Environment Committee on April 29th, 2019

[The Chair, Liberal, John Aldag]

There's still a minute left, if anybody on this side wants.

Mike.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

I know that the Conservatives like to talk about a tax on a tax. They like to drill away at this all the time. I'd like to remind everyone that ever since Brian Mulroney's Conservative government brought in the GST, there has been GST on the whole price of gasoline, including the excise tax. This is not new, Minister. Could you maybe address that, that once again, it's not the importance of whether it's a tax, it's the importance that we're doing something to address climate change?

[Catherine McKenna, Liberal, Ottawa Centre, ON]

You know what I think about? I think the biggest tax and the biggest deficit we can leave for our kids is climate inaction. We are passing on to our children and grandchildren billions and billions of dollars in cost. That's why we're acting. That's why we're making it no longer free to pollute, and we're doing it while we're growing our economy and creating good jobs.

[The Chair, Liberal, John Aldag]

Thank you.

Ms. Stubbs, it's over to you for your six minutes of questions.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, Mr. Chair.

Minister, in the spirit of ensuring that policy achieves outcomes, can you explain exactly the cost per tonne that will be imposed by the new Liberal fuel standard?

[Catherine McKenna, Liberal, Ottawa Centre, ON]

We do an analysis of every policy. We look at interactive impacts and we make sure that we're getting emission reductions bang for our buck. Putting a price on pollution, as you probably know, is the lowest-cost measure that you can bring in when it comes to tackling climate change—

[Shannon Stubbs, Conservative, Lakeland, AB]

What specifically will be the cost per tonne imposed by the new Liberal fuel standard?

[Catherine McKenna, Liberal, Ottawa Centre, ON]

I will pass it on to my deputy to talk about the clean fuel standard. We have taken the time to understand the clean fuel standard and to receive comments from industry, because we need to all be working together. I'll ask my deputy to answer.

[Shannon Stubbs, Conservative, Lakeland, AB]

That's okay. My question was to you, Minister, and you made the announcement before Christmas, so I would expect that by now you would know.

Of course, the reality is that you don't know the impact, because the cost-benefit analysis on your own departmental website says, quote, that “there are no models within the Department designed to model”, one, “emission reductions”, two, “credit supply”, “or”, three, “economic impacts of” your new Liberal fuel standard “policy in detail.” It also says, “The Department is currently developing a Fuel Lifecycle Assessment Modelling Tool”, I understand, “and...may use new and updated models for publication in the Canada Gazette, Part II, should they become available in time....”

In your own internal documents, I think they are estimating a carbon tax of around $230 a tonne—that would be the equivalent of it—on industry. The Chemistry Industry Association says that your fuel standard will be the equivalent of a carbon tax of “$200 a tonne” on industry, and Ontario manufacturers, as you must know, are warning that it could kill their ability to sell exports to the United States.

What's really curious about this is that you gave large emitters an 80% exemption from your carbon tax, your carbon tax of $30 a tonne, specifically because, you said—and as Conservatives have been warning for years—your new carbon tax would kill jobs and drive businesses out of Canada, but you're imposing a cost four times greater with your new Liberal fuel standard.

If I'm a truck driver and driving a truck 50 hours a week, how many cents per litre will the new Liberal fuel standard add to the cost of diesel?

[Catherine McKenna, Liberal, Ottawa Centre, ON]

There are a lot of things that you've put out there that are simply inaccurate.

Of course, we're going to do proper modelling. Of course, we're going to understand the costs. That's why we are still consulting on our clean fuel standard. We're always transparent on what we do. We've been transparent on the costs of putting a price on pollution: it's four cents.

[Shannon Stubbs, Conservative, Lakeland, AB]

But you announced—

[Catherine McKenna, Liberal, Ottawa Centre, ON]

Unfortunately, Conservative politicians are always misleading. We are going to continue working—

[Shannon Stubbs, Conservative, Lakeland, AB]

But you announced the new fuel standard in December. You are imposing it. Your own department says you—

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

On a point of order, Chair, can the minister please be allowed to answer the question?

