Environment Committee on April 23rd, 2026

[Mark Purdon]

Generally speaking, I think so.

I think the Western Climate Initiative, which Quebec is part of with California, with its absolute emissions accounting system, has certain advantages in terms of the criteria I mentioned earlier—transparency being amongst the most important.

I think it's also important that there is momentum building in the United States on the Western Climate Initiative. The state of Washington is very likely to join next year. There are discussions in New York state and Colorado. There seems to be, again, some momentum in the United States. That's also something of importance to consider because of the linkages that are still present between the Canadian and U.S. economies.

[Patrick Bonin, Bloc, Repentigny, QC]

Could you tell us a little about absolute emissions accounting? Is it important compared to emissions intensity accounting, for example?

[Mark Purdon]

The output-based pricing system will require some sort of analysis and information for each specific firm that is being regulated under an output-based pricing system. That requires a whole information-gathering effort and technical analysis validation. There are a number of steps in that process.

With absolute emissions trading systems, yes, there are complications. Firms need to be able to measure their inventory's greenhouse gas emissions, but we've been developing these capacities and practices over a decade in Quebec, and I think that probably most firms across Canada have already developed these capacities. There is a standardized process, whereas each output-based pricing system seems to have its own specific rules and regulations about how to calculate the thresholds and how to measure compliance, which become very complex.

[Patrick Bonin, Bloc, Repentigny, QC]

In your opinion, is a single price signal from industrial carbon pricing sufficient to reduce emissions quickly enough and to align pricing with the Paris Agreement’s goals? If so, do you think there should be a minimum price? What price should we aim for?

[Mark Purdon]

I'll respond with a situation in Quebec. There are benefits from emissions trading with California because of reduced compliance cost. It's cheaper to reduce emissions in California than in Quebec because Quebec is relatively energy clean, so a lot of those emission reductions are achieved in California relative to Quebec. That brings down the compliance cost considerably.

There are all sorts of issues going on in California. We can get into it if you want, but the most important thing is that, if Quebec were to delink from California to meet its 2030 reduction target, carbon prices in Quebec would need to rise to over $300 per tonne. Right now, they're about $40 or $50. That's a bit suppressed because of political problems in California. They should certainly be higher in California and Quebec to drive toward the 2030 reduction targets, jointly, of those two jurisdictions. However, it's an order of difference from what Quebec would need to achieve those reductions unilaterally.

[The Chair, Liberal, Shannon Miedema]

Thank you.

We will now turn to Mr. Leslie for five minutes.

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

Thank you, Madam Chair.

Ms. Swift, I'm sorry you had to face such slanderous commentary towards you and, frankly, small and medium-sized manufacturers across this country. However, I did appreciate that the quiet part was said out loud. We can look forward to a majority government scenario in which dissenting voices of all types are going to be silenced as much as possible.

When the United States is moving in one direction, and Canada is piling on more industrial carbon taxes, are we making it easier or harder to keep manufacturing jobs and investment in this country?

[Catherine Swift]

The data are clear. We're making it much harder, and that's been going on for some time now. It's not a recent phenomena.

I think we can be theoretical all we want, but the data are very clear, and they are facts. They're not theory. People are leaving. Talented individuals are leaving. Frankly, everyone wants to do something good for the environment, including small and medium-sized businesses. They're actually often better than large corporations, but the stick and not the carrot is not the way to go.

As we know, the belief in this climate change being man-made, years ago, was very much, “The science is settled.” Well, the science is nowhere near settled. More and more people who initially very much believed in that don't anymore once they actually analyze the data. If we don't have our economy in a decent state, which we do not right now, we won't even be able to afford the kinds of climate incentives that we might all want to do, so again—

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

Ms. Swift, I'm sorry to interrupt. You mentioned and warned that capital is mobile, and you mentioned that roughly half of your existing board members have already set up a facility, in addition, in the United States. When these decisions are being made by those businesses or others, what role does the industrial carbon tax have in deciding what jurisdiction to set up shop in?

[Catherine Swift]

It's not the only thing, obviously. There are a lot of things, like the tax burden overall, the accumulative tax burden. The red tape burden is equally bad. I would say that, one, it's not a major factor, but it's one of many factors.

