Environment Committee on Nov. 25th, 2024

[The Chair, Liberal, Francis Scarpaleggia]

No. We go to Madam Taylor Roy.

Do you want to get on the list later?

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

No, not yet.

[The Chair, Liberal, Francis Scarpaleggia]

The list goes: Ms. Taylor Roy, Madame Chatel, Mr. Longfield, Mr. van Koeverden, Mr. Deltell, Mr. Leslie and Ms. Collins.

[Adam van Koeverden, Liberal, Milton, ON]

Mr. Chair, was I really that far down the list?

[The Chair, Liberal, Francis Scarpaleggia]

Well, it's very complicated, but that's just the way it is. I'll explain, maybe, later. Thank you.

Go ahead, Ms. Taylor Roy.

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

Thank you, Mr. Chair.

Thank you to my colleague Madame Pauzé for putting forward this motion.

I think it's a very good idea to be doing this. We've worked on this study for quite a while now. The time frame to get our sustainable finance legislation in place was yesterday, or last year. The climate-aligned finance act is already there. We have some good legislation, and I think we need to move more quickly.

Unfortunately, we've had a number of delays in this committee over the course of this study, which have caused us to not move as quickly as we would have liked to get this study and the report completed. Some of them were necessary, like our study on the Jasper fire. I believe sending a letter to the ministers would help expedite some of the things that need to be undertaken and at least have them considered by the bodies.

With regard to OSFI, since it's in the middle of reconsidering it and it can start looking at what it should be doing to align with it, we should definitely have that recommendation there.

We've talked a lot about the climate-aligned finance act in this committee, and we need to have that science-based regulatory framework in place. Asking to have these particular recommendations in place and having the federally regulated public pension funds—the CPPIB and the Public Sector Pension Investment Board—disclose their investments, starting as soon as possible, would be very important.

I note what's happening in Alberta with its pension fund right now. There's the move toward less transparency and a very bizarre way of running a pension plan. I think the example set by the federal government in the pension plans that we regulate would be good for other pension plans across Canada.

The working group in the Competition Bureau is also an excellent idea, Madame Pauzé. We need to do what we can to combat greenwashing in the financial sector as well as we have in the real economy.

For all those reasons, I say that we should do this. I think there could be more in this letter, but given that the report will be going forward in January and we can supplement it with other recommendations, these are some of the key ones that we should put in place and put forward.

I will just thank you for this. Sustainable finance is something we have not moved on quickly enough. The taxonomy is very important. Disclosures are important, obviously. I believe that the sooner we can get these in place, the better.

We had unprecedented cross-party support for climate-aligned financial regulation in 2023, with motion 84. We already know we're all behind this. We want our financial sector to be in support of the real sector when it comes to meeting our environmental goals. The more we can do to expedite that, the better it will be.

I know our analysts will do an amazing job working on the full report that will be forthcoming. We will certainly add other recommendations to this. This is something that should be done, especially in light of the FES coming forward, if we are able to actually do some real work in the House of Commons and if the Conservatives allow us to actually move on from debating a privilege motion—which we've already agreed to, but they've changed the terms of it now—so that we can get to some of the other work we have to do, it would be helpful. In the absence of that—we don't know when the FES will be coming forward—having other things like this go directly to the environment minister is important, as is trying to get some of this work started.

Bill S-243, which Senator Galvez put forward, has a lot of good material in it. Referencing that and trying to move forward on some of those issues is also important.

We have a climate emergency. Canadians across the country are concerned about the level of pollution that is continuing with the level of investment that is being made by our financial institutions and our pensions in the oil and gas sector for new production. They're not investments that would actually reduce emissions, as they like to say they want to do; they're for new production, which actually increases emissions.

The oil and gas sector in Canada right now is contributing, I think, less than 6% to our GDP. A lot of our oil and gas industry is foreign-owned and is contributing over 31% to greenhouse gas emissions in Canada. It's the only sector that has not contributed to the decrease we've seen in our emissions over the last while.

The sooner we can get the financial sector online, the sooner we will understand, along with the public, whether these investments are helping us meet our climate goals, are transitioning us to our environment goals, or are doing nothing or hurting us when it comes to our climate goals. I think all Canadians should have that information; certainly, when I look at investments or I look at companies, that is something I think about. I know many of my constituents in Aurora—Oak Ridges—Richmond Hill also look at that information and have found it difficult in the past to ascertain, in fact, where the investments are being made and whether a fund that says it's green is actually green.

