Environment Committee on May 2nd, 2024

[Markirit Armutlu]

Our understanding is that to be included in the national inventory report, the data would need to be collected for a considerable number of years. These programs were all still relatively new, so they had not yet been sent into the national inventory report.

[Branden Leslie, Conservative, Portage—Lisgar, MB]

Are the reductions that are mentioned in this report included in the NIR, then?

[Markirit Armutlu]

No.

[Branden Leslie, Conservative, Portage—Lisgar, MB]

Okay.

Has there ever been an audit done of the national inventory reporting numbers as they are submitted?

[Markirit Armutlu]

I would not be able to answer that. It was not part of our audit.

[Kimberley Leach]

The answer is that we use the national inventory in a lot of the work we do on climate change. Have we audited the whole inventory? No. Have we audited bits and pieces? Yes. You'll see those in some of our past reports, including the report we did last year on the Canadian Net-Zero Emissions Accountability Act.

[Branden Leslie, Conservative, Portage—Lisgar, MB]

Do you think there would be value for money in doing that across the board?

[Kimberley Leach]

For the national inventory?

[Branden Leslie, Conservative, Portage—Lisgar, MB]

Yes.

[Kimberley Leach]

That would be a massive undertaking. We are part of the international...or we see what other countries are doing in terms of their audits on climate change as well. I can't recall a case where the entire national inventory has been under audit. Of course, you can do sectors. You can do specific programs. Auditing the whole national inventory and everything that goes into that would be an enormous undertaking.

[Branden Leslie, Conservative, Portage—Lisgar, MB]

Is it normal to have a department have no strategy and yet spend $1.5 billion on a plan to reduce emissions? Is that a typical thing across departments, in your experience?

[Jerry V. DeMarco]

I can handle that one. I wish it were unique to this report, but even amongst these five reports, there's a lack of a horizontal decarbonization strategy in one of the other reports. In two of the five here, we have that situation. Having a strategy that brings it all together is an integral part of good performance management, but we have unfortunately seen more than one instance where there's an absence of strategy.

[Branden Leslie, Conservative, Portage—Lisgar, MB]

How could taxpayers ever know they're getting value for money out of any of these programs then?

[Jerry V. DeMarco]

That's one of the themes of one of the reports today in terms of the net-zero accelerator. We believe that if you are going to be essentially spending taxpayer money in such large sums, such as $8 billion for this, there's a duty for the department to indicate to Canadians what reductions they're getting from that and what cost per tonne they are achieving through those reductions.

[Branden Leslie, Conservative, Portage—Lisgar, MB]

I'm going to think back to the previous report you had where we were double-counting trees. We've been double-counting emissions, seemingly having artificially high emissions reductions reporting.

Also, as a very recent concern, there was a recent announcement from the Minister of Environment regarding the 2022 numbers that came out around noon today showing 708 megatonnes of emissions. As a reasonable person, I went to the website of Environment and Climate Change Canada and looked back at previous years, because they said that this was the lowest in the last 25 years outside of COVID.

At that time, at around 1:30, the website indicated that there were actually lower emissions in 2009, 2010 and 2016—for sure in 2016; that I know. Why this is relevant is that, instead of printing off a piece of paper today, I went to the website right now, and those numbers are different.

[The Chair, Liberal, Francis Scarpaleggia]

We're really over time, so maybe one of your colleagues can take up the rest of the commentary.

We have to go to Madam Chatel now.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you very much, Mr. Chair.

I'd like to get back to the questions my colleague Mr. Trudel asked, and to recommendation 36, to which the industry department responded. I would therefore ask Ms. Stéphanie Tanton of the department to answer, if she's with us. If she's not, I would ask Mr. Lapointe to do so.

We received the national inventory report, which showed that Canada's climate policies were working. We've had the lowest GHG emissions in 25 years, with the exception of the levels recorded during the years of the pandemic. The fact remains that the oil and gas sector was yet again the largest source of these emissions in 2022.

Ms. Stanton, according to recommendation 4.36, concerning the Strategic Innovation Fund's net zero accelerator initiative, the department “should analyze how to better encourage large emitters to apply to the initiative”. The department answered that it had some possible solutions and that it had received a number of applications. Sixteen large emitters have submitted projects since March 2022.

Could the departmental representatives give us more details about this response to recommendation 4.36?

[Stephanie Tanton, Assistant Deputy Minister, Department of Industry]

I'd like to thank the member for her question, Mr. Chair.

With regard to the large emitters, as the report indicated, in the early initial days of the NZA, ISED encountered challenges attracting large emitters. To address the challenge, ISED launched a call to action in March 2022. It was closed on June 30, 2022. Of Canada's 55 identified large emitters, 16 applied through the CTA. In addition, ISED received another 23 applications from other companies.

To date, funding has been provided through two large emitter projects to support production processes in steel. These projects have a combined six megatonnes of direct on-site facility reductions. The full application for another seven projects is under way, and two have completed the due diligence process. Moving forward, ISED is committed to continue to work with industry to identify opportunities to address barriers for large emitters to advance on these projects. We continue to engage with industry, and we'll continue to engage moving forward.

[Sophie Chatel, Liberal, Pontiac, QC]

We're going to monitor that very closely. Thank you.

I'd like to ask the commissioner a question now, but would first like to thank him for his reports.

The government is currently working on developing a strategy for sustainable agriculture. My understanding is that the strategy will be developed by various people in that sector.

Commissioner, do you think this strategy will satisfactorily address the first recommendation in your report on sustainable agriculture?

[Jerry V. DeMarco]

I'm pleased with the responses to our report because they're clear and timelines have been set. One example is the department's response: It's going to finish developing the strategy this year, in 2024. Better late than never; we've been waiting for it since 2020.

The department said it was going to finish developing its strategy. Will I be happy with the strategy? I'd have to read it before saying so; I don't yet know what it's going to contain.

[Sophie Chatel, Liberal, Pontiac, QC]

Great. Thank you.

I'm going to continue on the topic of agriculture, Commissioner.

If you had recommendations to make about developing this strategy, including any missing links between the various departments and programs, what would they be?

[Jerry V. DeMarco]

That has to do with recommendation 29 of our report, in which we recommend five categories of measures for sustainable agriculture. You can read it later. It would also have to be harmonized with the other departments. We've discussed that repeatedly.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Mr. Trudel, please go ahead now for two and a half minutes.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Thank you, Mr. Chair.

Mr. DeMarco, in your opening statement, you said quite a few surprising things, but I'd like to return to one item in particular. You said that you had also found that the department didn't always know by how much most of the companies taking part in the initiative would be reducing their emissions, or whether the funding granted would lead to reduced emissions.

That's pretty important. It's rather haphazard: Money is being invested but no one knows how things are going to work. How can that be?

Billions of dollars are being invested to help companies reduce their greenhouse gas emissions. The initiatives have to work. Otherwise, there's no way of determining whether they're working or not.

How is that possible?

[Jerry V. DeMarco]

As Mr. Lequain was saying, in some of the project categories, the target date is 2050 rather than 2030. There are some risks and uncertainties with respect to these projects, particularly for those making use of new technologies. It may well be that it's too difficult to estimate reductions for some of the projects.

However, the fund gets us to net zero more quickly. If the projects are targeting reductions, we want to have actual numbers, and we want it specified in the contribution contract.