Thank you.
I would like to begin by acknowledging the territory of the Songhees and Esquimalt first nations, and by thanking the committee for the invitation to appear today.
I'm going to start by drawing your attention to the recent report from the United Nations Intergovernmental Panel on Climate Change. This report shows that we cannot avoid the worst impacts of climate change unless we reduce our emissions by one-fifth in the next 12 years.
I raise this here because I believe that climate change is not only the largest environmental and moral crisis we face but also the biggest economic challenge of our time. The IPCC report points out that while the cost of addressing the crisis will be high, the costs of not acting are even higher. We are already paying the costs of climate change. We have seen steady increases in disaster financial assistance arrangement liabilities. Two decades ago they averaged around a $100 million a year. Today the Parliamentary Budget Office estimates that they have grown more than sixfold to $673 million a year. Meanwhile, Canadian insurance companies have seen claims following natural catastrophes rise over the same period from $400 million to over a billion dollars a year.
As the impact of climate change becomes more and more real, these costs are only going to continue to rise. Case in point, here in B.C. we had a record-breaking forest fire season in 2007, losing over 1.2 million hectares of forest to wildfires and costing the provincial government more than half a billion dollars.
However, that record did not stand long. Although the season is not over and there are still fires burning around the forests today, we have already this year lost 1.3 million hectares of forest in British Columbia fires. Experts warn that these kinds of wildfires are going to be the new normal.
Obviously the costs of climate change are not limited to natural disasters. The economists at the University of North Carolina have modelled the growth rate of the U.S. economy under several climate scenarios. They've found that in the most optimistic climate scenario model where we meet our targets and limit rising temperatures to 1.5 degrees, climate impacts on the economy could represent as little of a reduction as 0.4% of GDP over the next 100 years. If we allow temperatures to rise by just 2.8 degrees, they predict a 10% loss in the growth of GDP. With an increase of 3.4 degrees, they calculate that the cost of climate change could be as large as one-third of the growth of GDP. We can see quite clearly that climate change has a real cost to the economy and that it grows exponentially with inaction.
I'm here today to offer a couple of concrete examples of actions that this government can take in its next budget to address climate while reducing spending.
First, we must end fossil fuel subsidies. Currently, Canadian taxpayers give fossil fuel producers $3.3 billion a year in tax breaks and direct subsidy. In addition, since this government came to power it has given a further $12 billion in loans to fossil fuel companies through Export Development Canada. I will remind you that in the last election the Liberal Party promised to end these subsidies. In addition, the Canadian government has made commitments to the G20 to end fossil fuel subsidies by 2020. Despite these stated commitments the Auditor General has found that this government has no plan to meet them. If this government hopes to keep Canada's climate goals, it must stop incentivizing the very industry that is driving climate change.
Finally, I would suggest that this government not invest any more public funds in the Trans Mountain pipeline. Construction costs are currently pegged at $9.3 billion. That number has more than doubled since the project was first announced, and is likely to continue to rise as delays continue.
Typically construction for this kind of infrastructure is paid off over a 30-year term, meaning we'll still be paying for this pipeline in 2050 when we need to reach the goal of reducing emissions by 80%. Simply put, we cannot do both simultaneously. We must choose. We can either build this pipeline or we can save the climate.
Thank you for this opportunity. I look forward to your questions.