Environment Committee on Nov. 9th, 2023

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. DeMarco.

When we look across the Canadian economy at all the sectors that contribute to our emissions profile, the progress on driving down those emissions has not been symmetrical across all these different sectors, whether it's building, electricity or transport, or the oil and gas sector.

If you were to highlight a sector in which the least progress has been made on reducing emissions, which sector would that be?

[Jerry V. DeMarco]

There are sectors that have made no progress. It's negative progress for some. I presume you would rather hear about the ones that are the worst overall in terms of not achieving any reductions.

Oil and gas is up between 80% and 90% in terms of emissions from 1990 to now. That would be—

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

I'm sorry. Since when is oil and gas up 80% to 90%?

[Jerry V. DeMarco]

It's since 1990. That's the baseline year for the United Nations Framework Convention on Climate Change and the baseline year for the IPCC.

Oil and gas is up approximately 88%. Electricity's down 45%, but because oil and gas is such a large sector—in fact, it is the largest sector in terms of emissions—it drowns out the progress in other sectors.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

There are two key policies that have yet to be implemented for the oil and gas sector. The emissions cap is the most significant of those.

When it comes to the emissions cap for the oil and gas sector, are you concerned about stringency? Could you elaborate on those concerns?

[Jerry V. DeMarco]

Yes. That's why we note in the report that if measures are widely applied and stringent enough, they have the potential to achieve the target. We just know there's a notion of a cap, but we don't know the details of it, so it's impossible to predict whether that will bridge the gap between the current estimation of 34% to 40% or not.

However, it targets the sector that is the greatest contributor to greenhouse gas emissions in Canada and the sector in which emissions have risen the most since 1990.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

When we ask you to come back and talk to us about the emissions cap and whether it's being effective, what are some key attributes that you would be looking at when it comes to stringency and effectiveness?

The converse of that is: What are the potential loopholes that would undermine the effectiveness of this policy?

[Jerry V. DeMarco]

One of the lessons learned from Canada's history is that it can achieve efficiency progress.

Per GDP and per capita, emissions have been down in Canada over the last 30 years, but it's the total that is the target for Canada. The total net emissions for the world are what affect, ultimately, global average temperatures, so the key thing would be for any measure to address the total and not just the efficiency with which we pollute.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you.

Do I have more time, Mr. Chair?

[The Vice-Chair, Conservative, Dan Mazier]

You have 10 seconds...oh no. You're over. I'm sorry. It's the other way.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

I exceeded my target.

[The Vice-Chair, Conservative, Dan Mazier]

There you go.

We'll start the second round with Mr. Kram for five minutes, please.

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you very much, Mr. Chair, and thank you to all the witnesses for being here today.

Mr. DeMarco, I would like to do a very quick summary of report 7, on zero-emission vehicles, if I may.

The government's goal was for 80% of federal government vehicles to be zero-emission by the end of the decade. We are currently sitting at 3%, and you estimate that we should come in at around 13% at the end of the decade. That's well below the 80% goal.

Is that an accurate summary?

[Jerry V. DeMarco]

Yes. If the current trend of acquisition were to continue at the same pace, they'd hit only 13% rather than 80%.

Hopefully, that current trend is not just a fait accompli, and they can change it, but it will require a strategic approach for them to do that.

[Michael Kram, Conservative, Regina—Wascana, SK]

Let's start with this question. Where does the federal government get its vehicles from? Does it purchase them from regular car dealerships across the country, the same way as regular Canadians?

[Jerry V. DeMarco]

I'll turn that over to the department to talk about the internal operations. We were focused on the results of the program, as opposed to the operational requirements.

[Vincent Ngan]

My colleague, Nick Xenos, executive director of the Treasury Board Secretariat, who is responsible for greening government operations, will join us.

[Nick Xenos, Executive Director, Centre for Greening Government, Treasury Board Secretariat]

We buy off a standing offer of PSPC, so it's Public Services and Procurement Canada that buys them from the manufacturers.

[Michael Kram, Conservative, Regina—Wascana, SK]

Very good.

I looked at the Statistics Canada website, and the uptake of zero-emissions vehicles for the general population is at about 1%. That was at the end of 2021, so it's in the same ballpark as the federal government.

