Environment Committee on Oct. 23rd, 2018

[William Amos, Liberal, Pontiac, QC]

That's very helpful. For someone like me who's not a farmer, it's also helpful to try to—“monetize” is the wrong word—render it even more concrete. I understand the idea around protecting and enabling access. It's enhancing access to markets. Roughly how many grain farmers are we talking about in the Pontiac, and what kind of price increase or market access would be important to them?

[Tyler McCann]

I can't give you a firm number on grain farmers in the Pontiac, but agriculture in the Pontiac is a growing reality. It's allowing more and more farms to grow and thrive. It's also hard to put a dollar figure on the benefit these trade agreements bring. Agricultural commodities often trade in global markets, and unfortunately, recently agricultural markets have been impacted by policies put in place by others around the world that are disrupting those global markets that are so vitally important to us all. But it would be worse if we didn't have the trade agreements that your government has concluded and has given us.

[William Amos, Liberal, Pontiac, QC]

Thank you for those comments.

I want to shift to our witnesses from Pembina and Greenpeace.

Ms. Turcotte, you said that today's announcement on carbon pollution pricing is cause for celebration and a positive measure.

Why is it vital for Canada to have carbon pollution pricing and to take other measures to demonstrate global leadership?

[Isabelle Turcotte]

First and foremost, what's most important for Canadians is that we have access to good air quality and healthy ecosystems, and we have to use all of the measures available to us to get there. What the federal Liberal government is demonstrating today is leadership, despite criticism in some provincial jurisdictions, on moving forward and implementing a measure that is seen and understood by economists and policy-makers across the world as the most cost-effective tool to reduce emissions. We have a Nobel Prize laureate who is telling us carbon pricing has to be part of a comprehensive and effective climate change plan if we are to get to our target of limiting temperature rise to 1.5°.

I would say Canada is demonstrating leadership in implementing a credible climate plan and is joining 70 jurisdictions that are doing the same.

[The Chair]

You're out of time, Mr. Amos.

We'll go over to Mr. Warawa.

[Mark Warawa]

Thank you, and thank you to the witnesses for being here.

I'm reading an article here from Pembina. It was authored by Sara Hastings-Simon. It highlighted the different ways of reducing our carbon footprint in the present time, in the mid-term, and in long-term goals. The paragraph I'm going to refer to is, “By making polluters pay, a price on carbon pollution kickstarts behaviour changes and innovation.”

That's the goal of putting a price on carbon to change behaviour, to change how people are using carbon as an energy source.

What I heard Pembina and Greenpeace say suggested a $10 a tonne per carbon increase per year will help this change going and continue to create innovation within manufacturing and how we use energy. I think back then to 10 years ago from where we are today. In British Columbia, which is my home, a carbon tax was introduced at $10 a tonne. At a $10 a tonne increase per year, it would be $100 a tonne. Right now it's $35 a tonne and emissions are going up. In British Columbia emissions are going up.

During the slowdown of 2008-09 during the recession, emissions did go down a little bit, and British Columbia acknowledged that's why emissions went down, but over the last four years emissions have gone up. Actually they have gone up 2.3%, yet the price on carbon is going up. I think British Columbia over the last 10 years had shown that a price of carbon of $35 a tonne is not making people change. People are still driving their cars.

I was really encouraged by comments about efficiencies. The home improvement tax credit the former government introduced had a huge uptake. People made their homes much more efficient. It was greatly successful. As of 2011, passenger vehicles reached a whole new standard and became much more efficient. With fridges and stoves and the densification of our communities, we became more and more efficient.

I think we have made a huge headway through those advances in reducing the amount, yet in addition to that we put a price on carbon of $35. Where there's the highest cost of living in Canada is where the carbon tax is, yet emissions are going up.

I think back to the IPCC report saying that they are not nearly high enough, that to make people change, to get people out of their cars, for people to put on more sweaters in their home and turn down their thermostats, we need to dramatically increase the price of carbon.

If we're talking already of a year from now we're looking at $150, and I think the figure mentioned by Pembina was $300 per tonne.... I think the question Mr. Lake asked is, what is that magic figure? To this point at $35 a tonne it is not changing behaviour in British Columbia. We've learned that in 10 years. We've made great strides in efficiencies, but the price on carbon has not done it.

I'm dubious about what the government has announced today. I don't think it's great news. I think it is a bit of politics at play. It's cheap politics promising people they will take money as a form of a tax and give it back as a gift. I think we need to do a better job and that we all need to commit to do a better job in cleaning up the environment.

I want to ask a question to Mr. McCann on farming.