This is an excellent motion you've put forward. Thank you for doing the work on this; I will certainly be supporting it.

Thank you, Mr. Chair.

[The Chair, Liberal, Francis Scarpaleggia]

Mrs. Chatel, the floor is yours.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you, Mr. Chair.

Thanks also to Ms. Pauzé, who is very familiar with my abiding interest in sustainable finance. I was quite pleased that she was introducing a motion in connection with this study, which I too am very eager to get to.

I am going to take a moment to say that I agree with Ms. Pauzé's motion, because I support the idea that the government has to pay attention to this in short order rather than wait for the committee's report. I do have some concerns, but they do not actually need to be stated in this letter. That said, I would still like to let my colleagues know what they are.

In October, the government announced major changes relating to sustainable finance. We finally have a science-based taxonomy, or path to a taxonomy. The government also announced rules concerning voluntary disclosure by big corporations, federal corporations. This is a very important adjustment and these are very important announcements.

Several aspects of the recommendations suggested in the letter are in line with the initiatives the government presented in October. For example, transparency, accountability and effectiveness in the financial system to support a net-zero transition are to be more robust. The taxonomy will also help considerably in addressing greenwashing. When the taxonomy is based on science, we can obviously expect that it will be implemented properly.

There are differences, and so there is the potential for tension, between our recommendations and the measures the government will be taking based on the announcements made in October regarding the taxonomy and disclosure.

I see that Ms. Pauzé has made suggestions relating to transparency and accountability. I think the government is also planning amendments to the Canada Business Corporations Act, to make climate disclosure mandatory. For its part, the committee recommends enhanced transparency, particularly as regards pension funds and climate transition plans. These initiatives would make the government's proposal more robust.

Regarding the Canadian taxonomy, the purpose of creating voluntary guidelines for green and transition investments is to provide clear definitions and thereby reduce the risk of greenwashing, which is consistent with the committee's recommendation that there be a robust, science-based regulatory framework to combat greenwashing. I do not see any problem with that, nor do I see any problem with mobilizing private capital, because both initiatives, the government's and the one suggested by Ms. Pauzé, are intended to encourage the private sector to target its investments on climate objectives, basing decisions on a green, sustainable transition. A review of green obligations at ten years is a concrete step for funding sustainable projects, in line with the committee's objectives, and this is good.

I began by talking about what is aligned, about what is good. However, there are some potential discrepancies. The government has focused on voluntary guidelines relating to the Canadian taxonomy, while the committee seems to be recommending a robust regulatory framework to be provided in bills like Bill S‑243. This difference might create confusion while we wait for stakeholders to implement it. I wanted to point that out. I do not have any proposal to make, but I do still want this distinction to be recognized.

The government also did not mention an express review of the role of the Office of the Superintendent of Financial Institutions, while the committee recommends an expanded interpretation of its mandate to include climate risks and transition plans. This is a new element that had not really been considered.

Third, there are gaps when it comes to public pension funds. The recent developments, in October, did not lay out specific measures concerning investments by public pension fund managers such as the Canada Pension Plan Investment Board, which seems to be a priority for Ms. Pauzé. I am simply pointing out that this is an element on which we differ.

Last, the proposed amendments to the Canada Business Corporations Act do not expressly provide for the governance structure needed in order to ensure that transition plans are consistent with climate commitments. The committee would therefore recommend a more complete and binding framework. This is not something I am opposed to, but I do want to mention that there is a difference. In other words, action is taken more directly on finance by adding obligations.

I do not really have any amendments to propose at this stage. However, for the draft report that will be tabled in February, it will be important to point out that there are various measures and proposals at this time. I do want to thank our analysts in advance; they always do terrific work. One of these proposals is the bill introduced by Senator Rosa Galvez, which is excellent, but differs from the announcements made in October. The committee is probably also going to write a letter in which it proposes certain measures.

In conclusion, I think a strong, consistent approach must be taken that will attract more potential investments to Canada in our 21st century economy.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Ms. Chatel.

Mr. Longfield, the floor is yours.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Chair.

