Evidence of meeting #214 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was program.
A recording is available from Parliament.
Noon
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Yes, it does. Thank you.
I have time for one last question.
Mr. Van Iterson, I'd like more details on your proposed amendments to the Pest Control Products Act. You mentioned them, but I don't think you went over them in detail.
Noon
Lisa Gue Co-Chair, Green Budget Coalition
Thank you very much.
I'll take that question.
You will also have received a written submission from five members of the Green Budget Coalition, including the David Suzuki Foundation, spelling out the amendments we're seeking.
It's a bit difficult to sum up, but the proposed provisions included in the budget bill would essentially allow Health Canada's Pest Management Regulatory Agency to decide not to conduct special reviews of pesticide risks that would otherwise be required under the law.
Right now, the special review provisions of the act require that the minister re-evaluate registered pesticides if there's information to suggest an unacceptable health or environmental risk, or in the case where another member country of the OECD prohibits all uses of that pesticide for health or environmental reasons. The special review requirements serve as an opportunity for a double-check to confirm risk assessments outside of the regular re-evaluation schedule. Otherwise, Canada wouldn't regularly review pesticide risks for another 20 years, perhaps.
The provisions in the act allow the minister, rather than initiating a new special review, to consider the aspect of concern within the scope of an existing special review or re-evaluation if there's already another process under way to look at that same pesticide. The minister could even decide not to initiate a special review in response to a ban in another OECD country if the same issue had been re-evaluated in the past.
Our concern is that under the existing legislation, there are clear requirements for consultation on these aspects of concern that trigger a special review. Our first proposed amendment would specify that a decision to essentially merge consideration of an aspect of concern with an existing re-evaluation process be taken before the consultation on that existing consultation process. This would ensure that the consideration that would have otherwise prompted a special review is still the subject of consultation and the evaluation is transparent.
The other amendment we're requesting is that if the—
12:05 p.m.
Liberal
The Chair Liberal Wayne Easter
We'll have to move on. We're way over. Mr. Dusseault manages to double his time sometimes around here.
We'll go to Ms. Rudd.
You might fit that in later, Ms. Gue.
12:05 p.m.
Co-Chair, Green Budget Coalition
I just want to say that the other amendment we're requesting is simply a requirement for the minister to make public a decision not to initiate a special review, and to give reasons, in the name of transparency.
12:05 p.m.
Liberal
Kim Rudd Liberal Northumberland—Peterborough South, ON
Thank you.
Thank you to all of you for joining us today.
I have a few questions, primarily for Stewart.
It's good to see you again. Thank you for joining us.
Stewart, you were part of the generation energy consultation that this government undertook—the largest in its history—asking Canadians, businesses, sector experts and researchers about what Canada's energy future would look like. Where our opportunities were, in terms of innovation and technology, was a huge part of that conversation, and the $5-trillion economic opportunity that we could see as a country by 2030, if we want to be at the forefront. If we're not, we're not going to see the benefit of that opportunity to the degree that we can.
There are a couple of things that you mentioned. I want to talk about the comment you made around oil and gas subsidies and the bad rap, if you will, that they get.
Certainly, the work with the G20 in Argentina and those initiatives are under way and moving through the process. There is one thing we have to remember. You mentioned oil and gas subsidies and the ability for them to innovate. I just want the panel and the rest of my colleagues to know that in 2017, NRCan undertook some experiments with the broader oil and gas sector to reduce the environmental footprint of extraction from the oil sands. The results have been excellent. It uses far less clean water because boiler tubes are no longer needed. It reduces the environmental footprint, and nearly all greenhouse gas emissions are sequestered underground. Instead of wet waste-water tailings, they're actually dry, which are much easier to deal with. Part of these subsidies are pushing us to a much better place in terms of the extraction of those fuels.
You talked about the flow-through shares, as in mining. As you know, the government went from a one-year renewal that's been going on for well over a decade, to five years to provide stability and opportunity for investment. Can you talk about what that might mean to the sectors in terms of the innovation that you were referring to?
12:05 p.m.
Prof. Stewart Elgie
Sure. That's two questions.
