Thank you, Mr. Chair.
I'd like to thank committee members for inviting me to attend this meeting. I also take the opportunity to congratulate you on the motion you passed.
In my view, it has great potential for exploring the potential of new and most desirable policy approaches.
In addition to the paper I have submitted for your consideration, which in essence says that the current federal tax regime is antiquated, out of synch, perhaps even absurd, and the subject, internationally speaking, particularly at the OECD, of criticism ranging from despair to derision, there are five points I would like to make here this morning.
The first point is about your committee. It could play, it seems to me, a determining role in solving the problems caused by climate change. You could give guidance to your respective caucuses and to cabinet. You're entering a territory that other finance committees in earlier Parliaments have carefully avoided. Your findings could guide the Department of Finance, which, despite its claims to the contrary, can play, and does play, a central and very influential role in the process of policy development, federally and provincially.
For all these reasons, the motion before us today could represent the initial step towards a badly needed substantive policy for the Government of Canada. In so doing, you would be upholding the fine tradition established by other committees in the House and the Senate wherein they tackled difficult policy areas, be it in health, languages, justice, or the environment.
My second point has to do with your motion itself. It addresses two areas. One is the taxation regime for fossil fuels. In the text of my submission, I've done my best to highlight the highly contradictory nature of Canada's tax system. It promotes and encourages greenhouse gas emissions at a time when we want to reduce them. No wonder, therefore, we are encountering great difficulties.
It does not make sense to have the Government of Canada attempting to ride two horses galloping in opposite directions, the Kyoto horse in one, and the fiscal horse in the opposite. Canada's tax system has to be modernized and redesigned to facilitate and not to hinder the achievement of the Kyoto objectives.
The other area of taxation addressed in your motion is renewable sources of energy. While achieving a level playing field might have been desirable a few years ago, today, with only six years separating us from 2012, what we need to achieve is a playing field considerably tilted in favour of renewables, as much as it is tilted in favour of fossil fuels now. That, coupled with a program offered by the climate change innovation fund, could take us a long way. In addition, perhaps a Canadian solar energy institute funded jointly by public and private sources could be very helpful in stimulating innovative thinking and innovative technologies.
The third point I would like to make is rooted in the report by the Commissioner of the Environment and Sustainable Development. In 2004 she made an interesting observation:
Finance Canada has not done a systematic job of assessing opportunities and options for using the tax system to advance sustainable development.... In other words, the federal government has not established a systematic basis for deciding whether and how to tap the potential of the tax system to help shift Canada toward a sustainable economy.
She also said:
...the federal government has acknowledged the important role that economic instruments—including tax measures—can play in making progress...
She concluded that the OECD
...has also repeatedly noted that Canada needs to make more use of economic instruments and, in particular, “green” tax reform, for environmental improvement.
Mr. Van Iterson has already referred to this.
Finally, the Commissioner notes that Parliament's role in holding the government to account is vital to progress on sustainable development, and this role, I suggest, is important for government backbenchers as well as for opposition backbenchers, because what they have in common is definitely their desire to be re-elected.
Finally, the Commissioner writes in section 45 of her report:
It is time for the deputy ministers' Environment and Sustainable Development Coordinating Committee to deliver.... This is a unique and powerful mandate, coming directly from the Clerk of the Privy Council. In my view, the Committee is falling short of its potential... It is up to senior departmental officials to better use the opportunities available to advance sustainable development.
The fourth point, Mr. Chairman, has to do with a communication by the assistant deputy minister of finance, Mr. Drummond, who is no longer holding that position, when he wrote on fiscal matters raised by the committee on the environment and sustainable development. He made a number of interesting points that may be helpful to your committee. Time does not permit me to go into the details, but his letter and the appendix are public documents, easily available from the clerk of the committee. Your committee may want to explore the taxation areas analyzed by Mr. Drummond to determine their potential, which in my view is considerable, and incorporate the findings in your report. It may turn out to be a very worthwhile exercise.
The last point, Mr. Chairman, is about observations by the minister and a quote. The minister says:
Environmental issues–including climate change–have traditionally been placed in a category separate from the economy and from economic policy. But this is no longer tenable. Across a range of environmental issues--from soil erosion to the depletion of marine stocks, from water scarcity to air pollution--it is clear now not just that economic activity is their cause, but that these problems in themselves threaten future economic activity and growth.... And we now have sufficient evidence that human-made climate change is the most far-reaching--and almost certainly the most threatening--of all the environmental challenges facing us.
That, Mr. Chairman, was Gordon Brown, the United Kingdom's Chancellor of the Exchequer.