Environment Committee on Feb. 10th, 2009

[The Chair, Conservative, James Bezan]

Good morning, everyone. We have a quorum, so we're going to get rolling. It is nine o'clock.

We welcome to the committee table Mr. Scott Vaughan, who is Commissioner of Environment and Sustainable Development. He's accompanied by Neil Maxwell, who's the assistant auditor general. And we also have with us, from the Office of the Auditor General, the principal, Richard Arseneault.

Welcome, everyone.

I would ask that you, Mr. Vaughan, make your opening comments. You are appearing pursuant to Standing Order 32(5), which is your report of the Commissioner of Environment and Sustainable Development for 2008, and it was referred to committee on February 5. And of course we do thank you for taking the time to have us in the lock-up last Thursday.

We're looking forward to your opening comments.

[Scott Vaughan, Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada]

Mr. Chair, thank you for inviting us this morning. I'm pleased to be here today to present my first report.

Let me begin with three general observations drawn from the report. First, the government cannot demonstrate that the money it is spending on some important environmental programs is making a difference. Second, the government is not ensuring that measures to limit harmful air emissions are working. And third, the government has not yet translated sustainable development into concrete practice.

Canadians expect the government to tackle environmental degradation. The government needs to know what works, what doesn't, and why. However, our audit work for this report found gaps in the information needed for Parliament to know how well the programs we examined are working or whether adjustments are needed.

In chapter 3 we've reviewed environmental programming at Agriculture and Agri-Food Canada. While agriculture generates billions of dollars for Canada's economy, pollution from the farm sector also represents a significant environmental burden. Public concern about its effects is growing. Agriculture and Agri-Food Canada has spent $370 million to encourage farm practices that protect the environment. However, after five years the department cannot show whether these environmental programs are leading to improvements in environmental quality on the farm.

We also examined Environment Canada's management of the issuance of severe weather warnings to Canadians. Some severe weather events such as tornados and blizzards can cause injuries, loss of life, and considerable material damages. Timely and accurate warnings of severe weather can allow Canadians to take appropriate action.

We found that the department lacks an effective national approach to verify the timeliness and the accuracy of the more than 10,000 severe weather warnings it issues each year. We also found that the assets of its weather observation network, including radar and surface stations, are not managed adequately to ensure that the network can continue providing the data needed by the department to issue and verify severe weather warnings.

Environment Canada is considered a leader in meteorological services. Every day it provides a valuable service to the Canadian public. Yet, while severe weather events are becoming more frequent and severe due to climate change, the department is facing challenges and risks that threaten the robustness of its systems. We recommend that the department adopt a long-term strategy to guide its decisions.

The report also contains examples of the government's measures to reduce air pollution. In order to be credible to Canadians and to the world, government air pollution reduction programs must produce results that are measurable. In that respect, most of our observations were disappointing.

For example, we looked at the regulations on gas pumps aimed at limiting the release of toxic vapours such as benzene when people refuel their cars and trucks. We found that Environment Canada has done almost no enforcement of these regulations. As a result, it does not know whether the regulations are working.

Another example is the clean air and climate change trust fund, the $1.5 billion transferred to the provinces to reduce greenhouse gas emissions and air pollution. Although Environment Canada claims that certain reductions will be achieved, the trust fund has no conditions requiring provinces to report on how this money will be used and what was achieved. This will make it difficult for Environment Canada to support its claims that greenhouse gas emissions will be reduced by 16 megatonnes per year between 2008 and 2012 as a result of the fund.

We also examined the public transit tax credits. The purpose of this measure is to encourage Canadians to use public transit. Although this is a laudable objective, we observed that real reductions in greenhouse gas emissions were disappointing, despite the $635 million this program costs each year.

Finally, we examined an antipollution plan to reduce emissions of a toxic substance, acrylonitrile. We observed that not only did total national emissions of acrylonitrile not decrease, they are three times higher than in 2000 when the substance was declared toxic.

My report also includes chapters on environmental petitions and sustainable development strategies.

In closing, the government has an important role to play in protecting the environment and the health of Canadians and in moving towards sustainable development. Unfortunately, all too often the government does not know the impact of its efforts.

That concludes my opening statement. We would be happy to answer any questions from the committee.

Thank you.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Vaughan.

I'll go to our first round of seven minutes. Mr. Scarpaleggia kicks off.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Thank you, Mr. Chair.

Welcome, Mr. Vaughan, and congratulations on your first report as Commissioner of the Environment. Your report got some good press yesterday and the day before.

Regarding paragraph 12 on public transit tax credits, do you know how much a one-tonne reduction in greenhouse gases costs?

[Scott Vaughan]

Thank you for your question.

We examined that evaluation. A government report states that a greenhouse gas emissions reduction program is not effective if it costs more than $800 to eliminate one tonne of carbon. We have estimated that the likely cost for such a reduction is over $3,000 a tonne.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Three thousand dollars a tonne.

[Scott Vaughan]

Or perhaps even more.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

So, that must mean that we know what reduction in greenhouse gases this credit has caused. How many tonnes of greenhouse gas have been eliminated?

