Environment Committee on Nov. 9th, 2023

[The Vice-Chair, Conservative, Dan Mazier]

I think it was a pretty simple question. Can you provide the information or not?

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

I think the answer is that he can't, because the government is keeping the information secret, so we'll be asking the government to provide that secret information so we can better understand how they came up with these aspirational numbers that have nothing behind them.

I thank Mr. Ngan for his response.

[The Vice-Chair, Conservative, Dan Mazier]

Thank you, Mr. Bachrach.

Mr. Kram, you have five minutes.

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

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

Mr. DeMarco, I'd like to follow up with some of the questions I asked in my first round of questioning.

We've established that it's the goal of the federal government to have 80% of its vehicles as zero emission by the end of the decade, and we established that right now we're still in the single digits, as is the general population of the country. I asked a question about the carbon tax, and your answer was that the carbon tax theory is sound.

I would like to go a step beyond that into practice. I wonder if you could help us understand how high the carbon tax has to go before the government starts meeting some of its goals? Are we talking $1 a litre, $2 a litre or $3 a litre in carbon tax before we start achieving some of these targets?

[Jerry V. DeMarco]

I can't give you an answer that's specific as to when people feel confident enough that it's worth their while to switch. The carbon levy is escalating by $15 per year to 2030. It will affect people differently. When one person is ready to say, “Okay, I think it's worth my while, given I just commute and don't do long-distance travel”, they may arrive at that decision earlier, especially if there is a provincial incentive program in there.

I can't say what the number has to be to switch everyone over. It will differ among provinces and among people, but it does have to be high enough so that the math works out, so that someone will say, “Okay, it makes sense for me to do the switch. It's more costly for me to use an internal combustion car than it is an electric vehicle,” but the exact price point, especially since it changes every year because it's escalating, is too hard to say. There may be some year-by-year modelling that Environment Canada has about that. It would be quite different between B.C. and Ontario or Quebec and Ontario, but I don't know if they have that.

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

Yes. I'd be happy to hear from the department, please.

[Derek Hermanutz]

Are you referring to the zero-emission vehicles?

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

Let's start with that. To get to that 80% of zero-emission vehicles for the federal government and the population at large, how high does the carbon tax have to go?

[Derek Hermanutz]

Like my colleague said, we're not the carbon pricing leads within the department. We can follow up on that.

I'd also be happy to table the RIAS cost-benefit analysis for the zero-emissions vehicle sales mandate.

With respect to federal government targets, I'll turn to my colleague, Erin O'Brien.

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

Maybe I'll come back to Mr. DeMarco with the issue identified on page 11, where “zero-emission vehicles” include trucks that are needed “to pull loads for long periods of time”, and vehicles that need to “work in harsh weather conditions”. I can't imagine any increase in the carbon tax that would make up for these technologies that do not yet exist.

Does it really matter how high the carbon tax goes? If the department can't switch to electric vehicles that are capable of towing certain loads or electric vehicles that are able to work in harsh weather conditions, then what does it matter how high the carbon tax goes?

[Jerry V. DeMarco]

There are impacts on the behaviour of consumers in terms of choice of vehicles, but there is also impact on the market and manufacturers. If there is certainty of a carbon price going up, there'll be an acceleration—under economic theory—in the research and development and bringing to market new products, such as three-quarter tonne trucks or one-tonne trucks that we don't have right now.

It's not just incenting behaviour change in the consumer; it's also incenting behaviour change in the market.

For them to meet their target on the fleet, knowing that those specialty vehicles are not available yet, it's all the more important that they switch over for light vehicles now, because they're going to have to wait until later in the seven-year cycle to see if the technology is there for the bigger trucks.

[The Vice-Chair, Conservative, Dan Mazier]

Thank you, Mr. Kram.

Now, we go on to Ms. Taylor Roy.

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

Thank you very much, Mr. Chair, and thank you to the witnesses for being here and to the commissioner for doing this report earlier than was necessary. I think we all take this very seriously.

I'm encouraged to see how much we are doing. I know we're falling short of our goals, but we have made a lot of progress.

I appreciate the discussion about the pollution pricing mechanism. I would ask whether there is some kind of primer on pollution pricing that you might also submit to the committee, because there seems to be a great deal of understanding about how this mechanism works and what its impact can be. This doesn't work in isolation. This works in conjunction, obviously, with many other factors.

Speaking of the factors, we were talking about the delineation of jurisdictions. When we look at comparing Canada to the other G7 countries and the percentage of our economy that is reliant on oil and gas, we see that one reason, I believe, that Canada as not done as well as other countries is that the oil and gas sector is a large part of our economy and has not made any emissions reductions.