First of all, thank you to Madame Pauzé. This was a very creative way of bringing the will of the committee into the public eye.

We have had testimonies that would reinforce these recommendations. I was also thinking of our analysts. Normally, we look at a report and we base our recommendations on the background that the analysts include in our report. We're going on a different route, but I think it's also very consistent with what we've heard. I don't think there would be any problem having a report align with these recommendations because we did hear them over and over, and, in particular, in getting Bill S-243 completed.

When Parliament gets hung up, we do need to find other ways of getting our signals to the market. I think having this discussed at committee in an open forum...and thank you for bringing it to an open forum instead of in camera. Having our comments either in support of these recommendations or not—I support every one of them—is important.

We have a sustainable finance forum coming up on November 28 and 29. It's put on by MP Turnbull. I know there will be about 1,000 people in that room who would be very interested to know what signals are coming out of the environment and sustainability committee, so getting this out there before the middle of February is a brilliant move, I think.

It's a little unusual, but given the delays we're seeing in Parliament and in committees, I think it's important, given the urgency of, first of all, the climate emergency we're in, but also because sustainable finance is a topic that we have had an extra-government committee look at. They've also been saying that we did all of this work two years ago, we'd like to see what the government is thinking. This gives us a chance to express that.

I know some of the people who worked internationally on this would be very interested to see that our comments are in alignment with their comments.

It's a great way of putting a signal to the market. I commend Madame Pauzé for her creativity. I haven't seen this before, but committees can be creative. I think it's good news for Canadians that we can find ways to work together on important issues, like the climate crisis we're in.

I'm fully in support of these four recommendations. As Madame Pauzé said, there will be others that will come from our study, which was an extensive study. I won't start picking at it, because we don't have it in front of us, but once we see the study.... There were some very key elements to that study that I would like to see recommendations on, but we're not studying the study, we're actually studying this letter, and so I would love to put my support behind this, Mr. Chair.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Mr. Longfield.

Next, we have Mr. van Koeverden.

[Adam van Koeverden, Liberal, Milton, ON]

Thanks, Mr. Chair.

I would really like to thank my colleague and friend, Ms. Pauzé, for giving me the opportunity to speak to the committee about this important issue.

For those who are unaware, Senator Galvez's bill is a great bill. She's an extraordinary senator with a ton of public sector and academic experience in this area. I'm very enthusiastic about the chance to not just highlight her work but also demonstrate that there is potentially a consensus on this committee with respect to aligning the Canadian financial sector with science and our climate commitments.

When we were on break, I was reading some of Senator Galvez's credentials. She has a Ph.D. in environmental engineering from McGill. She was a professor at Université Laval for 25 years. She specializes in water and soil contamination, waste management and residues, sustainable development, environmental impact assessments and climate risk to infrastructure.

Suffice to say, she would have been a fine committee witness at many points in the last couple of weeks, months or year as we were studying water, climate-aligned finance and various other challenges with which we've been confronted.

I'm very much in support of this letter. It's creative and potentially unorthodox, but that's great. We have heard from many witnesses on our climate-aligned finance. We do have the summit coming up, thanks to MP Turnbull. I think this is a great way to demonstrate that the committee has been working on it. I fully support it.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Mr. van Koeverden.

Next, we have Monsieur Deltell.

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

Thank you, Mr. Chair.

I would first like to congratulate Mr. van Koevrden again on the quality of his French. Every time he has the opportunity to thank someone in French, he does it. He did it in the House of Commons last week and he did it here in this parliamentary committee, so I wanted to recognize him, and I applaud the efforts he makes for both our official languages. Here end the congratulations and acknowledgements.

I admit that I am a bit puzzled and surprised. Parliamentary committees deciding to send letters to ministers is to be expected. Mr. Chair, you have a lot more experience than I have, but I have nonetheless been here for nine years and I think this would be the first time a parliamentary committee sent a letter to some ministers about a problem before its report is released. It must be acknowledged that the law is meant to admit precedents, but in this case I think it is a very weighty precedent. I will explain.