[Scott Vaughan]

There was a change in the 2007 target. The target for that year is 220,000 tonnes. In the 2008 plan, there is a change of 35,000 tonnes. That is a more than 80% decrease in the targeted figure. The tax credit has various objectives, including lessening traffic congestion. We looked at the target for reduction of greenhouse gases.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

How do we know if there has been an increase? Are they doing a survey of commuters, or looking at the increase in ridership a few weeks after the tax credit was announced?

[Scott Vaughan]

If you'll permit me, in English, sir--

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Sure.

[Scott Vaughan]

--I think what we found from the report was that the departments themselves did not have a methodology by which they could calculate.

Our understanding is that they will look at the tax returns that Canadians will submit through Revenue Canada in 2011. Then, based on the number of people who have taken the tax credit, they will do some analysis. But from our side, we were unable to determine how they would do that analysis. We simply don't know. It's probably something you may want to ask Finance Canada and Environment Canada.

We think, given the complexity of showing causal links between tax incentives and how people change their behaviour, it would be extremely difficult to assign a causal link between the tax credit itself and actual reductions.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Sure, but they must have their models and so on. They've been working at this a while.

My second question has to do with the agricultural policy framework. I guess that's what you were looking at, the agricultural policy framework and the programs under that framework. Do you have examples of some of the programs you have looked at under that framework? We don't need many, just a couple to give us a base for what we're talking about here.

[Scott Vaughan]

I will ask my colleague, Mr. Maxwell.

[Neil Maxwell, Assistant Auditor General, Office of the Auditor General of Canada]

Thank you, Mr. Chairman.

There are several programs that have been put in place by Agriculture and Agri-Food Canada. The key one is agricultural environmental farm plans. Basically, agricultural producers look at their own farm situations to ask where the big environmental risks are. What are the negative and potentially positive impacts? Once a producer has completed an environmental farm plan, he or she is eligible for a series of reimbursements, if you will, for improvements on the farm. For example, if a major issue is livestock in the streams and the impact of that on the environment, there's money available under a farm stewardship program, a greencover program, and several other programs, that will provide reimbursement.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

This is joint federal-provincial money, I take it.

[Neil Maxwell]

This is joint federal-provincial programming.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Do you have any insights on whether the farmers were successful in reducing the runoff of phosphorus into rivers? We've talked about that at this committee, and we've talked about regulations for dishwasher detergents and so on. People have come back to us and said that it's really an agricultural problem, which it is, and that it's up to the provinces. However, the federal government has the agricultural policy framework, and under the agricultural policy framework we're encouraging farmers to have better practices to reduce the runoff of phosphorus. Yet we never hear whether any of this works. Do you have any insights on that issue?

[Neil Maxwell]

Thank you for that question, because that is one of the central messages from our work, which is that the department has spent about $370 million as of the time of our audit and it really doesn't have a good sense of the impacts. There are quite a few specific issues we raise in this audit, but the short answer is that not much is known about whether we're talking in general about the impacts or about something as specific as you've asked in the question about phosphorus runoff.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Do you think there's hope that--

[The Chair, Conservative, James Bezan]

Your time has expired, Mr. Scarpaleggia. You shouldn't have asked.

Monsieur Bigras, sept minutes, s'il vous plaît.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

Thank you, Mr. Chair.

In reading Chapter 1 of your report, managing air emissions, what strikes me and worries me is that we must ensure that the figures available to the public are as reliable as possible. Why? Because when we appear on the international scene, when we are estimating and issuing national inventories, it is important to have audited figures.

One thing strikes me particularly. Take the example of Quebec. When we consider Quebec's inventory of greenhouse gas emissions reductions, we learn that they rose 1.2% over 1990 levels. When we look at the federal inventory, we see that Quebec reduced its emissions by 1.5% over 1990. These are completely different figures coming from two completely different inventories. I can understand that there is a problem achieving good accountability with respect to greenhouse gas emissions.

On page 23, paragraph 1.53, concerning agreements with industry, that the government did not carry out any verification of the reported results. On page 18, in paragraph 1.39, regarding the Clean Air and Climate Change Trust Fund, you tell us, “The little analysis it did undertake is based on flawed assumptions”.

Here is my question: Does this lack of analysis of the greenhouse gas emissions plan reflect badly on the national accountability Canada presents to the world? In theory, we have increased our greenhouse gas emissions by more than 30% in Canada. Does the system Canada has established lead us to doubt the national reports presented by the government at the conference of the parties on climate change, for instance?

[Scott Vaughan]

Thank you.

I think there are probably two answers to that question. First, there is a kind of inventory for which the methods used are those of the United Nations and the Kyoto protocol. It is separate for the greenhouse gas emissions reduction targets that the department has proposed.

In fact the inventory is like a list for verifying what is going on right now. We have looked at the question of finding out whether there is a system that would enable us to verify future reductions. Are there targets and are there methods for measuring the reductions resulting from the programs against the targets? As we have said, there is a problem with the methods aimed at producing these reductions.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

This lack of a method—for measurement and verification—can that make Canada's accounts less credible when presented to the world at each of these conferences of the parties? Canada has an obligation to present its national accounts for greenhouse gases. Does this lack of a method have an impact on the reports it presents?