavioural changes will be needed to meet those targets, what costs the public is prepared to pay and how progress will be monitored. Balance and equity. Canada?s strategy must be balanced and equitable. Whatever targets for action we adopt as a country, no sector or region should bear an undue share of the burden. Short- and long-term action. An effective strategy must both include prudent and cost-effective action in the near term and contribute to lasting solutions over the longer term. For instance, Canadian-led fuel cell technology offers great promise, but cannot possibly contribute meaningfully to reducing Canadian emissions within the Kyoto Protocol timeframe. Overall societal benefits. Rather than a strategy focused solely on greenhouse gases, Canada must fashion an approach that maximizes environmental, health and social benefits domestically, and that contributes to broader economic and environmental progress internationally. In particular, domestic policies should focus on improving important indicators of quality of life such as air quality in urban regions. North American integration. Continental economic integration and shared environmental space require a coherent approach to reducing emissions on a North American basis. Canada can play a leadership role among its continental partners in forging a more innovative and sensible North American response. Canadian Council of Chief Executives Page 5 will: THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA 0 Economic competitiveness and growth. Global leadership in any field flows from economic strength. TO ensure that Canadian governments and enterprises maintain their capacity to develop and deploy innovative emission-reducing technologies, it is essential to foster a sustainable business environment that encourages economic growth and leads to more jobs, rising personal incomes and a stronger tax base. Global champions. The strategy must strengthen Canada as a base for innovative and competitive global champions that can create economic advantage at home while also developing technologies and practices that contribute to global environmental solutions. Canadian action to deal with climate change must be broadly based, engage governments, industry and citizens in meaningful actions and ensure maximum benefit for each dollar expended. The most important elements of a Canadian action plan are: Public involvement and education. Meaningful progress in reducing emissions is not possible without broadly based public support and a willingness to act. Such a strategy requires: 0 A meaningful public debate about the most effective policies, what the necessary measures will cost and who will pay the price; 0 A longer-term and much expanded public education campaign on responsible citizen action, similar to the one that built broad support for the fight against government deficits in the 19905; Development of indicators to measure citizen engagement and progress on issues of environmental sustainability; - A committed business community that can contribute through employee information and support of public education and action programs. Strategic investment in the development and adoption of energy- efficient technologies. emissions of greenhouse gases, governments will have to devote a much larger share of their resources to environmental purposes. These resources In order to change behaviour and reduce Canadian Council of Chief Executives Page 6 CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA should be targeted to areas where Canada has a particular advantage and partnered with industry wherever possible. Governments could: Increase public investment in research in potential breakthrough technologies in a wide range of energy sources, which offer the potential to dramatically reduce global greenhouse gas emissions; Increase the share of renewable energy and lower emitting technologies by offering tax credits or other incentives; Offer an accelerated capital cost allowance for business investment in advanced technologies and emissions-reducing machinery and equipment; Support further development of fuel cell technologies and the refueling infrastructure; Provide additional incentives and innovative financing for energy retrofits of buildings; Adopt a national building code with strong energy efficiency criteria; Expand energy audit programs for houses, commercial buildings and public facilities; Set new energy efficiency standards for appliances; Enhance support for research and development in clean coal and hydrogen technologies; Reduce the fiscal and regulatory barriers to greater use of co- generation in industrial plants; Intensify research into and demonstration of carbon dioxide capture and storage; and Expand Canada's world-leading efforts in carbon sequestration through measures such as tax incentives for reforestation; improved Crown forest land management; restoration of marginal land with tree- planting, shelter belts and green spaces; and tax incentives and education to improve agricultural practices with respect to carbon retention in soils. Canadian Council of Chief Executives Page 7 CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA 3. A stronger commitment by industry. While energy use by consumers has continued to grow rapidly, Canadian industry has made considerable progress in improving energy efficiency, enhancing both its competitiveness and its ability to contribute to lasting technology-based solutions. Emissions from the mining and manufacturing industries overall already have been stabilized at 1990 levels, despite production increases of 35 percent, which represents an improvement in emissions intensity of 1.4 percent annually. As well, technology improvements in the oilsands industry has led to a 45 percent decline in GHG emissions per barrel of oil since 1990. Industry?government partnerships in programs such as the Canadian Industry Program for Energy Conservation (CIPEC) and the Voluntary Challenge and Registry (VCR) have resulted in enhanced performance and reporting of emissions. Nonetheless, businesses need to remain focused on investigating new technologies and other opportunities to continue to reduce emissions per unit of output. 0 Agreements entered into between government and industry sectors can set appropriate performance goals and monitor performance. in order to encourage the growth of globally competitive firms, these goals should focus on lowering the emissions intensity of production. In addition, such agreements would need to recognize the rate Of capital stock turnover and technology development, as well as the nature of the resource base and production processes in different sectors. 0 Mechanisms such as domestic emissions trading could in some circumstances prove useful, but cannot be developed until agreement has been reached on performance goals and after careful design to ensure such mechanisms are efficient and cost-effective. - 0 Companies should make energy efficiency a standard benchmark of corporate competitiveness. 0 Companies should strengthen their focus on continuous improvement in product and process design, recycling and management of materials through their lifecycle, and examine opportunities to lower the carbon intensity of their operations. - Smaller and medium sized enterprises lag significantly in the development and adoption of innovative technologies. Larger companies therefore have an opportunity to demonstrate leadership Canadian Council of Chief Executives Page 8 CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA within the private sector by encouraging adherence to voluntary codes and sharing best practices and information programs on energy management. 4. A Canadian program on science and adaptation. Canada should advocate internationally and carry out domestically a balanced approach of research, mitigation and adaptation. 0 Canada can contribute to improving the world?s scientific understanding of the climate system and the extent of human influence on the climate. 0 Canadian research priorities should include the potential impact on the Arctic, the Great Lakes and fragile ecosystems, as well as effects on agriculture, forestry and resource development. 