Finance Committee on May 3rd, 2018

[Bill Morneau, Liberal, Toronto Centre, ON]

We've already told you that it's a revenue-neutral approach.

[Pierre Poilievre, Conservative, Carleton, ON]

I just asked you if that meant free, and you still won't answer that question.

Again, back to another question, will you charge GST on this tax?

[The Chair, Liberal, Wayne Easter]

That's your last question.

Minister, go ahead.

[Bill Morneau, Liberal, Toronto Centre, ON]

What we will do is not leave aside the responsibility to deal with our environment over the long term. We will not leave aside the opportunity for us to be leaders on the planet in clean technology. We will not leave aside the climate risks and challenges to the next generation of Canadians.

What we've decided to do is move forward in a way that is achieving a broad consensus. We're seeing that businesses are coming on board. In fact, they're asking how they can represent those risks actually in their own financial disclosures.

We know that, over the long term, this is going to be positive for our economy, and we look forward to being a leader in the world on this front.

[The Chair, Liberal, Wayne Easter]

Ms. O'Connell.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you, Mr. Chair, and thank you, Minister, for being here.

I want to start out by asking questions about Canada's competitiveness and the ability to attract foreign investment. I've spoken about this at this committee and to you as well. Certainly, internationally, and definitely in Europe, they're leading the way when it comes to climate-related financing, so I was really happy to see the announcement of an expert panel, with climate financing announced as the first step. I was also happy to see that my home province of Ontario has actually moved forward to have climate risk investment disclosures.

My question is somewhat twofold. One, how are you working with the provinces and territories, and with the expert panel, on how to determine some of these climate policies around finance? Two, how does that then make us more competitive, especially when we know that other countries are somewhat ahead or really moving along in this regard?

[Bill Morneau, Liberal, Toronto Centre, ON]

We know that in the market, publicly traded companies need to present risks to their investors, so they have a responsibility to represent in their statements to investors risks that are clearly identified in the short term. If you looked at the statements that come out from property and casualty insurers, for example, you would see that they're ahead on this game. They recognize that climate-related risks are significant challenges. Environmental issues are front of mind for them.

What we're finding is that, globally, people are recognizing that long-term environmental risks around increasing carbon pollution are a problem that should be represented as a long-term risk for many businesses. I will tell you that businesses are getting together to think about how they can represent those longer-term risks and how those can be presented to investors so that they can think about the appropriate decisions to take for their investment. What that will do, of course, is enable businesses that take appropriate approaches to get a lower cost of capital, because they will see a greater influx of people interested in investing in their business or their opportunities.

We're starting to see that work together. We've seen not only institutional investors and pension funds coming to the table worrying about their long-term investments and the environmental risks, but also large firms, both those that emit a large amount of carbon and those that don't. That's because they want to think about how they can become more efficient in the case where they emit a lot of carbon, and for those that don't, they want to represent the fact that they see themselves in an advantageous position.

We think working together to make this more clear to investors is critically important and will lend itself to the right kinds of behaviours for investment, both in firms that are in the resources and those that aren't. What I find in those discussions is that firms in the resource sector are looking for ways that they can responsibly address the long-term challenges that are presented to their businesses and therefore to their investors.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you.

Following up on that, one of the strongest policies to move forward on climate change is pricing pollution. Certainly, this is something that many countries around the world are moving towards. In Canada, 85% of the population already lives in a regime with pollution pricing.

I guess my question in another way is what the cost would be if we did nothing. I know there are reports about insurance claims going up. I was in municipal politics, and I've mentioned that many times. The cost to municipalities to prepare for climate change and adaptation is enormous, and it's all on the backs of property taxpayers. We don't build storm sewers for 100-year storms anymore. We build them now, basically, for every five to 10 years. Can you talk a little bit about the overall cost if we actually do nothing on climate?

[Bill Morneau, Liberal, Toronto Centre, ON]

It seems to me that in this area, we have to play a short and medium game, and a long game. With the short and medium game—and the very short, obviously—we're dealing with the immediate costs. Property insurers are seeing risks go up. They're seeing their claims go up. We're hearing directly from them that this is a big challenge. That is an immediate issue. They're talking about how we can develop more resiliency against those challenges by seeking ways that we can create more ability to deal with these issues, including, even in the case of the government, thinking about how we can be prepared for what will be eventual costs that come from those challenges.

In the longer term, of course, it's exactly as you have pointed out. It's around carbon pricing so that we can be part of a global consensus on how we can move forward to deal with this issue. It's obviously not easy, as we see. Even getting coalitions to do this is fraught with challenges because in different countries, and even within countries like ours, there are different footprints.

