Environment Committee on April 28th, 2022

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Okay. Thank you very much. I can understand that this must be a very tricky area in which to make an accurate assessment, because a lot of these programs are not specific to one particular technology. Electricity could be biofuels or could be a lot of other low-carbon or net-zero fuels.

I actually asked this next question in my first round of questioning, but there was only about 20 seconds of time. Commissioner, I would like to give you the opportunity to really explain in a little more detail the best method for assessing the emissions-reduction potential for these emerging technologies, whether hydrogen or otherwise.

[Jerry V. DeMarco]

Thank you.

You're right that it is a bit of a challenge because it's a moving target. There are a lot of these issues, but that's a good thing. It means that things are happening. That may make it messier for auditing, because things happen after the close of our books, but it's better than nothing happening in terms of addressing the climate crisis, so we deal with the moving target as we can within the context of our standards and so on.

With respect to what can be done to increase the effectiveness and transparency of modelling, that's the whole last third of our report, so I can't really summarize it, especially in the lightning round or whatever we call the third round. I'd just direct you to the last third of the report, and you can see our recommendations in that regard.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you.

I'll switch gears a little, to the just transition report. In that report, you made an analogy between the threat towards folks working in the fossil fuel sector and the collapse of the Atlantic cod fishery that we experienced. As part of that, you made the case that 150,000 Canadian jobs are at risk as part of this.

I was wondering how you came to that particular figure and whether you think the transition will be abrupt or it will be done over time with perhaps pathways for some of the folks who are working in that industry to transition to other areas.

[The Chair, Liberal, Francis Scarpaleggia]

We have only 20 seconds. You can get started so that we can continue the answer.

[Jerry V. DeMarco]

We'll provide the background study that came up with the numbers. I think it was 170,000 rather than 150,000, but you're in the ballpark.

The coal phase-out is quite obvious with plants closing, etc. The rest of the energy transition will not be quite so identifiable by community, and so on. There are differences between cod and coal, and then there are differences between coal and the others.

[The Chair, Liberal, Francis Scarpaleggia]

Thanks.

Ms. Pauzé, you have the floor for two minutes.

[Monique Pauzé, Bloc, Repentigny, QC]

Mr. DeMarco, from what you said in your presentation, there is no reliable, complete or clear information. There are lowered requirements and unrealistic assumptions.

Are you optimistic about the future, Commissioner?

[Jerry V. DeMarco]

My work means that I need to be optimistic. In addition, I have children, and so I need to be optimistic for them.

As I said, I'm not in a position to make predictions. However, I know they can turn things around and I hope they'll have...

[Monique Pauzé, Bloc, Repentigny, QC]

You hope they'll have the will to do it.

Thank you, Commissioner.

My second question is for the representatives of the Department of the Environment.

The report says some disturbing things. It refers to unrealistic assumptions and 30 years of failures.

Can that be explained, at least in part, by current practices at the Department of the Environment in terms of making unrealistic assumptions?

Are you aware that the Commissioner's findings undermine public confidence and fuel cynicism?

[The Chair, Liberal, Francis Scarpaleggia]

I would ask the person who is going to answer the question to give a brief answer.

[Derek Hermanutz, Director General, Economic Analysis Directorate, Strategic Policy Branch, Department of the Environment]

I can answer that.

With respect to Environment and Climate Change Canada's modelling, it is done according to UNFCCC reporting guidelines and is reviewed internationally. We also look at the best available data, the best available cost curves that are out there underlying the projections we do in the model.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Go ahead, Ms. Collins, for two minutes, please.

[Laurel Collins, NDP, Victoria, BC]

Thanks so much.

My first question is about the difference in the estimates between Environment and Climate Change Canada and Natural Resources Canada. They had such a huge difference in their estimates of the amount of greenhouse gas reductions from hydrogen. This seems like a big disconnect between two departments that need to be working closely together for climate solutions.

Mr. DeMarco, can you tell me a little bit of your concern about this gap?

[Jerry V. DeMarco]

Yes.

We have two ships passing in the night, one ship with 45 megatonnes on it and one ship with 15 megatonnes on it.

Going forward, I would hope, because we have a Canadian emission reduction plan, that we don't have different departments going off and doing their own thing, with one saying that they're trying to be optimistic and transformational and that's why theirs is different and so on. We have one Canada and one plan at the national level. We don't need to be spending taxpayers' money with different competing plans from different departments.