0 Canada can also participate in the global effort to develop strategies for managing and adapting to the longer-term risks of climate change, particularly for vulnerable regions and people in developing countries. 0 Canadian industry should contribute resources and expertise to this research effort. 5. Inter-governmental collaboration in transportation and urban design. The transportation sector in particular is a large and growing source of emissions and must be a focus of any effective strategy to reduce Canadian emissions: 0 Federal, provincial and municipal governments must coordinate policies to enhance transportation systems and urban design, reduce traffic congestion and improve air quality in the country?s most heavily populated regions. 0 Significant additional investment in urban and inter-city public transit will require federal as well as provincial and municipal participation. 0 Vehicle fuel efficiency standards should remain harmonized on a North American basis as they continue to evolve. Canadian Council of Chief Executives Page 9 THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA 6. Action at the community level. There are a number of opportunities to integrate climate change actions with local efforts to revitalize communities. Among other things, municipal governments could: Set targets for reductions in per capita CHG emissions; Enhance land-use planning; investigate community energy planning and green power purchasing, with an aim to ensure such purchases optimize results for taxpayer dollars; Accelerate the capture of landfill gas for use in electricity; Improve management of municipal solid waste, including diversion from landfill; Improve municipal water and sewage infrastructure. 7. A ?scal and business environment that encourages energy-efficient growth. Any serious measures to reduce emissions inevitany will constrain the growth of Canada?s energy-intensive economy. These measures therefore must be offset by determined efforts to improve Canada's tax and regulatory regimes and ensure robust business investment and job creation. The potentially substantial new public investments in areas such as research, renewable energy and public transit will require difficult choices among fiscal alternatives. However, an effective made-in- Canada climate change strategy should not add to the overall share of government in the economy. Higher spending on environmental measures may reduce governments? ability to address growing needs in other areas such as health care and education. The test of their commitment to addressing climate change lies in the trade-offs that must be made between competing priorities. Incentives to stimulate new investment must be carefully designed to ensure efficient attainment of program objectives and effective use of public resources, and be neutral as to choice of technology or sector. Canadian Council of Chief Executives Page 10 CONFIDENTIAL THE KYOTO PROTOCOL REVISITED: A RESPONSIBLE AND DYNAMIC ALTERNATIVE FOR CANADA 8. Canadian leadership internationally. A made-in-Canada approach would also seek to provide leadership in developing a truly global strategy for managing climate change. 0 While continuously improving its own emissions performance, Canada?s international development strategy should focus on helping developing countries to increase economic growth while becoming more efficient in energy use, so that they can be part of the global effort to reduce emissions over the long term. Bringing major emitters such as China and India and the key energy-exporting members of OPEC into the global effort to reduce emissions would do far more for the global climate than any measures Canada could hope to make within its own borders. 0 Reducing emissions will have an impact only over the very long term. Investment in alternative priorities such as the alleviation of poverty, provision of clean water and improvement Of health care would have a much greater impact in meeting the broader goal of improving the quality of life of the world?s poorest people. Meeting these objectives could bring the world to a position of economic strength from which it would be better able to address global issues such as climate change. a Canada should address climate change issues as an essential element in its strategy for managing North American integration. Economic integration imposes some real constraints on Canadian policy choices, but also Offers important opportunities and points of leverage. In particular, energy security remains a priority for the United States within the context of increased integration with Canada and Mexico. This provides an opening for Canadian leadership within North America that could lead to a more comprehensive, innovative and sensible response on climate change through a coherent continental approach. Canada can play a leadership role in managing the transition to a more sustainable future both at home and abroad, but only if we have a "made- in-Canada? strategy that has broad public support and reinforces the creative energies of our governments, our enterprises and our citizens. Canadian Council of Chief Executives Page 11 CANADIAN COUNCIL OF CHIEF EXECUTIVES 90 Sparks Street Suite 806 Ottawa, Canada K1 534 Telephone (613) 238-3727 Facsimile (613) 236-8679 E-mail address leaders@ce0council.ca Web Site wwceocouncilLa CANADIEN DES CHEFS 90, rue Sparks Bureau 806 Ottawa, Canada K1 584 T?l?phone (613) 238-3727 T?l?copieur (613) 236?8679 Courrier ?lectronique global@bcni.com Site internet Dealt. CANADIAN COUNCIL CON SEIL CANADIEN OF CHIEF EXECUTIVES DES CHEFS Thomas d'Aquino President and Chief Executive President et chef de la direction March 25, 2002 Mr. Stephen Harper Leader of the Canadian Alliance House of Commons Room 409-8, Centre Block OTTAWA KIA 0A6 JMWM) Congratulations on your decisive victory in the vote for the leadership of the Canadian Alliance. You, better than anyone, know the magnitude of the challenge you are taking on, and I wish you every success. Canada is in urgent need of a respected and effective opposition and I have no doubt that you and your team will work around the clock to achieve this end. As you know, the Canadian Council of Chief Executives shares a signi?cant number of the policy positions with the Canadian Alliance. We both are committed to a more competitive Canada and to a stronger voice in foreign policy and security issues. When you have settled in, I would welcome an opportunity to get together. And at an alppropriate time, I look forward to having you meet with Counci members. the meantime, please accept my kind regards. 5401' Royal Bank Centre a 90 Sparks Street - Suite 806 - Ottawa - Canada 534 Centre Banque Royale - 90. rue Sparks . bureau 806 - Ottawa - Canada 584 Telephone (613) 238-3727 Telephone - Facsimile (613) 236-8679 T?l?coPieur E-mail address leaders@ceocouncil.ca Courrier ?lectronique Web Site Site internet formerly Business Council on National Issues CANADIAN CO UNCLL CONSEIL CANADIEN OF CHIEF EXEC DES CHEFS Thomas d'Aqulno President and Chief Executive President et chef de la direction March 25, 2002 The Honourable Ernie Eves, Q.C. Premier Designate Government of Ontario Legislative Building, Room 281 Queen's Park TORONTO, Ontario M7A .210". 574112.) Warmest congratulations on your decisive victory on Saturday. The members of your party have chosen well and have vested in you their con?dence and hope that you will lead the great province of Ontario for many years to come. Personally, I am delighted with the outcome as you bring much valuable experience to the leadership of the province. also am heartened by the clarit of purpose with which you want to build on the outstanding stewards ip of Premier Harris. The enormity of the challenge you face cannot be emphasized strongly enough. As you have said so often 1n recent weeks, a stron Ontario is a pre- condition of a successful Canada. As you prepare to take 0 ?ce, we at the Canadian Council of Chief Executives look forward to working closely with you. As the premier business or anization in the country, we care deeply about the direction of Ontario. (province?s position on ?scal policy, taxation, trade, health, education an the environment is of special interest to us. One of the Council?s great is that our CEO members represent Canada?s leading enterprises, coast to coast. By far the largest contingent of my colleagues head enterprises based in Ontario. It will not surprise you, therefore, to hear me say that Ontario has a special place in our organization. Royal Bank Centre - 90 Sparks Street - Suite 806 - Ottawa - Canada KIP 584 Centre Banque Royale - 90. rue Sparks - bureau 806 - Ottawa . Canada KIP 534 Telephone (613) 238-3727 ?l?phone - Facsimile (613) 236-8679 T?l?COpieur E-mall address leaders@ceocouncil.ca Courrier ?lectronlque Web Site Site tnternet formerly Business Council on National Issues March 25, 2002 . Page 2 Once you are settled in, I would very much welcome the opportunity to meet with you so that we might have a good exchange on subjects of mutual interest. And at an early date, I would hope that you will agree to meet with the members of the Council. There is a strong appetite among my CEO colleagues for such a meetin and with this end 111 mind, I will be in touch with your of?ce in the near ture. wish you every success in you new responsibilities, Ernie, and when I next write to you, I look forward to addressmg you as ?Premier.? 