Environment Committee on Nov. 9th, 2023

[Jerry V. DeMarco]

There was a lot in there. I'm not sure I feel comfortable agreeing with everything you said, but I'll start towards the end and pick up there.

As noted in our report, this plan has some critical elements in terms of carbon pricing and regulations under the Canadian Environmental Protection Act. These have the potential to achieve deep emissions reductions. There are 80 measures in the plan, but several of them are the big-ticket items, if you could call them that.

It's very important that Canada has a plan that adds up. In this case, it doesn't quite add up on paper just yet. However, if Environment and Climate Change Canada and its partner departments add to the portfolio measures, and if they're strong enough and effective enough, there is still time to reach the target.

I'm not sure whether I've addressed everything in your comment and question, but I'll stop there. You can let me know if there's something else I need to cover.

[Adam van Koeverden, Liberal, Milton, ON]

Thank you, Mr. DeMarco. I appreciate that answer.

My next question is for Mr. Ngan or Mr. Hermanutz.

With respect to carbon pricing, it's difficult to quantify how many of the reductions we've seen since 2005.... I appreciate that we have been able to measure our emissions reductions since 1990 or 2005. I've seen all the graphs in the G7. It's challenging to identify exactly when we ought to start measuring. However, we have seen a 6% reduction in emissions, as a country, since 2005. Since 2019, those have gone down quite dramatically. That's also—not coincidentally, in my view—around the same time we started pricing carbon emissions and pollution in Canada with a federal carbon tax.

I know it's challenging to say how many of those emissions reductions are attributable to carbon pricing. Do you have an estimation or some insight for us with respect to, perhaps, a range that might be attributable?

Anybody who might have insight could answer.

[Derek Hermanutz, Director General, Economic Analysis Directorate, Department of the Environment]

You're right. It is very difficult, in a package of 80 different measures, to attribute specific megatonnes to individual measures, although we know that carbon pricing is a significant contributor to the expected reductions. I think the commissioner's report agrees with that statement.

I think we're probably in a world where we could say, with some rough analysis, that up to one-third, potentially, of the emissions reductions that we're projecting to 2030 would come from carbon pricing.

[Adam van Koeverden, Liberal, Milton, ON]

Is that one-third of the 6% reduction or so that we've seen since 2019?

[Derek Hermanutz]

This is from 2005 to 2030.

[Adam van Koeverden, Liberal, Milton, ON]

Thank you very much.

I've garnered a lot of insight from the Province of British Columbia, which basically started pricing carbon first. They've been a model for the world, in fact, of how to reduce emissions through effective market-based instrument systems.

Is there any insight that we can garner from the Province of British Columbia's being out front in that regard?

[Vincent Ngan, Assistant Deputy Minister, Climate Change Branch, Department of the Environment]

First of all, Derek and I are not the lead officials for the carbon pricing system. That being said, when the pricing system was developed, a lot of lessons learned were undertaken. Also, as we know, carbon pricing is a worldwide-recognized instrument to effectively drive greenhouse gas emission reduction.

Also, the pricing system provides incentives through a cost-neutral system of returning proceeds back to households and small and medium enterprises. Therefore, this is a very effective system. That we know.

That being said, I regret that I do not work on this file as intimately as other colleagues; therefore, this is the extent to which I can comment on the instrument.

[Adam van Koeverden, Liberal, Milton, ON]

Thank you, Mr. Ngan.

My last question is for Mr. DeMarco.

If we were to stop pricing carbon altogether in Canada in every province and territory, if we eliminated the price on pollution, would that bring us closer to achieving our targets of 40% to 45% emission reductions by 2030, or would it bring us further away from achieving those targets?

[Jerry V. DeMarco]

Do you mean if we eliminated carbon pricing and didn't replace it with something else just as significant?

[Adam van Koeverden, Liberal, Milton, ON]

There could be another market-based instrument perhaps, but, yes, eliminate carbon tax—

[Jerry V. DeMarco]

If you eliminate it without compensating, then you're talking about what Environment and Climate Change Canada believes is responsible for one-third of the reduction—

[The Vice-Chair, Conservative, Dan Mazier]

If you want to provide the reply in writing, that's fine.

[Adam van Koeverden, Liberal, Milton, ON]

He was mid-sentence, Mr. Chair.

[The Vice-Chair, Conservative, Dan Mazier]

Okay, but it's 30 seconds over.

[Jerry V. DeMarco]

If you eliminate it and don't replace it with something just as effective, there's an obvious gap that Environment Canada estimates to be one-third.

[The Vice-Chair, Conservative, Dan Mazier]

Thank you.

We have Madame Pauzé for six minutes, please.

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you, Mr. Chair.

I want to thank everyone for being here.

Thank you, Mr. DeMarco. I was very pleased to hear you say that you will continue to sound the alarm until Canada reverses this trend. I think that is very professional of you, and I wanted to point that out.

My questions are for the assistant deputy minister, Mr. Ngan.

Report 6 of the Commissioner of the Environment and Sustainable Development shows what we already know. The Liberal government is failing to meet its climate change commitments and Canada is going to once again fail to meet its emissions reduction target.

In order to determine whether it will meet its emissions reduction target, the government has to calculate the projected emissions for a certain number of years. However, the environment commissioner's report shows that the government did not do those calculations properly. The report states, and I quote: “Modelling is an important tool for assessing the potential effectiveness of a plan's mitigation measures and informing about whether adjustments are needed.” The report then basically goes on to say that high-quality, reliable modelling is needed because there has been no sustained downward trend in Canada's emissions since 2005. We have had many successive governments since then.

