Evidence of meeting #25 for Agriculture and Agri-Food in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was farmers.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Miodrag Jovanovic  Assistant Deputy Minister, Tax Policy Branch, Department of Finance
Natasha Kim  Assistant Deputy Minister, Strategic Policy Branch, Department of Agriculture and Agri-Food
John Moffet  Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment
Marco Valicenti  Director General, Innovation Programs Directorate, Department of Agriculture and Agri-Food
Gervais Coulombe  Senior Director, Excise Taxation and Legislation, Sales Tax Division, Tax Policy Branch, Department of Finance

5:30 p.m.

Liberal

The Chair Liberal Kody Blois

I am sorry, Mr. Perron, but your time is up.

I am usually very generous, but your speaking time is up.

Mr. MacGregor, you now have the floor for two and a half minutes.

5:30 p.m.

NDP

Alistair MacGregor NDP Cowichan—Malahat—Langford, BC

Mr. Jovanovic, I'd like to continue with you.

In your last exchange with Mr. Turnbull, he was saying that if Bill C-234 were to receive royal assent, we could be removing an incentive for farmers to try to transition to different technology. If we take that same logic and apply it to the exemptions that exist in the Greenhouse Gas Pollution Pricing Act, does that mean then, rhetorically, that the government gave up on incentivizing a change in technology when it passed Bill C-74?

The government at the time I think recognized that there were no commercially viable alternatives. That is why they specifically spelled out what eligible farming activity is, eligible farming machinery, what a qualifying farm fuel is. They listed them. There's a farm truck or a tractor—the farming machinery on a farm for the purposes of farming. There's a recognition of that.

My question for you, though, is this. We have those exemptions that already exist, but are there not other financial tools and other ways that the government has at its disposal to incentivize changes in behaviour while recognizing that there are no commercially viable alternatives?

5:30 p.m.

Assistant Deputy Minister, Tax Policy Branch, Department of Finance

Miodrag Jovanovic

Well, generally the best tools, the most effective tools, remain imposing a price on carbon. Depending on the sensitivity of the sectors and, as you say, the availability of technologies, you may have a more gradual approach to introducing such carbon pricing.

When this was introduced at the federal level, the main consideration in play—because there were already systems in place at the provincial level was how we could introduce a system that could be smoothly introduced into a system that was already existing at the provincial level. Therefore, looking at B.C. as a starting point and as a model, and, as my colleague mentioned, with respect to farming activities, it was such that it would be as generous as the one applied in B.C., and a bit more generous than the one applied in Quebec, for instance. That was seen at the time as a good approach, basically.

I don't think that at the time the logic was to say, “Well, we agree, and this is specifically because there are no alternatives for these specific sectors.” It was a broader kind of question.

5:30 p.m.

Liberal

The Chair Liberal Kody Blois

That's the time, Mr. MacGregor and Mr. Jovanovic.

Colleagues, I'm just going to ask one question.

Mr. Jovanovic, I assume that the Department of Finance would have an analysis of this particular private member's bill in terms of its cost—and I don't mean a cost to the government treasury. As you were mentioning in some of your testimony, of course, the government is levelling a price on pollution on these particular fuels that are not exempted right now. That means that ultimately there would be a cost and an impact to the overall aggregate of what is collected in the province of choice where the federal backstop applies.

Do you have analysis of what this would actually cost across the country versus the price not being collected on these particular fuels?

5:30 p.m.

Assistant Deputy Minister, Tax Policy Branch, Department of Finance

Miodrag Jovanovic

Well, presumably the cost would be similar to the cost of Bill C-8, since Bill C-8 is returning everything that is being paid.

5:30 p.m.

Liberal

The Chair Liberal Kody Blois

So the position of the Department of Finance is that essentially Bill C-8 is rebating every single dollar that would otherwise be getting charged right now in the pricing scheme in the particular province of choice under federal backstop legislation.

5:30 p.m.