In terms of the economic transition, I would just say that the world is moving to a cleaner, more innovative economy whether Canada likes it or not. Our choice is whether we go with the leading peloton or fall behind. I think that in 20 years.... Much like the transition to free trade 30 years ago, falling behind is a bad long-term decision.
That said, we still live in a world that uses oil and gas. We'll continue to use oil and gas for decades. We should be able to compete in world markets to produce that oil and gas and we should strive to have the environmental footprint of our production be as low as possible and support our producers in doing that.
For example, if an oil company used the accelerated capital cost allowance for clean technology, it would count as a fossil fuel subsidy right now. We don't want to count that as a fossil fuel subsidy. That's actually a good incentive. My point was to encourage incentives that encourage our industry to reduce its footprint, while at the same time we keep pace with the rest of the world in moving to a de-carbonized economy because that train has left the station and we can either get on it or not.
In terms of the incentives, to make a long story short, there's this valley of death. It's well known in the investment world that when you're starting up a small firm and you're moving from R and D to scaling up, it's really hard to get investment. We've done a really good job of providing public support through BDC, EDC, SDTC and other vehicles to help leverage that private investment, but these tax incentives pull the private funding that you need. That's ultimately what's going to carry these companies through to market. We don't want permanent public funding. We want to use it as a nudge, basically, to pull private investors in.
Flow-through shares have been very successful in mining. They're good for a cyclical industry. They're targeted. A targeted tax incentive that targets those early-stage innovative firms.... You don't have to limit it to clean tech. You could look at digital, for example. I would say that you want to target the technologies of the future. B.C., Alberta and New Brunswick have all done it. They've had these 30% investor tax credits. There are a couple of good external reviews that show they've been good value for money. They've pulled new funding into the marketplace that wouldn't have been there with a significant return on public investment, so it kind of seems like a no-brainer.
It was the big resource companies of the country recommending this. This is the oil industry, the mining industry and the forestry industry saying that they depend on those small innovative firms to feed the innovation that they then adopt and that's going to position them to be at the leading edge.
People think of clean tech as electric cars and solar panels. Clean tech is also the mining industry, the oil and gas industry and the forestry industry. These are the adopters of the clean tech and they're the backbone of our economy. The two go hand in hand.
12:10 p.m.
Liberal
Kim Rudd Liberal Northumberland—Peterborough South, ON
I have a very short follow-up.
Electrification is the sort of next big step that we are taking as society in terms of being able to manage all the things that we want to have in our homes and on the road in an energy efficient way. Can you tell us what you think electrification and the larger electrification of the grid are going to mean and how we're going to get there?
12:10 p.m.
Prof. Stewart Elgie
In one minute or less?
May 16th, 2019 / 12:10 p.m.
Liberal
12:10 p.m.
Prof. Stewart Elgie
Sure.
Basically, it's a transformation of the economy similar to the Industrial Revolution—in one minute or less. I'm being glib, but the Industrial Revolution in many ways was built on unlocking fossil fuels. It wasn't the only thing, but it was a big part of it. We're now going through a new industrial revolution that will be built on transitioning to a different set of fuels. We won't eliminate fossil fuels, but we'll depend on them much less. We will be generating clean energy, and we'll be using much less energy.
The good news for Canada is that we actually have a relatively clean electricity grid already. Most of our electricity is carbon-free. The government has brought in a law to phase out coal power production by 2030. That's a good idea. The market's going to kill coal power anyway, but this will do it earlier so that we can bring in the energy of the future.
If you want to move to things like electrifying heat and electrifying vehicles, which is where the world's going to be in 20 years.... In 20 years, you will not be able to buy an internal combustion engine car. China, India and western Europe have banned the sale of internal combustion engine cars in 20 years. So, let's move to where the puck is going.
The part I would say is this, though. We think a lot about this low-carbon transition in terms of reducing greenhouse gas emissions, but the other part of it isn't just the technologies we use. It's what we make as a country. We could meet our climate targets by buying electric cars from Nevada, solar panels from China and biofuels from Brazil. We'd meet our climate target, and we'd hollow out our economy. So, we actually want to be making that stuff too. We want to be punching above our weight for our vehicle industry, our resource industry and our manufacturing industry to be world leaders in low-carbon, clean and innovative production.
