Environment Committee on March 29th, 2022

[Laurel Collins, NDP, Victoria, BC]

Thanks so much.

You spoke a lot about Export Development Canada and the billions of dollars they're giving out in public financing. If the government is going to make good on their promise to end public financing of fossil fuels, including through Crown corporations like EDC, we need to support this policy change quickly.

What are your recommendations for changes that the government should make to the Export Development Act to stop funding fossil fuels and align with the 1.5^o future?

[Bronwen Tucker]

Definitely those three policies that I just mentioned are kind of excellent policies. For the UK and the U.S., they're whole-of-government approaches, so, for us, EDC is by far the largest source of public finance, but there are other agencies that give smaller amounts.

A whole-of-government approach that fires that going forward is needed, as are exclusions of future government-backed finance for fossil fuels, including oil and gas, CCS gas and hydrogen. Alongside that, there should also be, I think, scope for alignment with Canada's overall net-zero alignment. Therefore, for EDC, the priority should be having a portfolio approach aligned with 1.5^o, looking at preventing carbon lock-in at the production level. Beyond that, there's lots of scope for these Crown corporations to instead support transition, so we should look at cross-support portfolios across all sectors to see how our public finances support a just transition that protects workers and communities rather than locking in climate chaos.

[Laurel Collins, NDP, Victoria, BC]

You mentioned that transparency is a big issue. What changes would be necessary to ensure that we have true accounting of how much money is going to fossil fuels and how the money is being spent?

[Bronwen Tucker]

Export Development Canada is supposed to undergo a legislative review every 10 years, and the one in 2018 was never completed. There was a report that was tabled under Jim Carr in 2018 that never went to a parliamentary committee, with strong recommendations for transparency of reporting, which EDC is not meeting. It's at the project and transaction level. The details on companies or amounts missing and the kinds of finance or financial products that are being given are often missing.

On the climate side, there's definitely a need to look at peers. We're also behind in looking at the carbon footprinting of energy investments, for sure, but across the board for the whole portfolio as well. That piece is also needed. We're seeing Canada fall rapidly behind its peers on that front as well.

Last, I think that for large investments with potentially major indigenous rights, human rights or environmental impact, the notice period is often at the OECD minimum rather than having that proper notice for real consultation with the communities that are potentially impacted and giving space for civil society, companies or others to comment.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you very much.

We'll now go to a second round. I'm going to have to shave about 25% of everyone's time so that we can arrive on time. Arriving on time always makes all passengers happy, so that's what we'll have to do.

Mr. Dreeshen, you have four minutes, please.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much, Mr. Chair.

I have a couple of points.

Perhaps, Dr. Kim, I would go to you first.

You mentioned your concern about the cost in terms of human lives and so on. Of course, this is a strong narrative of people at this point in time as they talk about climate change, but if we look at the metrics, the number of lives lost in the last 200 years that has to do with weather-related issues has dropped drastically. I'm just wondering if this is being calculated as an offset when you speak about human lives and human suffering because of climate change.

I would preface that with this situation. If you start taking away jobs and you want to look at human suffering, I would point out that indigenous business leaders are onside with natural resource sectors. The discussion around this table in many ways today is what we can do to stop that. We also have to understand that we're talking about human lives there. Has there been any calculation done from your organization in this regard?

[Dr. Joy Aeree Kim]

If I may clarify, when I was talking about the lives that were lost, I was talking in the context of air pollution. There are a lot of hidden costs associated with fossil fuels, and then the fossil fuel subsidies, which are not very well known, and this was based on the study done by the IMF on fossil fuel subsidies and the impact of removing those subsidies—

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much. I appreciate that.

I would like to talk to Mr. Brunnen right now.

How committed are indigenous invertors to our oil and gas industry in western Canada?

[Shannon Joseph]

I'll take that for CAPP.

Today the oil and gas industry is a significant partner with many indigenous-owned businesses across our operating areas. Our oil sands alone do about $2.4 billion in business with those indigenous-owned businesses and, of course, many of these nations and communities are now seeking equity stakes in projects. Most recently, a 10% stake was acquired by 10 first nations in the Coastal Gaslink pipeline.

This is an important part of the Canadian economy and the indigenous economy. I guess I would point out as well that this is going to be very impactful, and not all of these things can be easily transitioned away.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you. I think I'll just leave it at that.