What we are talking about right now is not a minor point. It is a very important subject that we have been talking about for months. No one here will doubt Ms. Pauzé's intention, or the intention of all the members here, to address this matter seriously and with a desire to move forward. The committee has not just met on a whim, for the fun of it. Ms. Pauzé and others had been talking about this for months. As well, the committee has been meeting since May. So there have been numerous meetings—nine, to be precise. Since we always go a bit over the allotted time, we are talking about some 20 hours of testimony. We have had 61 people testify before the committee. This is not a minor study.

It would also be wrong to argue or think that everyone is leaning in the same direction, like the tower of Pisa. I say that because we have had balanced testimony. Some witnesses were in favour of this approach, others were against it. Some stated objections, others pointed to positive elements; some were in favour of this approach but had a reservation that I won't say was neutral, but a caution, that we should not always look at things from the same perspective, and should rather come at them from different angles. This is what we call democracy and the work of Parliament. This is why we are here.

I know that Ms. Pauzé's heart is in the right place. She is not a person who gets involved in political wheeling and dealing; very much the opposite. However, I find that her letter illustrates her own vision, which some people share. We could see this during the recent testimony by people from the department. That is fine, and I have nothing against it. It is called democracy. However, to go from that to sending ministers a letter from the committee, a letter that assumes the content of the report to be released in February, February 12, if I recall correctly—I think that is a bit ambitious, to put it politely.

Ms. Pauzé, you know me pretty well. I am not the type to want to insult people for the fun of it. This is certainly not an insult; I just want to voice a caution. If this were a problem that had just fallen from the sky, on which we had to act fast, I could understand. However, this study is of considerable consequence. It is serious. That is why we have done it seriously, over nine meetings, and heard 61 witnesses.

Mr. Chair, we have done our homework correctly. We had almost 20 hours' worth of witnesses.

I am not against the letter, but I don't think that, in this specific case, it's our job to send a letter to the minister addressing what we have done as a committee. If some members here feel comfortable with this, fine. However, from my personal perspective, not all 61 witnesses agree with this. Some people have other opinions. This is what democracy is all about. This is what parliamentary committees are all about. This is why we have these witnesses and meetings.

I think it's a bit too early to conclude what will be in the report tabled in February. If some members here around the table feel comfortable with this and some other issues, go ahead. Everybody is free to send a letter to a minister. It's not because we are parliamentarians that we have to be sure of this. To the Canadian citizens watching us today, if you want to write to a minister, go ahead. However, as a committee, I think we have to be more careful with that.

This is why we are not comfortable with the issue and will not vote in favour of it. If all of the members here want to sign it, go ahead. However, sign it as a member of Parliament, not as a committee member.

Thank you so much.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Mr. Leslie, you have the floor.

[Branden Leslie, Conservative, Portage—Lisgar, MB]

Thank you, Mr. Chair.

I would like to echo some of the points of my colleague Mr. Deltell, which he articulated extremely well.

The analysts have yet to do the work of compiling over 20 hours of testimony over the course of nine meetings, much of which I do not see reflected in the specific priority recommendations outlined in this letter, as proposed by my Bloc Québécois colleague, including alignment with Bill S-243. We heard a number of witnesses say it is terrible legislation. I would find it extremely disheartening to discount that via a letter on behalf of the environment committee. I think a report, at least, is a more thorough overview of all of the pieces of information that have been gathered throughout this very lengthy study. It could provide balance between two or more different views, and will, of course, include recommendations.

Largely for that reason, I will not be supporting this motion.

I also hope my name is not on it. Hopefully, it will not come from the environment committee. I will happily write my own letter to the environment minister sharing some of my views on these rather insane ideas that are clearly meant to starve our oil and gas sector. We've heard comments from members of this committee today attacking certain provinces, which highlights the division sowed by the current federal government. We've never seen more division among people in this country. We've never seen more division across provinces in this country. Comments like those I've heard today—reflecting why we should be sending this letter to try to gut control of public sector pension plans and the livelihoods they will support, now and into the future, of our retirees—are on the basis of purely ideological, radical, activist viewpoints, as reflected by some members of this committee. I do not think this is an accurate representation of either this committee or all Canadians.

I will happily be opposing this letter.

Should the will of the committee be to send such a letter, I will individually send a letter following up and disputing the views on this. That will more accurately reflect the dual opinions that will undoubtedly emerge from the great work our analysts will do. In the new year, we'll finally receive the summary of information heard during this study, and the recommendations that stem from it.