6 . Kindest regards. (bou't CONSEIL CANADIEN DES CHEFS CANADMN COUNCIL OF CHIEF Thomas d'Aquino President and Chief Executive President ei chef de la direction March 25, 2002 Mr. Stockwell Day, MP. The Canadian Alliance House of Commons Room 930, Confederation Building OTTAWA KIA 0A6 Jam ?ack, Your bid for the leadership of the Canadian Alliance did not turn out as you would have wanted and I can only imagine your sense of disappointment. But you gave it your best shot -- as you have done consistently during the past several years that you have been in Ottawa. I take 111 hat 0 to you for pursumg your goals in public life with courage an determination. All the best to you in whatever to you decide to do. Jm? Royal Bank Centre. 90 Sparks Street- Suite 806 - Ottawa. Canada KI 584 Centre Banque Royale - 90. rue Sparks . bureau 806 - Ottawa - Canada KIP 534 Telephone {613) 238?3727 T?l?phone- Facsimile (613) 236-8679 T?l?copieur E-mail address leaders@ceocouncil.ca Courrier ?lectronique Web Site Site internet formerly Business Council on National issues awe CANADIAN COUNCIL . CONSEIL CANADIEN OF CHIEF DES CHEFS Thomas d'Aquino President and Chief Executive President et chef de la direction March 22, 2002 The Honourable Mike Harris, M.P.P. Premier Government of Ontario Legislative Building, Room 281 Queen?s Park TORONTO, Ontario M7A 1A1 3mm, As you prepare to take your leave of the of?ce of Premier, I simply wish to say ?thank you? -- thank you for your vision, your courage and your leadership. You have transformed this reat province and you have positioned the people of Ontario as able and con 1dent compentors 1n an complex global envuonment. We at the Canadian Council of Chief Executives (formerly Business Council on National Issues) have greatly appreciated working with you during the better art of the past decade, and we have seen to on so many of the critica issues facmg Ontario and the country at large. Whatever new challenge you decide to take on, we look forward to remaining. closely in touch and to continuing our very constructive relationship. Kindest regards. I . Royal Bank Centre - 90 Sparks Street - Suite 806 - Ottawa - Canada KIP 534 Centre Banque Royale - 90. rue Sparks - bureau 806 - Ottawa Canada KLP 584 Telephone (613) 238-3727 Telephone - Facsimile (613) 236?8679 T?l?copieur E-mail address ieaders@ceocouncil.ca Courrier ?lectronique Web Site Site internet *formeriy Business Council on National Issues . CANADIAN COUNCIL OF CHIEF CONSEIL CANADIEN DES CHEFS Thomas d'Aquino President and Chief Executive President et chef de in direction March 14, 2002 The Honourable Jean Charest, P.C. Leader of the Of?cial Opposition and Leader of the Liberal Party of Quebec 1 Place Ville Marie Suite 1515 MONTREAL, Quebec H3B 2B5 DETAILS CONCERNING YOUR ADDRESS TO THE SPRING GENERAL MEETING OF THE CANADIAN COUNCIL OF CHIEF EXECUTIVES I am pleased to provide you with details concernin your participation in the Spring General Meeting of the Canadian Council 0 Chief Executives. An agenda is attached with speci?cs as to venue and times. Jean, we look forward to welcoming you at the Mount Royal Club at 4:30 pm, on Monday, April 8. Upon your arrival, Jean Monty will introduce you and invite you to the podium. Feel free to speak for some twenty to twenty-?ve minutes. A question and answer period will follow. (No media will be present.) At approximately 5:55 pm, I will thank you and you should be well on your way by a few minutes past 6:00 pm. Together with my colleagues, let me say how pleased we are that you will be with us for what promises to be a lively and informative part of our Spring General Meeting programme. 0 If you have any questions, do not hesitate to get in touch with me or With Nancy Wallace, the Counc??s Vice Presrdent and Director of Operations. In the meantime, please accept my kindest regards. Royal Bank Centre - 90 Sparks Street - Suite 806 - Ottawa - Canada KIP 584 Centre Banque Royale - 90. rue Sparks - bureau 806 - Ottawa Canada KIP 584 Telephone (613} 238-3727 Telephone - Facsimile {613) 236-8679 T?l?copieur E-matl address leaders@ceocouncil.ca Courrier ?lectrontque Web Site Site Internet formerly Business Council on National Issues AGENDA SPRING GENERAL MEETING CANADIAN COUNCIL OF CHIEF EXECUTIVES MONTREAL, APRIL 8 AND 9, 2002 Monday, April 8, 2002 Mount Royal Club 4:30 p.m. The politics and economics of Quebec: The issues and the challenges ahead A CEO roundtable with a presentation by The Honourable Jean Charest, Leader of the Of?cial Opposition and of the Liberal Party of Quebec 6:00 p.m. Recess ?fteen minutes 6:15 p.m. Reception followed by dinner with an address by David Dodge, Governor of the Bank of Canada Tuesday, April 9, 2002 Bombardier Aerospace Administrative Centre 7:30 a.m. Departure from Ritz Carlton Hotel for Bombardier Aerospace Administrative Centre 8:30 a.m. Chairman?s welcome and introduction Jean Monty, Chairman of the Board of Directors, Canadian Council of Chief Executives, and Chairman and Chief Executive Of?cer, Bell Canada Enterprises Inc. 8:35 a.m. President?s Report Thomas d?Aquino, President and Chief Executive Canadian Council of Chief Executives 8:45 a.m. New challenges to corporate governance: leadership 10:00 a.m. and accountability in the post-Enron environment A CEO rountable with resentations by John F. Olson, Senior artner, Gibson, Dunn and Crutcher, Washington, DC, and Chairman, American Bar Association Committee on Co orate Governance; David A. Leslie, Chairman and hief Executive Of?cer, Ernst Young LLP, Canada; and Brian Levitt, Co-Chairman, Osler, Hoskin Harcourt LLP Recess ?fteen minutes 10:15 a.m. 11:15 a.m. 1:15 p.m. 2:30 p.m. Page 2 The ?tture of the Canadian dollar and monetary system A debate and CEO roundtable with presentations by Richard Harris, Professor of Economics, Simon Fraser University; and John Murray, ecial Advisor to the Governor of the Bank 0 Canada Welcome and brie?ng prior to a tour of Bombardier?s Aerospace facilities Robert E. Brown, Vice-Chairman, Canadian Council of Chief Executives, and President and Chief Executive Of?cer Bombardier Inc. Luncheon with an address b? The Honourable Allan ock, Minister of Industry, Government of Canada Conclusion of Spring General Meeting and departure from Bombardier Aerospace facilities {Qt-(oh . C100 i, CONSEIL CANADIEN DES CHEFS . CANADIAN COUNCIL OF CHIEF Thomas d'Aquino President and Chief Executive President et chef de la direction March 14, 2002 The Honourable Allan Rock, P.C., MP. Minister of Industry Government of Canada House of Commons Room 441-8, Centre Block OTTAWA KIA 0A6 ADDRESS TO THE CANADIAN COUNCIL OF CHIEF EXECUTIVES MONTREAL, TUESDAY, APRIL 9, 2002 . My colleagues and I very much look forward to welcoming you in Montreal on Tuesday, A ril 9, on the occasion of the Spring General Meeting of the Canadian Counci of Chief Executives. A copy of the agenda for our General Meeting for April 8/9 is attached. You have agreed to be our special uest at the April 9 concluding luncheon which will begin at 1:15 pm. venue for our ABril 9 meetings will be the Bombardier Aerospace Administrative Centre in orval. Council Vice Chairman and Bombardier CEO, Bob Brown, will be our host and the Bombardier aerospace facilities will provide an excellent backdrop for our deliberations. As