Environment Committee on Nov. 27th, 2024

[The Chair, Liberal, Francis Scarpaleggia]

Good afternoon and welcome to meeting number 135 of the House of Commons Standing Committee on Environment and Sustainable Development.

The first hour of the meeting will focus on greenhouse gas emissions reduction policies in Canada, following a motion adopted by the committee on Friday, November 15.

Today, it is our honour and privilege to welcome the Minister of the Environment and Climate Change.

Minister, unless I'm mistaken, you'd like to take five minutes for your opening remarks. Is that correct?

[Steven Guilbeault, Liberal, Minister of Environment and Climate Change]

Yes, Mr. Chair. Thank you.

Honourable members of the committee, before I begin, I would like to acknowledge that we are gathered on the unceded territory of the Algonquin Anishinabe people.

Let me first talk about COP29, which ended last weekend. Canada came to COP29 with a clear purpose: to demonstrate that climate multilateralism matters. Despite all the challenges, our climate ambition remains unchanged. While there, we successfully defended the interests of Canadians, as well as human rights, workers' rights and the rights of indigenous peoples. We pushed for greater mitigation ambition and we collaborated with island nations and the least developed countries on international co-operation. We also announced a new climate funding model along with my colleague Ahmed Hussen, the Minister of International Development.

By endorsing, during COP29, the high ambition coalition leaders' statement on nature and people, we have shown that, once again, the Paris accord is working. Now, we are preparing to assume the G7 presidency, starting January 1, 2025.

While the Conservatives are focused on some random international assessment that doesn't reflect Canada's policies and reality, we are continuing to get credit for the results of our climate plan. Over the past years, our climate plan has been assessed and reviewed by credible international institutions like the International Energy Agency. They have acknowledged, when ranking G20 countries, that our plan is “ambitious”. Canada used to be one of the worst performers. That was nine years ago. Today organizations like Climate Action Tracker recognize that Canada's plan is credible and transparent. The latest "Emissions Gap Report" from UNEP, the United Nations Environment Programme, says that Canada has the first comprehensive road map to achieve the 2030 target. This was unthinkable nine years ago.

Our government has put forward very ambitious measures. International organizations have noted that at the end of 2022, Canada followed through on its commitment to end international public finance for fossil fuels—a commitment that was made, I might specify, under the previous Harper government—and that we've put forward some of the most ambitious regulations, with the goal of reducing oil and gas methane emissions by at least 75% from 2012 levels by 2030.

Building on the actions of millions of Canadians, the government continues to take action to reduce emissions to fight climate change while strengthening our economy with good jobs, clean industrial growth and a healthy environment for all Canadians.

First, let's talk about progress. Since 2005 Canada's emissions have dropped by 8%, according to the Canadian Climate Institute. Canada's emissions are at their lowest point in 25 years. We're on track to meet our interim 2026 goal, and we have a fair shot at meeting our 2030 target. At the same time, our economy is growing and inflation and interest rates are coming down. We are capping pollution, not production, from the oil and gas sector, a critical step toward fighting climate change while requiring investments in decarbonization.

Under a Harper-Poilievre Conservative government, estimates show that Canada's emissions would be 41% higher by 2030, the equivalent, in terms of pollution, of adding 69 million cars on our roads. Pierre Poilievre wants to slash legislation protecting our environment and allow Canada's largest polluters to pollute without limits, driving up the cost of climate change. We cannot let that happen.

Now let's talk about Canada's 2030 emissions reduction plan, a sector-by-sector path for Canada to reach its reduction target of 40% below 2005 levels by 2030 and net-zero emissions by 2050. The plan was introduced in 2022. It reflects input from over 30,000 Canadians, provinces and territories, indigenous peoples, industry and Canada's independent net-zero advisory body.

The Government of Canada has continued to make historic investments in clean growth and climate action since 2016. Pollution pricing is a big part of Canada’s climate plan. A carbon pollution pricing policy that makes life affordable while growing a clean economy by providing money upfront to families. The majority of families are better off with Canada carbon rebate payments every four months, in provinces where the federal system applies.

