Evidence of meeting #12 for Environment and Sustainable Development in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was sector.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Eddy Pérez  International Climate Diplomacy Manager, Climate Action Network Canada
Jerry V. DeMarco  Commissioner of the Environment and Sustainable Development, Office of the Auditor General
Simon Langlois-Bertrand  Research Associate, Trottier Energy Institute
Sylvie Marchand  Director, Office of the Auditor General
Christina Hoicka  Canada Research Chair in Urban Planning for Climate Change, Associate Professor in Geography and Civil Engineering, University of Victoria, As an Individual
Éric Pineault  Professor, President of the Scientific Committee, Institute of Environmental Sciences, Université du Québec à Montréal, As an Individual
Dan McTeague  President, Canadians for Affordable Energy

11:50 a.m.

NDP

Laurel Collins NDP Victoria, BC

Thank you, Mr. Chair.

Mr. DeMarco, many of the questions I had for you have already been asked, but is a review of the government's progress on its 2023 commitment to eliminate fossil fuel subsidies something you'd consider adding to your agenda?

11:50 a.m.

Commissioner of the Environment and Sustainable Development, Office of the Auditor General

Jerry V. DeMarco

Possibly. I was hoping we wouldn't need to. I was hoping that this file would be closed and that there wouldn't be much residual risk left of non-compliance with the commitment from Pittsburgh in 2009 by this late stage, but it is possible we may have to look at it.

If we do look at it, we may look at it more broadly, as we did, for example, in 2012, when we looked at all supports in a study on fossil fuel supports as opposed to getting mired in this word game about the definition.

11:50 a.m.

NDP

Laurel Collins NDP Victoria, BC

Thank you so much.

Mr. Langlois-Bertrand, yesterday's IPCC report made it very clear that we have the tools to transition to ensure that we are reducing emissions. You mentioned in one of your answers that CCUS subsidies shouldn't be given to the fossil fuel industry. Could you elaborate?

11:50 a.m.

Research Associate, Trottier Energy Institute

Dr. Simon Langlois-Bertrand

Sure. We're going to have to do a lot of carbon capture and storage in order to reach carbon neutrality, or at least that's what all the modelling seems to suggest at this point. That means we need to be careful about where we use it, especially in the short term. It's still an expensive technology. There's still a lot of uncertainty with regard to storage itself and the performance of the technology to capture emissions.

We know that theoretically we can get to 90-something per cent of capture, but so far, we're very far from that. We need to think about whether or not it's a good idea to do this in a sector where there are other options to reduce the carbon footprint, while other sectors may be left wanting. I mentioned earlier that in the production of cement and steel, for instance, it is much more difficult to consider alternatives for reducing emissions, apart from drastic cuts in production.

11:50 a.m.

NDP

Laurel Collins NDP Victoria, BC

Thank you so much. I'll go back to Mr. DeMarco.

Given that we're hearing that the government is planning on giving the fossil fuel industry and others a $50-billion tax credit subsidy, do you see a policy disconnect between continuing to subsidize the production of fossil fuels when we have solutions available to transition to renewable energy that are not adequately funded currently?

11:50 a.m.

Liberal

The Chair Liberal Francis Scarpaleggia

That's kind of a yes or no question, I guess, because we're running out of time.

11:50 a.m.

Commissioner of the Environment and Sustainable Development, Office of the Auditor General

Jerry V. DeMarco

There's a potential for policy incoherence, as we've talked about in our “Lessons Learned” report.

11:50 a.m.

Liberal

The Chair Liberal Francis Scarpaleggia

Thank you.

Go ahead, Mr. Mazier.

11:50 a.m.

Conservative

Dan Mazier Conservative Dauphin—Swan River—Neepawa, MB

Thank you, Chair.

Mr. Pérez, we heard from the Indian Resource Council last week, who stated the following:

Many of the things that have been described as fossil fuel subsidies are actual programs and funds that directly support our first nations communities and our involvement in the sector. These go to rectifying some of the economic wrongs that have been done to first nations in the past.

However, you and your organization are calling on the elimination of the so-called fossil fuel subsidies. Do you see a concern with the economic impact that this would have on first nations?

11:50 a.m.

International Climate Diplomacy Manager, Climate Action Network Canada

Eddy Pérez

I see a concern with the impact on fiscal policy and the help that indigenous communities need in the context of transitioning and making sure they have the services they need to thrive, but I don't think we can limit the debate on fossil fuel subsidies to that specific case. We need to look at, as we've said before, which subsidies need to be phased out immediately and which are those that are helping to meet specific needs, in particular when it comes to indigenous communities.

The fact of the matter is that when you look at the whole spectrum, Canada continues to subsidize the industry domestically and internationally, and it is not even related to indigenous communities. Our view is that we need to differentiate, of course, between those subsidies that need to be immediately phased out from those that have a particular impact on indigenous communities.

11:55 a.m.

Conservative

Dan Mazier Conservative Dauphin—Swan River—Neepawa, MB

I have another question for you, Mr. Pérez.

In the IISD report, “Federal Fossil Fuel Subsidies in Canada”, one of the non-tax subsidies listed was $2.37 million to fund a diesel generating station in a northern Ontario first nation. Seeing that this is considered a fossil fuel subsidy, do you believe that this investment should have been made?

11:55 a.m.

International Climate Diplomacy Manager, Climate Action Network Canada

Eddy Pérez

I think that Canada, in the context of reconciliation, should consider investing in what it should to repair the harm done to indigenous communities.

As I said earlier, in our view, there is a distinction that needs to be made between the subsidies that government is giving to industry and the money that is being used to make sure that indigenous people have access to the services they need in the north, where the government has also underinvested, to ensure that they also have the ability to participate—

11:55 a.m.