Assistant Deputy Minister, Tax Policy Branch, Department of Finance

Miodrag Jovanovic

I would say that on an aggregate basis for these four provinces, because it's an aggregate approach, yes.

5:30 p.m.

Liberal

The Chair Liberal Kody Blois

Okay.

Basically, just so I'm sure, you mentioned that it was about $101 million in last year's budget, and I think you might have quoted $122 million. Essentially, the Department of Finance's estimates is that what is collected in those provinces on these fuels where the price still applies right now would be exactly equivalent to Bill C-8.

5:35 p.m.

Assistant Deputy Minister, Tax Policy Branch, Department of Finance

Miodrag Jovanovic

We have not—I mean, I can turn to my colleague Monsieur Coulombe again—but I don't think we have a specific estimate for Bill C-234. But again—

5:35 p.m.

Liberal

The Chair Liberal Kody Blois

That's okay. I'm indulging a bit of time from my colleagues. If those analyses come, I think the committee will welcome having that.

Mr. Barlow was talking about revenue neutral.... Mr. Jovanovic, I hear where you're coming from. The program writ large is revenue neutral and Bill C-8 is trying to create an industry-specific carve-out. We appreciate the different approaches.

Thank you so much for that.

Colleagues, that ends our preliminary meeting on Bill C-234. I have a couple of reminders to give. I'll need your indulgence on a few matters.

Thank you to our witnesses. We really appreciate the work that you do. Thank you for joining us here today to give additional context, as Mr. Lobb gave us the intention in the first hour.

Colleagues, there are a couple of things. On Monday, we'll be studying cannabis vis-à-vis agriculture. Mr. MacGregor brought forward that suggestion. The clerk is working to have the witnesses lined up. We'll have a notice of meeting out shortly.

We have started our global agriculture food insecurity study. We're running out of runway here before we break for the summer. I've talked to all of you collectively about the desire to put in a letter to the Minister of Agriculture—we'll cc other requisite ministers—on what we've heard and to give some key recommendations that this committee feels are important.

I would ask your permission to proceed by having you provide any recommendations to the clerk and, ultimately, to the analysts by tomorrow at midday. The analysts will then provide a copy of the letter, along with what we've heard and the recommendations. We will seek your feedback via email, and then I would ask for your indulgence for some discretion to work with the clerks to be able to have something put out before we break for the summer or shortly thereafter, so that we don't have a gap between now and September.

I've talked to all of you. This shouldn't be a problem.

5:35 p.m.

Liberal

Francis Drouin Liberal Glengarry—Prescott—Russell, ON

Mr. Chair, the only thing I'd say is let's keep what we've heard to what we've heard. It's not necessarily recommendations, but “here's what we've heard”. The government may think of doing this based on the witness testimony. It's so we don't have a back-and-forth for three weeks.

5:35 p.m.

Liberal

The Chair Liberal Kody Blois

Fair enough. As I've talked to the other folks, I think it would be nice to have a few things. We will stay, generally, within the confines of what we've heard. I'm happy to work with all the folks here to make sure it reflects your wishes, and keep this committee functioning as well as it has been since the start.

Thank you, Mr. Drouin.

Mr. Turnbull, please be quick.

5:35 p.m.

Liberal

Ryan Turnbull Liberal Whitby, ON

To clarify, are we to send our recommendations by tomorrow?

5:35 p.m.

Liberal

The Chair Liberal Kody Blois

We would ask that if you have recommendations, to send them to the analysts. They're going to prepare something.

You will still have an opportunity, once the letter to the minister, along with some of what we heard.... You will have some editorial ability to do that via email. Of course, we're not going to have the opportunity to get back in person to have the same level of a draft report that we usually would.

I think, having talked to all of you, that this is extremely important. We don't want to have a gap in the summer. This is a fluid issue. It's really important. Providing some context and some suggestions back to the government is part of our parliamentary function, so I appreciate your indulgence on that.

We will see you Monday. Thank you.

The meeting is adjourned.