you know, through our work on the Canada Global Leadership Initiative, and for the better part of two decades, the Council has beelrli dediclitlted to making Canada the most competitive and innovative country Int 6 wor . As per my discussions with Cyrus Re orter, I understand that you will be prepared to speak at the outset of the lunc con and that you will have partaken of your own lunch en route to Dorval. At 1:15 Council Chairman, Jean Monty, will introduce you and we woul expect that on would 3 eak for some twenty minutes. Following our address, the hairman will inv1te uestions from the ?oor. At 2:25 pm, will thank you and the meeting wi I conclude by 2:30 pm. . Royal Bank Centre - 90 Sparks Street - Suite 806 - Ottawa - Canada KIP 534 Centre Banque Royaie - 90. rue Sparks - bureau 806 Ottawa - Canada 534 Telephone (613) 238-3727 T?i?phone - Facsimile {613} 236-8679 T?le?c0pteur E-mati address ieaders?ceocounciLca Courrter ?iectronique Web Site Site internet *formeriy Business Council on National Issues The Honourable Allan Rock, P.C., M.P. March 14, 2002 Page 2 The luncheon will be attended by approximately 90 CEOs (a list of members is attached). By the time we meet in Dorval, it is planned that you will have received a Council memorandum commenting on our department?s innovation initiative. This will provide food for thought an discussion at our meeting, and the backdrop for Vigorous Council participation in the national consultative process on innovation leading to a summit later this year. I trust that the above details provide you and your staff with what you need to know prior to getting together with are scheduled to meet next Thursday, March 21, I will pleased to provide further details if they are necessary. In the meantime, please accept my warmest regards. AGENDA SPRING GENERAL MEETING CANADIAN COUNCIL OF CHIEF EXECUTIVES MONTREAL, APRIL 8 AND 9, 2002 Monday, April 8, 2002 Mount Royal Club 4:30 p.m. The politics and economics of Quebec: The issues and the challenges ahead A CEO roundtable with a presentation by The Honourable Jean Charest, Leader of the Official Opposition and of the Liberal Party of Quebec 6:00 p.m. Recess ?fteen minutes 6:15 p.m. Reception followed by dinner with an address by David Dodge, Governor of the Bank of Canada Tuesday, April 9, 2002 Bombardier Aerospace Administrative Centre 7:30 a.m. Departure from Ritz Carlton Hotel for Bombardier Aerospace Administrative Centre 8:30 a.m. Chairman?s welcome and introduction Jean Monty, Chairman of the Board of Directors, Canadian Council of Chief Executives, and Chairman and Chief Executive Of?cer, Bell Canada Enterprises me. 8:35 a.m. President?s Report Thomas ?Aquino, President and Chief Executive Canadian Council of Chief Executives 8:45 a.m. New challenges to corporate governance: leadership and accountability in the post-Enron environment A CEO rountable with resentations by John F. Olson, Senior Ifj?artner, Gibson, Dunn and Crutcher, Washington, DC, and Chairman, American Bar Association Committee on Co orate Governance; David A. Leslie, Chairman and hief Executive Of?cer, Ernst Young LLP, Canada; and Brian Levitt, Co?Chairman, Osler, Hoskin Harcourt LLP 10:00 a.m. Recess ?fteen minutes 10:15 a.m. 11:15 a.m. 1:15 p.m. 2:30 p.m. Page 2 The future of the Canadian dollar and monetary system A debate and CEO roundtable with presentations by Richard Harris, Professor of Economics, Simon Fraser University; and John Murray, ecial Advisor to the Governor of the Bank 0 Canada Welcome and brie?ng prior to a tour of Bombardier?s Aerospace facilities . Robert E. Brown, Vice-Chairman, Canadian Council of Chief Executives, and President and Chief Executive Of?cer Bombardier Inc. Luncheon with an address by The Honourable Allan Rock, Minister of Industry, Government of Canada Conclusion of Spring General Meeting and departure from Bombardier Aerospace facilities THE MEMBERSHIP CANADIAN COUNCIL OF CHIEF EXECUTIVES Mr. Leonard J. Asper President and Chief Executive Of?cer CanWest Global Communications Corp. Mr. Robert M. Astley President and Chief Executive Of?cer Clarica Life Insurance Company Mr. A. Charles Baillie Chairman and Chief Executive Of?cer TD Bank Financial Group Mr. John R. Barnett President and Chief Executive Of?cer Rothmans Inc. Mr. Thomas J. Bata Honorary Chairman Bata Limited Mr. Alain Batty President and Chief Executive Of?cer Ford Motor Company of Canada, Limited Mr. W. Geoffrey Beattie President The Woodbridge Company Limited Mr. Peter J. G. Bentley Chairman Canfor Corporation Mr. J. Mark Borseth President and General Manager 3M Canada Company Mr. Kevin T. Boyce President and Chief Executive Of?cer Unilever Canada Limited Mr. David Braley Pmsident Orlick Industries Limited Mr. Ron A. Brenneman President and Chief Executive Of?cer Perm-Canada Mr. Robert J. Briscoe Chair Canadian Chamber of Commerce Mr. Robert E. Brown President and Chief Executive Of?cer Bombardier Inc. Mr. Derek H. Burney President and Chief Executive Of?cer CAE Mr. Derek J. Burney President and Chief Executive Of?cer Corel Corporation Mr. Claudio F. Bussandri President and Chief Executive Of?cer Medis Health and Pharmaceutical Services Inc. Mr. John M. Cassaday President and Chief Executive Of?cer Corus Entertainment Inc. Mr. John Chippindale President and Chief Executive Of?cer Marsh Canada Limited Mr. Pierre Choquette President and Chief Executive Of?cer Methanex Corporation Mr. Frank Clegg President Microsoft Canada Co. Mr. Jack L. Cockwell Co-Chairman Brascan Corporation Mr. Mark A. Cohen Chairman and Chief Executive Of?cer Sears Canada Inc. Mr. David W. Colcleugh Chairman, President and Chief Executive Of?cer DuPont Canada Inc. Mr. Tony Comper Chairman and Chief Executive Of?cer Bank of Montreal THE MEMBERSHIP CANADIAN COUNCIL OF CHIEF EXECUTIVES Mr. Dean A. Connor Chairman and Chief Executive Of?cer William M. Mercer Limited Mr. David M. Culver Chairman CAI Capital Corporation Mr. Dominic D'Alessandro President and Chief Executive Of?cer Manulife Financial Mr. Kevin J. Dancey Chief Executive Of?cer PricewaterhouseCoopers LLP Mr. Patrick D. Daniel President and Chief Executive Of?cer Enbridge Inc. Mr. Arthur A. DeFehr President and Chief Executive Of?cer Palliser Furniture Ltd. Mr. Andr? Desmarais President and Co-Chief Executive Of?cer Power Corporation of Canada Mr. Paul Desmarais, Jr. Chairman and Co-Chief Executive Of?cer Power Corporation of Canada Mr. Kenji Dewa President and Chief Executive Of?cer Mitsui Co. (Canada) Ltd. Mr. Pierre Dion President and Chief Executive Of?cer The Reader's Digest Association (Canada) Ltd. Mr. Patrick Dolberg President and Chief Executive Of?cer St. Lawrence Cement Group Inc. Mr. John R. Dowd - President EDS Canada Inc. Mr. William A. Downe Chief Executive Of?cer BMO Nesbitt Burns Inc. Mr. Frank A. Dunn President and Chief Executive Of?cer Nortel Networks Corporation Mr. N. Murray Edwards President Edco Financial Holdings Ltd. Mr. David L. Emerson President and Chief Executive Of?cer Canfor Corporation Mr. Travis Eugen President and Chief Executive Of?cer Alcan Inc. Mr. Darren Entwistle President and Chief Executive Of?cer Telus Mr. Tim W. Faithful] President and Chief Executive Of?cer Shell Canada Limited Mr. William R. att Chief Executive Of?cer Fairmont Hotels Resorts Inc. Mr. Jay A. Forbes Acting Chief Executive Of?cer Aliant Inc. Mr. Andr? Fortier Chairman Conseil du patronat du Qu?bec Mr. David A. Ganong President Ganong Bros. Limited Mr. Claude A. Garcia President, Canadian Operations The Standard Life Assurance Company Mr. Jim G. Gardiner President and Chief Executive Of?cer Fording Inc. THE MEMBERSHIP CANADIAN COUNCIL OF CHIEF EXECUTIVES Mr. C. William Gaynor President . . Weyerhaeuser Company Limited Mr. Richard L. George President and Chief Executive Of?cer Suncor Energy Inc. Mr. Robert T. E. Gillespie Chairman and Chief Executive Of?cer General Electric Canada Inc. Mr. Martin J. G. President and Chief Executive Of?cer HSBC Bank Canada Mr. Serge Godin Chairman and Chief Executive Of?cer CGI Group Inc. Mr. Peter C. Godsoe Chairman and Chief Executive Of?cer The Bank of Nova Scotia Mr. John R. Grainger President and Chief Executive Of?cer Laidlaw Inc. Mr. Ross A. Grieve President and Chief Executive Of?cer PCL Construction Group Inc. Mr. Michael A. Grimaldi President General Motors of Canada