In my area of British Columbia there's a lot of farming. If if we download the cost of energy onto farming.... If we make industry non-competitive, they will relocate. We're already seeing that with the government's policies. Business is relocating to jurisdictions like the United States, where there is no carbon tax, but farming can't do that. It just makes your product less competitive and more expensive.

Could you comment on the challenges? You said you've asked the government to make you exempt for propane and natural gas for drying. How important is that, and if you don't get it, what does it mean? You won't be moving your farm, but is it going to mean a lack of growth and investment in farming?

[The Chair]

You have 15 seconds, just so you know.

[Tyler McCann]

The short answer is that while we can't move farms, we can leave tractors in the yard. That could certainly be the impact of pricing that gets to be exorbitant and makes us less competitive.

Grain drying is essential. This year, in particular, it's needed in order to get crops off the prairies and into bins, into storage and into markets. The additional carbon price will have an impact.

[The Chair]

Thank you.

Ms. Dzerowicz, we'll move over to you.

[Julie Dzerowicz, Davenport, Lib.]

Thank you.

First I want to thank all three of you for your excellent presentations.

I want to also say an extra thanks to Mr. Stewart for coming back around to Mr. Lake's comment in terms of whether or not there were alternatives to pricing pollution, and indicating that we have to move on a number of multiple levels at the same time to be able to achieve our Paris accord targets, which is what we're trying to do.

It isn't just the choice of pricing pollution, or looking at some alternatives around energy or looking at some of the clean, green investments that we have to make. It's on all three of those areas, if not more, that we have to move. I really appreciated your clarifying that.

I'd like to give an opportunity to both Ms. Turcotte and Mr. Stewart to respond to Mr. Warawa's comments, because I think we have to clear up the misperception that if you put a price on pollution, it leads to higher emissions, so why do it anyway. I don't want that to stand alone on the record.

I'll start off with you, Ms. Turcotte, and end with you, Mr. Stewart.

[Isabelle Turcotte]

In B.C., the price began at $10 a tonne in 2008, and the increase was about $5 every year, but it's very important to note that there was a freeze on the increase at that price in, I think it was, 2011, and we can see that at that point, the signal stops, and fuel consumption.... I'm sorry that I don't have this information to share with the rest of the group, but I'm happy to share it with the committee later. We can see that the sale of fuels goes up when the signal stops increasing.

I would argue that B.C.'s case is indeed an argument in favour of keeping a strong signal to reduce emissions through an increasing carbon price.

[Julie Dzerowicz]

Mr. Stewart.

[Keith Stewart]

Yes, there's been lots of academic research done on the B.C. carbon tax. It's the perfect study that economists love to do, a nice case study. It's shown that emissions would have gone up much more without the carbon tax in there.

The example I use with my students is that I now weigh 10 pounds more than I did 10 years ago. If I weren't biking to work every day, I would probably weigh 20 pounds more. If I wanted to lose weight, I'd have to do more. I'd have to have a better diet and exercise even more. Those are options that are available to me, but because I've gained some weight, it doesn't mean that biking hasn't had any impact.

Without the carbon tax, we would have seen much higher increases, primarily driven by population growth in B.C. B.C. has been growing rapidly, so that means new construction, more vehicles, etc. The carbon price has helped temper that increase, but we need to have it higher to really start bringing emissions down.

[Julie Dzerowicz]

I'm going to shift topics now.

Mr. Stewart, you talked about trade and climate policy and you said there are eight planks that Greenpeace has. I'd love it if you could, in the future, just send that off to the committee so we could have a sense about those.

On that topic, has there been any country that has adopted any one of those planks in their trade agreements? Has any country successfully incorporated that? If you don't know, that's fine. I just wanted to know, because I'm very interested in trade policy as well. I do know we try to add an environmental component to each of our trade agreements now.

Do you know of a country that has successfully done that?

[Keith Stewart]

The Europeans have implemented more of these types of measures. They actually have more teeth in their environmental policies. I would say that one of the eight was to get rid of the chapter 11 investor-state dispute system, which is now done, which is good, but I will share that with the committee.

It's sort of jointly from Greenpeace, the Sierra Club and Natural Resources Defense Council. There is a whole bunch of groups that signed onto it. The main thing is that environmental stuff is sort of nice to have in all these agreements and it would be great if these things happened; however, the agreement is about making sure that these things will happen and those things will not happen around economics of trade and protecting corporations and their prerogatives. We need to actually reverse that so that the climate and environmental protections are actually the primary thing guiding these types of agreements, so that the agreement is actually helping to facilitate the transition to a low-carbon world.

