Environment Committee on Oct. 17th, 2023

[Tara Shannon, Assistant Deputy Minister, Canadian Wildlife Services, Department of the Environment]

Thank you, Mr. Chair.

Tara Shannon, assistant deputy minister of the Canadian Wildlife Service at Environment and Climate Change Canada.

My colleagues and I are happy to meet with the committee today to discuss ECCC's management action plan in response to the commissioner's audit recommendations regarding the implementation of the Species at Risk Act and Canada's greenhouse gas emission regulations. I'm joined today by Derek Hermanutz, director general of economic analysis; and Mark Cauchi, director general of energy and transportation at ECCC.

The objective of audit report two, as the commissioner noted, focused on whether ECCC, Fisheries and Oceans Canada and Parks Canada met the Species at Risk Act timeline requirements to develop recovery documents and related implementation reports and whether the objectives set out in said documents were met. The objective of audit report three focused on whether Environment and Climate Change Canada took a timely and evidence-based approach to informing the Minister of Environment and Climate Change's recommendations to apply the Species at Risk Act's discretionary power provisions for terrestrial wildlife species on non-federal lands.

The department acknowledges the recommendations for improvement and is taking action to address them. The department is committed to ensuring the efficient implementation of the Species at Risk Act across all programming areas, which includes the use of the safety net and emergency order provisions on non-federal lands, as appropriate, and the timely development of recovery documents for species at risk.

The Species at Risk report findings show that more must be done to halt and reverse biodiversity loss. Canada is committed to working collaboratively with provinces, territories, indigenous peoples and stakeholders to protect and recover species at risk across the country and to fulfilling its obligations under SARA.

In terms of report five, the objective of the audit report focused on whether regulations administered by ECCC achieved their GHG emissions reduction targets. The department appreciates the commissioner's three recommendations, and we have implemented action plans to address them.

Although Canada has made significant progress in implementing GHG regulations as well as all the other measures in the 2022 emissions reduction plan, achieving our 2030 target of 40% to 45% reductions from 2005 levels and reaching net zero by 2050 will require significant effort to accelerate emissions reductions. These goals are being supported by an all-of-government approach, which includes a wide range of policy instruments, ranging from regulations to using federal procurement to transform markets and providing direct financial support to decarbonization projects, and the numerous investment tax credits announced in the last fall economic update and budget 2023.

We are working to integrate the three recommendations from the commissioner into our work as we implement our current regulations and develop new ones. The department is committed to continuing to improve our ability to model the impacts of new measures and to monitoring and reporting the impacts of existing measures. This includes improving how we use sensitivity analysis in our modelling.

In regard to the findings on methane, ECCC also committed to continue engaging with British Columbia, Alberta and Saskatchewan on the ongoing implementation of those provinces' methane regulations. Ensuring that provincial actions deliver expected results is a key feature of any equivalency agreement we enter into. This information will also be important when the existing agreements expire and renewal is discussed.

In our action plan we also committed to addressing the commissioner's third recommendation to use the most recent measurement-based data to improve the accuracy of the oil and gas sector methane emissions we publish in the national inventory report. This commitment was made in our most recent report.

We are happy to respond to any questions.

Thank you.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Ms. Shannon.

Stéphane Tardif, Managing Director of OSFI's Climate Risk Hub, you have the floor for five minutes.

[Stephane Tardif, Managing Director, Climate Risks, Office of the Superintendent of Financial Institutions]

Thank you, Mr. Chair and members of the committee.

My name is Stephane Tardif and I'm the managing director of OSFI's climate risk hub. I'm joined by my colleague Theresa Hinz, executive director of OSFI's regulatory affairs directorate.

OSFI is mandated to ensure the financial soundness and operational resilience of the institutions under its supervision. We are responsible for the prudential regulation and supervision of federally regulated financial institutions and federally regulated private pension plans. We supervise FRFIs with respect to their governance, solvency, liquidity, safety, soundness and operational resilience.

It's my pleasure today to update you on OSFI's progress towards addressing the commissioner's five recommendations regarding the supervision of climate-related risks.