Limited Mr. Jean-Ren? Halde President and Chief Executive Of?cer Irwin Toy Limited Mr. Scott M. Hand DiePuty Chairman and Chief Executive 0 icer Inco Limited Mr. Milton E. Harris Chairman and Chief Executive Of?cer Harris Steel Group Inc. Mr. Kerry L. Hawkins President and Chief Executive Of?cer Cargill Limited Mr. Mark Henderson President and Chief Executive Of?cer Ericsson Canada Inc. Mr. Paul J. Hill President and Chief Executive Of?cer Harvard Developments Inc. - A Hill Company Mr. Ben Hume Chairman Canadian Manufacturers Exporters Mr. John S. Hunkin Chairman and Chief Executive Of?cer CIBC Mr. Peter S. anson Chairman and Chief Executive Of?cer AMEC Inc. Mr. Fred Jaques President Labatt Interbrew North America Mr. Kevin J. Jenkins Pmsident and Chief Executive Of?cer The Westaim Corporation Mr. Mitsuru Kawaguchi President and Chief Executive Of?cer Mitsubishi Canada Limited Mr. Brian F. Kenny President Bechtel Canada Co. Mr. David W. Kerr Chairman and Chief Executive Of?cer Noranda Inc. Mr. Hassan Khosrowshahi Chairman and Chief Executive Of?cer Inwest Investments Ltd. THE MEMBERSHIP CANADIAN COUNCIL OF CHIEF EXECUTIVES Mr. Ed Kilroy President IBM Canada Ltd. Mr. Joseph Kruger II Chairman and Chief Executive Of?cer Kruger Inc. Mr. Hal Kvisle President and Chief Executive Of?cer TransCanada PipeLines Limited Mr. Jacques Lamarre President and Chief Executive Of?cer SN Group Inc. Mr. R. Jack Lawrence Chairman Lawrence Company Inc. Mr. David A. Leslie, CA Chairman and Chief Executive Of?cer Ernst Young LLP Mr. Jeffrey M. Li ton President and Chie Executive Of?cer NOVA Chemicals Mr. Paul N. Lucas President and Chief Executive Of?cer GlaxoSmithKline Mr. William A. MacKinnon Chairman and Chief Executive KPMG LLP Mr. David Mann President and Chief Executive Of?cer Emera Inc. Mr. Ronald N. Mannix Chairman Coril Holdings Ltd. Mr. R?mi Marcoux Chairman of the Board and Chief Executive Of?cer G.T.C. Transcontinental Group Ltd. Dr. Albert Maringer President and Chief Executive Of?cer Siemens Canada Limited Mr. John T. Mayberry President and Chief Executive Of?cer Dofasco Inc. Mr. Jeffrey J. McCaig President and Chief Executive Of?cer Trimac Corporation Mr. Raymond L. McFeetors President and Chief Executive Of?cer The Great-West Life Assurance Company Mr. Robert A. Milton President and Chief Executive Of?cer Air Canada Ms. LuAn Mitchell Chairperson of the Board Mitchell's Gourmet Foods Inc. Mr. Jean C. Monty Chairman and Chief Executive Of?cer Bell Canada Enterprises Inc. Mr. Morgan President and Chief Executive Of?cer Alberta Energy Company Ltd. Mr. Yoshio Nakatani Chairman Toyota Canada Inc. Mr. Norman W. Naumoff President Kodak Canada Inc. Mr. Arnold M. Nemirow Chairman, President and Chief Executive Of?cer Bowater Incorporated Mr. J. Edward Newall Chairman Newall Associates THE MEMBERSHIP CANADIAN COUNCIL OF CHIEF EXECUTIVES Mr. Eric P. Newell Chairman and Chief Executive Of?cer Canada Ltd. Mr. David A. Nield Chairman, President and Chief Executive Of?cer The Canada Life Assurance Company Mr. Gordon M. Nixon President and Chief Executive Of?cer RBC Financial Group Mr. David P. O'Brien Chairman and Chief Executive Of?cer PanCanadian Energy Corporation Mr. Philip M. O'Brien Chairman Devencore Investments Inc. Mr. R. Jeffrey Orr President and Chief Executive Of?cer Investors Group Inc. Mr. Gilles P. Ouimet President and Chief Executive Of?cer Pratt Whitney Canada Corp. Mr. Robert B. Peterson Chairman and Chief Executive Of?cer Imperial Oil Limited Mr. Michael E. J. Phelps Chairman and Chief Executive Of?cer Westcoast Energy Inc. Mr. Alfred Powis Founding Chairman Business Council on National Issues Mr. Hartley T. Richardson President and Chief Executive Of?cer James Richardson Sons, Limited Mr. John C. Risley, O.C. President Clearwater Fine Foods Inc. Mr. Robert J. Ritchie President and Chief Executive Of?cer Canadian Paci?c Railway Mr. Russel C. Robertson Canadian Managing Partner Arthur Andersen LLP Mr. Edward S. Rogers President and Chief Executive Of?cer Rogers Communications Inc. Mr. Seymour Schulich Chairman and Co-Chief Executive Of?cer Nevada Capital Corporation Limited Mr. Isadore Sharp Chairman and Chief Executive Of?cer Four Seasons Hotels and Resorts Mr. J. A. Shepherd President and Chief Executive Of?cer Slocan Group Mr. Vince J. Smith President and Chief Executive Of?cer Dow Chemical Canada Inc. Mr. Ron D. Southern Chairman and Chief Executive Of?cer ATCO Group Mr. Harry R. Steele Chairman and Chief Executive Of?cer Newfoundland Capital Corporation Limited Mr. Donald A. Stewart Chairman and Chief Executive Of?cer Sun Life Financial Services of Canada Inc. Dr. Jozef Straus Co-Chairman and Chief Executive Of?cer JDS Uniphase Corporation Mr. David Sutherland President and Chief Executive Of?cer IPSCO Inc. THE MEMBERSHIP CANADIAN COUNCIL OF CHIEF EXECUTIVES Mr. Douglas R. Swartout Chairman, President and Chief Executive Of?cer Aon Reed Stenhouse Inc. Mr. Colin Taylor Managing Partner and Chief Executive Deloitte Touche LLP Mr. Jay K. Taylor President and Chief Executive Of?cer Placer Dome Inc. Mr. Paul M. Tellier President and Chief Executive Of?cer Canadian National Mr. Robert Tessier President and Chief Executive Of?cer Gaz M?tropolitain Mr. Paul Tsaparis President and Chief Executive Of?cer Hewlett-Packard (Canada) Ltd. Mr. Jean Turmel Chairman of the Board and President of the Executive Committee National Bank Financial Mr. John M. Van Brunt President and Chief Executive Of?cer Agrium Inc. Ms. Annette Verschuren President Home Depot Canada Ltd. Mr. Douglas Whitehead President and Chief Executive Of?cer Pinning International Inc. Mr. W. David Wilson Co-Chairman and Co-Chief Executive Of?cer Scotia Capital Mr. Charles M. Winograd President and Chief Executive Of?cer RBC Capital Markets Cir - G103 CANADIAN COUNCIL .- CON SEIL CANADIEN OF CHIEF EXEC DES CHEFS Thomas d'Aqutno President and Chief Executive President et chef de la direction February 19, 2002 VIA FACSINIILE The Honourable John Manley, P.C., M.P. Deputy Prime Minister Canada Four Corners Marshall Building 14 Metcalfe Street, 3rd Floor OTTAWA KIA 0A6 company of four to six CEOs) to discuss a constructive, forward strategy on global i 99m? 2 As you kno I have requested a meeting with you (desirably in the mate change. You already are in possession of my letter on is subject to the Prime Minister dated January, 2002. I conveyed the urgency of my request to Tony Macerollo in the hope that the government and the business community might avoid the worst of a messy and acrimonious debate in public. In the time that has passed, we have missed an im ortant opportunity, and now (in part due to an intervention by the Premiers trave ing with the Prime in Euro e) the subject is being tossed around aimlessly hke some unwanted footba 1. Before the debate intensi?es and ositions harden further, would you agree to receive a small delegation of senior Os committed to a constructive way forward? We are prepared to meet with you next week. C.C. In the hope of hearing from you shortly, please accept my warmest wishes. (5447? I Mr. Tony Macerollo Executive Assistant to the Deputy Prime Minister Royal Bank Centre - 90 Spade: Street - Suite 806 Ottawa - Canada 5134 Centre Banque Royale - 90, rue Sparks bureau 806 - Ottawa Canada KIP 584 Telephone (613)238-3 727 Telephone - Facstmile (61 31236-8679 Te?l?copleur E-mail address leaders@ceocouncil.ca Courrter ?lectronique Web Site Site Internet {formerly Business Council on National Issues . CANADIAN COUNCIL .- CONSEIL CANADIEN DES CHEFS OF CHIEF ?1 Thomas d?Aquino President and Chief Executive President et chef de to direction February 18, 2002 VIA FACSINIILE The Honourable Sergio Marchi, P.C. Ambassador, Permanent Re resentative to the Of?ce of the United ations and to the World Trade Organization Permanent Mission of Canada 5, avenue de l'Ariana GENEVA SWITZERLAND CH-1202 92am Sly/0?