Environment Committee on Jan. 28th, 2019

[David Sawyer]

Ontario's inflation rate was lower in 2017, when cap and trade was in place. The growth in inflation was lower than the previous year and the following year. GDP growth is positive when there's a carbon price in Ontario. We did the analytics on it forecasting it forward, and the GDP impact was a slowing in growth of literally four days in 2020. At $20 a tonne, yes, we have a hard time seeing the impact, and the macroeconomic data from Stats Canada shows no perceivable impact.

[Dr. Andrew Leach]

I think it's worth noting that in the previous full year of data the four provinces with carbon prices in place had the fastest-growing economies in Canada. It's not a causal statement, but it certainly is really powerful against the idea that carbon pricing could cause a recession. We've run that experiment and we haven't had that outcome.

[William Amos, Liberal, Pontiac, QC]

It's over to Ms. Dzerowicz, if we have any time left.

[Julie Dzerowicz]

You mentioned, Mr. Cameron, that 90% goes back to all citizens, and 10% is redistributed in other ways. I think it's meant to go not only to farming communities but also to areas like Davenport, our schools, our hospitals. Is that the right way to redistribute and support? Is that seen in a positive light as part of the overall plan?

[Mark Cameron]

What we've recommended doing with that 10%.... The one sector that is impacted and doesn't get something directly is small and medium-sized business. We'd recommend cutting the small business tax rate by an additional 0.5%. That would essentially use that source of revenue. Schools and hospitals are provincially funded institutions. I think the provincial government eliminated the programs in place to reduce emissions in schools and hospitals, so there's less effect on them than on small and medium-sized business.

[Julie Dzerowicz]

So that extra 10% doesn't go to small and medium-sized businesses right now.

[Mark Cameron]

The government hasn't decided how it's going to deal with that.

[Julie Dzerowicz]

Okay, thank you so much.

[The Chair]

Mr. Godin, go ahead.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Thank you, Mr. Chair.

I have a question for Mr. Cameron.

In your introduction, you mentioned at the outset that the leadership is yet to come. That's true. We must implement mechanisms that, if they work well, enable us to become leaders. I fully agree with you. We can't say that we're leaders, since we're at the start of the process.

Most of the witnesses talked a great deal about British Columbia's success with the carbon tax on greenhouse gas emissions. I'm not sure whether I've understood this issue correctly—I'm not an expert—but I read an analysis on the National Energy Board's website dated December 27, 2017. The analysis states that British Columbia's greenhouse gas emissions were at their lowest level in 2009. There were increases until 2014, a decrease in 2015 and a further increase in 2016. However, emissions have never been lower than the 2009 level.

We're following a model, and you're praising British Columbia's carbon tax. However, the documents that I consulted suggest that it's not completely true that greenhouse gas emissions have decreased in British Columbia.

Can you talk about this?

[Dale Beugin]

As the other panellists have noted, many factors can affect greenhouse gas emissions. The key in isolating the impacts of any one factor is to use statistics to try to determine what is attributable to the carbon pricing and what is not. In other words, what would the carbon price have been absent that carbon tax in B.C.?

The statistical analysis that Nick and others have done says that emissions would have been even higher if B.C. had not implemented its carbon tax. That is through rigorous, very credible econometric analysis.

[Mark Cameron]

It's also worth pointing out that B.C.'s GDP has been growing faster than that of any other province, and B.C.'s population has been growing. The emissions are growing at a lower rate than that of the population growth and the economic growth.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

It's like some other provinces in Canada. We can't say that, without a carbon tax, the situation would have been different and the increase would have been worse. I can't take this for granted, because what you just said is hypothetical.

I have one final brief question. Will the carbon tax that the federal Liberal government wants to impose on the provinces help us achieve the 2030 goal?

My question is simple, but the answer may not be simple.

[Dr. Nicholas Rivers]

I think it's clear that this will reduce emissions, and so far—

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Will we achieve the goal?

[Dr. Nicholas Rivers]

The published estimates suggest we're not all the way to getting to the 2030 goals. The mix of the carbon price and the regulations on methane and coal and that kind of thing is not sufficient to get us all the way to the 2030 target.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

I gather that we set goals when we were in power and that the Liberal government has adopted our goals. Today, we're realizing that, even if we implement this, we won't achieve the goals.

Shouldn't we find other solutions? Shouldn't we be more innovative? Shouldn't we be doing more to be true leaders?

Mr. Beugin, do you want to answer my question?

[Dale Beugin]

I don't think it's a question of instrument; it's a question of stringency. You can have more aggressive regulations or more aggressive carbon pricing policies. To drive deeper emissions reductions, we need more stringent policy. That means either higher carbon prices still, over time, or even more aggressive regulatory policies. But again, it's not a question of carbon pricing, yes or no.

[The Chair]

Thank you.

Mr. Stetski, you have the last four minutes.

[Wayne Stetski]

I have a quick question. I can't remember if it was Mr. Cameron or Mr. Sawyer, but one of you mentioned that the chambers of commerce have now come on board. I wonder if you could speak a bit more about that.

[Dale Beugin]

This was in a report in December of last year, that the Canadian Chamber of Commerce indicated its support for carbon pricing as a transparent, market-driven approach to reducing greenhouse gas emissions.

[Wayne Stetski]

Of course, the Canadian Chamber of Commerce represents small businesses across the country.

My last question is this. If you had the premiers from the provinces that are holdouts on carbon pricing currently, what would you tell them? How would you convince them that it's a good thing to do?

[Dr. Andrew Leach]

I think I'd echo some of the comments that have come up, which is that every province has very different circumstances, so carbon pricing gives not only a broad policy tool but flexibility in what to do with revenues. It also gives people a lot more flexibility in how they individually react, so you're not, as a government, imposing solutions or believing that you can dictate innovation from on high, or any of these sorts of things; you're relying on the power of the market to generate the outcomes you want.

[Dr. Nicholas Rivers]

I think I would say the same things we said earlier, that this is a policy that we have a proven foundation for. It reduces emissions, and it does so at very small cost and at a lower cost than any other option for reducing emissions.

[Dale Beugin]

Given that action is required, and policy is required, it's better to have a policy that costs less than a policy that costs more. Carbon pricing is going to be the lowest-cost, least expensive way to reduce greenhouse gas emissions.