[Julie Dzerowicz]

Okay, I appreciate that.

Ms. Turcotte, you ended off your presentation talking about the huge role the private sector can play in being more ambitious with our targets. Can you maybe elaborate a bit on that and whether there's also a role for small business, or are you also talking about big business?

[Isabelle Turcotte]

I would say that for businesses, for Canadian entrepreneurs, it's a huge market opportunity. From their perspective, from their angle, it's not so much about what they can do to reduce emissions as what they can do to make sure Canada produces, manufactures, exports and sells in its domestic market the clean technologies, the low-carbon technologies that are the future of those markets.

Let's not make any mistake. That's where other countries are going. We're not the only ones with reduction targets, and we're not the only ones seeing the opportunities.

[Julie Dzerowicz]

Thank you.

Then you also mentioned—this is something Davenport residents point out to me all the time—that we have a 66-megatonne gap in our plan to achieve our Paris accord targets. Is there any country that has fully costed out its plan on achieving its respective targets? Are we the outlier, or is everybody on the same track as we are, where we have a plan in place, we're busy implementing it and we're still struggling to make sure we account for everything? Are we kind of in line with where most countries are in trying to achieve their Paris accord targets? Are we the only ones—

[The Chair]

Answer quickly, please. We are out of time.

[Isabelle Turcotte]

I would say the reason we have a gap is that we have to make progress very quickly on years of inaction, so we're starting with a bit of a delay. Other countries are also seeing similar challenges, but this shouldn't hold us back.

[The Chair]

Next up, we have Mr. Genuis.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Mr. Chair.

It's a pleasure to be here visiting at the environment committee.

I wanted to ask a question that has sort of been on my mind. I started studying these things in my university days. It's a frustration or a problem about how we measure who's responsible for what in terms of the international community around carbon.

We look at current or historical carbon levels generally, and then we ask countries to make reductions relative to those historical levels. At the same time a country may increase its economic development during that period, or it may reduce its economic development. A country might take over more of the world's energy production by doing it in a cleaner way, but in the process it might be increasing its emissions but having a positive effect on global emissions.

For example, if Canada dramatically develops relatively low carbon but still has carbon-emitting energy sources and exports its production—that's not hypothetical, of course—we might well be increasing our emissions while having a positive effect on global emissions by out-competing other higher-emitting jurisdictions. It seems to me a bit of a problem to only look at, in isolation, how nations are doing in terms of historical trends without looking at the intensity of their production and the impact that intensity of production has on global emissions.

That problem of measurement has a policy consequence. It means that then we think about our goals as being to impose, for instance, in the case of this government, taxes on energy production, which discourage production—don't necessarily encourage cleaner production, just discourage production—and chase that production to less environmentally friendly jurisdictions.

I'd love to hear comments from Mr. Stewart and Ms. Turcotte on what they think of what I've proposed, and if there are better ways for us to look at, let's say, the kinds of obligations a country should have that take into consideration this problem.

[Isabelle Turcotte]

I'm happy for Keith to go first.

[Keith Stewart]

Sure.

There's huge literature on this in terms of how you assign these things. The basic principle that the current treaty comes down to is this: Countries are responsible for the emissions that they control directly, that happen within their territory, because that's a principle of sovereignty. It's hard to account for things when you export LNG to China, for instance. If it displaces coal, there is a net benefit. If it displaces renewables, there is not. It's hard to figure those things out. This was actually one of Jean Chrétien's big things. He wanted to have that system.

The challenge is that every country wants to get credits for the good things they do, such as the low-greenhouse gas stuff, but then they don't want to have to account for perhaps the less-good things they have. This is where, if we were to shift to a system of including downstream emissions, which is one of the proposals, Canada then, as a major oil exporter, for instance, would be responsible for a larger share of global emissions than we are right now, just looking at domestic emissions within Canada.

You have to take the good with the bad when you try to shift these types of things. Right now, basically, governments can control what happens in their territory. That's how the accounting is done, but there are lots of other ways you could do it.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

It seems to me you're saying that this is the simpler way of doing it, but you haven't really responded to the proposal that this somewhat perverse measurement system leads to perverse outcomes. To take a somewhat absurd hypothetical, let's say Vatican City started producing natural gas very, very efficiently. They would be increasing their emissions but very clearly decreasing global emissions if they were able to displace coal, etc. But given that their present emissions are presumably virtually nothing....

Doesn't this measurement problem have consequences for us in that it discourages us from developing resources that might actually improve the environmental situation globally?