In March, we published guideline B-15, which sets clear prudential expectations for the management of climate-related risks by federally regulated financial institutions. It also communicates expectations for climate-related financial disclosures and transition plans that consider both physical risks and transition risks.

In June, to increase the breadth of our public outreach on climate, OSFI launched the climate risk forum to continue raising awareness and building capacity within Canada's regulated financial sector with respect to responding to climate-related risks. We recently used this forum to publicly consult on draft climate statistical risk data returns—a new tri-agency initiative with the Bank of Canada and the Canada Deposit Insurance Corporation. In early 2024, we'll also publish a “what we heard” report on OSFI's website through this initiative.

Yesterday, we published the draft methodology for a standardized climate-scenario analysis exercise that we will run in 2024. This scenario analysis exercise will help over 300 regulated financial institutions build up their capacity to conduct climate-scenario analysis. We'll use the forum again to conduct consultations for this work.

OSFI's new supervisory framework—which includes climate risk as a transverse risk—will become effective in 2024 and will be published on OSFI's website early next year. We have webinars scheduled for regulated financial institutions in early November to share more on requirements and timelines prior to the effective date.

When we published guideline B-15 in March 2023, we signalled that it would continue to evolve as standards and best practices advance both internationally and domestically. To that end, we are now working on changes to B-15 focused on disclosures, following the publication this summer of the International Sustainability Standards Board's S1 and S2 disclosure standards, which focus on governance, strategy, risk management, metrics and targets. We anticipate releasing an updated version of B-15 in March 2024.

To ensure an efficient and effective pension regulatory system in Canada, OSFI has been focused on coordinating with the Canadian Association of Pension Supervisory Authorities. CAPSA recently completed a consultation for a draft risk management guideline. The finalized CAPSA guideline on pension plan risk management is expected to be published in March 2024.

Finally, this winter we will table OSFI's departmental sustainable development strategy in Parliament and publish it on the OSFI website.

These are just some of the highlights of the progress we have made to date.

Thank you, Mr. Chair. I welcome questions from the committee.

[The Chair, Liberal, Francis Scarpaleggia]

Last but not least, we have Ms. Lisa Young, director of conservation strategy at Parks Canada.

[Lisa Young, Director, Conservation Strategy Branch, Parks Canada Agency]

Thank you, Mr. Chair and committee members.

As mentioned, my name is Lisa Young. I'm the director of the conservation strategy branch within the protected areas establishment and conservation directorate.

Thank you for the opportunity to be here today and to share some details concerning Parks Canada's responsibilities related to the Species at Risk Act, also known as SARA.

The minister responsible for Parks Canada is a competent authority under the Species at Risk Act and is competent for over 260 terrestrial and aquatic species at risk that frequent Parks Canada administered places. Parks Canada works in collaboration with Environment and Climate Change Canada and Fisheries and Oceans Canada for a number of these species, as their range extends beyond Parks Canada administered places. We have a strong species at risk program, and we are in a unique position to support species at risk through taking on-the-ground action in the places the agency administers. Parks Canada works in collaboration with indigenous partners and stakeholders, other government departments and provinces and territories on many elements of this work.

Parks Canada works within the species at risk cycle of assessment, protection, recovery planning, implementation, and monitoring and evaluation to support species and conducts outreach and education activities for visitors and Canadians. The committee may wish to look at Parks Canada's website or YouTube channel for some examples of our work.

While Parks Canada implements and enforces the Species at Risk Act, many of Parks Canada administered places also offer additional protection, such as through the Canada National Parks Act and associated regulations. We develop recovery strategies or management plans for species that occur primarily on the lands and waters that Parks Canada administers, and there is not a backlog for these documents.

Parks Canada is working collaboratively with Environment and Climate Change Canada and Fisheries and Oceans Canada on recovery documents for species at risk that occur inside and outside Parks Canada administered places and on a variety of guidance and policy documents.

Parks Canada has developed 23 site-based, multispecies action plans that address over 200 SARA-listed species across 55 places administered by Parks Canada. These action plans set population and distribution objectives and identify concrete measures that are required to achieve those objectives.

