Evidence of meeting #152 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was provinces.
A recording is available from Parliament.
Conservative
Associate Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment
Yes.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
In that type of system, it would be pretty simple for me to underbid another competitor company—telling them I have cheaper credits they can get from me. But there's a price ceiling set by the government. You can't exceed a certain price because nobody will buy. Is that correct?
Associate Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment
It's an effective price ceiling: there's nothing legal about it. But yes.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
Right. Okay. That's how it would work.
In this offset credit system, what if there's a disagreement between the province and the federal government over which facility is covered? Could the federal government cover the provincial...? Could you double up the offset credits? Could a province offer up offset credits for a particular facility? Could the federal government then cover it as well and say “you get these extra federal credits”? Or is that not possible?
Associate Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment
I guess hypothetically that's possible.
We are going to be issuing a paper, a document, describing the proposed approach to offsets under this system in the very near future. One of the core things that we are saying in that paper is that the criteria we're going to rely on for determining offset credits are the criteria that have been worked on over the past year and a half by the Canadian Council of Ministers of the Environment in a project precisely to come to an agreement on what the core features of a good offset are.
There are a number of features, but at the heart of an offset are two concepts. One is additionality, so you're not getting a credit for something that you would have done anyway, or that you had to do. Second, there is no double counting, and that's a concept that runs through any offset system in the world.
Conservative
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
It's on proposed section 270, which is the “Report to Parliament”.
This one doesn't seem to have a lot of detail. In your experience, are there other acts that produce a larger volume of information, or where the report to Parliament is more comprehensive?
Associate Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment
I can only speak for the environmental statues, a number of which require annual reports. I was responsible for all of them for about a decade. They all have brief legislative obligations to report on the operation of the legislation.
The annual reports, the reports that we have provided with respect to environmental legislation, have ranged from two or three pages, in the case of the International River Improvements Act, where nothing happens on an annual basis, typically, or maybe one decision, to a 200-page plus report under the Canadian Environmental Protection Act, where we describe all of the science research, all the risk assessments, and all the risk management decisions that are made under the act during the course of the year.
The general question is, I guess, is this a typical provision? From my limited knowledge of provisions in environmental statues, this is a very typical provision that provides authority for a detailed annual report.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
Does anybody else know of other acts that have more detailed information on what's reported back?
In a previous exchange with my colleague from Carleton, there was discussion about the GHG emission reductions that this particular piece of the act is trying to manage in that reduction program in the different provinces, in imposing a carbon tax or price on each province. The flip side is the perceived GHG reductions. That information would be collected by province, I would assume, and the federal government would have information year by year on the reductions achieved. Am I correct?
Associate Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment
The federal government has legislative authority under another act, which it currently exercises to collect emission reduction information from industry and other kinds of institutions. It compiles that information in a national annual report. There's no authority provided in this act for the federal government to compel provinces to report on the GHG reduction impacts of their own pricing systems—
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
The federal government could report it, because it would know, wouldn't it? That's how it would see equivalence.
Associate Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment
Indeed, under the current governance arrangement under the pan-Canadian framework, there is an agreement to do collective reporting. We just issued the first annual report of the implementation of the pan-Canadian framework. That was a report that was endorsed by all jurisdictions in Canada. It included contributions from all jurisdictions.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
How hard would it be to include that type of information in an annual report to Parliament that's under proposed section 270? Would it be difficult to do?
Associate Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment
If the federal government receives that information, it can report it, and indeed has made the commitment to do so under the pan-Canadian framework.
The legal challenge we would have is that if Parliament required the federal government to report on the outcome of a provincial system, then we would also have to provide the authority to require the province to report. As I said, provinces have agreed, but agreements can change.
I'm on very thin legal ice if we start to get into whether the federal government has the authority to require provinces to report, so there are a bunch of legal reasons why that kind of requirement is not in this act.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
The Saskatchewan government is taking the federal government to court over the imposition of a carbon tax. There's at least one other province that may also do so in the coming year—next year, actually—so the whole underpinning of the legislation I think is on thin ground.
I'm just talking about proposed section 270 here. In an annual report, how difficult would it be for the government to report total GHG per-tonne emission reductions achieved by a listed province, or any other system that's designed—cap and trade, or provinces that don't have anything?
How hard would that be for the government to say that this is an estimate of the total reduction? You did it last week, on Monday. There was a report put out with very generic global numbers. Obviously, it's being modelled and prepared in some way. How hard would it be to provide that information once a year to Parliament?
Manager, Legislative Policy, Department of the Environment
I think that Mr. Moffet answered your question on the issue.
If we want to include a requirement in the act to that effect, we must ensure that this information can be requested from the provinces. However, legally, it is not feasible at this time.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
In the case of provinces that do not have their own system but are subject to the federal system, would it be possible to find out the total number of tonnes of emissions that the carbon tax has supposedly reduced?
Manager, Legislative Policy, Department of the Environment
In the case of a province where the federal system applies, of course.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
It would not be difficult to get the numbers for each year so that Parliament can see the success—
Manager, Legislative Policy, Department of the Environment
The challenge is another issue. Legally, it can be done, but in terms of the challenge, I'm in the hands of my colleagues from Environment Canada.
Your question is about section 270, and yes, that section would do that.
Liberal
The Chair Liberal Wayne Easter
That is it, I believe. I hope.
A very big thank you to officials for coming here to answer questions on part 5. I know it's taken quite a bit of time, but I thank you for your open responses and all of your hard work in this regard.
Thank you very much.
We'll turn to part 6, division 1, with the Financial Administration Act first.
John, I believe there are a couple of reports that you're going to send us.