[Shannon Stubbs, Conservative, Lakeland, AB]

My question was, how many cents per litre will the clean fuel standard add to the cost of diesel?

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Let's give her a chance to answer.

[Catherine McKenna, Liberal, Ottawa Centre, ON]

Let's be clear: the clean fuel standard is not in place. We have put out a regulatory framework paper on which we are consulting and receiving feedback. We want to make sure that everything we do is done in a thoughtful way that protects the environment and grows a clean economy.

We believe that, yes, we can use cleaner fuels and that is a smart thing to do, but we have to do it in a responsible way. We're going to continue to do that transparently. We always report transparently. We make decisions based on science, evidence and facts. We consult broadly, including with industry, but I'm happy to ask my deputy to explain the process so that we are extremely clear on the record on what we have done.

[Shannon Stubbs, Conservative, Lakeland, AB]

That's okay. I'm sure you can table it to the committee later. My job is to ask you questions.

[Catherine McKenna, Liberal, Ottawa Centre, ON]

We will table it to committee because I think it's important that Canadians have the proper information.

[Shannon Stubbs, Conservative, Lakeland, AB]

Here's what the concern is. This is why your position is concerning. In October, in question period, you admitted what Conservatives have been warning about the carbon tax for the entire time: that the 80% to 95% exemption from the carbon tax you've granted for large emitters—and you've said this—is “to stay competitive and keep good jobs in Canada.”

If these businesses, according to your analysis.... We agree that it's the risk of your carbon tax: that you will do economic harm to Canada without reducing emissions and will drive businesses and jobs out of Canada. If your argument is that those businesses will shut down if they pay more than 5% of your carbon tax, then how do you justify the dramatic and multiple times more cost of your Liberal new fuel standard for those same companies?

[Catherine McKenna, Liberal, Ottawa Centre, ON]

Once again, I would like to repeat that we have not brought in our clean fuel standard. I hope you would agree that what we do should grow the economy, should move to a cleaner future and should tackle climate change and create good jobs. We should ensure that our companies are more competitive, that we are creating good jobs in Canada and that we are creating incentives for clean innovation. That is what our climate plan is all about.

Once again, it would be great, 365 days to the day that we are in committee, and while there's flooding, that we would see an actual climate plan from Conservatives. Canadians deserve no less. We have been very clear about our climate plan. We negotiated it with Canadians. It is right here. Every single measure is out. Everything we do is modelled with the department. We put things out in a transparent way, including emission trends. We work with industry to find solutions. Everyone pays the price on pollution because we believe that's the right thing, and we will continue implementing our plan with Canadians.

[Shannon Stubbs, Conservative, Lakeland, AB]

Minister, you've granted major exemptions to the carbon tax, which you said yourself was for keeping jobs and businesses in Canada, but you are getting those companies and that industry on the back end with your escalating plans for a Liberal fuel standard. This is unprecedented in the entire world. It's going to apply to solid and gaseous fuels and to industry, businesses and facilities. It's very alarming that you're imposing a policy and then doing the modelling on the back end after you've already announced it.

Can I just ask you a question about the thousands of jobs that are at risk in my riding and across Alberta if you impose your federal methane regulations on the timeline you've outlined? I wonder if you'll grant equivalency to Alberta's methane regulations, which were finalized by the previous NDP government.

[Catherine McKenna, Liberal, Ottawa Centre, ON]

Tackling methane emissions from the oil and gas industry is one of the most cost-effective measures that we can take. You can actually capture what you don't want and create products. We have amazing Canadian companies doing that. We've been working with provinces and we've been working with industry to do this.

[Shannon Stubbs, Conservative, Lakeland, AB]

Yes, and Alberta has been a long-time leader—

[Catherine McKenna, Liberal, Ottawa Centre, ON]

We have a standard—