I would like to read a quick quote from page 11 of the report. It says:

Not all of the operational requirements of the 4 selected federal organizations could be met by the zero‑emission vehicles on the market during the audit period. These included trucks needed to pull loads for long periods of time...and vehicles that can work in harsh weather conditions.

If the uptake of electric vehicles among the general population is about the same as the federal government, would it be reasonable to conclude that individual Canadians and Canadian companies trying to transition to electric vehicles are encountering the same challenges, and that's why they're experiencing similar results?

[Jerry V. DeMarco]

This relates to an earlier question about leading by example.

We would expect, given that Canada is requiring all Canadians to have only zero-emission vehicles available for purchase by 2035, that it is very important for the federal government to step up and lead by example in greening its fleet.

If Canadians don't see the federal government walking the talk, then they will be less inclined to do their part, especially when it comes to something like this, where it's not just a hoped-for behavioural change, but an actual requirement for sales to be 100% electric by 2035 for light-duty vehicles.

[Michael Kram, Conservative, Regina—Wascana, SK]

Another reason Canadians may want to transition to electric vehicles is to avoid paying the carbon tax. When the carbon tax was introduced in 2019, it was at 4¢ a litre. Now it's up to 14¢ a litre and projected to increase to 37¢ a litre by the end of the decade.

I would like to read a quote from yesterday in question period. The Prime Minister described the carbon tax as “one of the most successful measures Canada has ever seen in the fight against climate change.”

Mr. DeMarco, in your audits, have you come across any evidence to support that statement?

[Jerry V. DeMarco]

The theory of the carbon levy, which is using a charge to partially internalize what was previously an economic externality in terms of economic theory, is well recognized as being a sound approach.

We did our carbon pricing audit very early on, to look at mostly design issues, coverage, equitability and all those things that are still being discussed today. We haven't done another follow-up that looks at exactly how much bang for their buck they're getting out of the carbon price, but the theory of carbon pricing in economics is a sound one, so long as it's widely applicable and the price is high enough to induce the behavioural change that is sought.

[The Vice-Chair, Conservative, Dan Mazier]

That's the end of the five minutes.

Mr. Longfield is online.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Mr. Chair, and thank you to Mr. DeMarco and officials for being here.

I don't want to spend a lot of time on it, because I have a limited amount, but on zero-emission vehicles, we did a study in this committee that showed that the provincial programs and federal programs combined get results. It showed that we're now at 7% nationally, but 21% in B.C. and 18% in Quebec, where there are also provincial programs to incent people to go to zero-emission vehicles.

The progress is actually ramping up, but of course implied in the question is that the supply chain may not be keeping up with demand on the market, although we are seeing increases.

I'd like to go back to the accountability act itself. We didn't have a Canadian Net-Zero Emissions Accountability Act, and some people on the committee—Mr. Bachrach and Madame Pauzé—were very instrumental in where we've landed. Of course, the Liberals...I was at the table as well. I'm very glad to see the audit is actually in front of us. I wasn't expecting to see it for a few years.

Mr. DeMarco, could you comment on the process? We're trying to get to net zero by 2050 and we have some goals for 2030. The reason we're doing this audit is really to get to net zero by 2050.

Could you comment on how this act is actually helping us in that regard?

[Jerry V. DeMarco]

Turning back to my appearance here a couple of years ago with respect to our lessons learned from Canada's record on climate change, we expressed some optimism about the recent climate legislation. That's twofold: the carbon pricing legislation and the net-zero act. It is much better than nothing. If climate initiatives are just set out in non-binding policies that can come and go, that's a much worse scenario than having some elements set in legislation. There are no consequences in this legislation for not meeting a target, so there's been criticism about that.

However, it is certainly better to have interim objectives and targets that are soon enough to drive change, as opposed to being too far off to worry people, and for there to be accountability mechanisms, like our role. The minimum in the act was for us to report by the end of 2024 and again in 2029, but given Canada's track record, I indicated that I'd like to start early, given that there appeared to be problems with the first plan under the act. We have decided to move early, and we're going to keep reporting until, as I mentioned earlier, the tide starts to turn.