I will be voting against this motion, Mr. Chair.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Mr. Leslie.

Ms. Collins.

[Laurel Collins, NDP, Victoria, BC]

That's a bit hard to follow up on.

I was going to speak, generally, to my support of this letter, to the work that Madame Pauzé has done and to the incredible expert witness testimony we received throughout the study.

Quickly, to follow up on Mr. Leslie's comments, this letter does not, in any way, talk about gutting public pension funds. In fact, I would like to read point three, which says, “Managers of federally regulated public pension funds, in particular the Canada Pension Plan Investment Board and the Public Sector Pension Investment Board, be required to fully disclose their investments in private equity funds.”

It's important that, at this table, we speak honestly and truthfully and we are accurate in the information we're providing to citizens. This is a very reasonable letter, and there are other pieces I would like to see in it. There are other pieces I want to see in the report. I have some pretty deep criticisms of the recent announcement the government made on the taxonomy and the fact that they're handing the decision-making over to a third party without making a firm commitment that fossil fuels won't be considered under the umbrella of sustainable finance. I would really like to see firm commitments around mandatory disclosures. I'm glad that, in this letter, it does talk a bit about transition plans and annual progress reports.

There are a number of pieces around the conflict of interest that exists when the people on fossil fuel—big oil and gas—boards sit on the same boards as our big banks. That's not outlined in the letter, but Madame Pauzé has taken a really reasonable approach to presenting a letter I hope we can all get behind, and then we'll do the work of digging into the final report.

I want to make sure that when people are listening in—there are people who tune in to our environment committee meetings—they know that not all the things Mr. Leslie just said are accurate. I encourage them to look at the motion itself.

I hope we can listen to the vast majority of the expert testimony that was presented here at committee and urge the government to move forward on sustainable finance and become a leader. Canada has been falling behind, so it is urgent that we tackle this issue. We are facing a climate emergency. We need to take every opportunity to move the needle when it comes to reducing our emissions.

Thank you, Mr. Chair.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Ms. Collins.

Madame Pauzé, go ahead.

[Monique Pauzé, Bloc, Repentigny, QC]

I thank my colleagues for all their comments. I have taken a lot of notes, which add a lot to the picture. I would have more recommendations to make, but I will stop here.

Regarding the creative form in which I moved my motion, I checked with my Bloc Québécois colleagues to see whether it was possible to do it and I was told that was the case. So I decided we could give it a try.

I think it is very important that the Canadian financial system be reformed to align with climate commitments. We have been told by almost all the witnesses who have appeared before this committee that Canada is really lagging behind on this and I think we are underestimating the impact of the banks' investments in fossil fuels on the Canadian economy. We are still talking about Canada for the moment.

The analysts have their work to do. Out of respect for that work, I thought we could wait until February 12 to study the report. However, we are elected representatives. If we do not agree on the recommendations that are to be proposed to us, we will still be able to write a supplementary or dissenting report. The fact remains the we are elected representatives and we have got to fulfill our responsibilities in order for things to get better.

We are talking about droughts, floods, health problems and even deaths. All aspects of our daily lives are being affected by climate change, and the banks are not being part of the solution. Rather, they are part of the problem, and it is therefore time for something to be done.

That is why this motion was very important to me. In point 1, it is not saying to pass the senator's bill. What it is saying is that we have to look to it in order to provide a robust, science-based regulatory framework. I do not believe people exist who are against things being science-based. In the case of the office of the superintendent of financial institutions, this is a suggestion by the commissioner of the environment and sustainable development. Point 3 is about mandatory disclosure. As long as the data is not disclosed and stays hidden, people are not able to take action. Information is essential if we are to be able to act and take the appropriate measures. It also talks about a working group. I do not think there is anything revolutionary in this motion.

May I ask for the vote, Mr. Chair?

[The Chair, Liberal, Francis Scarpaleggia]

Ms. Taylor Roy's name is still on the list.

[Monique Pauzé, Bloc, Repentigny, QC]

Okay.

[The Chair, Liberal, Francis Scarpaleggia]

Have you finished speaking, Ms. Pauzé?

[Monique Pauzé, Bloc, Repentigny, QC]

Yes.

[The Chair, Liberal, Francis Scarpaleggia]

The floor is yours, Ms. Taylor Roy.