Pollution pricing is estimated to contribute to about a third of the emissions reduction achieved under Canada's 2030 emissions reduction plan. There's a reason countries around the globe implement a pollution-pricing system—it works. Let me give you a few examples.

The entire EU has a cap-and-trade system that is working. The price is 70 euros a tonne, which would make it a little over $100 Canadian right now, higher than our current $80 a tonne. Many other EU countries, including Finland, Switzerland and France, also have a price on pollution. South Africa has a carbon-pricing mechanism as does New Zealand, which is using cap and trade with a price of $50 a tonne.

The ERP includes over 140 programs, policies and regulations to help Canada bend the curve, such as phasing out inefficient fossil fuel subsidies; adjusting Canada carbon rebate amounts in line with the price on pollution, ensuring that the rebate continues to reflect the projected proceeds in each province where the fuel charge applies; having a 20% rural top-up available for households in rural areas and in small communities; having cleaner fuels to power our vehicles and industries; increasing the supply of zero-emission vehicles so that more Canadians can make the switch to cleaner and cheaper vehicles; adding more clean and reliable electricity to help our economy remain competitive; and releasing Canada's methane strategy to cut the emissions of this powerful greenhouse gas across the economy.

All parts of the economy have a role to play in meeting Canada's 2030 climate target, from transportation to the oil and gas sector, and from heavy industry to buildings. Everyone must do their part.

Measures such as the proposed pollution cap are crucial in addressing emissions from Canada's highest-polluting sectors. It also encourages the sectors to reinvest in clean energy projects that will cut pollution and that will create new jobs.

We're focusing on putting in place foundational measures for the future. It’s more than just targets. The 2030 emissions reduction plan is the cornerstone of our emissions reduction. Once we have a 2035 target, Canada will work towards developing comprehensive policies to help shape the measures and strategies needed to achieve it.

Canada has shown that it can reduce emissions while growing its economy and while supporting Canadians by creating new, sustainable jobs in emerging sectors; by driving environmental innovation; by providing economic opportunities for Canadian businesses; and by increasing investments in clean energy projects.

We cannot stop now. We need to continue pushing forward. Future generations—our kids and our grandkids—depend on it.

Thank you.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Minister.

I now invite Mr. Deltell to begin the discussion.

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

Thank you, Mr. Chair.

Good day, colleagues.

Minister, it's always nice to see you at this table. Welcome. We're happy to have you here whenever you like.

Climate change is real and we need to adapt to it, but the ultimate goal is to reduce pollution and emissions. There are two ways to do that. First, there's the dogmatic approach we've been living with for the past nine years and which has done nothing; then, there's a far more pragmatic approach.

Last week, around the same time and in the same location, we put a very clear question to the commissioner of the environment and sustainable development. We asked him if Canada was achieving its 2030 targets and his answer was categorically no. Yet, the minister says it is.

In his report, the commissioner concluded that Canada has the worst climate record in the G7, after nine years of this administration. He also talked about attending COP. I attended virtually and, one week ago at 1 a.m., COP tabled its annual report on the climate change performance index. For the second year in a row, Canada ranks 62nd out of 67 countries. That's the Liberal record, after nine years under this sanctimonious government that wants to tax Canadians.

Two weeks ago at COP, the minister mentioned the possibility of introducing not the first, not the second, but a third carbon tax, on shipping. Was he serious or was he just making a good joke? Quebeckers and Canadians really don't want another carbon tax.

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

Are you done?

First, thank you for the question and for recognizing the reality of climate change. If we asked all your Conservative Party colleagues, I'm not certain we'd get the same answer. However, I'm delighted to see that you, at least, think it's an important issue.

As for the report by the commissioner of the environment and sustainable development, it's important to note that the report covers everything Canada has done since 1990. When the environment commissioner says that Canada has the worst performance of all G7 countries, it's against the 1990 baseline, which is quite true. However, if we consider the last few years, Canada has one of the best performances of any G7 country. According to E3G, an international organization—we can forward the report to the committee—Canada has the second-best performance of all the G7 countries.

