Environment Committee on June 12th, 2017

[Matt Jones, Director General, Strategic Policy Branch, Department of the Environment]

Thank you for your question.

On carbon pricing, as you pointed out, there are a number of different jurisdictions, with different regimes and different price levels. There is a carbon tax in B.C. There's a bit of a hybrid system in Alberta, and cap and trade is being pursued in Ontario and Quebec. The exact purpose of the federal benchmark and the proposed backstop legislation is to bring a level playing field to the situation within Canada. We've had jurisdictions that have indicated maybe they could be willing to increase the price, or pursue pricing if they don't have it now, but they want to compare with their neighbours and they don't want to be too far out of step.

The whole purpose of the approach and the design of the approach of the benchmark and the backstop is to bring a level playing field within the country so that while there are different systems, either cap and trade or different pricing systems, the level of stringency would be consistent across the country and there would be equal treatment. We've committed to do a study to ensure there is comparability between the different systems on the basis of stringency and the impact on the consumer.

[Jim Eglinski, Conservative, Yellowhead, AB]

As I indicated, though, the statistics out there right now show that by 2022 there will be almost a 50% difference between Ontario and Quebec. Have you guys talked to those provinces or have you talked to the other provinces to see if there's an agreement for everybody to come fairly close together? We maybe don't expect it to be exactly on, but when it's $23 to $50, I think that's quite a variation. It kind of makes me concerned, because I'm from the west.

[Matt Jones]

Both Ontario and Quebec have signed on to the pan-Canadian framework, including the carbon pricing component, which includes the benchmark that was released well in advance of the pan-Canadian framework. The proposed price increases within the Quebec and Ontario systems were released prior to the development, as I understand it, of the pan-Canadian framework. That is the past estimate of increases in prices, but now with the benchmark and with the legislation that we intend to bring forward, there will be consistency across the country, explicitly to close those gaps and to have a consistent approach across the country.

[Jim Eglinski, Conservative, Yellowhead, AB]

Okay.

There's a second part to the question. This was supposed to be revenue neutral, but we know from information received from the Library of Parliament that the GST on carbon pricing, if we look at the two western provinces of B.C. and Alberta over the next two years, will be $280 million. I'm wondering if the federal government has calculated what the GST or equivalent tax from Quebec and Ontario would be over that same period of time.

[Matt Jones]

I'm not aware of any forward projections of the potential revenues. I think we're waiting to see which provinces pursue which types of systems in the interim. There are a lot of decisions. What we're proposing is a backstop approach, so it's meant to apply only where—

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

My apologies, but I can't hear the interpretation.

[The Chair, Liberal, Deb Schulte]

We've lost our translation.

[An hon. member]

It went the other way.

[The Chair, Liberal, Deb Schulte]

Yes, that happened the other day. We had it flip back and forth.

Can we have that looked at? What I did the last time was flip it over, and it worked.

Is it back?

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

It's okay.

[Matt Jones]

Sorry, I'm not always so—

[The Chair, Liberal, Deb Schulte]

It's okay. We'll just skip the translation—

[Matt Jones]

I'm sorry. I'll continue en anglais. Thank you.

Because the backstop model is really meant to fill gaps where trading systems or other pricing systems don't exist, our hope is that individual jurisdictions will implement systems that are consistent with this backstop approach. Until we know which types of systems are going to be implemented and if they're indeed consistent with the benchmark we've established, it's difficult to anticipate what the revenues would be.

[Jim Eglinski, Conservative, Yellowhead, AB]

Okay, I'm going to take it a little easier on you now. I have one last question.

Of the $11.6 million for the oceans protection plan, is any of that going to the cleanup of abandoned vessels on the west or east coasts or inland waters?

[Nancy Hamzawi]

In terms of the funds allocated to Environment Canada, we are not looking at derelict vessels. Those are with another department.

[The Chair, Liberal, Deb Schulte]

Thank you.

Mr. Fisher.

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

Thank you very much, Madam Chair.

This is probably going to be a little shorter than I thought, because a few people have touched on some of my topics.

Thank you for being here, folks. I appreciate this.

I'll touch first on something that Mr. Aldag touched on, which is the HRM negotiated settlement, the $20 million.

Mitch, I think you indicated there is no annual deal going forward.

[Mitch Bloom]

What I was saying was that they haven't yet negotiated the going-forward approach. The first step was to deal with the back payments, which went back to 1997.

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

Okay. Not to put you on the spot, but assuming that this $20 million, plus the $4 million that the HRM received in that 19- to 20-year period.... It's $1.2 million, and some of that would be back interest or things like that. Is there a way forward or are we going to assume there is somewhere around $1.2 million a year in PILT?

[Mitch Bloom]

Going forward?

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

Yes, or is that just—

[Mitch Bloom]

It might be, but it hasn't been negotiated yet. If you do those kinds of numbers, it will be over $1 million a year—$1.2 million or something of that nature, probably—but it's still to be negotiated.

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

Okay. Just for fun now, the HRM estimated that the land value was $42 million. I was told—and I'm not certain about this—that the federal government in 2012 indicated it was worth $10. Or is that $10 million?

[Mitch Bloom]

I'm sorry, I don't know. Again, we don't do those negotiations. We just pay the bill.

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

Okay. I guess your assumption, then, is that it's going to be somewhere over $1 million a year going forward? At least, that's an assumption, but I would never hold you to it.