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Danielle In The House, November 20: Electric Utilities Amendment Act, Amendment A1
Ms Smith: Thank you, Madam Chair. Well, I wasn’t expecting to be in the Legislature this early in the morning. I think we’re now in our 15th hour of debate on one of what will ultimately be three bills that the Official Opposition and members of other opposition parties believe need to have significant amendments to in order to make them right.
The amendment that is before us on Bill 8, the Electric Utilities Amendment Act, 2012, is, I think, the only way that we are going to truly correct the problems that were created when Bill 50 was passed, inappropriately in our view, inappropriately in the view of many watchers of the electricity business, inappropriately in the view of landowners. Bill 8 as it was put forward demonstrates, I think, that they’re at least recognizing they made a mistake when they passed it in the first place. But to truly undo the damage that was created when Bill 50 passed, we need to also pass the amendment put forward by the hon. Member for Rimbey-Rocky Mountain House-Sundre.
Before I get to the meat of this amendment, I do just want to talk a bit about process. As a new MLA, a new Member of the Legislative Assembly – and I speak, I think, on behalf of many of my colleagues who are new in the Legislature – we actually took the words of the Premier at face value when she was running for the leadership of the Progressive Conservative Party a number of years ago. I find it remarkable that we are in a position now where we have a government that is prepared to go through and make the exact same mistakes as they’ve made in the past. I think that this is contrary to what the Premier promised Albertans. I think this is contrary to what we in the opposition expect. I think it’s contrary to what new members, not only on this side but also on that side, expected that their Premier would do once she won another majority government.
I want to read a column from the Premier that was written in August of 2011, and I think it goes directly to the issue of what we’re facing today. We’ve got an amendment before us to correct a piece of legislation that was passed in haste, that was a mistake, and now here we are years later having to come back to correct it.
What the hon. Premier noted in her leadership campaign was: We need to change how we make decisions. We must make time and processes available for consulting with Albertans before we pass laws. That doesn’t mean every Albertan will agree with every decision, but there will be time to learn about the issue and [there will be time to] weigh in.
We need to change how the Legislature and MLAs operate. More free votes so MLAs can reflect constituents’ views . . . and, importantly, . . . more time between proposing and voting on legislation.
This was a commitment.
The Deputy Chair: Could you please table that document that you just quoted from at the appropriate time?
Ms Smith: I will be happy to table the document at the appropriate time.
The Deputy Chair: Thank you.
Ms Smith: Now, I think that if you look at the manner in which the opposition and the new MLAs have been conducting business in this Legislature, you’ll see that we genuinely thought that we would be doing business in a different way. There have been, I think, 700 pages, if you count Bill 7, of legislation that have been dropped on this Legislature to go through, review, for us to identify amendments, to debate as a caucus. We are now in our fourth week of debating these issues. In that time, when I look at the way in which we have been able to work constructively with the government, we look at, for instance, Bill 1, where one of our own members, the Member for Calgary-Shaw, was able to propose a number of amendments. One of the amendments was duly debated. It was discussed, it was agreed to, and it was ultimately passed. I think it made the bill better.
It’s I think a credit to this Legislature when you look at how that bill passed through its different processes, where the government gave due consideration to the amendments that we put forward.
Again, as the Premier said: we may not agree on everything, but we can agree on some things. In that case we did agree on some things. We improved the bill, we made it better, and when it passed, my recollection is that it passed with unanimous consent of this Chamber. Every single party felt that they could support that bill. That to me is the way this Legislature is supposed to work. Again, we may not agree on everything.
I can go to looking at Bill 3, another example where the opposition put forward multiple amendments. One of them was put forward by the hon. Member for Calgary-Fish Creek, working with the whip on the other side to put forward an amendment that would strengthen the provisions for our schools to be able to deal with issues of weapons on school grounds, to deal with drugs on school grounds. This to us and I think to all of the members in this Chamber was an important amendment. It was debated, it was discussed, it was agreed to, it was given due consideration, it was passed, and I think it made the legislation better.
Now, not all of our amendments were agreed to. We know that the Education minister spoke at length about why he opposed many of the other amendments that were put forward by the hon. Member for Chestermere-Rocky View. But the point is that the process in that case worked. We put forward our amendments. We debated them in the light of day without having to go through a full evening session where no one got any sleep. We had respect on both sides of the Chamber. I understand that the debate got heated from time to time, but we were able to debate it, we were able to look at the amendment appropriately, we were able to come to an agreement, we were able to improve the bill, and, ultimately, it passed.
