Evidence of meeting #16 for Environment and Sustainable Development in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was subsidy.
A recording is available from Parliament.
NDP
Laurel Collins NDP Victoria, BC
I'd like just a yes or no. Can it be given to companies who are increasing their production?
Assistant Deputy Minister, Tax Policy Branch, Department of Finance
The company may increase the production, but there's no direct link between that incentive and any incentive to increase production.
NDP
Laurel Collins NDP Victoria, BC
Thank you.
ECCC has been working on a definition. What is the status of that definition? Can you share it with the committee?
Assistant Deputy Minister, Strategic Policy Branch, Department of the Environment
The work to put parameters around a definition of “inefficient” is ongoing. I think it's interesting and instructive to—
NDP
Laurel Collins NDP Victoria, BC
Thank you. Do you want to give me any kind of timeline? If it's not done yet, how are you reviewing subsidies to be phased out by 2023?
Assistant Deputy Minister, Strategic Policy Branch, Department of the Environment
We're on a timeline to be able to provide advice to the government so that it can make decisions in time to have the phase-out of the non-tax inefficient fossil fuel subsidies done in 2023, as per their mandate commitments.
Assistant Deputy Minister, Strategic Policy Branch, Department of the Environment
That's unclear at this time, because the work is still under way.
NDP
Laurel Collins NDP Victoria, BC
Okay. Thank you.
I want to ask a few questions about public financing. In the mandate letters to the Minister of Finance, Minister of Environment and Climate Change and Minister of Natural Resources, all of them were instructed to work together to accelerate Canada's G20 commitment not only to eliminate fossil fuel subsidies by 2023 but also to develop a plan to phase out public financing of the fossil fuel sector.
How do each of your departments define public financing? Does that include more than fossil fuel subsidies?
Assistant Deputy Minister, Strategic Policy Branch, Department of the Environment
That work is still at the planning stage. We are all working together on it, as per the mandate letters.
I will note that work that flows from the Glasgow commitment that Ms. Vrany spoke about is a component of that, but we haven't moved beyond to fully scope it at this point in time.
NDP
Laurel Collins NDP Victoria, BC
Is there any timeline for phasing out public financing of the fossil fuel sector, especially including Export Development Canada?
Assistant Deputy Minister, Strategic Policy Branch, Department of the Environment
No, because it's still at the planning phase.
NDP
Laurel Collins NDP Victoria, BC
Okay, so there's no concept of any timeline whatsoever looking forward.
Assistant Deputy Minister, Strategic Policy Branch, Department of the Environment
The timeline as it's known today is attached to the work that Ms. Vrany is doing coming out of the Glasgow commitment.
NDP
Laurel Collins NDP Victoria, BC
Thanks.
The emissions reduction plan says Canada “is developing a plan to phase out international public financing of the unabated fossil fuel sector, including by federal Crown corporations.” We were talking a little bit about CCUS. It's a form of emissions abatement.
Will there be any limits to federal supports or subsidies related to CCUS?
Assistant Deputy Minister, Tax Policy Branch, Department of Finance
With respect to the investment tax credit, it is a tax credit, so it's provided through the Income Tax Act. There's no cap per se. There is, however, a time limit. First, the higher income tax credit rates will be enforced until the end of 2030. Then, from 2031 to the end of 2040, the rates will be cut in half.
NDP
Laurel Collins NDP Victoria, BC
Thank you.
Under the plan being developed, will Export Development Canada be expected to phase out financing for the fossil fuel sector as a whole, or only unabated projects?
Assistant Deputy Minister, Strategic Policy Branch, Department of the Environment
We'd anticipate that EDC would be part of this public financing commitment that's still at the planning phase. As for the—
Assistant Deputy Minister, Strategic Policy Branch, Department of the Environment
I can't tell you that, because it's at a very early planning stage.
NDP
Laurel Collins NDP Victoria, BC
Okay.
On my question around abatement, it's important that the oil and gas companies reduce their emissions intensity in production. Ideally, that would be funded by them, since they're making record profits. Emissions from production are only a small fraction of our overall emissions. Eventually the oil and gas is going to be burned, even if that's not in Canada. Is the department tracking these downstream emissions?
Assistant Deputy Minister, Strategic Policy Branch, Department of the Environment
Ms. Vrany, I'm wondering if that's a question for you. I'm not sure I understand it completely. I think it's about tracking emissions—scope 1, 2 and 3.
Director General, Petroleum Resources Branch, Department of Natural Resources
So do I. I think some of your colleagues at ECCC would be doing that, and various departments, depending on if it's transportation or whatever.
NDP
Laurel Collins NDP Victoria, BC
Will these downstream emissions be something you're taking into consideration when designing programs that subsidize oil and gas?
Assistant Deputy Minister, Strategic Policy Branch, Department of the Environment
I think the question of the creation of new programs potentially is a very important one, and I can tell you that, as part of our work to identify inefficient fossil fuel subsidies, we are looking at ways to future-proof, if you like, any new programs that are being created or any grants and contributions that come out of any existing programs.