Environment Committee on Nov. 6th, 2018

[William Amos, Liberal, Pontiac, QC]

Okay. I know I don't have much time. I appreciate that there are exemptions for farmers and fishers for specific fuels, but my understanding is that, pursuant to this pollution pricing system, locally grown vegetables will be more competitive vis-à-vis vegetables or fruits grown far away. Let's take the example of Chilean apples. A locally grown apple will be more competitive, because it won't be subject to the same transportation costs. Is that a fair assessment?

[Miodrag Jovanovic]

I think it is. That is the objective, and that's why this instrument is being used and is thought to be effective. It allows people and families to continue to make the choices they want, but by changing prices there's an incentive to actually look again at their basket and make the appropriate choice.

[The Chair]

Thank you.

Mr. Lake, go ahead.

[Mike Lake]

My question is for Mr. Jovanovic.

The climate action incentive initiative is referring to the payments to Canadians. Is that right?

[Miodrag Jovanovic]

Yes.

[Mike Lake]

Just looking at the name, one would assume that there would be some incentive to take climate action. What is the incentive part of the payment initiative?

[Miodrag Jovanovic]

It's basically a way to say that we want to continue to provide you with enough financial capacity, in a way, to be able to make these choices. It's one thing to raise prices on those goods and services with a carbon content, but if at the same time I make you poorer because I created a charge there, it may not be as efficient—

[Mike Lake]

You're talking about the tax part—

[Miodrag Jovanovic]

It's the charge part, yes.

[Mike Lake]

—but the government is using “climate action incentive” to refer to the payments, so what is the incentive to change behaviour, to take climate action from receiving a payment? Ms. Dzerowicz made the point that there is no requirement to actually apply for anything; you just automatically get the money, so what is the incentive to take climate action?

[Miodrag Jovanovic]

The incentive is coming from the fact that we maintain their financial ability to make these choices. So if, for instance, the effect of the charge is such that a family may think a bit more about making the big jump in buying an electric car or a hybrid—

[Mike Lake]

Just to be clear, though, the incentive doesn't refer to the charge. The incentive refers only to the payment that—

[Miodrag Jovanovic]

They are complementary.

[Mike Lake]

Yes, but the incentive is.... There was a big announcement made.

Actually, I'm running out of time here, and I just want to have another question for the environment folks.

This follows on Mr. Warawa's questioning about cost. One would assume the carbon pricing bureau didn't exist prior to 2015. It's obviously a new entity. First of all, when was it established?

[Judy Meltzer]

The carbon pricing bureau was established formally as a structure on April 1, 2017, I think. That said, it is made up largely of people like me, who were in the department working on related policy. While there was a structural shift to focus capacity on a particular area at a particular point in time, it doesn't translate into new resources necessarily being brought on board.

[Mike Lake]

How many staff are there?

[Judy Meltzer]

I'd have to look. I can follow up to provide you with the specifics.

The bureau itself has approximately 18 full-time employees—FTEs, as we refer to them, permanent government employees. We're a relatively small team. As I said, a lot of people worked on similar files and have been in government for some time. We leverage a lot of analysis and input from different groups that exist across the department, including our economic analysis division, our legislative and regulatory affairs folks, and other government departments.

It's a relatively small group, and we do rely on a lot of different expertise, including sector-specific expertise. Environment is a very regulatory department, and we have a lot of sector-specific engineers who focus on specific industrial sectors. We rely heavily on that.

[Mike Lake]

You talked about consensus, but you were very clear to point out that the consensus isn't among stakeholders or Canadians; the consensus is among a small group of economists who are in favour of carbon taxes. Does the bureau do polling among Canadians to gauge where they are at in terms of the carbon tax?

[Judy Meltzer]

No, we don't. Any of that type of work might be done by a communications branch or elsewhere, but that's certainly not part of our mandate. We have a mixture of legislative policy and regulatory and technical work that's under way in our group.

[Mike Lake]

You're talking about your bureau. How about within the department?

[Judy Meltzer]

I can't comment on any polling that may have been done. That's well beyond my area.

[Mike Lake]

If you could endeavour to find out and get some information to the committee regarding that, it would be fantastic.

I'll just reference a few points made by some members of the committee. Mr. Fisher said that carbon pricing is “not only a little confusing; it's extremely complex.” Mr. Peschisolido talked about the complexity and said, “but they do want to know that we know what we're doing.” I think other members talked about the complexity of it as well.

Do you think that if the committee was to undertake a study of carbon pricing as part of its overall study of the framework, we could find 24 witnesses from across Canada or around the globe who could actually talk in some meaningful way about carbon pricing?

[Judy Meltzer]

Absolutely. But I would also point you to a lot of accessible material.

The one that stands out is the really comprehensive report that was done with provinces and territories, with a lot of input from a whole range of stakeholders. It was released, I believe, in early 2016, or possibly 2015. It's the carbon pricing working group report.

There's a whole host of resources that can be pointed to that explain how it's been working in jurisdictions for well over a decade, and the different ways it can be applied. There are different ways to put a price on carbon pollution. We see that in Canada. There are different ways in Quebec versus B.C. and Alberta, for example. They also explain what makes it effective and what considerations need to be taken into account to mitigate the risk of carbon leakage, for example, as we're doing now.

I'm certainly happy to share those, and I do think there's deep expertise, including in the Canadian context.

[Mike Lake]

As a point of order, Mr. Chair, just going back to my first question, I'd be interested if we could have the Department of Finance get back to us on where the name “climate action incentive” actually came from. I'd be curious to know the origin of the title. The payments are clearly not an incentive to take climate action.

[Judy Meltzer]

Can I just—