Evidence of meeting #130 for Environment and Sustainable Development in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was carbon.
A recording is available from Parliament.
Director General, Carbon Pricing Bureau, Department of the Environment
That's right.
Steveston—Richmond East, Lib.
Mr. Jovanovic, you said something that struck me—that the goal here is not to make people poor. It's not to raise revenue. It's to change behaviour but keep the distribution of tax revenues pretty well the same.
Can you elaborate a little on that, that it isn't a tax grab? How will that work?
Associate Assistant Deputy Minister, Tax Policy Branch, Department of Finance
The first instrument, which is one of the components of the system, is the fuel charge. That in itself is there to change the prices, to increase the prices of those goods and services where there is bigger carbon content, to try to change behaviour.
You can look at it and say, well, that's interesting, because one of the side effects of that is that there will be money flowing in. However, the objective of that fuel charge is not to raise revenues. You need a second mechanism whereby you're going to take these proceeds and give them back to the economy: to individuals, businesses and the MUSH sector.
The government decided to have a specific approach, which is basically to take about 90% of these proceeds and give it back on a flat, almost per capita basis to all individuals in these implicated provinces. We're going to put aside about 10% and create a fund for MUSH, not-for-profits and indigenous groups, and another fund for SMEs. As I said, details of these funds will come later, but essentially their purpose would be to provide support for these entities' actions, if they want to take some actions to reduce their emissions.
That is the approach. Overall, it's revenue-neutral, but it maintains the price signal, which is key to this approach. Basically, that's where the incentive is coming from.
Mike Lake Edmonton—Wetaskiwin, CPC
I'm going to start with Ms. Meltzer.
In December 2017, we had a UN filing saying that we were 66 megatonnes behind on our Paris Agreement targets. Is that accurate?
Director General, Carbon Pricing Bureau, Department of the Environment
I can't confirm that currently, but I'm happy to follow up.
I know the report you're referring to, but I don't have that number on hand.
Edmonton—Wetaskiwin, CPC
Is there an updated number right now, or is that the last number available?
Director General, Carbon Pricing Bureau, Department of the Environment
My focus, singularly, is on the development of the carbon pollution pricing system. I want to make sure we give you accurate data. We will follow up to confirm.
I guess what I would point to is our recent.... We submit reports to the UNFCCC—national communications in a biennial report. I would point out our last report, which was submitted to the UNFCCC in December 2017. There are a lot of elements to it, but one of them is to show the projected emissions to 2030.
What we see in that most recent report is that our projected emissions are approximately 583 megatonnes in 2030. That is approximately 230 megatonnes lower than what the projection was from the previous biennial report in 2016. Again, I will follow up to confirm the precise numbers.
I'm not sure if this was underpinning the question, but what we can see in that trajectory is the effect of a whole range of measures, and that does not take into account planned measures, measures that are still to come, not just at the federal level but provincial and municipal investments in infrastructure and so on. I would point to that report as a sort of good, recent update, but I'm happy to do some further follow-up with colleagues who can speak to that in more detail.
Edmonton—Wetaskiwin, CPC
I'm looking at a CBC story from the spring. It says:
In December, the government delivered a report to the United Nations outlining progress on reaching that target. The report acknowledged that both current and planned policies are likely to leave the country 66 megatonnes short of its target.
That figure is 50 per cent higher than a similar report made to the UN 18 months ago.
That's the CBC article. The gap was actually higher in December than it was 18 months earlier. Is that accurate?
Director General, Carbon Pricing Bureau, Department of the Environment
When it comes to making sure you have the right figures, I want to make sure the right people provide that information, but I think there are two different things here. What I'm referring to is the projected emissions trajectory from the prior report. As you may be aware, year over year, in our national inventory report, for the amount of total emissions—the actual calculation—our methodologies improve and information is updated. In terms of the differences between reports, I think that would need to be taken into account.
Again, what I would point to is that this number, even though it does reflect existing and some planned measures, doesn't account for the full range of investments that are anticipated to be made to contribute to the path to 2030.
Edmonton—Wetaskiwin, CPC
One would expect, though, that those plans would be reflected in plans that have actually been made.
There hasn't been an update since then, at this point.
Director General, Carbon Pricing Bureau, Department of the Environment
Not that I'm aware of.
Edmonton—Wetaskiwin, CPC
The minister or the parliamentary secretary wouldn't have access to an update at all.
Director General, Carbon Pricing Bureau, Department of the Environment
Not that I'm aware of, but again, I would just caveat that this is beyond my general scope of expertise.
Edmonton—Wetaskiwin, CPC
Is it safe to say that when the parliamentary secretary stood up in the House of Commons and said, “With respect to the question on the Paris agreement, we are confident that we can reach the Paris agreement without question,” he would have had information different from the 66-megatonne gap that we have? It sounds like he may have information that might be different from that.
Director General, Carbon Pricing Bureau, Department of the Environment
Again, I'm not your number one numbers person on the overarching projections, but I think it's just what I was pointing to before. What's not reflected in those numbers is the additional measures that are expected to occur, out to 2030—municipal, provincial, federal, investments in infrastructure and so on. I think that's likely the context, but I can't comment on those specific remarks.
Edmonton—Wetaskiwin, CPC
In the same CBC report that I cited earlier, in explaining that the gap was actually going up over an 18-month period, the minister said, “Our economy is growing and our projections are based on our economic growth.” Later, a public servant, someone from Environment Canada, said something similar to that.
Is that the information you have—that as the economy grows, it becomes harder and harder for us to reach our Paris Agreement targets and the gap will actually increase?
Director General, Carbon Pricing Bureau, Department of the Environment
Again, I apologize for reiterating the caveat, but I think it's important. There are other people from the department who can give you more detailed answers, and we can follow up, but I think there are two points that I'd flag. One is that every country's emissions change day over day, year over year, and that's tracked in a public national inventory report that our department compiles and releases each year.
I think one thing that these reports have pointed to or noted in the past few years is the decoupling of the growth of the economy and the concomitant growth in emissions. It's not that as economic growth occurs, you can't see growth in emissions, but I think that the trend, in general, over the past few years is a decoupling of emissions growth and economic growth. Again, I would need to follow up to provide you with details on that.
Mr. John Aldag (Cloverdale—Langley City, Lib.)
Thank you.
Ms. Dzerowicz, you're up next.
Davenport, Lib.
Thank you for your great presentation.
I have a number of questions. If I'm a solo homeowner who has a car, the way the climate action incentive is going to impact me is through my home heating prices, as well as filling up on gas at the pump. Is that true? Is there anything else that would actually impact me?
Associate Assistant Deputy Minister, Tax Policy Branch, Department of Finance
I think that's true. There are direct impacts, which you would see directly at the pump, and there are what we call indirect impacts, which are basically what is embedded in the price of other goods and services, which you don't necessarily directly see but will be there.
Davenport, Lib.
Would you give me an example of that? It's just because I want to understand how a simple person who lives in a home and has a car might see an increase of prices.
Associate Assistant Deputy Minister, Tax Policy Branch, Department of Finance
I think you mentioned heating. For instance, it could be in grocery products such as fruits, vegetables and all of that—if there's a substantial transportation cost component within products and services. Basically, it's going to fuel from all of these products where there's a combustion of fuel being used in the production of them. At the end of the day, it will be reflected.
It will also depend on the extent to which these costs are shifted to the consumer at the end.