Conservative

Dan Mazier Conservative Dauphin—Swan River—Neepawa, MB

Should that investment have been made? Yes or no.

11:55 a.m.

International Climate Diplomacy Manager, Climate Action Network Canada

Eddy Pérez

From a personal experience, I think it should, but we also need to think that those—

11:55 a.m.

Conservative

Dan Mazier Conservative Dauphin—Swan River—Neepawa, MB

Thank you, yes.

You wrote an article in December on COP26, and you stated in regard to the Glasgow Climate Pact, “The final text didn't go far enough and avoided mentioning the need to phase out gas or oil.”

Do you still believe that Canada should phase out oil and gas at a time when the world wants to cut ties with Russian energy?

11:55 a.m.

International Climate Diplomacy Manager, Climate Action Network Canada

Eddy Pérez

I do. I do, and this war has exposed the need for us to transition away from oil and gas. Around the world, the European Union and members of the European Union are looking for ways to transition away from fossil fuels and gas. There is, of course, this energy crunch discussion that is happening right now, but that can't be a replacement for the fact that we can't expand production and increase infrastructure for fossil fuels. Certainly this war has made a case that we need to transition away from fossil fuels.

11:55 a.m.

Conservative

Dan Mazier Conservative Dauphin—Swan River—Neepawa, MB

What do you tell the people who have no energy right now, today? Germany's basically firing up its old coal plants because it has been cut off from Russia.

What do you tell people who are sitting cold there today?

11:55 a.m.

International Climate Diplomacy Manager, Climate Action Network Canada

Eddy Pérez

The energy experts around the world, in particular those from the International Energy Agency, have said clearly that this represents a moment of wake up in the context of energy security. It will come first, of course, with relying on some fossil fuels, but this is also a way in which we can get ourselves out of the dependence on fossil fuel energy.

They have said it; it's not me. There's a 10-point plan that looks at all the solutions at our disposal to put behind us the legacy of fossil fuel dependence.

11:55 a.m.

Liberal

The Chair Liberal Francis Scarpaleggia

Thank you.

Mr. Duguid.

11:55 a.m.

Liberal

Terry Duguid Liberal Winnipeg South, MB

Thank you, Mr. Chair, and thank you to our witnesses.

I have a quick question, and hope I can get a quick response from our commissioner.

The government has committed to phasing out fossil fuel subsidies two years in advance of its previous commitment.

I'm wondering what you need in terms of transparency, data and a framework to assess whether that commitment has been fulfilled. I'm wondering also whether you have had the opportunity to provide some input into the definition of subsidy. As you said, we've been hung up on that to some extent, and that's been evident in some of the discussion today. Have you provided the government with guidance, beyond the simple fact of whether it helps or it hurts?

11:55 a.m.

Commissioner of the Environment and Sustainable Development, Office of the Auditor General

Jerry V. DeMarco

There's nothing recent. Because this is the topic that the committee chose to study, we don't have a recent report on it. I don't have any new data to share with you, because it's not an open file. I did respond to Ms. Collins and said it is something that we'll consider looking at again in the future.

We don't have any late breaking news or anything in terms of our relationship with the departments on this particular issue. We've come here today only because it's a topic that was chosen by the committee as opposed to a topic from a recent report that we've tabled.

Having said that, with the 2018 peer review, which Argentina started, and then a 2019 consultation with Canadians on definitional issues and so on, I was expecting to find more in the file in terms of recent communications from the department to Canadians at large regarding this issue. There isn't that sort of reporting, and I do not know the answer to that.

Noon

Liberal

Terry Duguid Liberal Winnipeg South, MB

Okay. This next question is for Mr. Langlois-Bertrand.

I enjoyed your testimony. The CCUS discussion has been very interesting. You have folks on one side of the equation who think it's salvation, and folks on the other side who think it's a subsidy for the oil and gas sector. The government has invested heavily in the net-zero accelerator in a hydrogen strategy, particularly as it relates to blue hydrogen, which, from my reading of the literature, has a tremendous potential in the heavy transportation sector. Once you get that hydrogen into a truck battery, it's non-emitting, as you know.

Can CCUS be viewed as a technology development initiative, as we have done for so many other sectors? We're doing it in the battery sector right now. We've done it in various technology sectors. Does the price on pollution, as it gets to $170 a tonne, make it much more economical? Isn't that why we should be developing the technology now? My understanding is that it's competitive at about $110 a tonne, and before you know it, we will be at that level.

Noon

Research Associate, Trottier Energy Institute

Dr. Simon Langlois-Bertrand

There are a few things I want to say here.

You're right to point out carbon pricing. At the same time, if carbon pricing becomes sufficient for it to be economical, then I don't think we should be talking about support. If it's not necessary and it will happen, the industry can make that decision for itself, just like any other industry.

With regard to the CCUS necessity, or use and so on, I think we need to be very careful about the “U” part. The “U” part, so far, is more than three-quarters of carbon capture around the world, including in Canada. The “U” part serves to extract more oil from deep underground wells when it would not otherwise be taken out of the ground. If that's what we want to support, then I would have some concerns about the—

Noon

Liberal

Terry Duguid Liberal Winnipeg South, MB

Okay. Just so you know, the Liberal platform commitment is not for more production or oil extraction.

Also, if you don't start the technology development now, you won't have it available in the late twenties and early thirties, which is when we will need it, not only for oil and gas, but also for cement and some of those other industries that you mentioned.

Noon

Research Associate, Trottier Energy Institute

Dr. Simon Langlois-Bertrand

Yes. To be prudent about this approach of supporting CCS, versus CCUS in some cases, I think it needs to be done outside of the oil and gas industry, and especially outside of sectors where it seems to be a silver bullet, when it's not. Don't get us into building a lot of infrastructure that we may have some concerns about just a few years down the road.