I wasn’t here when it was passed because, again, I think it was passed in the wee hours of one of the evenings. I would have liked to have been here, to have been able to have a final moment to be able to discuss that and to lend my support to it and to vote on it.
Again, this is an example of how you can work together collaboratively, come to a conclusion, and pass the legislation in a way that I think respects all of the members in this Chamber Now, last evening, I don’t know how things got off the rails. I thought that our House leader and the House leader of the party opposite were working pretty well together getting legislation through this Chamber. I thought that there was an agreement, some mutual respect, some understanding that the members on this side of the Legislature take the issue of being serious parliamentarians seriously. We read the legislation.
The Deputy Chair: Hon. member, I’ll just remind you that we need you to be speaking to the amendment.
Ms Smith: Absolutely. As I said, this is all related to the fact that we have different processes that worked for dealing with amendments that improved the bills. This is what we are attempting to do with this amendment that we’ve put forward on Bill 8. We are attempting to go through a similar process that successfully managed to improve Bill 1 and get our support, that managed to improve Bill 3 and get our support. We think that if the government takes that same approach in dealing with this amendment as the way that they dealt with our previous amendments, with respect, with due consideration, we may be able to improve this bill in a way that will not only satisfy the needs of our constituents but also will satisfy the needs of the constituents of the members opposite.
I think you can’t talk about this amendment until you talk about why this process has become so dysfunctional in the course of 15 hours. I don’t know what occurred over the course of the last 15 hours that has caused us to go from a process that was working reasonably well to going towards a process that is not working for any of us and which, I think, violates the spirit of what the Premier had suggested when she talked about slowing legislation down, when she talked about having a process where we could take time between readings, where she talked about free votes and giving due consideration. I, frankly, haven’t seen that. I’m once again wanting to support my colleagues on this side in the fact that we have been constructive in developing a process that we think leads to better legislation.
Last night there were an additional four bills that passed. The home warranty legislation passed which, once again, is one that did not receive a lot of push-back from other members of the opposition. We had issues with Bill 6, the fact that they were increasing the fines extremely without putting those dollars into a special fund to be able to deal with the victims of those violations.
We think that could have made the bill better. There wasn’t an opportunity for us to be able to amend it, but we certainly spoke to it and made that point. Another piece of legislation that passed, Bill 9, was the bill where we were dealing essentially with some housekeeping issues in dealing with changes to the corporate tax structure. Bill 10, the Employment Pension Plans Act, again allowed for our oversight bodies to have a greater purview to look at a range of pension plans.
Once again, I believe that the opposition members have put forward amendments, they had them debated, there was due consideration. We didn’t get our way on all of those amendments, but at least we felt that there was due consideration being given to these bills. Unfortunately, again, something happened in the last 12 hours, and I’m not quite sure what it was. We’re not seeing, I don’t think, a level of respect and decorum for the process, that was promised by the Premier when she ran for the leader of the Progressive Conservative Party.
I’m glad that the Deputy Premier is here. I’d kind of like him to give me a display of the kind of behaviour that we saw last night.
Maybe I’ll model it. My understanding is that as our members were speaking, he was doing something like this and actually handing pieces of paper back to others so that they can go like this. [Ms Smith scrunched a piece of paper] I think there were a couple of hon. members from the other side that were doing things like this as we were speaking. [Ms Smith tore a piece of paper]
The Deputy Chair: Hon. member, please address amendment A1.
Ms Smith: I’m just trying to understand what we’re going to be experiencing today as we debate these amendments. I’m trying to understand whether the hon. members opposite take this process seriously. We have discussions in this Chamber about bullying. I have been to events in the last couple of weeks talking about bullying. The behaviour that I am seeing on that side towards these hon. members is outrageous, the fact that they’re sitting here now pretending that they didn’t behave this way last night.
I can tell you that what this does is that it diminishes the process. When we come here and we are putting forward hours and hours of our time to go through and read these bills, we are putting forward hours and hours of our time to go through and talk to stakeholders, hours and hours of our time to go through and draft amendments to come here to debate them, that is the behaviour that we see on the other side. Now that we’re in the light of day, maybe the Deputy Premier isn’t going to behave that way. But I think the media, I think the public need to understand that we have a government that does not take this process seriously. That, I think, is the biggest shame. I do not think that is raising the bar.
