Environment Committee on June 13th, 2024

[David McKay]

I'm not sure what—

[Matthew Green, NDP, Hamilton Centre, ON]

Then, in 2024, your board approved a pay raise of 12%, which means you'll be bringing in $17 million. You're profiting from both high inflation on oil and gas and mortgages as direct compensation.

Does your bonus package include performances in the oil and gas sector, yes or no?

[David McKay]

My compensation is set by the board and includes a number of publicly disclosed financial targets, strategic targets and climate targets. Ten per cent of my.... It does not include any specific reference to oil and gas.

[Matthew Green, NDP, Hamilton Centre, ON]

It has your climate targets. How much of your climate-target metric in the last fiscal year was included in your bonus? Have you met those targets?

[David McKay]

Yes, we met those targets. Given the strong performance we had in helping influence policy, the climate institute and the renewables program—the $400 billion in sustainable financing we put in there—the leadership we've shown on policy....

Yes, we met our targets in 2023.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you very much, Mr. Green.

Mr. Deltell, you have the floor for five minutes.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you, Mr. Chair.

My questions will be directed to Mr. Thomson and will focus on First Nations.

We all recognize that we need the support and assistance of First Nations more than ever to develop our economic future, as well as our energy future and our environmental future, in particular. First Nations are part of the solution.

That's why our party has made very firm commitments to make First Nations partners in every project for the future that touches one of their ancestral lands. We want First Nations to be partners in these projects, whether they involve natural resources or energy, and to benefit from the prosperity of these projects. For centuries, they've been given a cheque to get out of the way. Now, we want to create paycheques together with First Nations.

Mr. Thomson, in your opening address, you talked a lot about First Nations, in fact.

The point is that first nations don't own the land like that. They have to go through the government.

How do you deal with a first nations community that would like to do a big project, but you have to address it as if they don't own the land as it is?

[Scott Thomson]

As I mentioned, indigenous reconciliation is extremely important, and economic reconciliation is part of that. As a Canadian and also as a bank CEO, I'm pleased to see the participation of indigenous communities in a lot of the sustainable infrastructure currently invested in.

This is where I get back to the point about the energy transition being so important, because it's a business opportunity and an economic opportunity as well as a risk that needs to be dealt with. We can use this moment in time to make sure we have indigenous and economic reconciliation at the same time.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Thomson, in your opening address, you rightly praised Canada's potential. We have everything we need to succeed in the energy transition, to make it a reality and secure our future in terms of energy and natural resources.

I remind you that oil consumption in Quebec has increased by 7%. If the business model imposes rules that are too strict, companies won't invest in Canada and projects will be developed elsewhere. If we turn off the Canadian tap, it's not the planet that will come out a winner, but Qatar and Saudi Arabia.

How is it winning to have overly strict measures, which put the brakes on Canadian momentum, when the planet needs Canada more than ever?

[Scott Thomson]

I agree that we have a great opportunity in front of us. We have a stable economy, innovative companies and strong talent. We have world-class companies in our energy sector. They will invest in helping us through this transition, and financial institutions have a role to play in that.

I'm very optimistic about the outlook for Canada as we navigate through a very complex situation.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

I'd like to ask you one last question.

Can you give us the definition of greenwashing? How can we avoid it and make efficient investments instead?

[Scott Thomson]

I think transparency and trust are key to what we're trying to do at the Bank of Nova Scotia. We've done a lot of disclosure. We've been recognized for that disclosure by a number of third parties. We've won awards for that disclosure.

I think disclosure is really important. I think it's really important that all stakeholders understand where we're allocating our capital and how we're helping our clients through the transition.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you very much, Mr. Thomson.

I would also like to thank all the other witnesses for their contributions.

Mr. Chair, I'd like to use the little speaking time I have left to share a final thought with you.

I'll confess my conflict of interest right away: I'm one of the 7.7 million members of the Desjardins Group. I must say that I was very disappointed to learn that no Desjardins representative was able to appear before our committee today. Desjardins Group has 56,000 employees. I'm sure Ms. Pauzé agrees with me that Desjardins Group represents the economic strength of Quebec. As I was saying, I was surprised to learn that Desjardins was unable to send a representative to testify before the committee. I think that's unfortunate.

It has to be said that Desjardins is a major player when it comes to finances in Quebec. When I attend community events in my riding on weekends, I always say it's suspicious when Desjardins isn't there. That's how present Desjardins Group is in the community. It's also everywhere in Quebec's financial world. I believe that Desjardins Group should have appointed a representative to come and testify. I can't believe they couldn't find someone, among the 56,000 Desjardins employees, to come and testify here...

[Monique Pauzé, Bloc, Repentigny, QC]

I have a point of order, Mr. Chair.

I'd like to remind you that we're talking about the major Canadian banks today because, as I was saying earlier, they're the ones at the top of the list when it comes to investing in fossil fuels, not Desjardins.

[The Chair, Liberal, Francis Scarpaleggia]

I didn't quite catch the last bit, but I'd like to clarify that today, it's actually the banks that are testifying. The Desjardins Group, as a cooperative, had not been invited to be part of this panel of witnesses. That said, we had invited Desjardins to testify at a later date, but unfortunately they turned down our invitation. I wanted to make that clear. So we had extended an invitation to them, but…

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Chair, I too would like to clarify one thing. I double-checked before making my comment, and the Desjardins Group refused to come and testify.

[The Chair, Liberal, Francis Scarpaleggia]

I can confirm that Mr. Deltell verified the information with me and that, for my part, I double‑checked it with the clerk. You have to be careful what you say.

The last speaking turn goes to Ms. Taylor Roy.

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

Thank you very much, Mr. Chair.

I'd like to start by thanking all of the witnesses here today.

Today, we have the CEOs of the major banks. Last week we had the CEOs of the major oil and gas companies. While it's a great pleasure to have you here to testify, I do hope that one day we will see a woman among the ranks of the CEOs.

I would like to start by saying that Canadians have always been able to trust our banks to protect our deposits and the financial stability of our country. However, today many Canadians do not trust our banks to protect the future of our planet. This is very troubling. There are many reasons this is the case. With my questioning, I'd like to address this.

There have been comments regarding how you're working with all clients on sustainability and meeting goals, but we know that the oil and gas sector, although it represents less than 5% of our GDP, is responsible for more than 31% of our emissions. We also know that the five major Canadian banks have been increasing their investments in fossil fuel companies. This seems very inconsistent with meeting the net-zero goals that we have set.

I'm wondering if each of you would be willing to commit to only financing fossil fuel companies if the projects are verified to have an impact that will reduce the greenhouse gas emissions significantly.

Mr. Dodig, I'll start with you.

[Victor Dodig]

Good afternoon. It's a great question.

I will commit that our bank will work with companies that are working toward a path to net zero across the energy spectrum. I think we have a responsibility, and candidly, you all have a responsibility—

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

Excuse me. I'm sorry. I'm just asking for a quick answer, because I want everyone to answer. Will you commit?

[Victor Dodig]

I'm committed. I'm committed to working with all our clients to net zero. We are working on that. We are absolutely working on that.

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

Will you finance only projects that reduce emissions in the sector?

[Victor Dodig]

Well, you can't actually define it that way, because not every project on its own.... That would be misleading you. What I would tell you is that on its whole, we are working to reduce that—

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

That's answering my question. Thank you.

Mr. White, could you answer the same question?

[The Chair, Liberal, Francis Scarpaleggia]

You're on mute, Mr. White.