} Congratulations on being named Chair of the WTO General Council. This expression of con?dence and sup ort in you by the 144 members of the Organization is a tribute to your 5 '11s and hard work in Geneva over the past couple of years. You take on the Chair at an enormously important time. The post-Doha challenges facing the Organization and the world are qulte staggering and will requige vision, tenacity and consummate diplomacy in the mont and years ahea . As ou know from our chat in New York on the occasion of the World Economic orum Annual Meeting, the new mandate of the Canadian Council of Chief Executives has a triple focus: Canada, North America and the world. The global mandate is a ecial preoccupation of mine, and within Council circles, a great deal of the wor on global issues is being carried out in con'unction with our Global Policy Committee co-chaired by Robert Brown, CEO of ombardier and Dominic d?Alessandro, CEO of Manulife. You will not be surprised to know that the work of the World Trade Organization is one of our top priorities, and quite so. . Royal Bank Centre 90 Sparks Street - Suite 806 - Ottawa - Canada KIP 584 Centre Banque Royale - 90, rue Sparks - bureau 806 - Ottawa - Canada 534 Telephone (613)238-3727 Telephone Facsimile (613)236-8679 T?l?copieur E-mail address leaders@ceocouncil.ca Courrier ?lectronlque Web Site Site intemet 'formerly Business Council on National issues The Honourable Sergio Marchi, P.C. February 18, 2002 . Page 2 When you next visit North America, I would be delighted to have you meet with members of the Global Policy Committee inclusive of other interested member CEOs. If you have some dates in mind, have your of?ce communicate them to me. In the meantime, I wish your every success as you move forward in your new responsibilities. 1 am proud that a Canadian is once again at the helm of the WTO Council and that Canada?s long and distinguished tradition of commitment to global trade liberalization and the rule of law 1s being advanced by someone as able as yourself. Warmest regards. . 5m c.c. Mr. Robert Brown and Mr. Dominic d? Alessandro . Co?Chairman Global Policy Committee Canadian Council of Chief Executives Mr. Jean C. Monty Chairman of the Board of Directors Canadian Council of Chief Executives The Honourable Pierre Pettigrew P.C., MP. Minister for International Trade Government of Canada CANADIAN COUNCIL CON SEIL CANADIEN God ?i OF CHIEF EXEC DES CHEFS Thomas d'Aquino President and Chief Executive President et chef cte in direction January 25, 2002 Private and Con?dential The Honourable John Manley, P.C., M.P. Deputy Prime Minister House of Commons Room 418-N. Centre Block OTTAWA 0A6 Jm Mm, I am enclosi a copy of a personal letter which I recently have sent to the Prime Minister on the subject of global climate change. The reasons for writing are fully explained in the letter itself. Suf?ce it to sa that I believe the pending decision on the rati?cation of the Kyoto Protoco is one of the most signi teant issues the government has faced. and that ratification and implementation will have far-reaching implications for jobs, investment and consumer behavior throughout Canada. Earlier this week I met privately with Eddie to discuss the importance and urgency of this issue. While not precluding a possible meeting with the Prime Minister. his advice was that 1 should take the matter up with you in the ?rst instance. I have discussed this with Tony Macerollo and requested a meeting with you at the earliest convenient opportunity. I would be pleased to have a small group of CEOs from across Canada (four to eight in number) join us for such a meeting. Altematively. I would be ready to engage in an initial discussion one-on-one. I am leaving this Wednesday for the World Economic Forum in New York and subsequently a board meeting in London. Might we get together during the week of February 1 I will be in touch with Tony Macerollo in this regard. In the meantime. please accept my warmest regards, and best wishes as you settle into your new responSIbilities. 5441? 7 c.c. Mr. Tony Macerollo Mr. Eddie Goldenberg Royal Bank Ct-nm- - 9O Sparks Strr'r-t - Sum- 806 - Ottawa - Canada RIP 55-! Centre Banqur' Rnyalr' 90. rue Sparks . burr-an 806 - Ottau'a - Canada KIPSB4 Telephone {Stilt 2555-3727 Telephone - Farsimilt' {613} 236-8679 T?l?copieur E-mml address leadch It Courrit'r electronique Web Site Site interact {turmr'riy Business Cuuncii on National Issues CANADIAN COUNCIL CON SEIL CANADIEN OF CHIEF DES CHEFS Thomas d?Aquino President and Chief Executive President et chef de la direction January 2, 2002 PRIVATE AND CONFIDENTLAL The Right Honourable Jean Chr?tien, P.C., M.P. COPY Prime Minister of Canada Of?ce of the Prime Minister Lan evin Block 80 ellington Street KIA 0A3 ?it/IL ffmb?h 7 I am writing in a personal capacity about an issue that could have a powerful in?uence on the future of our country, erhaps even more rofound than the ?scal transformation that marked your 1rst two terms in 0 me. I am referring to the issue of global climate change and in particular, the question of whether and when to ratify the Kyoto Protocol. 1 think that both of us share a desire to see the ?rst decade of the 21st century remembered as a period in which Canada seized the opportunities of a global economy and forged an unparalleled reputation as the best place in the world in which to live, to work, to invest and to row. Environmental policy provides an important arena for demonstrating anadian leadership, but if mishandled, the country's response to the Kyoto Protocol could turn the next decade instead into a period of precipitous decline in Canadian incomes and in Canada?s global in?uence. I want to assure you that Canada?s business leaders take the issue of climate change very senously. Canadian enterprises are leaders domestically and internationally in reducing greenhouse gas (GHG) emissions, in developing new environmental technologies and products and in exploring alternative ener sources. They will continue to pursue such strategies not just as good 10 a1 citizens, but also because improving energy ef?c1ency makes good usiness sense. Royal Bank Centre - 90 Sparks Street - Suite 806 - Ottawa - Canada KIP 584 Centre Banque Royale - 90, rue Sparks - bureau 806 - Ottawa - Canada KIP 534 Telephone (613) 238-3 727 T?i?phone - Facsimile {613} 236-8679 T?i?copieur E-mail address ieaders@ceocouncll.ca Courrier ?iectronique Web Site Site internet formerly Business Council on National Issues The Right Honourable Jean Chr?tien, P.C., M.P. January 2, 2002 Page 2 However, when I hear that your government is prepared to move ahead quickly .with rati?cation of the Kyoto PrOtocol, I and most other business leaders in Canada have serious reservations. I see the followmg as the most critical issues: First, the magnitude of the Canadian challenge, a reduction in GHG emissions of at least 25 percent within six to ten years, is unprecedented. Meeting this target would require improvements in energy ef?ciency two to three times as great as those dnven by the oil price shocks of the 19705. Second, the Canadian public has shown little awareness or understanding of the extent to which the policies needed to meet the Kyoto target would affect day-to-day life. Whether your government chooses to restrict energy use by regulations such as alternate-da driving or through dramatic increases in the price of gasoline an home heating fuel, it a major public backlash if it does not ?rst ensure a consensus among Canadians on both the target to be adopted and the means that will be necessary to meet that target. Third, because the United States has indicated that it will not ratify the Kyoto Protocol, Canadian producers of both resource-based products and manufactured oods face the prospect of a signi?cant com etitive disadvantage. A anadian decision to ratify in the absence of Bnited States partlci ation could lead to job losses across a wide range of industnes. ore ominously, a decision to ratify now would have an immediate impact on Canada?s ability to attract new investments in operations geared to serving the continental and global markets. Fourth, at a time when security concerns are 0 ening new opportunities for energy development, a commitment to the yoto target would sacri?ce 1nvestment and job creation not only in British Columbia, Alberta and Saskatchewan, but in less advantaged regions including Newfoundland and Labrador, Nova Scotia and the North. Fifth, the impact on Canadian competitiveness, employment and investment will be compounded by the fact that the Kyoto Protocol provides no mechanism to recognlze the contributions that Canada can make to reducing lobal emissions of greenhouse gases by increasing exports of relative clean fuels such as natural gas. Sixth, the exclusion of the United States in addition to all of the develo ing world means that the Kyoto Protocol will cover at best one third 0 global greenhouse gas emissions. The result is that no matter The Right Honourable Jean Chr?tien, P.C., M.P. January 2, 2002 Page 3 how many jobs and how much income Canadians give up to achieve the Kyoto target, global emissions will continue to rise overall. 