Environment Committee on May 21st, 2024

[The Chair, Liberal, Francis Scarpaleggia]

We'll have to stop there because we have to vote, and then we'll come back to Mr. Trudel. We'll take a little break to vote, and we'll resume after that.

[The Chair, Liberal, Francis Scarpaleggia]

Mr. Trudel, welcome to the committee.

I heard Ms. Pauzé became a grandmother for the second time.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

That's right.

[The Chair, Liberal, Francis Scarpaleggia]

Please send her our warmest congratulations on behalf of the committee.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

I will be happy to do so, Mr. Chair.

Thank you, Minister, for being here with us.

I also thank our friendly officials for being with us to answer important questions about the fundamental issue of fighting climate change.

I am very happy to be here today to replace my colleague.

In Longueuil, people are very concerned about fighting climate change. I will remind you that in 2019, my riding was the one where the Green Party obtained the highest rating in Quebec: 12%. So that's a riding where environmental issues are very important.

Unfortunately, we are not heading in the right direction, despite all your efforts, Minister. I think it's important to take note of that.

An article from La Presse dated November 7, 2023, stated that Canada never reached its greenhouse gas reduction target. They didn't mince words. That's exactly how they put it in the article.

It also stated that the last plan implemented by the Trudeau government, therefore by you, Minister, was not enough to reach the target. That was an observation by the commissioner of the environment and sustainable development.

There's a corollary to that, because it's hard not to talk about climate change and reducing greenhouse gas emissions without talking about our investments in fossil fuels. I think it's clear for everyone now that Canada is a petromonarchy.

On August 24, 2023, which is not so long ago, the title from an article that appeared in Le Devoir stated: “$38 billion US in fossil fuel subsidies in Canada in 2022”. This number came from the International Monetary Fund. In this article, it also states that:

Canadian fossil fuel subsidies reached $38 billion American last year, concluded a new analysis published on Thursday by International Monetary Fund (IMF) researchers.

We are therefore still investing massively in fossil fuels.

When it comes to reducing emissions, the fossil fuel sector is being asked to cut them by 31%, whereas in other sectors, including transportation, heavy industry, steel and concrete, it's around 40%. Why ask less of the fossil fuel industry? We don't know. On the one hand, we send it money, and on the other hand, we ask less of it. The prime minister's justification was that we were asking a lot of the sector because production went up. He said that the target of 31% was already high. However, we know that we won't be reaching our targets, that we will never reach them.

The oil and gas sector hasn't reduced its global emissions record, not even by a quarter of the current 31% reduction. This sector is being asked to achieve a 31% reduction, which is already lower than what is being asked of other sectors, and the current plan is such that we will not reach the target.

The Paris Agreement came into force nearly 10 years ago. The International Energy Agency, the IEA, and the Intergovernmental Panel on Climate Change, the IPCC, were rather clear about the path we should take.

Minister, isn't it time to start thinking seriously about reducing oil production in Canada?

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

Thank you for your question.

I said something earlier, but I will repeat it. According to the Canadian Climate Institute, which is an independent organization, we are on track to reach our 2026 interim objective. We're talking here about a 20% reduction, a first in Canada's history. If we continue in this direction, and that's a very important “if,” we will be able to reach our 2030 objectives.

As for fossil energy, we eliminated fossil fuel subsidies. We are the only G20 country to have done so. We did it two years before the projected deadline of 2025, meaning in 2023.

If you take the time to look at the reduction plan, you will see that the targets vary from one sector to the other.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

You are actually saying that Canada has stopped investing in fossil energies since 2023?

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

The agreement—

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

You are saying that Canada stopped granting funding to oil and gas companies?

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

The agreement concluded at the 2009 G20 Pittsburgh Summit involved eliminating what we refer to as inefficient subsidies.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Excuse me, Mr. Chair—

[The Chair, Liberal, Francis Scarpaleggia]

There is a lot of noise in the room.

There is less now, so we can proceed.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Go on, Minister.

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

The agreement concluded at the G20 Pittsburgh Summit in 2009 involved eliminating what is known as inefficient subsidies. What is considered inefficient? The WTO proposed a definition when talking about subsidies granted to a single sector that give it a comparative advantage, meaning compared to other sectors. In this case, it was government funding. That does not include funding from Crown corporations like EDC or the BDC, for example. What we committed to eliminating this year, in 2024, no other G20 country committed to eliminating.

You said that the fossil fuel sector is being asked to reduce fewer emissions than the transportation sector, as well as other sectors. But you might find that we identified GHG reduction opportunities for each sector. In terms of emissions reductions, you can see that we're asking for very little effort from the agricultural sector until 2030, for example. In fact, we understand that implementation will take a certain amount of time. In this context, you could say that the efforts being asked of the oil and gas sector are much more significant than those being asked of the agricultural sector, specifically.

You asked whether the time has come to cut production. I think that the representative of a sovereignist party like yours understands full well that the use of natural resources falls under provincial jurisdiction in Canada. Pollution, methane, CO2 and so on are what we can act on as the federal government, and that's exactly what we're doing by setting up a clean fuel standard. It's being done for the first time in the country's history. We're talking about a regulation to set a 40% reduction of methane emissions from the oil and gas sector by 2025, and at least a 75% reduction by 2030. That's one of the most ambitious objectives on the planet. The cap on greenhouse gas emissions…

[The Chair, Liberal, Francis Scarpaleggia]

Unfortunately, you're out of time, Mr. Trudel.

It's now Ms. Collins's turn.

[Laurel Collins, NDP, Victoria, BC]

Thank you, Mr. Chair.

Thank you to the minister for being here.

First, I just want to ask about the numbers that you shared in response to Mr. Mazier's question. Were those numbers a combination of the industrial and the consumer carbon pricing systems?

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

Yes.

[Laurel Collins, NDP, Victoria, BC]

Do you have those numbers but with each one—the industrial side and the consumer side—separated out?

[John Moffet, Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment]

I don't know if we have them disaggregated precisely by year, but as we have reported and as various third parties have estimated, the industrial pricing system contributes about two-thirds of the total reduction.

[Laurel Collins, NDP, Victoria, BC]

Could we get those numbers, whatever you have?

[John Moffet]

Yes.

[Laurel Collins, NDP, Victoria, BC]

In 2022, the environment commissioner did an audit of Canada's carbon pricing system and found that “Weak requirements for large-emitter programs reduced the effectiveness of the carbon price”.

Then, in March 2024, the Canadian Climate Institute released a report that you've mentioned already, really seeing the huge potential in the output-based pricing system for the industrial carbon price.

I'm curious about why your government continues to allow loopholes that allow the biggest polluters to make billions from this crisis and keep polluting.

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

In reference to the 2022 environment commissioner's report, we, in fact, renegotiated in 2022 with all provinces and territories the federal benchmark to make it tighter than when it was introduced in 2019.

Unfortunately, that was finalized after the commissioner did his study, so he couldn't benefit from what we were doing. However, we've already started tightening it. As you know, the price continues increasing year after year.

[Laurel Collins, NDP, Victoria, BC]

The loopholes in the carbon pricing system mean that big oil and gas companies pay a tiny fraction of the cost of their pollution. It's about 80% to 90%. Suncor pays one-fourteenth of the full carbon price.

The federal backstop isn't actually doing the most effective job of reducing emissions in the oil and gas sector. We've seen that because the oil and gas sector has continued to increase its emissions. We've heard from the authors of the report from the Climate Institute that we could strengthen the industrial carbon price.

Why aren't we?

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

We have, in fact, started another evaluation of the OBPS system to see where it could be further improved.