[Laurel Collins, NDP, Victoria, BC]

Thank you so much.

To Environment and Climate Change Canada, can you explain the gap, this huge disparity and disconnect, between your department and Natural Resources Canada when you should be working very closely on climate solutions?

[John Moffet]

Maybe I can start the answer.

The gap arises in a lot of circumstances, in that when measures are developed, it's generally possible to develop a very rudimentary assessment of the likely emission reductions associated with a measure. That initial assessment is very different from what we do from a modelling perspective. The reason for this is—

[Laurel Collins, NDP, Victoria, BC]

Mr. Moffet, I have a very short amount of time, so I'm going to cut in here—

[The Chair, Liberal, Francis Scarpaleggia]

We're really out of time.

I think this was more or less answered before, in that NRCan's strategy was not as detailed as the modelling. I think that's the answer.

[John Moffet]

No, that's not the answer. I'm sorry, Mr. Chair.

The reason is that measures are interactive. You cannot simply add one to another. What we do is discount the interactive effect and look at only the additional impact, and that's why there are different numbers.

[The Chair, Liberal, Francis Scarpaleggia]

This is a highly complex—

[Laurel Collins, NDP, Victoria, BC]

Mr. Chair, I was just going to cut in to ask if Environment and Climate Change Canada could submit a report or any information they have on what Mr. Moffet just said, which was that these disconnects happen frequently. Could we get a list of other disconnects that the government knows about between Environment and Climate Change Canada and Natural Resources, and where those gaps are?

[The Chair, Liberal, Francis Scarpaleggia]

I'm sure they would be happy to oblige you.

Mr. Dreeshen is next, for three and a half minutes, please.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much, Mr. Chair.

Mr. DeMarco, you were talking earlier about provincial audits and how, if they had targets they wanted to address, they maybe should be addressed there.

I go back to your notes where, in paragraphs 5 and 6—I realize this was on the just transition—you spoke about “less effective provincial carbon pricing systems”. You spoke about “approving weaker systems for large emitters in some parts of the country”. Some of my colleagues were talking about rural Canada, farmers and those sorts of things, so there was an issue there.

I'd like to expand from that and go back to what I was talking about earlier. When provinces have major initiatives they use in order.... For example, as I was mentioning, Alberta has had over 20 years of carbon pricing on heavy emitters, which has allowed it to be able to do the innovative things it does, such as their push as far as hydrogen is concerned, net zero in plastics production, and so on. It doesn't get much credit for it, but it does all of these innovative things. All of those things are happening now.

As a matter of fact, two days ago there was a major announcement of $50 million to launch a hydrogen centre of excellence in Olds in my riding. These things are happening, and because they happen, if we look at the overall effect on our trade and on selling the products that we have, if we don't talk about these things and don't encourage them, we're going to lose that opportunity to sell this technology around the world.

What I'm asking is this. Has this concept of the things happening in the provinces really being addressed? Maybe I'll have to address it to the minister when he does show up.

In the audit, when you say that we know there are less effective provincial carbon pricing systems and you say there are issues with large emitters in some parts of the country, are we really talking about a snapshot of what has been happening specifically, as I say, in western Canada, where the large resources sector is so important not just to them, but to this country and to the world?

[Jerry V. DeMarco]

I think you are getting at the tension between strong centralized control and the principle of subsidiarity, for example. We're in a federal state, so there is always going to be some work done at the national level in a coordinated way, like the PCF, the pan-Canadian framework. Sometimes the federal government will do its own thing and the provincial governments will do their own thing.

On a matter of national concern like this, the federal government chose to do a program that allows for provincial systems to be substituted for the federal one, which is called the “backstop”, if they meet a benchmark.

What we are saying is that if you're going to use that system, make sure that the benchmark is rigorous enough so that whatever systems are being approved at the provincial level to reflect their own regional needs are at least as effective as the federal backstop. That's the idea.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Sometimes they become ideological, and I say that sincerely, because if someone had said they are getting rid of oil and gas, then this is the way to get rid of oil and gas. Here I'm concerned about what we're looking at with agriculture right now. There's been a report saying how serious the situation is with cereal crops and that we have to make changes there. I'm afraid that the next report you're going to have to do will be taking a look at agriculture and saying there must be issues there that need to be addressed.

I hope that we do.