Environment Committee on Dec. 9th, 2024

[The Chair, Liberal, Francis Scarpaleggia]

We can start.

Welcome, Commissioner. It's nice to see you again. This time it's on Canada's emissions reduction policies, which is a topic you've broached a number of times.

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

Mr. Chair, I have a point of order.

[The Chair, Liberal, Francis Scarpaleggia]

Yes, Mr. Mazier.

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

I wonder if we have any intention of getting the minister here on the supplementaries.

[The Chair, Liberal, Francis Scarpaleggia]

I haven't had a confirmation. We invited him for the 4th. He couldn't attend, which is why we did the net zero accelerator.

That's a good question you raise about the supplementaries, because I believe, as of Tuesday, hopefully, the estimates will have been adopted. Looking at the supplementary estimates becomes a moot point for us, because they will have been adopted by the House, hopefully.

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

The better an understanding we have of what the government is spending the money on—

[The Chair, Liberal, Francis Scarpaleggia]

You're saying you want the minister back.

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

Yes, please.

[The Chair, Liberal, Francis Scarpaleggia]

I'll check with his staff and we'll see what happens.

Commissioner, the floor is yours. Go ahead, please.

[Jerry V. DeMarco, Commissioner of the Environment and Sustainable Development, Office of the Auditor General]

Mr. Chair, we are happy to appear before your committee this morning.

I would like to acknowledge that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinabe people.

With me today are Kimberly Leach, principal, and Elsa Da Costa, director. They have conducted much of the audit work on climate change we have undertaken in recent years.

Since 1990, Canada has set out many plans, measures and targets to reduce greenhouse gas emissions, but no target has been met. According to Environment and Climate Change Canada, national emissions in 2022 were 708 megatonnes. This is 7% lower than in 2005, but 16% higher than in 1990. According to the department's most recent projections, with existing measures, Canada will not deliver on its commitment to reduce emissions by 40% to 45% below 2005 levels by 2030. While Canada's overall emissions have increased since 1990, some sectors have achieved reductions, with the electricity sector leading the pack.

The good news is that there is still time to meet the 2030 target, but it will not happen without a significant shift toward implementing effective actions. The time is now to take stock of existing policies and plans, and to consider lessons learned from past efforts.

In November 2021, I provided to Parliament a report that sets out eight lessons learned from Canada's record on climate change. The report is based on three decades of audits focused on Canada's action, and inaction, on the enduring climate crisis. Given Canada's disappointing track record in addressing climate change, we urge the government to ensure its plans and actions work to meet its targets. At the time of our 2021 report, we noted that implementing the measures then in place was expected to yield reductions of 36% by 2030.

To help frame discussions on climate change such as this one, the lessons learned report also sets out critical questions for parliamentarians to consider as levers to prompt action against commitments. We have provided these in an appendix to this statement for your reference.

Environment and Climate Change Canada's first report under the Canadian Net-Zero Emissions Accountability Act was produced in 2023. It indicates that there is still a gap between the expected results of current actions and meeting the 2030 target. This legislation, if implemented diligently, should help establish the accountability and oversight framework needed to reduce emissions and achieve targets.

Since 2021, our office has reviewed approximately 40 of the more than 140 measures outlined in the 2030 Emissions Reduction Plan or in the progress report. Our most recent report on the subject, tabled last month, identified common systems that emerged from our findings, including delays in implementing measures, unreliable emission reduction estimates, and lack of transparency.

In our audit work, we noted that many experts and international organizations agree that a set of policies including a range of measures, such as regulations and carbon pricing, can contribute to significant emission reductions if measures are sufficiently stringent and applied on a large scale.

The ongoing climate change crisis is more important than ever. We are at a crossroads, both globally and domestically, and we have to make tough decisions about managing climate change and the kind of world we want to leave for future generations.