What would we do if we were elected? We talked about doing something quite a bit different on the process, and I think what we had proposed was very much in line with what the hon. Premier proposed as well: taking the time between amendments, taking the time to go back and consult, taking the time to make sure that we get the legislation right. We would not be here today addressing this issue and addressing this amendment that has been put forward by the hon. Member for Rimbey-Rocky Mountain House- Sundre if the government had actually had a different process, where we would be able to go through and properly assess legislation, talk to stakeholders, and be able to get an appropriate result.
On the issue of this particular amendment one of the reasons why it is coming forward now is because the government once again took a half measure in how they were trying to assess and deal with the problems that they brought forward because they passed inappropriate legislation in the first place.
I’m going to read into the record a column that was written and appeared in the Calgary Herald which quotes the Energy minister.
It talks about the reason why we need to go back, pass the amendment that has been put forward by the hon. Member for Rimbey-Rocky Mountain House-Sundre, and actually fix this bill once and for all.
[The Energy minister] introduced legislation to repeal controversial Bill 50, but he says the law that empowered cabinet to approve $8-billion worth of critical transmission projects without a public hearing was necessary at the time. He said Tuesday it was not a mistake to pass the Electric Statutes Amendment Act to seize that power from the Alberta Utilities Commission in 2009.
“Different times; different needs,” he told reporters at the legislature.
“Now it’s important that we send this responsibility back to the Utilities Commission. The decision to pass that bill to move forward with that critical infrastructure was needed at the time it was done by the government.”
The law, which sparked outrage across the province, enabled cabinet to give the green light to five transmission projects, including two high-voltage lines connecting Edmonton and Calgary – worth more than $3 billion – as well as a $400- million line into the industrial heartland northeast of Edmonton. Now, I’ll go on referencing this once again because it goes directly to the point.
The Deputy Chair: Hon. member, you will table that document as well at an appropriate time?
Ms Smith: I’m happy to table this document.
The Deputy Chair: Thank you.
Ms Smith: It goes directly to the point that this amendment is trying to address. We have acknowledged in our second reading of this bill that part of what occurred when the bill was being drafted, debated, and what’s happened today is that the world has changed. Bill 50 was created in a world where we thought that we would have cheap and plentiful coal-fired production into the foreseeable future, where we would see natural gas prices remain sky-high in the double digits, where in this province we were even looking at other potential options.
I recall going up to the Peace Country and talking to a number of people who were concerned about the creation of a new nuclear power plant, with 4,000 megawatts of power. We know that there have been discussions, potentially, about bringing hydro power online.
What has happened between the time that this bill was introduced and crafted, the time that the hon. Energy minister talks about, is that the world has changed. Now, they recognize one portion, that the world has changed to the point where we have to go back and allow for the Alberta Utilities Commission to do a full independent needs assessment. We completely agree with that. We, in fact, felt that we should not ever have taken that power away from the Alberta Utilities Commission because if we had maintained that power with the Alberta Utilities Commission and we had given an appropriate oversight of these various projects that were approved by cabinet fiat, by legislation that allowed the cabinet to make these decisions, we wouldn’t be in the position we are in today.
We, actually, would likely have a number of statements on the record by a number of different groups that would either affirm the government’s position that, indeed, this critical infrastructure is necessary, or it would reject the government’s position and support the position that we have heard from multiple landowner advocates, multiple property rights advocates, multiple consumer association groups. We simply think the government made two mistakes, not only in removing that regulatory process, but the second mistake was thinking that they were power engineers and could figure out what the power needs of this province would be on a go-forward basis.
Now, let’s remember what we’re hearing now. We’re now hearing that at the time the reason why they said that we needed this transmission production was because of the fact that Calgary would be in the dark, that the lights would go out, that we would have blackouts. Well, now what we’re hearing is that the argument has changed. Now the argument that we hear is that the reason we’re building it is because we’re actually building out 30 years into the future. So what has happened is that, yes, the world has changed – and the government has recognized that – but rather than correct the true error that they made and take these projects and put them back to the Utilities Commission for a proper review, they’re trying to change their argument to justify why they’re going to burden consumers and industry with the cost of building a bunch of additional transmission lines that we simply don’t need.