I have a minute or so left.

When we hear a lot about making sure that we tax these people because they are making money, I assume that those who are going to invest in solar panels and windmills and so on plan on making money as well in the future. We talked earlier about long-term commitment and about governments actually sticking with a plan so that people will know and investors will know.

I'm just curious. Who is going to be paying for the added costs when we have to recycle and repurpose products that come from solar panels and windmills? Is it going to be those investors who are engaged with that or is it going to be the taxpayer?

Perhaps, Ms. Tucker, you could weigh in on that.

[The Chair, Liberal, Francis Scarpaleggia]

You have 30 seconds, please.

[Bronwen Tucker]

We can see across all jurisdictions that for the least cost of energy across the life cycle, renewables are cheaper to build, even from scratch, than fossil fuels at this point. That's in Bloomberg models. It's in IEA. The costs for cleanup for oil and gas are considerably higher, and as we're seeing right now, you can go back to the Parliamentary Budget Officer's reports of those—

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

[Bronwen Tucker]

—costs escalating.

[The Chair, Liberal, Francis Scarpaleggia]

Thanks very much.

Mr. Baker, you have four minutes.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks very much, Mr. Chair. It's great to be back at the environment committee with my colleagues.

Thank you to the witnesses who are here today.

I'd like to start with you, Ms. Kim, if I may.

One of the things I'm interested in is how the climate change fight is a global fight. I'm curious as to how Canada's work compares with that of some of our comparable countries or other countries around the world in terms of eliminating subsidies. Can you speak to that a bit?

[Dr. Joy Aeree Kim]

Globally, I mentioned that between 2015 and 2020, there were 53 countries that reformed their fossil fuel subsidies. Some were very successful and some were not very successful, but there were a lot of lessons learned about how to design them better without having too much impact on those on the ground.

We have seen recently, unfortunately, some cases of failure in France, for instance, though they were not necessarily related to the fossil fuel subsidy. They had to do with the taxes on fossil fuels or carbon. What I want to emphasize is that the European Union has a very strict rule to stick to the commitments it made in the Paris Agreement, and that fossil fuel subsidy reform is included as a part of its plan.

I would say that in many countries other than in the European Union, which covers many countries in Europe, in the discussions going they have undertaken the peer review—like Italy—as part of the G20. They have also made the commitment in terms of implementing...fossil fuel subsidies, and they are undertaking a series of preparatory analyses of the mitigation measures and the distributional impact when they remove fossil fuel subsidies and what the impact on the environment and pollution will be when they remove those fossil fuel subsidies.

There are many examples where a number of countries are taking action, starting with the preparatory process, but also going into the implementation of removing fossil fuel subsidies. I would say the G7 and the G20 countries are taking a lead. The peer-review process accelerates countries to start looking at how much they're providing in subsidies and what needs to be put in place for them to take actions to remove fossil fuel subsidies.

Thank you.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you.

I think I have about a minute left, if I'm not mistaken.

[The Chair, Liberal, Francis Scarpaleggia]

Yes.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

I want to ask Ms. Kim briefly in that time whether there are major oil-producing countries that have eliminated subsidies.

[Dr. Joy Aeree Kim]

There are some. I would say that they're not major oil producers, but they are oil-producing countries.

They have attempted to remove fossil fuel subsidies; unfortunately, they were not always successful. They made several attempts, but timing is important. When the energy price goes up, it is much more challenging to try to remove fossil fuel subsidies. When the timing is right, and when there is enough groundwork done.... This includes communication strategies and communicating with the public about what is going to take place and why is it going to take place. That is a very critical step, I would say, for countries to succeed in reforming fossil fuel subsidies.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Yes. I'm hearing that none have eliminated them completely.

Thank you.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Ms. Pauzé, you have two minutes.

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you, Mr. Chair.

Canada's greenhouse gas emissions increased between 2015 and 2019, while Japan, Italy, Germany, France and the United Kingdom reduced theirs. We know that, compared to all those countries, Canada has the highest fossil fuel subsidies. Is there a correlation between the two?

My question is for Ms. Kim.

[Dr. Joy Aeree Kim]

I'm sorry. Could you repeat the essence of the question?