0 Finally, a commitment to ratify ?ow at this time would do additional damage to a Canadian economy eady reeling from the aftereffects of the tragic events of September 11, a cyclical downturn and severe structural challenges such as global overcapacity in sectors such as steel, petrochemicals, automobiles and forest products. As companies worldwide make decisions in the months ahead about where to consolidate roduction, a signal that Canada has no room for growth could have evastating consequences. There have been some suggestions that somehow Canada could meet the Kyoto targets with little cost or disruption to either the lifest les or incomes of Canadians. With respect, this is wishful thinking. anada?s prowess may indeed create new economic op ortunities in environmental technologies, but these will take time to deve op and will roduce gains that are modest relative to the economic costs of meetin the yoto target. To put it bluntly, serious questions remain about whether anada can meet its Kyoto obligations at all, much less at anything close to an acceptable price. Canada?s business leaders are committed to addressing the challenge of climate change in ways that as much as possible add to, rather than subtract from, both the standard of living and qualit of life of Canadians. To this end, Canada must work constructive with the nited States and the developing world to ensure broader global action, and I understand that credibility in persuading others requires a demonstrable commitment to efforts of our own. In arguin for greater re?ection before a decision on rati?cation, I am not sayin that anada should contribute little to the battle against climate change. am suggesting, however, that the most productive opportunities for Canadian leadership on environmental issues may lie beyond the Kyoto Protocol. Climate change is very much a long-term issue that demands consistent and coordinated global action in the decades ahead. In the meantime, the immense sums that Canada would have to spend to meet the Kyoto target could have far more im act on the health and well being of the world?s Citizens if committed instea to immediate and pressing causes such as ensuring clean drinking water across the developing world, or providing improved medical assistance to the many millions in need. . My advice, Prime Minister, is that Canada should proceed with great caution in terms of the Kyoto process. In particular, 1 thle 1t 13 essential for Canada to resist international pressure to ratify the Kyoto Erotocol right away. Before contemplating any suc binding commitment, I believe it IS essential The Right Honourable Jean Chr?tien, P.C., M.P. January 2, 2002 Page 4 ?rst to develo and debate ublicly a detailed strategy that lays out the mechanisms anada woul use to meet its Kyoto target, and second to ensure that there is a broad consensus that such a strategy makes sense for and is supported by all Canadians. I am convinced that leadership on environmental issues can be a key element in a national strategy for enhancing Canada?s competitiveness and economic growth and for reinforcing our country?s sovereignty and global in?uence. 1 am deeply worried, however, that a hasty commitment to the arbiltrary target set by the Kyoto Protocol would undermine both of these goa s. I would very much welcome an opportunity to meet with you privately at your earliest convenience to discuss this issue in greater de th and to determine how I and possibly the Canadian Council of Chief xecutives could be most constructive in helping you to develop a winning strategy for Canada on this issue of vital importance to our country and to the world. I do ho that you will agree to see me. I would not be so insistent were I not so eeply concerned about the very serious consequences for Canada of a hasty and insuf?ciently informed decision on rati?cation of the Kyoto Protocol. In_ the ex ectation that you will consider my intervention in the constructive an fnendly spirit motivated me to write to you, please accept my warmest regards. Emit CANADIAN COUNCIL CONSEIL CANADIEN OF CHIEF DES CHEFS Thomas d'Aquino President and Chief Executive President et chef de la direction January 25, 2002 Strictly Private and Con?dential His Excellency A. Paul Cellucci Ambassador Embassy of the United States of America PO Box 866, Station OTTAWA 5T1 Jam I noted with special interest reports of your address on the subject of the Kyoto Protocol. You should know that Canada's business leadership is fully and deeply engaged on this issue. My concern about Canada moving ahead with rati?cation and implementation is such that have written personally to the Prime Minister. On a con?dential basis. I am pleased to share with you a copy of my letter to him. As a ?rst ste . I intend to meet with Deputy Prime Minister. John Manley, on this subject in the near future. I would welcome an portunity to discuss this issue with you. In addition, I would like to brie you on the work of our recently-created CEO Action Group on Canada-United States Co-operatt'ou. I leave this week for the World Economic Forum meetings in New York and then I will be in London for board meetings. Perhaps ou and I might be able to get together soon after my return to Canada on ebruary 10. In the meantime. please accept my warmest regards. 6M: Royal Bank Centre a 90 Sparks Street - Suite 806 - Ottawa Canada KIP 584 Centre Banque Royaie 90. rue Sparks - bureau 806 - Ottawa - Canada 5134 Telephone i6i3i 238-3727 Telephone - Facsimile i6l3; 236-8679 T?i?copieur E-maii address ieadersw ceocouncii.ca Courrier ?iectronique Web Site Site tnternet Iformerly Business Council on National issues CANADIAN COUNCH. CONSEIL CANADIEN OF CHIEF EXECUTIVES DES CHEFS Thomas d'Aquino President and Chief Executive President et chef de in direction January 2, 2002 PRIVATE AND CONFIDENTIAL The Right Honourable Jean Chr?tien, P.C., M.P. COPY Prime Minister of Canada Of?ce of the Prime Minister Lan evin Block 80 ellington Street OTTAWA 0A3 Wt. fme/n 7 I am writing in a personal capacity about an issue that could have a powerful in?uence on the future of our country, erhaps even more rofound than the ?scal transformation that marked your two terms in 0 ice. I am referring to the issue of global climate change and in particular, the question of whether and when to ratify the Kyoto Protocol. I think that both of us share a desire to see the ?rst decade of the 21st century remembered as a period in which Canada seized the opportunities of a global economy and forged an unparalleled reputation as the best place in the world in which to live, to work. to invest and to row. Environmental policy provides an important arena for demonstrating anadian leadership, but if mishandled, the country's response to the Kyoto Protocol could turn the next decade instead into a period of precipitous decline in Canadian incomes and in Canada?s global influence. 