Evidence of meeting #163 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 households.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Yves Giroux  Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Jason Jacques  Senior Director, Costing and Budgetary Analysis, Office of the Parliamentary Budget Officer

4 p.m.

Liberal

Mike Bossio Liberal Hastings—Lennox and Addington, ON

I just want to clarify a couple of things from our conversation earlier.

Once again, eight out of 10 Canadians are going to benefit more from the rebate than what they're paying out in a price on pollution. Is that for all provinces in which the federal backstop will be in place?

June 12th, 2019 / 4 p.m.

Parliamentary Budget Officer, Office of the Parliamentary Budget Officer

Yves Giroux

That's right. We looked at these four provinces because that's where the regime is the federal backstop, and it's the same in all four provinces. The other provinces have a different mix of measures that are different from the federal backstop and different in each province.

4 p.m.

Liberal

Mike Bossio Liberal Hastings—Lennox and Addington, ON

With all the revenue that is raised within those provinces, the rebate will go back to the province in which the revenue has been raised. Is that correct?

4 p.m.

Parliamentary Budget Officer, Office of the Parliamentary Budget Officer

Yves Giroux

Yes, that's our assumption. Ninety per cent of the revenues generated will be returned to households, and the remaining 10% will go to particularly affected sectors. That's our understanding of the government's policy.

4 p.m.

Liberal

Mike Bossio Liberal Hastings—Lennox and Addington, ON

If I remember correctly, in your report you indicated that for even the wealthiest—the two out of 10 Canadians who will pay more—it would be on average of $50 more.

4 p.m.

Parliamentary Budget Officer, Office of the Parliamentary Budget Officer

Yves Giroux

I don't have the exact numbers in front of me at this very moment. Perhaps you would bear with me for a second, but yes, they will be receiving....

It depends on the jurisdiction. For example, in Saskatchewan, by the end of the period, when the price of carbon reaches $50 a tonne, they will be paying, on a net basis, $112 or $113. That's the province where the richest households will be the most affected. In New Brunswick, the 20% at the higher end of income distribution will pay, on a net basis, $14 per year.

4 p.m.

Liberal

Mike Bossio Liberal Hastings—Lennox and Addington, ON

We hear from Conservatives that average Canadians, low- and middle-income Canadians, will be punished by this price on pollution, that it will vastly increase their costs—I've heard $800 and I've heard numbers up to $5,000—and that they will pay above and beyond, but that is not what you found in your analysis.

4 p.m.

Parliamentary Budget Officer, Office of the Parliamentary Budget Officer

Yves Giroux

On a net basis, no, but on a gross basis, we found that on average, the highest quintile in Saskatchewan, for example, will pay between $585 and $1,200 over the period that stretches from 2019-20 to 2023-24. That's on a gross basis. That's before the rebate.

Therefore, on a gross basis, it's true that households will have to pay more. Depending on their consumption patterns, it could be a few hundred dollars or it could be a thousand, but on a net basis, after the rebate, it is significantly less.

4 p.m.

Liberal

Mike Bossio Liberal Hastings—Lennox and Addington, ON

Or it might be nothing at all. They're actually going to gain—

4 p.m.

Parliamentary Budget Officer, Office of the Parliamentary Budget Officer

4 p.m.

Liberal

Mike Bossio Liberal Hastings—Lennox and Addington, ON

—on that rebate. That's eight out of 10 Canadians. It's a bit misleading, then, to say that this is going to cost Canadians, because they're not including the rebate portion of that analysis.

4 p.m.

Parliamentary Budget Officer, Office of the Parliamentary Budget Officer

Yves Giroux

Well, the gross and the net are two different costs.

I'll let you use the adjectives or not, but....

4 p.m.

Liberal

Mike Bossio Liberal Hastings—Lennox and Addington, ON

Okay.

This is in relation to where Mr. Stetski was going at the end of his comments about your report tomorrow. I know you can't divulge any of the information in the report, but I want to ask one thing about it.

When you say you're looking at a price on pollution and the impact, or the amount it needs to get to by 2030 in order to meet our GHG emissions, is that taking into account the other 50-plus measures that are in place by government? In other words, will you be balancing that analysis across all measures that are being taken in order to meet that target, or are you using only this one measurement? If so, what is the value in doing that analysis if you're not going to take into consideration all of the measures that will be in place to deal with a GHG emissions reduction?

4 p.m.

Parliamentary Budget Officer, Office of the Parliamentary Budget Officer

Yves Giroux

The report tomorrow will incorporate.... In computing or determining the amount necessary to reach the Paris targets, the report takes into consideration all the measures that were in place or had been announced as of September 2018. We had to do a cut-off, because at one point we had to get the work going and input that into our model.

In any case, it will include the vast majority of the measures that have been announced or are already implemented.

4:05 p.m.

Liberal

Mike Bossio Liberal Hastings—Lennox and Addington, ON

But there is an unmodelled portion of analysis by the government. I think it's either 76 megatonnes or 79 megatonnes. Have you been able to find the data sets that will take into account the unmodelled portion of those measures?

4:05 p.m.

Parliamentary Budget Officer, Office of the Parliamentary Budget Officer

Yves Giroux

I'm not sure I fully understand the question. We should probably talk after we have released the report. I find it a bit difficult to speak in the abstract.

4:05 p.m.

Liberal

Mike Bossio Liberal Hastings—Lennox and Addington, ON

Okay.

Thank you very much. I appreciate, once again, your forthrightness in answering the questions.

4:05 p.m.

Parliamentary Budget Officer, Office of the Parliamentary Budget Officer

4:05 p.m.

Liberal

Mike Bossio Liberal Hastings—Lennox and Addington, ON

I hope we weren't too hard on you.

4:05 p.m.

Parliamentary Budget Officer, Office of the Parliamentary Budget Officer

4:05 p.m.

Liberal

The Chair Liberal John Aldag

Mr. Chong, we'll go over to you now for six minutes.

4:05 p.m.

Conservative

Michael Chong Conservative Wellington—Halton Hills, ON

Thank you, Mr. Chair.

When you did your analysis, you focused on just the federal backstop. In each of those four provinces, there are various provincial plans that have put a price on carbon, directly or indirectly. Can you tell us what revenues would be derived from those provincial revenues, from those provincial plans?

4:05 p.m.

Parliamentary Budget Officer, Office of the Parliamentary Budget Officer

Yves Giroux

There are several measures in each of these four provinces. I know that. We have not quantified them, because the purpose of the report was to determine the accuracy of what the government had alleged, which was that individuals or households in the federally backstopped provinces would indeed be better off in most cases.

4:05 p.m.

Conservative

Michael Chong Conservative Wellington—Halton Hills, ON

Sure. Let me ask the question differently, then.

Collectively, in 2017 these four provinces had roughly 275 megatonnes' worth of emissions. What per cent of those emissions are covered by the federal backstop?

4:05 p.m.

Parliamentary Budget Officer, Office of the Parliamentary Budget Officer

Yves Giroux

That's a very good question. I would assume that it's close to 100%, but I'm not certain, so I shouldn't put a number on it—