Environment Committee on March 19th, 2024

[John Moffet]

For every measure we've introduced, we've had to provide Canadians with modelling about the estimated impacts, including, in particular, two impacts.

One of these is this: Will the measure contribute to the reduction of emissions?

The answer, as we've stated repeatedly, is that carbon pricing has and will continue to reduce emissions, which will have the effect of reducing increases in the adverse effects of climate change.

[Michael Kram, Conservative, Regina—Wascana, SK]

Is an adverse effect of climate change global warming?

[John Moffet]

Yes.

[Michael Kram, Conservative, Regina—Wascana, SK]

Okay.

Can your model figure out what effect the change in Canada's CO2 emissions will have on the overall warming of the planet?

[John Moffet]

Yes. We shared this analysis globally. There is a fairly well-established methodology for estimating the incremental impact of a tonne of greenhouse gas emissions—regardless of where it comes from—on the overall climate and progression of climate change, in terms of whether it will get worse or better.

[Michael Kram, Conservative, Regina—Wascana, SK]

What effects will next month's carbon tax increase have on the temperature of the planet? Surely it must be so tiny you can't even measure it.

[John Moffet]

No, and that's not what I said we could do.

What we have done is provide information—we'll table it with this committee—about the expected impact of our collective set of measures on Canadian emissions and the expected effect of our collective set of measures on GDP in Canada. That will be, importantly, relative to impacts on GDP in the absence of having taken action on climate change.

[Michael Kram, Conservative, Regina—Wascana, SK]

Okay. I look forward to the tabling of your modelling.

Has the modelling been peer reviewed?

[John Moffet]

Yes, it has, repeatedly.

[Michael Kram, Conservative, Regina—Wascana, SK]

Okay.

I believe that's my time, Mr. Chair.

[The Chair, Liberal, Francis Scarpaleggia]

Okay.

We'll go to Ms. Taylor Roy for the last series of questions.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you very much, Mr. Chair.

I want to follow up on the modelling and the estimation.

We repeatedly hear estimates from the opposition about what programs like the price on pollution or the change in the single-use plastics will cost, but they don't anticipate any change in behaviour due to these programs.

How do you model for that or anticipate how people's behaviour might change due to these programs, since that is the point of the programs in the first place? Is it fair to just put a straight-line projection out, saying nothing will change and that the cost will be X?

[Jean-François Tremblay]

There's a significant amount of literature on the impact of pricing on people's behaviour, and that's one of the reasons that the government selected this option. It has been documented, so there's no doubt about that.

We also continue to track the results, but it's not just about carbon pricing; it's about other measures that we need to take into account.

It's also sometimes that people look at the.... That was the point that John was trying to make too, which is that the status quo is not cost neutral. That's a point that was in some analyses in Europe, and it's important.

That status quo costs money, and it is going to cost more money for Canadians and for the globe in general. We saw it last year. We're more exposed to that—I don't think anybody here denies it—so when we look at those elements, we also need to think about the risk of not taking any action versus the risk of taking some action.

When we take those actions, we try to minimize any negative impacts on the population. That's why, as we mentioned before, the government decided to frame the carbon pricing in this way, to make sure that there is a strong redistribution and that the redistribution will go to those who need it the most.

That's the way it is. The models are models, in the end. We need to check them against reality, and that's what we're doing on an annual basis to see if they translate into facts.

Yes, it's going in the right direction, but of course, as some of you mentioned, there's still work to be done for sure.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

I have one more quick question before I pass it to my colleague.

The estimated impact of doing nothing is something we hear about a lot, and we know from a lot of the reports by the Parliamentary Budget Officer and others that it's not ever incorporated in terms of the trade-offs between having a program and not having a program.

Do you have any kind of estimates of what these dramatic climate events cost Canadians? Can we, in any way, distribute that across the population to say that just the extreme climate events are already costing us up to $200 billion, or whatever?

[Jean-François Tremblay]

As I said, the Canadian Climate Institute has numbers that are around $25 billion annually on the GDP. That's quite a serious number. Is it the best calculation? I will not pretend that I'm the expert at the moment to say that, but it is a cost that has been documented by many people, and we've seen it. We've seen it in all departments in terms of costs to address emergencies.

Parks Canada sees it, and that's just one element. Others will see it too. I was deputy minister at Indigenous Services, and the numbers for evacuations and emergencies were getting very high, so that's—

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you.

I want to leave time for my colleague Sophie Chatel.

[Sophie Chatel, Liberal, Pontiac, QC]

I have a quick question. If we do not have carbon pricing just as Europe, the U.S., California and the G20 are moving to implement it, the large economies will impose a carbon pricing adjustment.

Will we be able to export to Europe if we don't have a carbon pricing system?

[Jean-François Tremblay]

It's hard for me to talk about hypothetical questions, so I would not go too far on this, but it is a legitimate question about how we make sure that we align with some of the big economies in the world.

The other elements that I would add to this—

[Sophie Chatel, Liberal, Pontiac, QC]

Europe has a carbon pricing adjustment on sectors such as cement. Today, would a company in Canada be able to export products to Europe when they're listed on the carbon pricing adjustment?

[Jean-François Tremblay]

It's not in force at this stage.

[John Moffet]

It's not yet in force, but it's coming into force.

The results of the CBAM in Europe would not be to ban Canadian cement, but to impose a surcharge on Canadian cement.

[Sophie Chatel, Liberal, Pontiac, QC]

Is it better to collect the surcharge here in Canada through carbon pricing or to pay it to Europe as a carbon tariff?

[John Moffet]

I'll leave that to you to decide, but—

[Sophie Chatel, Liberal, Pontiac, QC]

I think you answered that. Thank you.

[John Moffet]

—I can tell you that as a result of having a carbon price, we have had successful negotiations with Europe to recognize the price that Canadian producers of cement, steel and aluminum pay. Therefore, although final decisions haven't been made, all signals are that they won't be subject to the CBAM.