Since 2018, Parks Canada has invested more than $20 million in implementing SARA recovery actions. These investments address 85 species in 38 places. For instance, Parks Canada has invested in re-establishing genetically pure populations of westslope cutthroat trout in Hidden Lake in Banff National Park. This species is important as it is a native species with specific habitat needs, such as a cold, clean freshwater environment, and for this reason they are considered an indicator species. Their presence shows that habitats and ecosystems are healthy. A four-step approach has occurred and included identifying habitat refuges, removing non-native fish, reintroducing native trout and monitoring for success. As a result of this work, we are seeing westslope cutthroat trout swimming in Hidden Creek for the first time in 50 years.

Following the species at risk requirements, Parks Canada has developed and posted 19 implementation reports describing progress made against delivering its multispecies action plans. As of spring 2023, 76% of the actions called for in Parks Canada's 23 action plans have been implemented, and the work is ongoing.

Parks Canada thanks the commissioner for his reports and is acting on the findings from the report “Follow-up on Recovery of Species at Risk” and the report “Discretionary Powers to Protect Species at Risk”. Parks Canada is on track to address the recommendations, working in collaboration with Environment and Climate Change Canada and with Fisheries and Oceans Canada, as appropriate.

I'd like to thank you again for the opportunity to be here today and to share this information. I am happy to answer any questions.

Thank you.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Ms. Young.

We'll pick up where we left off.

Mr. Longfield, you have the floor.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Chair.

Thank you all for your presentations.

It's difficult for us to ask questions in this limited amount of time with all the experts in the field that we have at the table here. I want to start with Mr. DeMarco on the structure of the audits around the planting of the trees, looking at how far we go into the partners who are at the table and possibly looking for some root causes as to the delays in some of the implementations you noted in your report.

I'm looking in particular at Ontario, where my riding is and where the Ontario government cancelled a program for planting trees. They cancelled $4.7 million to Forests Ontario, which had an associated 50 million trees attached to that program. That was done in 2019. Then, in 2022, the federal government came to the table with $12.7 million for Forests Ontario to plant 7.2 million trees.

The partner, Forests Ontario, would be an interesting one to talk to. Is that somebody you would normally talk to in the course of your audit, or would you look at the externalities that are causing delays and what the root causes are?

[Jerry V. DeMarco]

We focused on the federal program, the two billion trees. They do have partners that also partner with provinces. There are several different tree-planting programs.

Our focus was on the two billion trees program for the first half of this audit and then on forest accounting for the second half of this audit.

At the two-year mark, which is when we did this audit in the hopes of doing essentially a report card on the early return so they could course correct and still meet the two billion trees target by 2031, we found that they were slow off the mark in creating the necessary partnerships primarily with the provinces, because, as you know, most Crown land in Canada in the provinces is with the provincial Crown rather than the federal Crown. Essentially they've designed a program where the federal government, in order to achieve its objective, is an obligate collaborator with the provinces and others. If they can't find enough dance partners, they can't complete the dance of the two billion trees, using that analogy.

They've made some progress since we've finished the audit in those partnerships, but they have a long way to go.

[Lloyd Longfield, Liberal, Guelph, ON]

I have very limited time, but would you then work with the auditors in the provinces? I don't think Ontario even has an environmental auditor you could partner with to see whether their programs are going to be moving forward or being audited.

[Jerry V. DeMarco]

There are commissioners of the environment at the federal level and in Quebec and Ontario. We do discuss the audit topics that we're covering. Occasionally, we will do a collaborative audit like on climate change in 2017 and 2018. We work with them behind the scenes and also sometimes with a collaborative audit such as the climate one.

[Lloyd Longfield, Liberal, Guelph, ON]

That's very important. Thank you for putting that out.

Ms. Frison, in terms of the trees that are getting planted, I was at the arboretum at the University of Guelph last Friday, and I had a walk through the arboretum, which is an amazing thing to be able to do. They tie with arboretums around the world.

I'm looking at species at risk in terms of trees. I'm not sure, Ms. Young, if that meets the SARA list or not. Species at risk include trees but also would inform which trees need to go where. Working with universities seems to be a missing piece, in that it's not just a matter of taking all the seedlings of spruce trees and running around the country. It's a very targeted program. Could you comment a little on that?

