Environment Committee on April 5th, 2022

[Dr. Simon Langlois-Bertrand]

I don't, actually. Our results are nuanced in a very important way with regard to carbon capture.

On the one hand, it seems to be—and there seems to be consensus more and more on this across net-zero reports around the world—that CCS will be necessary to reach carbon neutrality in the longer term. However, it needs to be kept for applications where it's absolutely essential, so where it's impossible to avoid the emissions, for example, in the production of cement, steel and such.

If we use CCS, it has to be as a last-resort solution for any sector, after all possibilities for reducing greenhouse gas emissions through other means have been—

[Lloyd Longfield, Liberal, Guelph, ON]

It has to be part of the tool box.

[Dr. Simon Langlois-Bertrand]

It has to be part of the tool box for sectors in which it's impossible to do otherwise, but that doesn't include oil and gas.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Madame Pauzé.

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you, Mr. Chair.

Once again, I join with my colleagues in thanking all the witnesses for being here today.

My questions are for Mr. Langlois-Bertrand, and they're similar to those of Mr. Longfield.

We've talked about your report entitled, On the way to net-zero: The 2030 milestone, which was submitted to the federal government for its consideration of your findings.

You say that, if the government were to adopt all your recommendations, it could hope at best for GHG emission reductions of only 25% to 35% by 2030. Those figures show that the targets advanced by the government can't be met. The minister released his program last week, and he claims he could meet them through his reduction plan.

Do you think he could do it by implementing what's proposed in the emissions reduction plan?

[Dr. Simon Langlois-Bertrand]

It's definitely possible to make significant progress toward those targets, but we very much doubt it based on the results we've achieved so far.

You have to understand that the deadline is slightly more than seven years away. Many sectors can begin a transition, which will be necessary to achieve net-zero emissions by 2050, but it will be extremely difficult to meet the 2030 targets.

We've proposed several ways in which we can try to make as much progress as possible. We're also realistic about the deadline for implementing those measures. We have doubts about that. It isn't necessarily enough to say the government's plan doesn't include a wide range of good ideas; they have to be clarified and implemented.

We can't see how all that can be done simultaneously by 2030. That's why we're pessimistic about that target in particular.

[Monique Pauzé, Bloc, Repentigny, QC]

Following on from that, you say in your report that you're pessimistic. You also say that urgent, major measures will be necessary to reverse the trend, beyond what's been announced publicly and what's been put in place. You say those measures must be introduced now and be coordinated among the various orders of government.

We know the provinces currently generate a lot of electricity, part of which comes from fossil fuels. They don't seem to be developing any plans that will head us in the direction you wish. Yesterday, however, the Intergovernmental Panel on Climate Change stated in its report that we have 3 years to cap our emissions and until 2030 to reduce them by 48%. It emphasizes solutions that are generated by cities.

My question concerns this kind of coordination, which seems absent from the new federal emissions reduction plan. Do you think there's a plan to grant efficient subsidies to the other orders of government to encourage them to act? I'm obviously referring to grants to low carbon-emitting sectors.

[Dr. Simon Langlois-Bertrand]

Electricity is a good example given the provinces' jurisdiction over the sector.

One of the issues the federal government is forced to consider in the plan is the realistic role it can play in getting things moving in the right direction. We can really see in the plan released last week that it's aware of that fact. It proposes pathways, but the provinces will definitely have to be included very soon.

Based on our analysis of the provincial planning of public power utilities, which we conducted before the federal government released its plan, there's absolutely no evidence for the moment that networks will get to the decarbonization stage it claims they have to reach by 2030.

Some provinces have detailed plans, but few of them are planning beyond the next few years, except for the very sharp increase in the demand for electricity that will accompany decarbonization in the longer term. Without this infrastructure, however, that will obviously be impossible.

[Monique Pauzé, Bloc, Repentigny, QC]

At the same time, isn't it surprising that the 2030 Emissions Reduction Plan makes no mention of the Canadian Council of Ministers of the Environment? Couldn't it be the place where that coordination is done?

