Environment Committee on May 30th, 2024

[Rosa Galvez]

Absolutely, because it's about opportunities. When risk is there, yes, there is a danger, but there are also the opportunities. When you innovate in order to mitigate the emissions, then you will create new technology, and you will create a different economy. I don't need to tell you that we didn't abandon the Stone Age for lack of stones.

[Voices]

Oh, oh!

[Rosa Galvez]

We abandoned that age because there were better, cleaner, safer and cheaper ways of doing the same thing. That's the idea.

[Laurel Collins, NDP, Victoria, BC]

Can you expand on how these kinds of robust regulatory tools—legislative tools—will impact banks, pension funds, jobs and affordability?

[The Chair, Liberal, Francis Scarpaleggia]

Take 30 seconds, please, Senator.

[Rosa Galvez]

It will enable the sustainable jobs act. Without money, you cannot have your sustainable jobs act.

[The Chair, Liberal, Francis Scarpaleggia]

I'm going to have to cut the time in half in the second round because we don't have permission to extend beyond a certain time.

You have two and a half minutes, Mr. Mazier.

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

Thank you, Chair.

Mr. Pardy, you're a lawyer. Is that correct?

[Bruce Pardy]

Correct.

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

You mentioned that public companies already have an obligation to consider and declare risks for investors. Can you explain what you mean by that?

[Bruce Pardy]

Of course. Sure.

There are some companies that are publicly listed on stock exchanges, and people buy shares. For example, if you're a company subject to the Ontario Securities Commission, it has a whole list of requirements that these public companies have to meet in terms of the disclosure, the material risks and change and so on. If they don't do that, they'll be in breach of those security rules.

More principally, the whole idea of a business enterprise is to be responsible to the people that invest in you. That's the definition of an entrepreneur: someone who takes risk and manages it.

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

Thank you.

Mr. Routledge, how many megatonnes of emissions will be reduced in Canada by implementing OSFI's climate-related financial disclosure expectations?

[Peter Routledge]

When financial institutions begin to measure their counterparties for emissions, they will make pragmatic, empirically driven decisions on whether to continue to expose themselves to those institutions over time. To the extent that the institution decides to lower their exposure to emitters of greenhouse gases, then they'll pull capital.

It is not our job, nor our intent, to measure the reduction of emissions in the broader economy by forcing disclosure. It is our job and intent to measure the risks financial institutions expose themselves to so their boards and senior managers can make sound risk-based judgments.

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

You're not worried about reducing emissions. It's not one of the wanted outcomes. Okay.

Mr. Routledge, how much does it cost financial institutions to meet OSFI's climate-related financial disclosure expectations?

[The Chair, Liberal, Francis Scarpaleggia]

Give a very quick answer, please, if you have the figure. If you don't, you can send it to us.

[Peter Routledge]

Yes. There was a study done for a small or a medium-sized bank where the burden would be highest to meet our measurement rules or requirements. It would be about $50,000 to $100,000—

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

Can you please table that?

[The Chair, Liberal, Francis Scarpaleggia]

Can you send us something in writing on that, Mr. Routledge?

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

Thank you.

[Peter Routledge]

There's also a study by the—

[The Chair, Liberal, Francis Scarpaleggia]

No, I'm sorry. We have to keep going, Mr.—

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

Send us both studies, please.

[The Chair, Liberal, Francis Scarpaleggia]

Mrs. Chatel, you have the floor.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you very much, Mr. Chair.

My question will go to Mr. Routledge.

Thank you for being here with us.

In your view, what is the urgency of getting the taxonomy and disclosure right, and what is the implication if we do not have those policies in place?

[Peter Routledge]

Taxonomy and disclosure are two different pieces of the pie.

The taxonomy would help us quantify the opportunity. It would help financial institutions measure and identify the opportunity for adaptation.

The measurement would help financial institutions understand the extent of risk concentration they have with greenhouse gas-emitting energy sources. If they look at the evolution of the world in terms of utilization of energy, they'll be better positioned to measure their exposure and make sound risk management decisions.