We believe that by putting forward this amendment to repeal section 41.1 and replace it with the following, we will be able to accomplish this task. So 41.1(1) in the amendment that we’re proposing would state that “a transmission facility designated as critical transmission infrastructure under section 41.1 of this Act as it read immediately prior to the coming into force of the Electric Utilities Amendment Act, 2012, shall be reviewed by the . . .” [Ms Smith’s speaking time expired]
(continued further on amendments)
Ms Smith: Thank you, Madam Chair. I thought it might be interesting to just start my comments once again on the amendment by reflecting on the practice of speaking at length.
The practice of speaking at length to a piece of legislation has been an effective tool for delaying unpopular, contentious, or, in the cases we see with this bill, bad legislation. If you want to know where the first use of it came from, we see its first use in ancient Roman times. Cato the Younger, a Roman senator, would use the rules requiring senate business to be concluded by dusk by speaking continuously until nightfall. Quite interesting. One of the famous times that Cato used this technique was in 59 BC in response to a land reform bill.
The Deputy Chair: Excuse me. Hon. members, I know you’re having some important conversations, but can we keep the level of noise lower, please? Thank you.
Ms Smith: Thank you, Madam Chair. Once again, they may not believe this on the other side, but we actually are trying to give them an opportunity to correct a piece of legislation, that has caused them great grief for the last three years, through this amendment that has been put forward by the hon. Member for Rimbey-Rocky Mountain House-Sundre.
Going back to an independent needs assessment is absolutely favoured by this caucus, is favoured by the landowners who have been advocating against this bill for some time, but it is not going to be enough for the consumer groups, especially the industrial consumer groups, who are still going to be harmed under the legislation as it is currently written unless we empower the Alberta Utilities Commission to go back and review these five pieces of infrastructure that have been passed by legislation without going through the proper process of scrutiny.
I’m still not quite sure why the government doesn’t see that this is actually an opportunity for them to either get independent assessment and approval and validation of the decisions that they made, which will give them the ammunition that they need – and
I’m sure they’re confident that these transmission lines are needed. It will give them the ammunition that they need if on the table we have the Alberta Utilities Commission saying: “Yes, they’re needed. Here are the reasons why. We’ve done the cost benefit analysis.” Right now we have a situation where we’ve got the government saying: “We’re not experts in this field. We’re looking at a report that was given to us in 2003. The world has changed because of the different prices for coal and natural gas, the different requirements on coal, but we’re going to go ahead with it anyway. We’ve changed the rationale now for why we need them.”
That is not going to fly with landowners, and it is not going to fly with consumer groups. If it is the case that we truly need those five independent transmission projects, the government should not have any fear of going through the regulatory process to assess and get the validation that they need. Once you have that independent regulatory approval, once you have the regulator saying, “Yeah, this is important critical infrastructure,” I think that what they will find is that a lot of landowners will say, “All right, then.” Right now landowners simply don’t trust that the government has done the due diligence on this because the rationale for why we need these projects keeps on changing.
The rationale, as I mentioned before, initially began because they said we were going to be in blackout in Calgary in 2009. That clearly hasn’t happened. Then there were reports that suggested that part of the reason this transmission needed to be built was so that it would enable the export of power, which, you can imagine, has a number of landowners very concerned that it’s Alberta ratepayers who would be paying the price for lines that were ultimately to be able to give American consumers lower electricity costs.
I have to go back to when I first began to be introduced to the issue of electricity and the concerns that we had. I remember back in 2006 that the world was a different place. People were concerned. We had just been seven years into deregulation. As the Alberta director of the Canadian Federation of Independent Business I was receiving calls from my members about the concerns they had about the cost of power. They were actually son concerned about the cost of power that we got involved with the government in trying to change the way the Utilities Consumer Advocate did its work.
What we were hoping to do as I was a representative for small business – and I think this was Bill 46 – was to be able to get an independent oversight body on the Utilities Consumer Advocate. It would have included a representative from small business through the Canadian Federation of Independent Business, it would have included a representative from the Federation of Alberta Gas Co-ops, it included a representative from the REAs, it included a representative from the Alberta Association of Municipal Districts and Counties, it included a member from the Alberta Urban Municipalities Association, all of whom were very concerned about being able to have an opportunity to intervene in a regulatory process to ensure that costs were reasonably shared, to ensure that we only built the amount of transmission that we needed, to ensure that there was oversight of the transmission line and distribution process so that we weren’t having extra costs being built into the costs that would ultimately flow through to consumers.