1 want to assure you that Canada?s business leaders take the issue of climate change very senously. Canadian enterprises are leaders domestically and internationally in reducing greenhouse gas (GHG) emissions, in developing new environmental technologies and products and in exploring alternative ener sources. They will continue to pursue such strategies not just as good 10 al citizens. but also because improving energy ef?crency makes good usiness sense. Royal Bank Centre a 90 Sparks Street - Suite 806 - Ottawa - Canada KIP 534 Centre Banque Royale - 90. rue Sparks - bureau 806 - Ottawa - Canada KIP 584 Telephone (613) 238-3727 T?l?phone - Facsimile (613} 236-8679 T?l?copieur E-mail address leaders@ceocouncil.ca Courrier ?lectrontque Web Site Site internet formerly Business Council on National Issues The Right Honourable Jean Chr?tien, P.C., M.P. January 2, 2002 Page 2 However, when I hear that your government is prepared to move ahead quickly with rati?cation of the Kyoto P_rotocol, I and most other business leaders in Canada have serious reservations. I see the followrng as the most critical Issues: First, the magnitude of the Canadian challenge, a reduction in GHG emissions of at least 25 percent within six to ten years, is unprecedented. Meeting this target would require improvements in energy ef?ciency two to three times as great as those driven by the oil price shocks of the 19705. Second, the Canadian public has shown little awareness or understanding of the extent to which the policies needed to meet the Kyoto target would affect day-to-day life. Whether your government chooses to restrict energy use by regulations such as altemate-da driving or through dramatic increases in the price of gasoline an home heating fuel, it a major public backlash if it does not ?rst ensure a consensus among Canadians on both the target to be adopted and the means that will be necessary to meet that target. Third, because the United States has indicated that it will not ratify the Kyoto Protocol, Canadian producers of both resource-based products and manufactured goods face the prospect of a signi?cant com etitive disadvantage. A Canadian decision to ratify in the absence of nited States partici ation could lead to job losses across a wide range of industries. ore ominously, a decision to ratify now would have an immediate impact on Canada?s ability to attract new investments in operations geared to serving the continental and global markets. Fourth, at a time when security concerns are 0 ening new Opportunities for energy development, a commitment to the yoto target would sacri?ce investment and job creation not only in British Columbia, Alberta and Saskatchewan, but in less advantaged regions including Newfoundland and Labrador, Nova Scotia and the North. Fifth, the impact on Canadian competitiveness, employment and investment will be compounded by the fact that the Kyoto Protocol provides no mechanism to recognize the contributions that Canada can make to reducing lobal emissions of greenhouse gases by increasing exports of relative clean fuels such as natural gas. Sixth, the exclusion of the United States in addition to all of the developing world means that the Kyoto Protocol will cover at best one third 0 global greenhouse gas emissions. The result is that no matter The Right Honourable Jean Chr?tien, P.C., M.P. January 2, 2002 Page 3 how many jobs and how much income Canadians give up to achieve the Kyoto target, global emissrons continue to nse overall. 0 Finally, a commitment to ratify oto at this time would do additional damage to a Canadian economy eady reeling from the aftereffects of the tragic events of September 11, a cyclical downturn and severe structural challenges such as global overcapacity in sectors such as steel, petrochemicals, automobiles and forest products. As companies worldwide make decisions in the months ahead about where to consolidate roduction, a signal that Canada has no room for growth could have evastating consequences. There have been some suggestions that somehow Canada could meet the Kyoto targets with little cost or disruption to either the lifest les or incomes of Canadians. With respect, this is wishful thinking. anada?s prowess may indeed create new economic op ortunities in environmental technologies, but these will take time to devefop and gains that are modest relative to the economic costs of meetin the yoto target. To put it bluntly, serious questions remain about whether anada can meet its Kyoto obligations at all, much less at anything close to an acceptable price. Canada?s business leaders are committed to addressing the challenge of climate change in ways that as much as possible add to, rather than subtract from, both the standard of livin and qualit of life of Canadians. To this end, Canada must work constructive with the nited States and the developing world to ensure broader global action, and I understand that credibility in persuading others requires a demonstrable commitment to efforts of our own. In arguin for greater reflection before a decision on rati?cation, I am not sayin that anada should contribute little to the battle against climate change. am suggesting, however, that the most productive opportunities for Canadian leadership on environmental issues may lie beyond the Kyoto Protocol. Climate change is very much a long-term issue that demands consistent and coordinated global action in the decades ahead. In the meantime, the immense sums that Canada would have to spend to meet the Kyoto target could have far more im act on the health and well being of the world's crtizens if committed instea to immediate and pressing causes such as ensuring clean drinking water across the developing world, or providing improved medical assistance to the many millions 1n need. My advice, Prime Minister, is that Canada should proceed with great caution in terms of the Kyoto process. In particular, I think it is essential for Canada to resist international ressure to ratify the Kyoto Protocol right away. Before contemplating any sucl'i binding commitment, I believe it is essential The Right Honourable Jean Chr?tien, P.C., M.P. January 2, 2002 Page 4 ?rst to develo and debate publicly a detailed strategy that lays out the mechanisms anada would use to meet its Kyoto target, and second to ensure that there is a broad consensus that such a strategy makes sense for and is supported by all Canadians. I am convinced that leadership on environmental issues can be a key element in a national strategy for enhancing Canada?s competitiveness and economic growth and for reinforcing our country?s sovereignty and global in?uence. I am deeply worried, however, that a hasty commitment to the arbiltrary target set by the Kyoto Protocol would undermine both of these goa s. I would very much welcome an opportunity to meet with you privately at your earliest convenience to discuss issue in greater deEth and to determine how I and possibly the Canadian Council of Chief xecutives could be most constructive 1n helping you to develop a winning strategy for Canada on this issue of vital importance to our country and to the world. I do ho that you will agree to see me. I would not be so insistent were I not so eeply concerned about the very serious consequences for Canada of a hasty and insuf?ciently informed decision on rati?cation of the Kyoto Protocol. In. the ex ectation that you will consider my intervention in the constructive an friendly spirit motivated me to wnte to you, please accept my warmest regards. 6 CANADIAN COUNCH. CON SEIL CANADIEN DES CHEFS OF CHIEF Thomas d'Aquino President and Chief Executive President et chefde in direction January 21, 2002 The Honourable William Graham, P.C., MP. Minister of Foreign Affairs Government of Canada House of Commons Room 259, West Block OTTAWA KIA 0A6 Jam ?ll; Congratulations on your appointment as Minister of Foreign Affairs. Your knowledge of the ?eld and passionate commitment to projecting Canadian excellence abroad, am 1y qualif?ygou for the post. Toget er with my colleagues on the Canadian ouncil hief Executives, I look forward to working with you. We last met on the occasion of John Manley?s Ministerial Retreat. I very much hope that you will continue this initiative in 2003. eSm? /rm Kindest regards. c.c. 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To ensure proper citation and to facilitate relocation of an item, the source of the material and its reference number should always accompany the copy. Pour les documents faisant encore l?objet d?obligations l?gislatives, contractuelles ou institutionnelles, les usagers s?engagent a respecter ces obligations eta ne pas utiliser les documents des collections de BAG de fagon a nuire aux droits d'autrui. doivent assumer entierement toute responsabilit? qui pourrait d?couler de I'utilisation d'une reproduction de document. BAC decline toute responsabilit? quant a I'utilisation non autoris?e de documents provenant de ses collections. Afin de citer un document avec exactitude et d?en faciliter le rep?rage, sa source et son num?ro de r?f?rence doivent toujours accompagner Ia reproduction. President's Correspondence to the Prime Minister and Senior Officials 2002 File 9 REFERENCE NUMBER NUMERO DE REFERENCE: B15526-869-9-E, Vol. 67 32 DATE 12/09/2016