If the calculations were not done properly, then it is not surprising that Canada is not meeting its targets. We have had 10 plans in a row now that have failed.

Why are the calculations not being done properly? We learned from the environment commissioner that it is because the government's assumptions are too optimistic. In other words, the government is looking through rose-coloured glasses. In my opinion, the government thinks that everything is going well because it is the one in power and because Liberal magic is somehow at play.

The commissioner's report also indicates, and I quote, “The models assumed that there would be no delays in the design and implementation of mitigation measures.” The government did not plan for its own delays, so that was overestimated, even though regulations to cap emissions, a Liberal promise, are two years behind schedule. Clean electricity regulations, another Liberal promise, are also behind schedule. According to the commissioner, these delays are the reason why Canada will not meet its emissions reduction target. It is as though the government did not consider its own ability to fail.

Mr. Ngan, how do you explain the fact that the government can make promises and come up with assumptions that are too optimistic, but it cannot implement real measures to fight climate change?

[Vincent Ngan]

It's a very comprehensive question, so I will answer it in two parts.

The first part is to talk about how the emissions reduction plan has achieved emissions reductions since its inception. The second part is to touch upon the modelling approach, and I will turn to my colleague, Mr. Hermanutz.

First of all, I would fully agree with the findings and the recommendations of the commissioner. There is still work to be done in order for us to meet the ambitious 2030 goal of at least 40% emissions reductions compared to the 2005 levels. That being said, I think it's also fair to demonstrate that Canada has achieved meaningful emissions reductions. We're already substantially bending the curve on emissions in Canada, and that is reversing a trajectory of emissions that would have gone unconstrained without any limitation in the future to one that is now significantly going downward.

[Monique Pauzé, Bloc, Repentigny, QC]

Mr. Ngan, that answers the question that Mr. van Koeverden asked earlier, but I am talking about the fact that the modelling was not done properly and the assumptions were too optimistic. I would like to hear more about that. You said that you were going to let Mr. Hermanutz speak to that, so I am ready to hear what he has to say.

[Derek Hermanutz]

We don't agree that the projections are overly optimistic. We follow several processes to ensure that they're realistic. We follow UNFCCC guidelines in how we prepare the projections. We've submitted five biannual reports to the UNFCCC in the last five years, all of which are subject to external review from accredited UNFCCC experts. We rely heavily on third party information. Our projections are based on historical data that's published in the national inventory report, and data from Statistics Canada. Our energy forecast comes from the Canada Energy Regulator.

[Monique Pauzé, Bloc, Repentigny, QC]

Perhaps this comes back to an answer that the commissioner gave earlier.

In the field of education, we refer to what I am hearing about as the intersectionality of issues. We are talking about issues that affect many or all of the departments, but no one is communicating. I hope that we will not have to create another organization to get everyone to sit down together at the table to talk.

I read the entire 2030 emissions reduction plan, and it focuses on measures that do not exist. There is no modelling. The plan makes promises and commitments as though these measures were real. It talks about how emissions will be reduced through measures that do not exist. I am thinking, in particular, of electric buses.

Do you think that this is just wishful thinking on the government's part? If not, how do you explain the commissioner's criticism?

[Derek Hermanutz]

I would say that within the modelling we follow UNFCCC guidelines, which build a reference case of policies that are legislated, funded or implemented, as well as announced measures, which include measures that have been announced by the federal, provincial and territorial governments.

[The Vice-Chair, Conservative, Dan Mazier]

Thank you, Madame Pauzé.

Now we go to Mr. Bachrach for six minutes.

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

Thank you very much, Mr. Chair.

I want to start by thanking Mr. DeMarco for his work and his determination to ensure that through this accountability process the government gets back on track. I think that's a desire shared by many of us at this table. This isn't meant as an opportunity to bash the government. We very much need the government to do right by its promise that it's going to meet the commitments that it made on the most important issue of our time.

I want to thank you, Mr. DeMarco, for your part in that.

I'm a bit concerned to hear what seems like a disagreement between Mr. Hermanutz and yourself around whether the projections are optimistic or not. The accountability measure that we have involves the work of the environment commissioner. The environment commissioner is saying that the projections are overly optimistic and that we're not going to meet the target. I would hope that Environment and Climate Change Canada would take that information very seriously and abide by the recommendations and the strong direction that's been provided by the commissioner.

I'm trying to think of where to start. There are so many questions.

One of them is that when we worked on the Canadian Net-Zero Emissions Accountability Act, one of the things we fought very hard for was the 2026 emissions objective. We felt that 2030 was too far out and that the government was going to drag its feet and then at the last minute throw up its hands and say, we just can't possibly do it. Or perhaps by then we would have a different government that doesn't care about it anyway.

It was important to have a near-term target or objective.

I wonder, Mr. DeMarco, if you consider that objective and if you would have any insights to share on whether we are on track to meet that objective in just a few short years.

[Jerry V. DeMarco]

The 20% target in 2026 is called an objective in the legislation and it is an important addition because typically targets are so many years out that by the time we get close to the target year, there's already a new target and a new plan replacing it, and the narrative is more about the latest one without closing the loop on how we did on the last one.

When you see the litany of failures over the years, it's important that we do something different rather than repeating the same thing we've done in the past and expecting different results. I'm pleased that there is an objective for 2026. The current emissions graph doesn't show that it's going to trend in the right direction to meet 2026, but we don't have enough transparency to be able to say for sure one way or the other.

If they added a number of measures quickly, it's conceivable that they could reach it. With the current measures in the plan, they already admit that they don't have enough to meet their targets. It remains to be seen, but the imposition of additional measures would increase their chances of meeting that interim objective in 2026.