Environment Committee on May 5th, 2022

[Miodrag Jovanovic]

Once again, I would like to clarify. If you look up the definition of the word "subsidy,” basically, I think most people agree that the reference point is the World Trade Organization's definition. This has already been discussed. Starting from that definition of the word "subsidy,” the second step is to apply it more specifically to fossil fuels.

[Monique Pauzé, Bloc, Repentigny, QC]

I want to know if, yes or no, the same definition applies to all relevant departments.

[Miodrag Jovanovic]

At the federal level, we have not yet established or published...

[Monique Pauzé, Bloc, Repentigny, QC]

All right, you haven't done it yet. I'll stop you right there—

[Miodrag Jovanovic]

—a definition of what constitutes a fossil fuel subsidy that would apply to all departments. This is the exercise we are currently undertaking.

[Monique Pauzé, Bloc, Repentigny, QC]

Very well.

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

There is little news about the Sustainable Finance Action Council set up in the summer of 2021. It will be a year old soon.

Are there any public documents on your work?

[Hilary Geller]

I suspect the establishment of the sustainable finance action council is what is being referred to here. The answer is, yes, they have submitted a report and there will be others coming. I believe that the report I'm referring to is on the website.

They have regular meetings. They have a work plan—

[Monique Pauzé, Bloc, Repentigny, QC]

I'll stop you there, as I have one last question to ask.

The commissioner criticized the half measures, the lack of transparency and, at times, the refusal to give him documents, as was the case in 2017.

I asked the commissioner about the $5 billion invested to advance the international fight against climate change. He was unable to answer me because it falls under Global Affairs Canada.

Is there a mechanism to track these funds and ensure that they are actually going to organizations working to address climate change?

[The Chair, Liberal, Francis Scarpaleggia]

You have 10 seconds at most to answer the question.

[Hilary Geller]

Thanks.

I was referring to the domestic work on sustainable finance. I'm aware that the international work, which is also referred to as “sustainable finances”, is different. We'll have to get back to the committee with an answer to that question.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Ms. Geller.

Ms. Collins.

[Laurel Collins, NDP, Victoria, BC]

Thank you, Mr. Chair.

Section 23 of the Canadian Net-Zero Emissions Accountability Act has still not come into force. That's the one about financial reporting requirements.

When I asked about this before, the answer provided by ECCC was, “The provision will come into force on a date that will be fixed by the Governor in Council. This will ensure that the government is prepared to act on the obligation.”

The rest of the act has been enforced for almost a year now. Why isn't the government prepared to act on this financial reporting obligation?

[Hilary Geller]

I'm afraid I don't have any information for the committee on this point. We'll have to discuss with our colleagues and get back to the committee.

[Laurel Collins, NDP, Victoria, BC]

Could I request that you send something in writing, ideally something more fulsome than the answer I got last time, which I just quoted back?

[Hilary Geller]

We'll do our best.

[Laurel Collins, NDP, Victoria, BC]

Thank you.

We've talked a little bit about CCUS. I'm deeply concerned that the government is proposing to give billions of dollars to subsidize these projects, especially because oil companies can count twice the reduction from these projects against their other climate obligations.

Can you confirm that these subsidies in the budget will not overlap and be double-counted in other programs and credit-generating initiatives, which are supposed to actually lower carbon emissions, like the clean fuel standard, for example?

[Miodrag Jovanovic]

I am not in a position to confirm this at this point. The finalization of the legislation on this program is ongoing.

[Laurel Collins, NDP, Victoria, BC]

Okay, if you're not able to confirm that.... They are overlapping. The clean fuel standard was originally supposed to generate almost 30 megatonnes of reductions. Now, based on the modelling just released by the Pembina Institute, Canada will be lucky to see a three-megatonne reduction—that's 10 times less—because of this kind of double-dipping.

Are you aware that other jurisdictions—Quebec for example—expressly prohibit these kinds of double-counting schemes? Why aren't the clean fuel standard regulations being designed to eliminate this kind of double counting?

[Miodrag Jovanovic]

I can confirm that I am aware of the Quebec system, which also is tied to the California system, I believe. The California system prevents credits generated from export fuels, or in the case of California, fuel not finally used in Canada, to access that clean fuel standard market. We are aware of that.

With respect to your other question in the Canadian context, that would be a question for ECCC. I don't think my colleague, Hilary, is necessarily in a position to answer either. My understanding is that each of us is working on finalizing the CFS regulations.

[The Chair, Liberal, Francis Scarpaleggia]

We'll have to go to Mr. Mazier.

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

Thank you, Chair.

The Government of Saskatchewan provided a letter to the committee on fossil fuel subsidies, expressing a concern with the “lack of any federal engagement”.

How many of Canada's oil and gas producing provinces did the government consult with when looking into defining and eliminating fossil fuel subsidies?

[Hilary Geller]

Again, the work that's happened to date has largely been on the tax side, so I'll turn to Mio.

[Miodrag Jovanovic]

Thank you, Hilary.

On the tax side, we have to understand that these measures are announced typically through budgets. Like any tax measure, the way consultation is done at the minimum is, once the proposal is announced, the department enters into some consultation mode, often through what we call our summer release, which is the draft legislation being released during the summer, in addition to generally receiving any feedback following a budget announcement, including any feedback from provinces. Depending on the measure, there could be some consultation done before the fact, but that's not necessarily always the case.

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

Could you provide the committee with any information related to what Canada's oil and gas producing provinces recommended to the federal government on this matter?

[Miodrag Jovanovic]

I'm sorry. When you say on this matter, what...?