You're telling me that COP presented a report putting Canada in 62nd place. Your comments need some clarification, Mr. Deltell. The Conference of the Parties didn't table that report; rather it was a German organization called Germanwatch, which doesn't report to the United Nations and whose report you have there. You must know that Canada's poor performance in that report is due to oil and gas production. Unless you're telling me that the Conservative Party is pushing for a reduction in oil and gas production to improve our ranking in that report, Canada won't have a very good rating as long as oil and gas production is being evaluated.

I'm going to share a one-page document with members of the committee. I have it here in front of me, in English only, and I apologize for that. It's an award.

The Climate Scorecard's 2024 Government Climate Leadership Award says, “The following award is presented to Steven Guilbeault, For leading advocacy efforts in reducing greenhouse gas emissions.”

Canada received this award in 2024 in recognition of efforts by all Canadians and the Government of Canada to reduce greenhouse gas emissions. I was given the award, but I think we won it thanks to efforts by all Canadians.

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

Minister, I'm happy for you and I congratulate you on being so modest. However, I asked a very specific question. At COP29, you raised the possibility of implementing a third carbon tax. It would apply to shipping. Are you joking or do you really intend to impose a third carbon tax on Canadians?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

That's not true, I did not say that.

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

You're aware of all the statements by future President Trump, including the one two days ago on 25% tariffs on Canadian products. Will you give up on imposing a carbon tax that would hurt our businesses and citizens even more in light of Mr. Trump's statements?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

You know that carbon pricing in Canada is responsible for $25 billion in annual investments by companies like Dow Chemicals and even the Pathways Alliance, which represents major oil sands producers. Alliance's new CEO recently asked your leader to clarify his stance on carbon pricing, because the uncertainty around the Conservative Party and its leader on that issue is jeopardizing $25 billion in annual investments in the economy. You want to deprive the Canadian economy and Canadian workers across the country of that.

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

Minister, you spoke earlier about emissions from Alberta's oil and gas industry. Are you aware that emissions intensity has dropped 15% over the last 10 years for the same barrel of oil? What I mean by that is that production is increasing because consumption is increasing, but even though production is going up, emissions are going down. Aren't you grateful to see that audits are being done and major advances being made to reduce greenhouse gas emissions?

[The Chair, Liberal, Francis Scarpaleggia]

Mr. Deltell, I gave you a few seconds more. Does the minister know that?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

I don't have the numbers at hand. We can verify and provide them to you. Emissions intensity doesn't really matter. What matters is the total amount of emissions, and emissions in the oil and gas sector are rising.

[The Chair, Liberal, Francis Scarpaleggia]

I'm in trouble, I've really gone over the time. It's my responsibility to ensure that we stick to the allotted speaking time.

Mr. Ali, you have the floor.

[Shafqat Ali, Liberal, Brampton Centre, ON]

Thank you, Chair.

Thank you, Minister, for being here today.

Unfortunately, the Conservatives and their leader are in denial mode. They don't agree that climate change is real, and they don't agree that pollution contributes to climate change.

You mentioned the pollution cap in your speech. Can you tell this committee why it is important to cap pollution from the oil and gas sector?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

Thank you very much, Mr. Ali.

Well, as I said earlier in French, the oil and gas sector is the largest emitter in Canada—the largest contributor to our emissions. It is the sector that has seen the fastest growth in the past few years. It is anticipated that it will continue to increase its emissions. Therefore, there's no pathway for Canada to achieve any climate goals unless the oil and gas sector does what every other sector of the economy is doing, which is reducing their emissions. We're asking for efforts from every single sector, whether it's cement, steel, auto, electricity production or building.

We can't—and, I'd say, morally, we shouldn't—let one sector pollute as much as it wants with unlimited pollution while we're asking everyone else to make efforts. That simply doesn't make any sense. Now some CEOs are starting to say they need to step up to the plate when it comes to reducing their emissions.

[Shafqat Ali, Liberal, Brampton Centre, ON]

Thank you, Minister.

Everyone around the world and all scientists agree that climate change is real, except our Conservative friends and their leader.

During the last election, we committed to introducing an emissions cap on the oil and gas sector. Two weeks ago, you followed through on that promise by publishing draft regulations that would permit oil and gas production to grow, while lowering greenhouse gas pollution.

