Evidence of meeting #140 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 fuel.
A recording is available from Parliament.
President and Chief Executive Officer, Canadian Fuels Association
The degree to which behaviour will be modified or investments will be made in emission reduction technology when it reaches that level is severely constrained. The only option will be to pay the amount.
Liberal
William Amos Liberal Pontiac, QC
I understand what you're saying. I do think we have to be careful with the words we use. Because this isn't a regulatory approach, I don't think “compliance” would be the appropriate term. They will certainly be above that—
President and Chief Executive Officer, Canadian Fuels Association
It is compliance. Ultimately it's a regulation under CEPA and CEPA comes with the hammer of the Criminal Code. Potentially you go to jail, so there is a real compliance issue.
Liberal
William Amos Liberal Pontiac, QC
There's a performance standard. I think there's a distinction to be drawn between a performance standard and compliance.
President and Chief Executive Officer, Canadian Fuels Association
It's a requirement.
Liberal
William Amos Liberal Pontiac, QC
The reason I wanted to go to this question is we've heard from the opposition benches repeatedly over the past several months that somehow this output-based pricing system is a giant giveaway to big emitters. I'm gathering from what you're saying that is entirely not the case. It is not some giveaway. In fact, it actually imposes some real costs.
President and Chief Executive Officer, Canadian Fuels Association
In fact, the whole concept of an output-based pricing system is something that we support. An output-based pricing system that sets a benchmark that everyone must achieve rather than an amount that everyone has to come down is, in our view, a smart policy design. The issue for us is where the benchmark is set and what the feasibility of achieving that benchmark is and what perverse outcomes it might drive with respect to what the objectives of the policy are.
Liberal
William Amos Liberal Pontiac, QC
Thank you. I understand your opinion.
Ms. Kyriazis, thank you for your presentation. Could you describe Clean Energy Canada's position in relation to the Canadian Fuels Association's position that the benchmark or the output-based performance standard should be shifted from 80% to 90%, effectively reducing the percentage at which a carbon pollution price ought to be paid?
Senior Policy Advisor, Clean Energy Canada
Clean Energy Canada doesn't have a position as to which benchmark a particular industry should be subject to under the output-based pricing system. We believe that the output-based pricing system is a good policy mechanism to help address competitiveness issues and protect against carbon leakage where those are risks.
Liberal
William Amos Liberal Pontiac, QC
Thank you for that.
I'll go back to Mr. Boag, then.
I understand that the initial phase one position of the federal government was that a 70% performance standard should be established. Your organization lobbied to secure a higher percentage.
President and Chief Executive Officer, Canadian Fuels Association
Actually, I would clarify. I think that in the government's own analysis they came to the conclusion that 80% was a more appropriate benchmark. Subsequent to that they asked us...or gave us and all the industries the opportunity to provide further analysis specific to our own sectors as to the appropriateness of the 80% new benchmark.
Liberal
William Amos Liberal Pontiac, QC
I understand there's been consultation. Opinions have been expressed. Evidence has been brought forward.
Liberal
William Amos Liberal Pontiac, QC
What evidence have you brought forward? If you have it, could you please provide to the committee the empirical evidence upon which a 90% standard is justified in the CFA's opinion?
President and Chief Executive Officer, Canadian Fuels Association
I don't have that here. I'll defer to Monsieur Montreuil of our staff, who has led this effort. It's an extensive deck of which we've extracted two charts here.
Carol Montreuil Vice-President, Eastern Canada, Canadian Fuels Association
The chart you see on page 4, in terms of cost comparison between the current backstop.... You like to talk about 80%; I talk about minus 20%. You like to talk about 90%; I talk about minus 10%. The cost that this backstop would mean compared to other jurisdictions, especially versus the United States where the cost is zero, that's what's at stake. This reduction—
Liberal
William Amos Liberal Pontiac, QC
Mr. Montreuil, I don't mean to interrupt, but I simply want to ask if you could send that empirical evidence to the committee. Thank you.
Liberal
William Amos Liberal Pontiac, QC
I have one last question for Mr. Myers.
Mr. Myers, I wasn't familiar with the Washington Policy Center until recently. I want to get a better sense of where you're from. I'm just looking for a yes or no confirmation.
My understanding is that the WPC gets part of its financing from the Charles Koch Foundation.
Ed Fast Abbotsford, CPC
Thank you very much.
I've listened very carefully to the presentations and I first of all want to address the issue of British Columbia.
Joanna, you're from B.C. Is that correct?
Abbotsford, CPC
You're not.
Okay, I am. I have lived the B.C. carbon tax and, as you know, the tax was promised to be revenue neutral and to reduce greenhouse gas emissions. I want to read something that is less than a year old. It's from the Sierra Club:
“B.C.’s latest emissions data mark years of failure to reduce emissions by more than a token amount”...“Ten years after the previous government legislated the target to reduce emissions by 33 per cent...we are essentially in the same place we started.”
British Columbia’s emissions are now 10 per cent higher than 1990 levels, in contrast to the European Union, which has reduced its emissions by 23 per cent over the same period.
It goes on to talk about the fact that the carbon tax has not achieved what it was intended to achieve. I'm sure the Sierra Club would like to have had an even higher carbon tax but, as you know, the promise from the Gordon Campbell government was that the tax was going to be revenue neutral—swear to God, it was going to be revenue neutral. A new government came in and effectively did what the taxpayers, or the voters of Washington state were afraid of, and they changed the tax. It was no longer revenue neutral, because the NDP removed the revenue neutrality of it. And the emissions continue to go up.
You suggest that the fact that emissions continue to go up is because of economic activity. That may be, but would you agree with me that the emissions targets in the Paris Agreement, which Canada signed on to, are absolute targets that are not subject to adjustment for economic activity?