Environment Committee on May 2nd, 2024

[Jerry V. DeMarco]

The way its being done now, no, that's not sustainable.

[Adam van Koeverden, Liberal, Milton, ON]

Thank you very much.

Mr. Drouin, report number three actually found that all of our implemented initiatives are being quite effective. They're strongly aligned. Eleven of the 16 waste reduction activities we've examined have been delivering good results.

Can you explain to this committee how we can reaccelerate those activities and whether motions to bring back plastic straws would bring us in the right direction or the wrong direction?

[Dany Drouin, Director General, Plastics and Waste Management Directorate, Department of the Environment]

Your question asks about what a circular plastic economy would achieve in Canada and, currently, it's a linear system. We produce, we use and we dispose of plastics. That's how it works, essentially.

The circular economy is on the way, though. It's not happening at the pace that it should, but it is happening. Accelerating action would include getting rid of some items outside of the economy like the bans that I think you're referring to and recycled content mandates so we keep the value of the plastics within our economy through the reintroduction of that material. Reuse and reduction of plastics products when appropriate, the reuse, the refineries and the remanufacturing, everything we need is within the reach of a circular economy when we will be able to keep that very high economic value in the economy. When we don't do that, it creates pollution, and it creates an economic loss.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you very much.

Go ahead, Mr. Trudel.

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

Mr. Chair, I'm going to give my two and a half minutes of speaking time to my esteemed colleague from the Green Party, Mr. Morrice.

[The Chair, Liberal, Francis Scarpaleggia]

Go ahead, Mr. Morrice.

[Mike Morrice, Green, Kitchener Centre, ON]

Thank you, my dear friend. That's very kind of you.

I'll start by sharing the national inventory report. To be clear, our emissions in 1990 were 608 megatonnes; today, they're 708. We are 100 megatonnes above the starting line, as the commissioner shared earlier.

To the subject of today, I'm deeply disappointed to see billions of dollars going to large companies with an extremely inefficient $523 per tonne reduced. My first question, I think, is for department officials.

Could department officials table the companies that received funds, all 17, and how much each received?

[Stephanie Tanton]

I would suggest that we could submit those to the committee in writing, following the—

[Mike Morrice, Green, Kitchener Centre, ON]

That's wonderful, thank you very much.

My understanding from the report is that it was the commissioner who calculated the cost per tonne and not department officials. Why were department officials not calculating the cost per tonne of $7.6 billion going to the highest emitters in the country?

[Jean-Philippe Lapointe]

We do calculate the cost per tonne. We do it mostly on projects where there's a megatonne estimate. Those are all projects that will contribute to our—

[Mike Morrice, Green, Kitchener Centre, ON]

I apologize for jumping in; I'm on limited time. The commissioner in his report says that he calculated the cost per tonne, so did he do that unnecessarily? Was that already done by officials?

[Jean-Philippe Lapointe]

Yes.

[Mike Morrice, Green, Kitchener Centre, ON]

Commissioner, is that the case?

[Jerry V. DeMarco]

Our work is necessary and hopefully helpful to the committee. We are confident in the numbers that we've produced and the value-for-money calculations we disclosed. We did one with the five that have contribution agreements with commitments and the other 12 that don't. I would expect that sort of calculation to be done by the department and reported to Canadians, because they are taxpayer dollars.

[Mike Morrice, Green, Kitchener Centre, ON]

I would expect that, too.

The commissioner mentions in his report that the department switched to “a qualitative method of assessing emission reductions for certain projects.” In my view, emission reductions are a number, and we need to know how many emissions are being reduced. What is a qualitative assessment of reducing emissions?

[The Chair, Liberal, Francis Scarpaleggia]

Be brief, please.

[Stephanie Tanton]

Mr. Chair, under the NZA, there are three pillars of investment. Large emitters are the first pillar, and the second and third pillars are focused on industrial transformation as well as the development of the battery ecosystem. For projects like this, the GHG emissions are extended beyond 2030 and our work towards 2050 objectives. For these projects, it's very difficult to undertake a quantitative assessment of GHG admissions, so a qualitative assessment was developed for these projects in order to allow us to undertake an assessment of the less direct or downstream GHG impacts. This includes, for example, a component or a technology that would be included in a new, cleaner manufacturing process or research and development projects.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

We'll go now to Ms. Collins.

