Environment Committee on May 21st, 2024

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

I have a point of order.

[The Chair, Liberal, Francis Scarpaleggia]

Go ahead, Mr. Mazier.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

I was wondering if there's any word on whether we have received the net-zero accelerator contracts.

[The Chair, Liberal, Francis Scarpaleggia]

I don't believe we have, but I'm not the authority on this at the moment. Maybe we did, but I don't think we did.

No, we did not.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Thank you. They were due today.

[The Chair, Liberal, Francis Scarpaleggia]

Yes, they were.

We are waiting for a few departmental officials. Are they in the room?

[Steven Guilbeault, Liberal, Minister of Environment and Climate Change]

They are very close by, Mr. Chair; we will confirm right away.

[The Chair, Liberal, Francis Scarpaleggia]

Are they coming? Yes.

[Adam van Koeverden, Liberal, Milton, ON]

I have a point of order, Mr. Chair.

I'm sorry. I didn't mean to cut you off. I'm just seeking unanimous consent to vote electronically while we do the meeting so we don't have to pause.

[The Chair, Liberal, Francis Scarpaleggia]

Does everyone agree to voting electronically when the votes happen so we don't lose time?

[Some hon. members]

Agreed.

[The Chair, Liberal, Francis Scarpaleggia]

Okay. That sounds good.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Is the minister okay to stay for the whole hour?

[The Chair, Liberal, Francis Scarpaleggia]

Are you agreeable to staying one hour regardless of when that hour starts and ends?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

Yes.

[The Chair, Liberal, Francis Scarpaleggia]

Very well, that's perfect.

Before starting, to protect interpreters' hearing, I want to remind you of some measures we must take. We must use the approved black earpiece, everyone understands that. It's the only one available unless I am mistaken. We must always keep the earpiece away from all the microphones. When you are not using your earpiece, place it face down on the sticker on the table for that purpose.

Before starting, if I may, do I have the committee's permission to approve the budget for the study on green finance? You received the budget from the clerk by email. Are we agreed to approve the budget? If there is no objection, then the budget is approved.

Minister, you have the floor. You have 10 minutes if you wish.

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

Thank you very much, Mr. Chair.

I want to thank the members of this committee for inviting me to talk to them about one of the most effective tools in Canada to reduce our carbon pollution.

I would also like to acknowledge that we are on the traditional territory of the Algonquin Anishinabe people.

I'm accompanied by various representatives of Environment and Climate Change Canada and Natural Resources Canada. In the interest of time, they will introduce themselves when they intervene.

Carbon pricing works; this has never been clearer. It works at the business level and at the personal household level. It increases the success of all other emissions reduction policies because it builds in a powerful incentive for energy efficiency right across the Canadian economy. ECCC's modelling shows that carbon pricing alone accounts for around a third of the emissions reductions expected in Canada between 2005 and 2030, while other independent experts have calculated that it is even more effective in cutting Canada's carbon pollution.

Let me summarize quickly how my department calculates these emissions reductions.

EC-PRO is a computable general equilibrium model that allows us to perform complex statistical calculations.

We began by preparing a reference scenario that includes all current federal, provincial and territorial emissions reduction policies and that calculates total emissions expected by 2030.

We then prepared a second hypothetical scenario that excludes carbon pricing. We also excluded all provincial carbon pricing policies, including those in Alberta, British Columbia and Quebec, which the federal system does not cover.

Finally, the difference is used to estimate the effect of carbon pricing on emissions. This results in a difference of 78 megatonnes of CO2 equivalent, which represents about a third of the total reduction that Canada plans to make between 2005 and 2030, according to our commitments under the Paris Agreement.

By 2023, the fourth year after the implementation of our pricing system, our emissions would have been about 24 million tonnes higher without Canada's national minimum carbon price, which is the same effect as taking more than seven million internal combustion passenger cars off the roads.

It's a measure that encourages the whole population, every household and every business, to find ways to cut pollution, whenever and however they want.

In provinces where the federal fuel charge applies, it represents a tiny fraction of inflation and the increase in the price of groceries: less than half a per cent.

There is a 10% supplement for people living in rural and remote areas, and I would argue that if the Conservatives would stop delaying the adoption of the fall economic statement, that would be increased to 20% for people living in rural areas. The government has also increased the rebate to indigenous governments.

For provinces under the federal pricing system, with the Canada carbon rebate, 80% of Canadian households receive a refund greater than what they pay. In fact, if carbon pricing was abolished, not only would clean energy investment and job creation grind to a halt, our low- and middle-income families would have less money in their pockets.

In other countries, we see that pricing systems like ours offer the stability required to build prosperous economies.

Sweden, which put in place a price on carbon over 30 years ago, has managed to cut its emissions by a third and double the size of its economy. The same is true for us. British Columbia, which has had its own system for more than a decade, is experiencing rapid economic growth.

We must also consider the demand for clean innovations, which is growing worldwide.

Because carbon pricing attracts investment in clean energy technologies and low carbon industry in Canada, it allows Canadian companies to take the lead.

If we abolished it, we would lose our position in the global race towards carbon neutrality.

It would seriously harm Canadian companies exporting to other countries with carbon markets, which impose carbon adjustment mechanisms at their borders. The European Union, for example, is currently working on implementing this type of system. Over $30 billion of Canadian exports towards Europe would be subject to taxes at the border if we were to abolish carbon pricing in Canada, and that's just in Europe alone. Other countries are also proposing to implement this type of measure.

Canada has already made so much progress. As a result of carbon pricing and other policies implemented since 2015, Canada is set to exceed, according to the Canadian Climate Institute, its 2026 interim climate objective of a 20% reduction in emissions from 2005 levels. The most recent projections, published last December, suggest that Canada should achieve a 30% reduction by 2030. Also, the latest national inventory report confirms that emissions are consistent with our forecasts, and they remain well below prepandemic levels.

Electricity and heat production in the public sector are less polluting, due in part to further reductions in coal consumption. Fugitive emissions, specifically methane from oil and gas extraction, have also decreased.

The numbers are clear: Carbon pricing works. It will make it possible to achieve one-third of Canada's emissions reduction by 2030.

Every day, Canadians see the costly impacts of climate change, from droughts and wildfires to flooding and atmospheric rivers. Climate change costs Canadian households an average of $720 a year, and that is set to rise, according to the Parliamentary Budget Officer, to $2,000 a year per household by 2050. Generational fairness means we can't saddle our children, grandchildren and great-grandchildren with cleaning up our climate mess.

Thank you.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Minister.

I want to inform members of the committee that nine minutes remain before the vote starts. When it starts, I will have to interrupt the sitting. The committee will then decide if it wants to resume the sitting once everyone has voted. We'll see what happens then.

Mr. Mazier, you have the floor.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Thank you, Chair.

Thank you, Minister.

Minister, how many megatonnes of emissions have been directly reduced from your carbon tax since it was introduced—just a number?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

I can give you the numbers. I have the table here. Just a second.

You mean not by 2030, but so far. Am I correct?

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

I mean directly reduced from the carbon tax.

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

I know I have it here. In 2018, it was five megatonnes. In 2019, it was 14 megatonnes. In 2020, it was 17 megatonnes. In 2021, it was 18 megatonnes. In 2022, it was 19 megatonnes, and in 2023, it was 24 megatonnes.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

I'm confused, Minister. In response to an Order Paper question in January, you said that the government does not measure the annual amount of emissions that are directly reduced by the carbon tax.

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

I don't have that in front of me, but I believe the question was about tracking individual ministers' movements or individuals in the country, which is not something we do.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

It was not. It was what was directly reduced by the carbon tax. What numbers did you give us just now?