Environment Committee on May 21st, 2024

[Lawrence Hanson]

Derek, it might be useful if you spoke a little bit to the peer review of the model and its operation that we have done to date and continue to do. It's not really just a matter of Environment Canada's modellers determining that this is a good model. There is an ongoing process of peer review. You might want to speak to that a bit, Derek.

[The Chair, Liberal, Francis Scarpaleggia]

We're out of time, but I was going to ask you that question. I was going to ask you if it was peer reviewed, and you're saying that it is.

[Derek Hermanutz]

Yes, we've had some peer review in the past through academic journals.

We also have a process that was started in the ERP where we're working with other Canadian modellers to share data and assumptions.

[The Chair, Liberal, Francis Scarpaleggia]

Okay.

[Derek Hermanutz]

We've had a couple of meetings with them. We have another meeting in two weeks.

[The Chair, Liberal, Francis Scarpaleggia]

That's an important point.

We have to stop there and go to Mr. Ali.

[Shafqat Ali, Liberal, Brampton Centre, ON]

Thank you, Chair. Thank you to the witnesses for being here today.

Getting back to modelling and the size of the computer, could you please give us an idea of the size of the model? For example, could I load it and run it on my laptop or desktop computer?

[Derek Hermanutz]

No, you couldn't. You would need a tower computer. I'm not an IT specialist though.

[Shafqat Ali, Liberal, Brampton Centre, ON]

This means the size of that file is huge, and it could not be uploaded to a laptop or computer. That's what Mr. Hanson meant by that you have to bring it....

[Derek Hermanutz]

Again, I'm not an expert on computing power, but if you could get it onto your laptop, you'd still have to know how to write and read the code and understand the software language that the model operates in. It's very specialized. We have a bunch of different models in the department.

I have maybe two or three people who can run this model after six to 18 months of training. These are econometricians that we hire right out of graduate schools.

[Shafqat Ali, Liberal, Brampton Centre, ON]

Thank you for clarifying the model and size situation.

For the rest of my time, my colleague Sophie Chatel would like to ask further questions, please.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you, Mr. Chair.

I would also like to thank my colleague.

My questions will be along the same lines as those I asked the minister.

We've had some great conversations at this committee about using carbon pricing as a tool to reduce greenhouse gas emissions. If, as my colleague mentioned earlier, a decision were made to use only technology, I would be curious to see what happened next. I've done some research and read some pretty interesting reports that have come out from international organizations such as the Intergovernmental Panel on Climate Change and the Organisation for Economic Co-operation and Development. These reports looked at how much Canada would need to invest in technology to be able to meet its targets without using carbon pricing. Investments in green technologies would need to be anywhere from $30 billion to $60 billion a year. That would triple Canada's deficit. In other words, using investments in green technologies instead of the carbon tax would triple the Canadian deficit.

Where would the money come from to do that? Should personal income taxes be increased? I don't know how we would go about getting that money. However, that is one way of doing things.

Most countries and major economies in the world simply use market forces to achieve that result at no cost to taxpayers, who receive a rebate. Before choosing this method, did your department study the option of investing in green technologies and tripling Canada's deficit instead of relying on market forces?

[Lawrence Hanson]

I'll turn to my colleagues in a bit because they were in the department at the time when some of this thinking went on.

I would note that the policy is ultimately based on recognizing that there's really not just one tool that you would use. The value of the carbon price is that it sends a market signal and it finds efficient ways to invest in those technologies. It creates an incentive for private sector investment in those technologies; therefore, they're ultimately beneficiaries of those technologies and pay for them. There's that and a combination of spending that we did to drive individual consumer behaviour, for example, with the zero-emission vehicle incentive.

The challenge on zero-emission vehicles is that, in the total cost of ownership, it's a good deal, but there's the upfront sticker shock for people to move to zero-emission vehicles because of the price spread between them and an internal combustion engine. That's an example of where there was some sense in spending money, because it encouraged consumer behaviours that they would not otherwise have taken based on existing market conditions. It's certainly not an either-or of pricing versus spending on technology; it's a combination of the two, and they're reinforcing one another.

John, you should feel free to add to that.

[John Moffet]

That's exactly right. We need to continue to emphasize that the current policy involves a mix of measures.

I would just like to identify or point to one of your—

[The Chair, Liberal, Francis Scarpaleggia]

I'm sorry, Mr. Moffet. Our time is up.

We have to take a small break because we're changing interpreter teams. We're going to break for five minutes.

I'm sorry to cut you off, but we're over by five minutes.

We'll break for five minutes. We're going to change teams, and then we'll continue with Mr. Trudel, Ms. Collins, Mr. Mazier and Mr. Ali again.

[The Chair, Liberal, Francis Scarpaleggia]

We can get started again.

Before we start, I'll just mention, as a matter of housekeeping, that we have the CEOs of oil companies coming to committee on June 6. This was based on a motion by Ms. Collins.

We have four CEOs. You'll recall at the last meeting that I said the CEO from Enbridge couldn't come because of a meeting. We agreed that they could send someone else. They're sending the executive vice-president and president—that's one person—of gas distribution and storage. Her name is Michele Harradence. I thought I would let you know about that.

Apparently, Mr. Trudel is giving his two and a half minutes to Ms. May.

Ms. May, the floor is yours.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Trudel, thank you for your generosity.

I want to ask officials about sensitivity analyses that have been done in terms of, as Monsieur Trudel raised quite appropriately, the impacts of things like Baie du Nord.

The minister has given his support to this project.

I'm looking at what increases in greenhouse gases we can see when we speak of unprecedented investments by this government—the $34 billion to the Trans Mountain expansion comes to mind—and what level of increased greenhouse gas emissions we'll see as a result of the Trans Mountain pipeline.

I wanted to ask officials if they had examined the price sensitivity analysis and the relationship between building a pipeline when oil prices are generally low and how that increases emissions. The most detailed report I've seen on that was the U.S. Department of State environmental assessment on the Keystone pipeline. I wondered if any of the officials here had examined that, and then looked at what kinds of emissions increases we would see with the Trans Mountain pipeline.

[The Chair, Liberal, Francis Scarpaleggia]

You have one minute.

[Lawrence Hanson]

I'll start.

I just think it's important to note up front the decisions related to the Trans Mountain pipeline were not made within our department, so we might not have been doing that kind of analysis.

I'll turn to Derek, if he wants to add anything.

[Derek Hermanutz]

No, I don't have anything to add. Our projections are based on the Canada Energy Regulator price and production forecasts. We don't have specific projects per se, at least from our macro-level projections.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

My concern is that in this conversation we quite often dive into details and weeds that don't make sense to Canadians. In 1990, our greenhouse gas emissions were 608 megatonnes, bringing it back up to easy levels for people to compare, and in 2022 they were up to 708 megatonnes, whereas virtually every one of our partners that signed the Kyoto Protocol, particularly the European Union, as an example, were far below their 1990 levels. We're one of the only countries that remained above 1990 levels.

Based on anything one can find in the literature, building additional fossil fuel infrastructure will increase emissions. The International Energy Agency says so. The Intergovernmental Panel on Climate Change says so. Putting public money into building the Trans Mountain expansion—this is the point about the U.S. Department of State analysis—particularly when the price of West Texas Intermediate is low, will actually increase emissions.

[The Chair, Liberal, Francis Scarpaleggia]

Ms. May, we're done here.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

I thought we had two and a half minutes. I'm sorry.

[The Chair, Liberal, Francis Scarpaleggia]

Yes. You got more than that. It's always very interesting. I wish I could give you more time.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

It's a question the department doesn't know, so....