That's why—and I didn't get into it because I didn't have enough time—in addition to an incentive for electric vehicle adoption, we should be putting just as much energy into helping our auto manufacturing sector reposition itself to be making the vehicles of the future, not just cars, but buses, trains, etc., and making the biofuels that are going to be the transition fuels. This is also a manufacturing story, not just a consumer story.
We're doing well, but we have to keep going.
12:10 p.m.
Liberal
The Chair Liberal Wayne Easter
We'll end it there.
Now we'll go over to Mr. Poilievre and move to five-minute rounds, although we're over in every round.
12:10 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
Ms. O'Leary, what is the criteria for determining what is in the market basket?
12:10 p.m.
Analyst, Socio-Economic Policy, Citizens for Public Justice
That's a good question.
Right now there is a consultation process that happened this winter between Statistics Canada and Employment and Social Development Canada. They took input from a range of—
12:10 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
I don't mean to interrupt you, but we've heard all of that from the officials that were here to talk about it. We know the process. No one can tell me the criteria. Do you know the criteria? If you don't—
12:10 p.m.
Analyst, Socio-Economic Policy, Citizens for Public Justice
I don't know.
12:10 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
—don't feel badly because I don't know, and I'm the former employment and social development minister. The officials didn't know. They promised to get us the list of what's in the market basket, and the chair now informs me that we still don't have that list. No one can tell us what's in the basket or the criteria to determine what should be in the basket. Does that trouble you at all?
12:15 p.m.
Analyst, Socio-Economic Policy, Citizens for Public Justice
Very much. Yes.
There is a range of things that we do know, such as shelter. Shelter includes not only things like rent and mortgage, but also utility costs. I think they're going to be including Internet as a cost that's included as a necessity. There are things that are not included, like child care.
It does feel like there's a bit of arbitrariness in terms of what ends up getting included in the basket. That's why, as these things are reviewed, we want an engagement with people who have lived the experience of poverty. However, yes, you're right. The arbitrariness is uncomfortable for sure.
12:15 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
My concern is.... Normally we say that consultation is a great thing. However, when we're determining what should be an objective measurement, a mathematical measurement of a poverty line, I would think that human subjectivity would not be a helpful thing. It would be, you know.... The other measures of poverty have been very mathematical, such as the LIM. It's very simple: median income divided by two. If you're income is below that, you're considered low income. For the LICO, we take the share of income that the average Canadian spends on the basic necessities of life, and anybody who spends 20% or above that amount on the basic necessities today is considered to be below the low-income cut-off line. It's mathematics.
12:15 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
The market basket measure is a basket of subjectively determined goods and services. I mean, the wealthiest kings of the Middle Ages would have lived in the most sumptuous circumstances and they would not have considered a smart phone to be a necessity, so if we say that a smart phone is required to live above the poverty line, then we are making a subjective determination that in no time in history would have been considered for a poverty line.
My concern about this whole measurement is that we're just going to allow a lot of opinions to determine what goes in the basket, rather than a mathematical standard. How are people supposed to know what poverty is when it is just an ensemble of bureaucratic and interest group opinions that determine what someone must have to avoid being poor?
12:15 p.m.
Analyst, Socio-Economic Policy, Citizens for Public Justice
I am aware that Statistics Canada has a methodology for how they establish criteria. I know through engagement in the consultation process that this was not fully clear to the people participating. It's a complex methodology.
I think the benefit of the market basket measure is that it does try to incorporate cost variations, because the cost of living is different across the country in different communities. Up until the current review, the territories were not even included in the market basket measure data, so that's another problem.
It's going to be a challenge to make sure that the MBM is a solid and transparent measure of poverty. It's the official poverty line. We have tended to rely more on the low-income measure for our own reporting, but of course no one measure is going to give you all the information you need.
We know that in the poverty strategy the expectation is that there will be an opportunity to have a range of measures to provide that data.