Finance Committee on May 1st, 2018

[Pierre Mercille]

I can't really talk about the system in Quebec because I'm not familiar with it. What I can say is that under this regime, the fuel distributors are the people who are going to pay the charge. The fuel will be paid, if it's delivered in a listed province—a listed province being a jurisdiction that will be listed in part 1 of schedule 1.There are rules for bringing in fuel to a listed province from another place in Canada, and in that case, the fuel charge under this system would apply, but there are also rules for relieving when the fuel is removed from a listed province to go somewhere else.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Is there equivalency, though? This is the question. If certain things are exempt under the cap-and-trade system of Quebec that are not exempted under this federal backstop regime you mentioned here, then you have the same product being used by different people who will have different costs when it comes to the imposition of this. Is there equivalency? Shouldn't the federal government be...? Again, if you're granting equivalency to provinces like Quebec and Ontario for cap and trade, shouldn't there be a bit more familiarity to ensure that there's not a different price on carbon depending on where you're from?

[John Moffet]

Other environmental legislation has a formal concept of equivalency. Under the Canadian Environmental Protection Act, the federal government has the authority to stand down a regulation that has been promulgated under the act when entering into an agreement with another jurisdiction—whether a provincial, territorial, or an aboriginal government—that has in place rules that are equivalent to those under CEPA.

The government has chosen not to pursue the model of formal equivalency under this system because, as I explained earlier, when the federal government moved to impose pricing across Canada, we already had a situation in which we had four provinces with pricing in place and three very different systems, each of which had a broadly similar scope of application—each applied to the same set of emissions—but used different mechanisms and, as a result, caused there to be different carbon prices in the marketplace.

British Columbia has an explicit charge; Alberta has an explicit levy on fuel use—we know exactly what the carbon price is. For covered facilities in Ontario and Quebec there's no legally established carbon price. Instead there's a cap, which creates market pressure, which is then manifested in a market price that may or may not be exactly the same as what exists in British Columbia or Alberta.

We are not in a position to say that the carbon price throughout Canada must be x dollars, because it's not x dollars in those four jurisdictions, and it wouldn't make any sense to require it to be that exact price everywhere else. Instead, the federal government has provided the remaining nine jurisdictions with exactly the same flexibility to choose their own system. If they do a cap-and-trade system, it needs to align with certain characteristics to make it essentially as rigorous and robust as the Ontario and Quebec system. If they rely on an express charge, then we need to see that price at $10 to $50 per tonne.

That's a long-winded answer, but the bottom line is that there's no way, in a situation in which we already have different systems, to insist on one single price across Canada.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

If someone from Nunavut were to drive down and purchase the gas directly and import it themselves right from the St. Lawrence, they would perhaps then pay a higher charge than someone in Quebec, because it's treated differently under cap and trade. The former premier of British Columbia, Christy Clark, expressed real concerns around equivalency, and the fact that this does not address that raises concerns, for me.

[The Chair, Liberal, Wayne Easter]

Are there any other questioners? It would be great if there weren't, but we can take one last question. That way we wouldn't have to call the officials back again.

To those who are here for divisions 1, 2, 3, and 4, I offer my apologies. I know you came to get on today, but we're going to be out of time.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Chair?

[The Chair, Liberal, Wayne Easter]

We'll get to you in one second, Tom.

We'll have to schedule you for another time. My apologies.

Mr. Kmiec.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

I just want to make sure that we will still be on part 5 at the next meeting, because I have questions about the whole proposed section 50, about rebates. My questions are too long to get into in a 15-minute exchange now, so I wanted to save them for another meeting.

[The Chair, Liberal, Wayne Easter]

Will we need officials from both Finance and Environment?

[Tom Kmiec, Conservative, Calgary Shepard, AB]

If they both want to be here, it would be wonderful.

[The Chair, Liberal, Wayne Easter]

Okay, we'll have to schedule it, if that's the case. If it's going to take 15 minutes, we have no choice.

Mr. Moffet, did you want to say something?

[John Moffet]

I was just going to say that we are at your disposal if you have further questions.

[The Chair, Liberal, Wayne Easter]

I know we have witnesses this afternoon and tomorrow, and we'll have to figure out when to reschedule you folks, and for the 20-plus divisions that we have yet to go through. I think we're probably going to be meeting a little overtime.

With that, I thank the officials for coming, both those at the table and those we didn't get to.

The meeting is adjourned.