This is the other problem. We have so many mechanisms. We keep getting told carbon pricing is the best way to go economically, as it's market-based, etc., but we have all kinds of other stuff we're piling on top of carbon taxes too. A lot of it is regulatory. If somebody really believed that carbon tax is it, then let's do only that. Why do we have all this other regulatory stuff piled on top?

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

In that vein, you mentioned this in representing small and medium-sized manufacturers. They often get hit especially hard because of the immense complexity of the regulatory red tape burden they face. However, they don't have compliance departments, lawyers on staff or the margins of the larger players.

Is it accurate to say that these policies hit SMEs much harder?

[Catherine Swift]

They do, of course.

I have tons of evidence, if anybody's interested. Businesses with fewer than 20 employees make up 98% of business in Canada. They represent half of our GDP and roughly 60% of overall employment. If you think that ignoring the small and medium-sized business sector doesn't have much of an impact, the data will show you to be dead wrong.

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

You also alluded to the fact that the businesses are going to eat these costs, and they won't get passed down the value chain. Government seems to believe that's the way it's going to work. The dastardly businesses are going to pay the taxes.

In the real world, who ends up paying more when manufacturers get hit with higher carbon taxes?

[Catherine Swift]

Often, they do suck up some of it.

I've been talking to some of our manufacturing members recently. A year ago, their businesses were in good shape, so they could stand some of these punitive policies. They take a long view. They can hang in for six or eight months, or whatever it happens to be. These are good businesses that have been around for a long time, but now they're saying that things are getting critical. This why they're looking at other jurisdictions, notably the U.S.

We can talk about Uzbekistan and their system, but 75% to 80% of our exports still go to the U.S., despite current measures. That will continue, in large part.

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

You mentioned the stacking and the tough decisions your members are making. Do you see changing behaviour among your members because of these costs? I think of things like delaying expansions, laying the foundation but the building not actually going up, cancelling projects, scaling back size or simply moving out of the country.

[Catherine Swift]

I definitely see that. They're expanding in the U.S., so Canada's the loser. Often, they will leave an operation in Canada—a rump operation—but they do their growth, innovating and whatnot south of the border.

It's interesting. As long as they leave some operation in Canada, the data don't show them as leaving because they're still here. Do you see what I mean? Even the data about leaving—and we have significant data—don't represent the whole picture, in that respect.

[The Chair, Liberal, Shannon Miedema]

Thank you very much.

Mr. St‑Pierre, you now have the floor for five minutes.

[Eric St-Pierre, Liberal, Honoré-Mercier, QC]

Thank you.

Ms. Swift, did you say that climate change isn't real and it's not a problem?

[Catherine Swift]

No, I didn't say climate change is not a problem. I said that the notion of man-made climate change is really the issue. We know climate has changed for millennia and will continue to change for millennia.

Bjorn Lomborg, who is quite an expert on this issue, feels that the idea is adaptation, not taxation, as do a lot of people.

[Eric St-Pierre, Liberal, Honoré-Mercier, QC]

Mr. Cosbey, what would you say to that?

[Aaron Cosbey]

Frankly, if that's your starting assumption, then I can understand the policy recommendations that come from it.

When looking at credible bodies of science, like the Intergovernmental Panel on Climate Change, which comprises over 3,000 natural scientists, economists and physical scientists, the evidence compiled from peer-reviewed studies seems to overwhelmingly indicate, with infallible certainty, that climate change is a man-made phenomenon.

Yes, we've had climate change over the years, but never at the scale and speed at which we're experiencing it now.

[Eric St-Pierre, Liberal, Honoré-Mercier, QC]

Thank you.

Mr. Purdon, is climate change real?

[Mark Purdon]

Yes, and it is caused by humans.

[Eric St-Pierre, Liberal, Honoré-Mercier, QC]

Mr. Purdon, do you agree that industrial carbon pricing is an effective mechanism for reducing our emissions?

[Mark Purdon]

Yes.

I think it's been effective. The research coming out suggests that it's the most effective tool being used by the Canadian federal government. However, the prices are low, and the objective is still quite far away.