Can you explain how it is possible to do both?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

Thank you.

Yes, the documents and the regulatory impact analysis that were tabled show, in fact, that under this pollution cap, it is anticipated that production in the oil and gas sector would increase by 16% by 2030. Those who say we're trying to cut production.... That's not supported by analysis. While this is happening, the emissions would go down by 35%, which is significant. It is absolutely necessary, as I said earlier, for Canada to achieve our 2030 and subsequent targets for emissions reduction in order to get to carbon neutrality.

I should also point out that the Government of Alberta and all of the major oil companies in Canada committed to being carbon neutral by 2050. What the regulation does is to put out a framework to ensure that we start acting soon and not wait until 2048, then say, “Oh, we haven't started doing what we said we would do.”

[Shafqat Ali, Liberal, Brampton Centre, ON]

Thank you, Minister, for making tough decisions for our future generations while realizing that climate change is real.

What would the economic impact of the pollution cap be? Can you elaborate, please?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

Well, we think it's going to generate significant investment in decarbonization projects. We're already seeing some projects being announced. Strathcona announced a $2-billion project for decarbonization technologies. We're seeing more and more of these projects come online.

In the last two years, Statistics Canada has compiled data that shows that the oil and gas sector has collected more than $100 billion in profits. We feel it's fair to ask them to invest some of those profits as we also put money on the table to help this sector, as well as other sectors, decarbonize the Canadian economy.

[Shafqat Ali, Liberal, Brampton Centre, ON]

Thank you.

Talking about the economic impact, last year we gave a Canada carbon rebate to Canadians while putting a price on polluters. Eight out of 10 Canadians are getting more money back than they pay. We're also giving Canada carbon rebates to small businesses.

Could you please talk about how that economic impact is benefiting Canadians while also addressing climate change?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

Yes. I don't think I have the data here for SMEs, but we can certainly get that to the committee.

We are in the process of returning proceeds from that carbon pricing to SMEs.

I'll find it and I'll be happy to come back to you on this.

[Shafqat Ali, Liberal, Brampton Centre, ON]

Thank you.

[The Chair, Liberal, Francis Scarpaleggia]

We're essentially out of time.

Madame Pauzé is next.

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you, Mr. Chair.

I'd like to welcome all the witnesses to the committee.

I'm going to talk about a measure that is long overdue—the emissions cap. The Bloc Québécois is in favour of an emissions cap on the oil and gas sector, but we disagree with the Prime Minister's statement at the United Nations this fall that Canada was the first country to do so. The fact is that it has yet to set a cap on greenhouse gas emissions.

In his report, the commissioner of the environment and sustainable development says that the measure was delayed. It was proposed in 2021 and the regulatory framework was to be completed in early 2023. However, the regulatory framework was not published until December 2023. The proposed regulations were originally planned for December 2023 but have not yet been published, and the final regulations are expected in 2025.

The Bloc Québécois agrees with capping emissions, but we think the implementation is taking too long. It makes no sense. The commissioner's report finally confirms what the Bloc Québécois has been saying: The process is much too long. One wonders just what is going on.

Minister, in the regulations you published, the compliance period for oil companies is set for 2030–2032. However, the overall reduction target of 40% to 45% for Canada is for 2030. How can oil companies help achieve this overall target of 40% to 45% when they have up to 2032 to comply?

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

First, you say that the Prime Minister said that Canada was the first country to set a cap, but that it had not done so. No other major oil-producing country is proposing to do so, not the United States, not Norway, not Great Britain, not the Gulf countries. Canada is the only country to do so, and some of these countries have commended Canada for this action. When you want to create new regulations, you can look at what other countries have done. Everybody does it that way. We learn from each other. That's how you develop regulations. In this case, we need to innovate. Canada is the first to do so.

For example, I'll remind you that, before I took office, it took almost five or even six years to adopt the clean fuel standard. Since I arrived, it has taken about two years, two and a half years, to develop new regulations, whether for electricity or cars. The one we're now talking about takes a little longer, about three years, which is not at all abnormal. It's even much faster than for other Canadian regulations that were adopted in recent years.