[Dr. Simon Langlois-Bertrand]

Unless I'm mistaken about the name, the plan raises the idea of creating a national council for electricity measures and thus helping to accelerate decarbonization.

Would it be better to rely on existing councils for that? Perhaps it's hard to answer that off the cuff. We already have cooperation mechanisms, but that doesn't mean the actors in the organizations in question have the same motivations. I think that that's where the difficulty lies and that we definitely need a leader to herd everyone in the same direction if we want significant results.

[Monique Pauzé, Bloc, Repentigny, QC]

I'm going to echo the question of my colleague Mr. Longfield and talk about carbon capture and storage. It appears a tax credit will be announced in Thursday's budget. Do you think a tax credit is a fossil energy subsidy?

[The Chair, Liberal, Francis Scarpaleggia]

Please be brief, Mr. Langlois-Bertrand.

[Dr. Simon Langlois-Bertrand]

I know the debate on that definition is a complex one, as Mr. DeMarco said earlier. Whether you call it a direct or indirect support provided by the government through whatever incentive it might be, I consider it a support. Now, will we call it a subsidy in the context of international negotiations? That may be a pointed question. Ultimately, however, the result is the same or the debate should be similar.

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you.

[The Chair, Liberal, Francis Scarpaleggia]

Go ahead, Madam Collins.

[Laurel Collins, NDP, Victoria, BC]

Thank you, Mr. Chair. My first question is for Eddy Pérez.

Canada gives out more public financing to big oil and gas than any other G20 country. At COP26, Canada adopted the Glasgow Climate Pact to accelerate efforts to phase out fossil fuel finance.

Where do you see Canada in relation to our international peers on this commitment, and what opportunities do you see leading up to COP27?

[Eddy Pérez]

The first thing we need to note is that we are currently giving about 14.5 times more support for fossil fuels compared with other countries. Just as a comparison, G20 countries provide about 2.5 times more support for fossil fuels than renewables. This kind of gives you an idea of the work we have to do to close that gap. At the same time, within the G7, we have changed the date of the phase-out of inefficient fossil fuel subsidies to 2023. We have a challenge to reduce the gap and then to meet that commitment by 2023.

At COP27, there are going to be discussions about enhancing Canada's NDCs. Canada committed to enhancing its NDC by the Egyptian COP. Within Canada's previous nationally determined contribution, Canada did not include fossil fuel subsidies reform like other countries have done in the past. This could be a major opportunity for Canada to use to present an enhanced nationally determined contribution in Egypt.

Additionally, we look at discussions related to reforms of the international financial architecture that are happening both at the International Monetary Fund and at the G7 summits. These are opportunities that Canada can use to really enhance its commitments. The world is looking at Canada because we changed the date to 2023, and it is something that other countries are looking at.

[Laurel Collins, NDP, Victoria, BC]

Can you describe the benefits of Canada's establishing a definition of fossil fuel subsidy that's aligned with leading international standards? In your opinion, is there such thing as an efficient fossil fuel subsidy?

[Eddy Pérez]

There is no such thing as an efficient fossil fuel subsidy. Fossil fuel subsidies could be seen as providing small benefits, but overall, in the context of the climate crisis, there's no such thing as an efficient fossil fuel subsidy.

The importance of a definition is a matter of transparency. As the commissioner said earlier, we need to know specifically what we're trying to take away from this in the context of subsidies. It's critically important that we look at what the debate on the definition is going to lead us to. We have a major investment gap here in Canada. In yesterday's report, the IPCC said we need to increase investments, only in North America, by a factor of three to increase the capacity of renewables and make sure we pay for the infrastructure that is going to lead us towards meeting our goals for 2030.

I see the definition debate as an opportunity to increase the ambition on transparency, but also to look at opportunities regarding the kinds of subsidies we actually need to unlock the renewable energy potential here in Canada.