[Monique Frison]

The projects we've seen so far have quite a variety to them. Some projects are planting spruce trees in large areas outside of urban populations. Some projects are in local conservation areas. Some projects are downtown. We have a project with the City of Edmonton to plant a million trees in the city. For every one of those projects, before we approve a project and before we sign on with partner, we look at things like what kinds of trees and what kind of expertise is going to helping plant and prepare the ground and the soil to ensure the trees live, but we also look at issues around species at risk in collaboration with the Canadian Wildlife Service as well as the trees themselves. We look at all of those issues.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you so much for the answer.

I want to flip over to OSFI with Mr. Tardif and the report on the finances.

When you look at Canada's economy being one of the most emissions-intensive in the world on a GDP and a per capita basis and how exposed we are to climate-related financial risks, do you tie in with the Parliamentary Budget Officer, who, in his last report, didn't look at externalities like the financial risks around climate change?

[The Chair, Liberal, Francis Scarpaleggia]

Answer really briefly, please.

[Stephane Tardif]

Mr. Chair, we have not tied in with the Parliamentary Budget Officer on his recent report.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Thank you, Mr. Longfield.

Ms. Pauzé, you have the floor.

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you, Mr. Chair.

I want to thank everyone for being with us this morning.

Commissioner, I'll follow up on what my colleague, Mr. Deltell, was saying about methane emissions. In your report, you said that you can't tell if the regulations are working or if the desired outcome is being achieved.

First, how is it possible that major sources of methane emissions have been ignored? Methane produced during oil and gas extraction, for example. The first set of requirements was supposed to be implemented in 2020 and the second in 2023. Does this suggest attempts to track methane emissions in Canada have failed?

[Jerry V. DeMarco]

Emissions tracking in Canada is lacking. As I said earlier, methane emissions and how forests affect emissions are two examples of areas where there are problems with the estimates.

We don't know all the problems, but we recommended that the departments try to improve things because this has implications for both future and past emissions. We don't know Canada's exact baseline because there are a lot of unknowns about methane.

If both departments act on our recommendations, I hope we will get a more complete picture that will include Canada's methane emissions because they have a very significant impact on global warming.

[Monique Pauzé, Bloc, Repentigny, QC]

Are you confirming that emissions from oil and gas extraction are not currently being accounted for?

[Jerry V. DeMarco]

It's not that the emissions are not accounted for at all. Efforts are being made to do that, but there are deficiencies. The departments can give you more details and tell you about the efforts they are currently making to try to address those deficiencies and do more accurate accounting. That way, we could have more accurate and effective regulations.

[Monique Pauzé, Bloc, Repentigny, QC]

Speaking of being more accurate and effective, did I understand correctly that the department does modelling for each regulation? If it does, why can't you specify the amount of greenhouse gases that each regulation helps remove? There really seems to be an issue with the way methane is measured.

[Jerry V. DeMarco]

Yes. There are interactions but, as you said, when regulations are proposed, they include an estimate of how many megatonnes of greenhouse gas emissions they will avert. We should try to do that as we implement the regulations, so that we can make the necessary changes and keep from falling short again on the 2030 target.

It's possible to make that estimate when the regulations are proposed. I know it's a challenge because there are interactions, but it's better than doing nothing and wondering why we haven't met our greenhouse gas reduction target in 2030.

[Monique Pauzé, Bloc, Repentigny, QC]

Why do the heavy-duty vehicle and engine greenhouse gas emission regulations not seem to be working?

[Jerry V. DeMarco]

We found that results vary from regulation to regulation. Some of them work well, but in other cases there is a gap between the target and the results. The department should explain to you in detail why there have been gaps like those to date. I can tell you that the heavy-duty vehicle and engine greenhouse gas emission regulations are up for review soon, and I believe the review will include a new emissions reduction target.

[Monique Pauzé, Bloc, Repentigny, QC]

You also said that the federal government intends to work together with the provinces, but if that doesn't work, what additional measures or commitments should Environment and Climate Change Canada look at to improve its assessment of the regulations? It has to work with the provinces on this.

Perhaps this is a question for the department.