Environment Committee on Feb. 1st, 2022

[The Chair, Liberal, Francis Scarpaleggia]

You have 15 seconds left, Mr. DeMarco.

[Jerry V. DeMarco]

I hope so, and we'll see what happens. I'm a little optimistic, more now than I was, because everyone understands the challenges we have to overcome in terms of the environment and sustainable development.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Ms. Collins, you have two and a half minutes.

[Laurel Collins, NDP, Victoria, BC]

We were talking a little about the lessons. Another lesson that you highlighted is the need to invest in a climate-resilient future. However, you found that Canada hasn't been a key player in the international discussion on sustainable finance.

Are we at risk of being left behind and allowing other countries to set the agenda on this?

[Jerry V. DeMarco]

Yes. As we noted in the report, it's an emerging and a very fast-moving issue, both at the governmental level and in the private sector, in terms of green finance and so on.

That train left the station a while ago. I wouldn't say that Canada was in the first car of that train, but it does have the opportunity to catch up. You will see—I guess it would be in section 23 of the new net-zero act—some movement toward government accountability for the minister of finance on risks and opportunities related to climate change. Then the mandate letters require moving forward with mandatory climate-risk disclosures.

It appears that the wake-up call has been heard. They'll be playing catch-up, but at least they're moving forward now.

[Laurel Collins, NDP, Victoria, BC]

Canada's current climate plans aren't projected to achieve Canada's target of 40% to 45% below 2005 levels by 2030. They're definitely not on track for the IPCC's recommendation of cutting emissions by half or 50%, so clearly more policy action is needed.

We're still waiting to see the emission-reduction plan as required under the Net-Zero Emissions Accountability Act, but you've also said that Canada needs to shift its focus to actually meeting targets and not just making plans.

How do you see the role of your office in really keeping them on track?

[The Chair, Liberal, Francis Scarpaleggia]

You have 30 seconds, please.

[Jerry V. DeMarco]

Through our new mandate on the net-zero act, we will be keeping a constant eye on this file. As you know from the lessons learned, we aren't going to just look at plans; we're going to look at results. We've had a lot of plans that have added up over the years and I'm sure—I'm not sure, but I'm hopeful—that the next one in March will add up as well.

Really, what we need to do is meet the plans, not just make them.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Thank you, Ms. Collins.

Mr. Mazier.

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

Thank you, Commissioner, for coming out today.

I'm focusing on report 3, on water basins. I've always been of the mind that agriculture should be set up as part of the solution when it comes to environmental challenges, and the environment department should be working with agriculture and agriculture producers, people in the landscape.

Do you believe that Environment and Climate Change Canada is working enough with Agriculture and Agri-Food Canada?

[Jerry V. DeMarco]

There's room for improvement.

The report on the three water basins indicated that they were moving in the right direction. There were often mechanisms in place for some coordination, but not enough.

We also noticed—and this is perhaps something for a future audit—that despite the co-operation and the coordination, there were still long-standing problems with the actual water quality. As per my focus on outcomes and results and not just on process, if we look at this issue again, or if this committee looks at this issue in the context of the water study that you were debating earlier today, I would propose that you ask for solutions that are going to actually affect the water quality itself, not just the co-operation related to water quality. That focus on outcomes is crucial.

I grew up next to the Great Lakes, and Lake Erie was the closest water body. It's still, in terms of eutrophication, a big problem 50 years later. There's lots of coordination and lots of co-operation, but not enough results. That, of course, includes the U.S. in that factor too.

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

I'm from Manitoba, so Lake Winnipeg is near and dear to our hearts as well.

Paragraph 3.27 of your report discusses the lack of information sharing actually between Environment and Agri-Food Canada. I'll quote from the report: “Furthermore, neither department had a formal and consistent process for sharing information about risks with the other....”

Can you tell me how a government is supposed to meet its targets when one department is doing one thing and another department is doing another?

[Jerry V. DeMarco]

That's an excellent question.

I'll have principal Jim McKenzie address that specific question, if he's available and can turn on his video.

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

Actually, Commissioner, I have more questions for you, so we can go back when Mr. McKenzie is back here for the next hour, I believe.

[Jerry V. DeMarco]

I think he's available. No, he's just here for this hour.

Here he is.

[James McKenzie, Principal, Office of the Auditor General]

I'll be brief.