[Laurel Collins, NDP, Victoria, BC]

The IPCC report showed clearly that at current levels of production there's no credible way to get to our goal of staying below 1.5°C. The government's emissions reduction plan actually shows an increase in production over the next eight years and relies heavily on unproven technologies like carbon capture and storage.

Do you consider this a winning climate strategy? Do you consider the CCUS tax credit a subsidy?

[Eddy Pérez]

No, and you're right: The emissions reduction plan is presenting a huge weakness, which is that it's trying to meet targets while at the same time increasing production of fossil fuels. That is inconsistent with the latest report from the IPCC.

Actually, the IPCC report yesterday called for the decommissioning and early retirement of fossil fuel, coal and gas infrastructure. It's warning governments that there is a huge risk of stranded assets. There's also a huge risk of increasing vulnerability in economics in Canada, but also in other petrostates. If Canada really wishes to move forward with a climate plan that is ambitious globally, it will need to look for ways to include the stopping of production of oil and gas in its climate plan. This could also be part of Canada's enhanced NDC in Egypt.

Additionally, I would say on the CCUS piece that it is one of the most expensive technologies presented in the IPCC report. The IPCC said yesterday that half of the solutions cost $20 or less per tonne of emissions, so we should also look at the list of solutions the IPCC presented yesterday.

[Laurel Collins, NDP, Victoria, BC]

Thank you.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

We have Mr. Carrie for five minutes, please.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Mr. Chair.

My question is for Mr. DeMarco. Canada has certain natural advantages, and the energy sector is certainly important for our economy. Our economy really depends on the energy sector to fund a lot of our social programs.

It was a little disturbing, when I read your opening remarks, that we still haven't come up with good definitions. I want to continue on with what Mr. Longfield was talking about, because governments tend to have this idea of “ready, shoot, aim”. In other words, they make big announcements to meet targets, but with no pathway forward. Like Mr. Longfield said, industry needs to be a partner. It's not the enemy, but we have to give it some certainty for investments because it's looking decades out. My understanding is that there's going to be an increased desire for greater energy over the next several decades, and we have to figure out ways of getting there.

My question to you is about trading competitiveness, because we compete. South of us is the United States, which is a very big producer of fossil fuels. Do we have any idea of regulatory harmonization within North America?

I'm asking you this question not only internationally, but also interprovincially. Are we starting to get some consensus on what a fossil fuel subsidy is? If we don't get that right, Mr. DeMarco.... As my friend Lloyd was saying, we can't phase out subsidies if we don't have the definition, and there are global implications. We could end up having an uneven playing field, and we could end up killing all of these jobs in Canada that our country and individual Canadians rely on.

Would you please comment on the regulatory harmonization piece, not only here in North America, but interprovincially?

[Jerry V. DeMarco]

There's a lot there, so I'll try to touch on the key points.

The notion of waiting until there's complete unanimity or whether the definition is ready.... The planet is heating up as we speak, so we can't always wait. It was in 2009 that Canada committed to phasing out inefficient fossil fuel subsidies. We're now in 2022 and we are still talking about the definition, so there's something wrong with that picture in terms of the pace of action.

Regarding Canada's being blessed with energy resources, it's blessed with a wide array of energy resources, not just fossil fuels. If we're going to move toward net zero, the answer isn't only going to be from the oil and gas industry to working on further oil and gas; it's also going to be in diversifying our energy base. This will also have the co-benefit of increasing energy security. That is something that countries around the world are looking at because of the crisis in Ukraine and the need to have more dispersed energy production, rather than relying on imports and so on.

It's important to work together on all of this, but we can't forget that there is only so much greenhouse gas budget that we have in the world. If we keep producing oil and gas with emissions here from production and emissions when they're combusted for the exports overseas, we will break that budget. We have to come to that realization at some point, before it's too late. That's what the IPCC is trying to tell us with its report yesterday. To meet 1.5º, we have to make some of these hard decisions sooner rather than later.