I remember that at the time there were two associations that did not want to be part of this process. One of them was the Consumers’ Association. There were a couple of lawyers there who were very, very concerned about all of the groups getting together to do a single intervention. The government was making the argument that by having a single intervention, it would streamline the regulatory approval process, we would be able to move forward ensuring that we weren’t having overlapping arguments, we wouldn’t end up with weeks and months and years of potential delays on these types of projects, and we would be able to ensure that we were also doing our work of protecting the consumers.
The other group, though, besides the Consumers’ Association, that rejected this process was IPCCAA. They were the big, institutional representatives. The Consumers’ Association and IPCCAA, like all of those other associations that I’ve mentioned – AUMA, AAMD and C, the REAs, the gas co-ops, and CFIB – had expertise on staff to be able to do their interventions at these rate hearings and also interventions when transmission lines were proposed. What was happening is that they were overlapping with each other, so the government wanted to streamline the process.
The reason the Consumers’ Association and IPCCAA did not want to be part of the process, though, is because they never believed that the government would truly make the Alberta Utilities Commission independent, and they worried that if they collapsed and moved into a government body and did not have that independence, ultimately what would happen is that we would go down the path, and the Utilities Consumer Advocate would not be able to be that effective voice for consumers. I ended up opting out of this process because it seemed to me that they were going in the wrong direction. At the time CFIB chose not to continue with having a representative on this board. I can tell you that from what I’ve seen that has happened in the subsequent years, the Consumers’ Association and IPCCAA were absolutely right because what happened through the process of Bill 50, when these transmission lines came forward and were approved by cabinet, is that we didn’t hear the Utilities Consumer Advocate able to speak publicly about it. They commissioned a separate report, a separate report that actually confirmed what we heard all these other industry groups saying, all of these other consumer groups saying, that it was an overbuild that was unjustified. I feel badly that I didn’t listen to the Consumers’ Association and I didn’t listen to IPCCAA back then. I actually trusted that the government believed that the regulatory process could be streamlined, that all of the interests would be listened to and heard, that the consumer interests would be protected. What we’ve seen in the subsequent years is that that hasn’t been the case.
I suspect part of the reason why the government is not seriously considering the amendment that’s been put forward by the Member for Rimbey-Rocky Mountain House-Sundre is because they’ve lost control over the costing process, especially for the two HVDC lines that are being proposed for the west as well as for the east. I recall reading a report that was provided to me by the Member for Rimbey-Rocky Mountain House-Sundre where the regulator had actually approved a certain amount of costs for the preconstruction and all of the pre-engineering work that needed to be done on these two lines, and they’d received approval for about a couple hundred million, if my memory serves me correctly, of construction costs.
What actually happened, though, is that these two companies went ahead and invested well over a billion dollars in both of those two transmission line projects.
Here’s the thing. If this is the case, that part of the reason why the government is fearful of going back to the drawing board on these lines is that they’re not going to be validated and approved by the Alberta Utilities Commission and they’re worried that they’re going to potentially have to break contracts with those two transmission line companies, my view is that it’s better to compensate those companies for their sunk costs now and limit your liability rather than potentially go through with projects that we don’t need and impose tens of billions of dollars of costs on ratepayers.
I will have more to say about this, Madam Chair, but I think maybe if we did a motion to adjourn and came back to this later this evening, that might satisfy everyone. I’m prepared to make the motion to adjourn, to do that so that we can move on to Bill 2. I will then abridge my comments and hope that we can return to this later.
Thank you, Madam Chair.
(Continued on further amendments)
Ms Smith: Thank you, Madam Chair. I’m delighted to rise to speak in favour of this amendment. I would just make note that we probably could have avoided being here throughout the entire night if the members opposite had been, I think, respectful of the process, acknowledged that this was the amendment that I was hoping to be able to speak to because I feel quite passionately about it. Now we’ve gotten, after a lot of lack of sleep, to the point where we were hoping to have been yesterday when the two House leaders began speaking.