We found some coordination, some sharing of information. We found no formal mechanisms that would allow departments to share information on risks with each other, which we felt would provide them with a more complete picture of, for example, areas of the country that they needed to focus on more, information gaps that would prevent them, or if they were to be addressed would help them better understand some of the issues.

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

If I could summarize that, they're operating still in silos and they're not communicating, basically. They could do it a lot better, I guess, to meet their goals, and that needs to happen to meet their goals.

I'll go back to the commissioner.

How important would you say local involvement is to reaching our climate targets, under water management especially?

I represent a very rural riding. It's the size of Nova Scotia and it drains.... It's all part of the Assiniboine watershed.

How important do you think it is working with those managers of the landscape, those agriculture producers, at the ground level?

[Jerry V. DeMarco]

It's absolutely crucial. Addressing climate change, drought, flooding and so on requires a whole-of-society approach. Even though I'm reporting to the federal government and auditing the federal government's role, it's not the only player on all of these issues, whether it's climate or water. There are various different levels of involvement.

Often, the people who are closest to the land, whether they're farmers, local water managers, local residents or others, will know best the issues that affect them in the local watershed, for example. It's absolutely crucial to involve all levels of government, all private and public sector agencies, civil society and indigenous communities.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

We'll go to Ms. Taylor Roy for five minutes.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you so much, Mr. DeMarco, for being here this morning.

I'm finding the conversation, despite the report's findings, to be very encouraging. The fact that you are here, that you are fulfilling this task and coming up with these recommendations for action and coordination, I think, will help us to move in a better direction than, as you have pointed out, our governments have over the past 30 years.

I want to follow up on one of the statements made earlier. One of the members said he thought we had a proper balance between environment and growth. I was wondering—and it's a very high-level question—if, given the results of your historical analysis, you could comment on whether you think we have the proper balance right now and how you would see that shifting.

[Jerry V. DeMarco]

That's a big question.

On your first point, I would commend you to read the last page of our climate change lessons learned report, if you haven't already, because we do strike an optimistic note there, and we're hopeful that this can be turned around.

It's too late to stop climate change, but we can at least mitigate and reduce the magnitude of the potentially catastrophic effects. We live on a finite planet with a certain amount of carbon. We don't want to have too much of it in the upper atmosphere and too little of it in the biomass, water, soil and earth, so, yes, we have to reconcile economic development with environmental protection in the long term, because we live on a finite planet with finite resources. There has to be a sustainable approach, as opposed to looking at it as growth at the expense of the environment, because the environment ultimately provides us with the air we breathe, the water we drink and the food we eat. There needs to be more of what I would call an integrated approach—and this is reflected in the Federal Sustainable Development Act—to the environment and economy, and movement past the more old-style trade-off approach, which is that we'll protect the environment in times of luxury or when it's feasible but that economic growth takes precedence. They have to go hand in hand, and that's what I think a net-zero future looks at, a healthy environment and a healthy economy working together, as opposed to being at odds with each other.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

I agree.

One of the ways I think we can mobilize or actionize some of these things is by having more quantification of the cost to our economy of some of the things that are being done that are affecting our environment. I know there's movement towards that with the different kinds of risk management and risk perspectives.

Do you think more has to be done on that by our government in order to achieve that kind of quantification and the ability of people to see the economic impact on the environment of doing less?

[Jerry V. DeMarco]

Absolutely. Externality as an economic theory has been a major problem in terms of the environmental process. Many of the true costs of doing business in, for example, fossil fuels before carbon pricing, were externalized, and that reflected neither the cost of doing business nor the cost to consumers, but we ultimately pay for that in terms of climate-related disasters, extreme weather and so on. Reducing those externalities using the principle of internalization of cost, polluter pays and a lot of things like that will help us have a full picture.

As I said, once you do that, and once you internalize social, environmental and economic costs into a comprehensive model, you will see more of a dovetailing between the environment and economy, as opposed to looking at it mainly from a financial point of view, where one could profit by externalizing costs to society and the environment. From a full economic point of view, it's not a good news story. It may be profitable for the entity involved, but it may not be economically or environmentally sound for society as a whole.

Cost internalization and the quantification of some of these ecosystem services and other natural assets that we have—and nature-based solutions come into play here too—are all emerging and critically important issues. As someone mentioned, one of the biggest impacts on the environment each year by governments is its budget decisions, not just the regulatory decisions of the environment department or the natural resources department in a given jurisdiction. Once we look at those together, we'll be on a good path.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you very much.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Can I just—