It seems to us that we're making progress, though. It seems to us that in Canada we've made great progress. You mentioned 85%. It's really about capturing the rest of the population and ensuring that we have an approach that deals with this in a way that can be manageable for individuals and businesses, and can create the economic advantage over the long term that we're seeking to have.

[The Chair, Liberal, Wayne Easter]

Thank you both.

I have Mr. Poilievre, then Mr. Sorbara, and hopefully we'll have time for one question from Mr. Dusseault.

Mr. Poilievre.

[Pierre Poilievre, Conservative, Carleton, ON]

The minister refused to answer the cost of the carbon tax to the average Canadian household.

Mr. Rochon, thank you for being here today. You received a memo on October 20, 2015, which provided some costing for various carbon tax options. The memo reads:

This memo focuses on the potential impact of a carbon price on households' consumption expenditures across the income distribution. Key findings are....

It's blacked out in the version that I received. Clearly, the blacked-out area is a table that shows how much people would pay in taxes depending on their incomes.

How much would a family that earns, say, $40,000 a year pay under a new carbon tax?

[Paul Rochon]

I think the ultimate outcome is entirely dependent upon the design of the tax and the rebate that is provided to households from the proceeds of the tax, but it's design-specific.

[Pierre Poilievre, Conservative, Carleton, ON]

In this document, how much does a family earning, say, $40,000 pay in a carbon tax?

[Paul Rochon]

As you know, we receive requests for access to information and there is a piece of legislation, the Access to Information Act. We apply the rules of the Access to Information Act when we get those requests, and we treated that document consistent with those rules.

[Pierre Poilievre, Conservative, Carleton, ON]

Right, and your department is under investigation right now by the Information Commissioner as a result.

[Paul Rochon]

That's correct.

[Pierre Poilievre, Conservative, Carleton, ON]

However, there's nothing in the act that prevents you from volunteering the information, so can you please tell us what a family earning, say, $40,000 a year would pay under a new proposed carbon tax?

[Paul Rochon]

Actually, I think, if you look at the act and the Security of Information Act, they're quite clear that we are to release information under certain circumstances and not under others.

[Pierre Poilievre, Conservative, Carleton, ON]

You mentioned security. You're suggesting that it would somehow harm the government's security if people knew what the tax was going to cost them.

[Paul Rochon]

No, no. I'm just saying we administer the act according to the legislation of Canada. Of course, if Parliament wants to change the legislation, that's always within the prerogative of Parliament.

[Pierre Poilievre, Conservative, Carleton, ON]

All right, so we have here blacked-out documents on the cost of the carbon tax. We have a public servant who I believe is being prevented from sharing information that is in the public interest to share. We have a minister who, under about a dozen questions, refuses to answer basic questions about what this tax will cost.

This looks like a cover-up, the carbon tax cover-up, and after receiving a dozen questions from me, you won't answer, Minister. Maybe you'll answer Mr. Albas' questions.

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

Thank you, Mr. Chair.

Thank you, Mr. Poilievre.

Minister, this past Monday we had a veterans advocacy group here before us who said that in this BIA, under your proposed veterans pension for life, the difference in payouts is based on gender, and that this government wilfully and woefully implemented a human rights violation.

We already know the government is implementing what has been called a sexist carbon tax on female Canadians. Why is your government including a similarly troubling pension payout for veterans founded on gender discrimination? Again, it's based on monthly payouts versus a total lump sum. A female who's injured fighting for this country versus a male who has the same kind of damage would receive a different monthly amount.

Minister, why is it seen that you've created this situation?

[Bill Morneau, Liberal, Toronto Centre, ON]

Perhaps I can go through what in fact we've outlined.

We outlined on December 20th our pension-for-life plan, and it proposes three new benefits to provide recognition, income support, and stability to Canada's veterans who experience a service-related injury or illness.

One is pain and suffering compensation. It's a monthly tax-free benefit for life of up to $1,150 for ill and injured veterans. The second is additional pain and suffering compensation. Again, it's a monthly tax-free benefit for life of up to $1,500 for veterans whose injuries greatly impact their quality of life. Finally, there's a monthly income replacement benefit at 90% of a veteran's pre-release salary.

I'm anxious to understand your context.

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

The context is exactly what I said, that if someone is injured they receive a different payout.

Minister, did your government perform a gender-based analysis on this pension for life for veterans?

[Bill Morneau, Liberal, Toronto Centre, ON]

We've performed a gender-based analysis on all the measures in our budget.