I appreciate that the members opposite have allowed me the opportunity to be able to speak to this amendment because it is something that I think is missing from the current legislation. I do think that this will go a long way towards giving the energy sector the certainty that it needs when it comes through this approval process.
In the second reading on this bill I mentioned a couple of examples where the regulatory approval process had been excessively delayed, which I think was the reason why the Energy minister and the Minister of Environment and Sustainable Resource Development embarked on this process for how we might be able to reduce the regulatory timelines. One was an example where a company was able to get approvals in Saskatchewan in two hours but took nine months here. Another was a company that looked to get approval in Saskatchewan and got it within 54 days; it took over two years here. Another was an oil sands project that took nine years and 300 permits and licences and approvals to get through the process. This is the very nut of what it is that this bill is trying to accomplish.
Unfortunately, by failing to put in specific time frames for how the regulator is expected by this Legislature and expected by our elected members to proceed with and approve these applications, it has been left out of the bill. The way the bill is currently written, it gives all of that discretion and latitude to the regulator, and we wouldn’t be in the position that we’re in today if the regulator had demonstrated responsibly that it was able to proceed with these applications in a time frame that was reasonable for industry as well as respecting the needs of landowners and the needs of our environmental community and the concerns that they have. When I was down in Montana, I talked with a number of people who were in their department of environment about the process that they went through for approving the leg of the Keystone XL pipeline through the state of Montana. It was very interesting when we began our conservation. They said, “Well, once we received the application, we had nine months to be able to dispense with it.” I asked: “Where’s this magical nine months?
Where does that come from?” They said, “It is prescribed to us that we have to complete this application process within nine months.” Now, there are different avenues that can go off that path, but what had happened is that it created a discipline among the regulators that they had to get all of their work done within a period of time. I think that that’s the job of this Legislature. It’s t actually set those parameters for the regulators and then have the regulators work towards that.
Now, I do recognize, as the hon. Member for Strathmore- Brooks pointed out, that it isn’t a one-size-fits-all. We have talked to industry, and we understand that there are many, many different types of applications. For some you may only need four or five days to get approval for, to be reasonable. For others it may take longer, particularly with some of these oil sands projects. It may end up taking a year or two. This is why I think it has been crafted in a way that allows for the kind of flexibility that the minister believes he needs, which is allowing for cabinet to be able to make the different time periods and different rules, but it sets the overall objective that generally speaking we want the regulator to come up with a decision within 180 days, within six months, once an application has been submitted.
We think that this is a way for us to be able to set a certain amount of parameters that allow us to also have some measure of whether or not we’re being successful. Once you’ve actually established that most applications should be completed within 180 days, then you’re able to go back and assess how much success they had in doing that. I know that this is something that the minister wants to have in regulation. What I worry about is that if we leave it to the discretion of the regulator, we’re not going to achieve the certainty for industry that we want. I would ask that the members opposite consider this amendment seriously. We think it is something that industry needs to be able to get the certainty that they need.
The only disappointment I would register. Myself and the hon. Member for Strathmore-Brooks have had lots of opportunity over the last week to talk with different associations. We’ve spoken with CAPP. We’ve spoken with CEPA. On Monday we spoke with the geophysical contractors. I know that the Freehold Owners Association is taking a look at this legislation, and they would like to have amendments. I am saddened that we are coming to the end of the process to amend this bill. I’ll speak more about that when we get to the third reading. I think that because we rushed through it, because certain groups haven’t been able to see the actual letter nof the legislation and would have liked to have been able to make changes, we actually are shortchanging all of the associations that
I think this bill is supposed to benefit. We’re shortchanging the landowners, who remain concerned that their interests are not going to be fully protected and actually are seeing that some of the current rights that they enjoy are being rolled back, and the issue of public interest and the concern that the public has about making sure these decisions are made in the public interest, with due respect for the environmental concerns.
I’m worried that because we have raced through and I think the government has not given due consideration to the full range of stakeholder consultation that needed to be done once this bill was introduced, there are still going to be some serious problems with this legislation. To me, though, this one is an amendment that I can’t see why the government would oppose. They’ve stated on the record they want to have timelines. I think it’s the job of this Legislature to meet that expectation with the public, with the industry, that there are going to be some timelines. That’s what this amendment aims to do.
I would ask the hon. members to register their support. I’ll be voting in favour.