Finance Committee on May 8th, 2018

[Pierre Mercille]

In terms of vehicles, what we try to do is to link to the Income Tax Act, because there are rules in the Income Tax Act that deal with vehicles—what is an automobile, what is not an automobile. The term “automobile” includes some pickup trucks.

The way we see it is that the farmer will know, because under the Income Tax Act, you're not allowed the same deduction, the capital cost allowance, for an automobile versus a vehicle that is used for farming. So if the farmer is compliant with the Income Tax Act, he will know whether his vehicle would be eligible to receive fuel without the fuel charge applying.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Okay, and obviously this will only occur in jurisdictions where there is a carbon pricing policy has not been put in place, correct?

[Pierre Mercille]

The fuel charge will only apply in listed provinces, and these listed provinces are the provinces that don't have a carbon pricing system in place that meets the federal standard.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

The way the legislation has been designed, in accordance with our policy platform that we ran on and Canadians elected us with a majority for, is that each province is to decide the system that best suits its needs.

[John Moffet]

That's what the government's pan-Canadian approach to pricing carbon pollution states, so long as the province or territory establishes a system that meets the basic criteria in that benchmark.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

One of them is $20 per tonne by 2019 and it goes up to $50 a tonne three or four years later, 2022, if I'm not mistaken. Is that correct?

Right now, my understanding is that 85% of the Canadian population is operating under some sort of system—and the economies are performing quite well—whether it's a hybrid, or pure cap and trade, or a carbon price such as the Province of British Columbia has operated for well over a decade, operating under a carbon pricing plan. Is that correct?

[John Moffet]

That's correct, and I believe you heard evidence yesterday of both the impacts of British Columbia's system: you heard of if reducing emissions and also the observation that those four jurisdictions that have carbon pricing have experienced the largest GDP growth in Canada.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

In reference to what one of my colleagues on the other side said about how decisions are made in terms of things going into the Canada Gazette and cabinet decision-making, I think that Canadian democracy has utilized that system for more than 150 years. Any stakeholders or intervenors wishing to participate in that process are allowed to participate, including in this very robust debate on how to deal with an issue that the whole world is facing, which is climate change.

So with all due respect to my colleague, Canadians do have an opportunity to express their views and opinions. A government is elected based on a platform, and part of that platform was to deal with climate change, and through the pan-Canadian framework, we are.

I'd welcome any folks, stakeholders, to always present their opinions, whether here at finance committee or through the Canada Gazette process. That's the way we've operated, in our democracy, and for my colleague on the other side to say something different, I think, is inaccurate, to be blunt.

I did wish to comment on that front. Thank you.

[The Chair, Liberal, Wayne Easter]

Mr. Moffett.

[John Moffet]

I just wanted to indicate, with apologies for the delay, that I do have the most current numbers that Mr. Poilievre asked for, and I can give them now or later.

[The Chair, Liberal, Wayne Easter]

We'll go to those figures now, and then we'll go to Mr. Dusseault and come back to Mr. Poilievre.

Mr. Moffet has the answer to your original question, but Mr. Dusseault is next on the list to raise questions.

Mr. Moffet, go ahead.

[John Moffet]

The commitment that Canada made in the Paris accord is to reduce our emissions from 2005 levels by 30%.

The calculation of emissions changes slightly from year to year, based on the application of internationally accepted and continually evolving modelling methodologies. The most recent report that we submitted to the United Nations Framework Convention on Climate Change indicated that our 2005 emissions were 738 megatonnes, so 30% of that equals 517, necessitating a reduction of 221 megatonnes.

The other number we reported in our most recent report to the United Nations framework convention is that to achieve that target of 517 megatonnes in 2030, relative to what we projected emissions to be in late 2015—which we reported in early 2016 in Canada's second biennial report on climate change to the United Nations framework convention—would have required a reduction of 298 megatonnes. That's because emissions had grown since 2005, so we're trying to bend the curve that was actually going up for a while, since 2005.

[The Chair, Liberal, Wayne Easter]

Okay.

[Pierre Poilievre, Conservative, Carleton, ON]

Chair, may I clarify that?

[The Chair, Liberal, Wayne Easter]

Sure.

[Pierre Poilievre, Conservative, Carleton, ON]

You are saying that by 2030 we need to reduce emissions by 221 megatonnes?

[John Moffet]

Yes, relative to where they were in 2005.

[Pierre Poilievre, Conservative, Carleton, ON]

But relative to where they are today, I'm asking.

[The Chair, Liberal, Wayne Easter]

That's changed to 298 megatonnes now, right?

[John Moffet]

Today they are slightly lower than where they were in 2005, but it's approximately the same reduction obligation.

[Pierre Poilievre, Conservative, Carleton, ON]

So it's 221 megatonnes—

[John Moffet]

That's a ballpark figure.

[Pierre Poilievre, Conservative, Carleton, ON]

—per year by 2030.

[John Moffet]

No, by 2030, not per year.

The commitment Canada made, the way it articulated its target, was that in 2030 our emissions would be 517 megatonnes. In theory they could be significantly more than that, and then decline dramatically in one year. I'm not suggesting that's going to be the case, but there is no commitment as to what the absolute emissions will be prior to 2030. There is a commitment to take measures to reduce emissions to get to the point where by 2030, they are at 517 megatonnes.

[Pierre Poilievre, Conservative, Carleton, ON]

That is 517, representing a reduction of roughly 221 megatonnes by 2030.