With technology like CCUS and other programs, we often hear from the oil and gas sector that they are working on plans to decarbonize, that they're going to be bringing down their emissions, and that there's no need to reduce production.

I was wondering if you could comment on that and on the Pathways Alliance in particular. I've heard a lot about them. They're advertised all over Ottawa.

Have you seen any particular plans from the Pathways Alliance on what they're doing or on anything they've actually done to reduce emissions in the oil and gas industry?

[Jerry V. DeMarco]

We audit the federal government, not the private sector. It's up to the federal government to make sure the math adds up in terms of all the sectors reaching the target for 2030. It hasn't been the case in the previous plans. They haven't reached the targets, even though—as has been noted today—the efficiency, or carbon intensity, has improved markedly over the years.

Canada does need to get a handle on that. It's not the only country in the G7 that had a large fossil extraction footprint in 1992 when the Rio Convention was signed. Germany, the U.K. and the U.S. also had large fossil energy extraction industries. They're all down since 1990, but Canada is up. These are choices that are made.

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

Thank you very much.

I want to go back to the delineation of jurisdictions.

We talked about the impact assessment and the fact that we don't have the ability, perhaps, to do as much as we did before.

When provinces are not working in the same direction as the federal government...and I take the great concern the Conservatives have here on electric vehicles as an example. In Ontario, when I bought my first electric vehicle, there was an incentive from the provincial government—think under the Liberal government of Kathleen Wynne—to purchase that. Of course, that, in addition to other things, incentivized people to change their behaviour.

We've just seen Danielle Smith in Alberta put a freeze on wind and solar projects.

How much do you think the willingness of the provinces to align with the climate goals is impacting our ability to meet our emissions targets?

[Jerry V. DeMarco]

The chief justice—and I think it's the last paragraph of the impact assessment decision that was just released—talks about co-operative federalism, which I think is what you're getting at. He also talks, in the first paragraph, about the fundamental value of the environment and the right of Canadians to a safe environment.

The jurisdiction is shared in Canada, so there needs to be work done within the spheres of jurisdiction at the federal level, at the provincial level, at the municipal level and with indigenous communities as well.

Carbon pricing and regulation of greenhouse gas pollution are clearly within the federal realm. The federal government does not have to worry about the effect of the Impact Assessment Act decision on its signature pieces in terms of climate change mitigation measures.

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

Thank you.

Do you see the price on pollution as one of the signature pieces of our platform and our program?

[Jerry V. DeMarco]

Yes. I characterize it as one of the big-ticket items, along with the regulation. As you mentioned, there are others, like incentives or subsidies. I believe the department estimates that pollution pricing is going to account for roughly one-third of the reductions it's seeking.

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

Thank you very much.

[The Vice-Chair, Conservative, Dan Mazier]

Thank you.

Just so everybody knows, we're entering the next round. It might go a little bit over, but instead of reducing everybody's time, if everybody agrees to it, we'll just keep on going with the regular times.

It will be Mr. Leslie, Mr. van Koeverden, Mr. Garon and Mr. Bachrach.

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

Could we actually reduce the times, as we normally do when we go into the next round?

[The Vice-Chair, Conservative, Dan Mazier]

This is a lot easier. Everybody is here, so we will just keep on going with the regular times. What would be the advantage of—

[A voice]

Are we doing one more round with the normal times?

[The Vice-Chair, Conservative, Dan Mazier]

It's with the normal times. Thank you.

Go ahead, Mr. Leslie.

[Branden Leslie, Conservative, Portage—Lisgar, MB]

Thank you, Mr. Chair.

I agree. I think it's important that we have the provinces and the federal government working together. I think that's why it's so interesting that all of the provinces enunciated their concern about the federal government's decision on changing the carbon taxation scheme.

I'd like to get to the questions. I understand that you guys aren't from the carbon tax branch. I'm still perplexed, and I think most people on this side of table have tried to decipher why on earth this economic and emissions reduction modelling is being hidden under cabinet confidence. Usually, cabinet confidence has been used in the past for SNC-Lavalin scandals or ArriveCAN scandals—scandals.

I'm curious, then, as to why the department is so unwilling to put forward this information that it doesn't seem any of our competitors would be interested in knowing. It doesn't seem as though there is a really good reason the commissioner can't see the full set of data to better understand how we're going to get the 40% reduction by 2030 and have a full understanding of what the economic modelling is.

My question to the department is this: Could we ask you to go ask your colleagues why this is the case and to send a letter or what I assume will be a fairly significant dump of information back to our committee for us to review?

I think, as the recommendation of the commissioner noted, transparency and the reliability of this data are very important. The fact that he and his office are unable to get it, I think, is reason for concern for all members of this committee, and all Canadians should know why this is the case.