[Laurel Collins, NDP, Victoria, BC]

Thank you, Mr. Chair.

On the net-zero accelerator initiative, out of the 55 companies that emitted at least one megatonne of carbon dioxide in 2021, only 15 applied for this initiative, and only two signed a contribution agreement. Can you talk a little bit about those numbers?

Considering this, do you think that the role of regulations like the clean fuel regulations, the clean electricity regulations and the emissions cap might have an impact on reducing emissions in a greater way than the net-zero accelerator, or would a combination of strengthening these regulations make the net-zero accelerator more successful? Can you spell out how these might interact?

[Jerry V. DeMarco]

Yes, there are interactions amongst the many measures, whether you count them as 80-something or 120-something measures, depending on whether you group them under the emissions reduction plan.

We've heard previously from departmental officials at this committee, in fact, that they expect carbon pricing to account for around a third of the emissions reductions, and obviously regulations are the other big tool. There's a package of regulations, but if you put them all together, the regulations are the other big chunk of projected emissions reductions.

However, there are other tools, like subsidies that we're talking about in a couple of the reports today, and using the purchasing power, which we're talking about in the third one relating to climate. They're all supposed to fit together and result in the achievement of a target.

We've had several plans over the years that, on paper, appear to add up—although the current one doesn't quite add up to 40%; it adds up to 30-something per cent in terms of measures that are in place now. They're supposed to all add up in an economic model that Environment Canada uses to project emissions.

There are interactions, and sometimes it is difficult to parse out the effect of one program in isolation from others, and it's certainly true in the electric vehicle and infrastructure area, for example.

However, that shouldn't be an excuse to not do the calculations when you can, and to try to get the best numbers possible, and to be transparent with Canadians as to how much each of these measures is costing them or costing industry or costing government. We're looking for more transparency and more reliability of the models and the measures.

There may be the need for more measures. Other than just barely meeting 40% from past practice, maybe they need to go a little bit higher, recognizing that some of these measures don't pay off as much as they had hoped.

[The Chair, Liberal, Francis Scarpaleggia]

I think your time is up, Ms. Collins.

We'll go to Mr. Kram.

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you very much, Mr. Chair.

Thank you to all the witnesses for being here today.

Mr. DeMarco, my questions will be about “Report 1: Contaminated Sites in the North”.

Typically this is what is happening when the government sets out to implement a project. Let's say that we're building a building. If we build the first few levels of the building this year and a few more levels next year and a few more the year after, the total amount of money left to complete the project, or the total amount of cost left in the project should be going down after we've done work on the project. However, that's not what's happening with the contaminated sites in the north. The total liability seems to be going up and up every year.

Could you explain to the committee how that's possible?

[Jerry V. DeMarco]

Yes, it's quite possible, because the project variable hasn't stayed constant. They've learned more about some of the worst sites, and so the cost for those essentially made the project bigger than they had anticipated; and the number of sites has increased quite a lot since we first started auditing this in the nineties and 2000s.

It's not entirely bad news that the liability has gone up for certain aspects, because it's a reflection of better knowledge of the project, as opposed to the project staying constant—if you know what I mean.

[Michael Kram, Conservative, Regina—Wascana, SK]

Yes, I think I know what you mean.

Could you explain why these cost estimates were so inaccurate in the first place? With the building example, if the original estimate was to build a 10-storey building, and now we decide we need to build a 20-storey or a 30-storey building, why was that not known from the beginning?

[Jerry V. DeMarco]

Yes, that is a good analogy, because essentially the building that they're having to deal with now is much bigger than the one they were thinking of.

That's actually partly because one of our older audits said that you don't have a good handle on the degree of contamination at certain sites, or the geographic distribution of the contaminated sites.

I don't want to criticize them for filling in those knowledge gaps, even though it does require that the financial liability number goes up. However, that's not the only reason the financial liability number has gone up, but it is a legitimate reason for a good portion of that. Essentially, the project is a bigger one than they thought it was.