It's clear that new or improved measures are needed to put Canada on the right track toward meeting the 2030 emissions reduction target. In this context, "on the right track" means three things. First, we need a plan with concrete measures to meet or exceed the targets. Second, there must be reliable modelling of the reductions that the plan seeks to achieve. Finally, the implementation of measures must be effective and result in significant reductions from year to year.

Mr. Chair, this concludes my opening remarks. We are happy to answer any questions the committee may have.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Commissioner.

We'll dive right into questions.

Mr. Mazier is up first.

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

Thank you, Chair.

It's nice to see you again, Commissioner, and others.

Commissioner, last week the industry department testified on the government's $8-billion net zero accelerator fund. Was there anything the department said that concerned you?

[Jerry V. DeMarco]

Yes, there was.

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

Can you elaborate?

[Jerry V. DeMarco]

I'm used to your starting with quick yes or no questions. I was prepared this time.

[Voices]

Oh, oh!

[Jerry V. DeMarco]

To start off with, as you recall, our report indicated that they had just over six megatonnes of bankable reductions in the contribution agreements, yet last week the department assured that they were on track to meeting Environment and Climate Change Canada's hoped-for emissions of 19 to 20 megatonnes. I would have liked to hear where those other reductions are coming from—by which facility, by which date and how confident they were—because that's a big gap, between six megatonnes and 19 to 20 megatonnes.

It's easy to assert that one is on track, but I'd like to see the evidence for that, and we didn't see the evidence for that when we did our audit.

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

Commissioner, the government is refusing to tell Canadians what the emission reduction target is for the $8-billion net zero accelerator fund. Have you ever seen an emission reduction target protected under cabinet confidence before?

[Jerry V. DeMarco]

I believe there's that example, and there was also the oil and gas percentage in our first net-zero act report from November of last year. That was also the subject of some questioning at a committee, regarding the cabinet confidence behind the, I think, 31% figure in that report. Those are two examples.

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

Do you view it as problematic?

[Jerry V. DeMarco]

Most certainly. From a transparency and accountability point of view, these measures cost taxpayers, industry or government considerable sums to implement. We would like to see at least an estimation of essentially the value for money in these various measures. One necessary element of calculating value for money is to know how many reductions are expected.

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

For $8 billion, if you don't know what the target is, it's pretty hard to hit it. You can change the rules as you go along.

The government gave a company by the name of PowerCo $700 million through the net zero accelerator fund. The government claimed that the net zero accelerator fund was needed to reduce emissions. However, the industry department could not tell this committee how many emissions, if any, were reduced by this $700-million handout.

Do you view this as problematic?

[Jerry V. DeMarco]

Our concerns about accurate estimations of emissions reductions primarily fall within those grants and contributions related to pillar one of the three pillars of the net zero accelerator.

Having said that, if that amount of money is going out the door, there should be some estimation of the benefits. Whether they can make a concrete estimation of exact greenhouse gas emissions reductions...perhaps not, but there should be at least some evaluation and publication for Canadians of the value that is going to be reaped from that subsidy, rather than a “just trust us” sort of approach.

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

Yes, we know how “just trust us” works.

Commissioner, the environment committee ordered the government to hand over all contracts for their $8-billion net zero accelerator fund. However, the government ripped out over 360 pages of those documents. This prevented our committee from seeing what the $8 billion was spent on.

You've seen the contracts. Do you see any reason why the government would actually be hiding this information from this parliamentary committee?

[Jerry V. DeMarco]

I'm more familiar with our free access provisions in our legislation, so we're able to see those documents. I'm not an expert in the rights and privileges that committees and the House or the Senate have in terms of access to documents. You would have to consult with the committee clerk and counsel on that.

I do have a concern in general regarding that amount of money going out the door without enough disclosure of the documents or at least disclosure of the benefits that are going to arise from those documents.

If there are trade secrets within the documents or other confidential information, I understand that, but there should at least be transparency in what the expected outcomes are. If that can be quantified, especially under pillar 1 of the net zero accelerator in terms of greenhouse gas emission reductions, that's all the better.