Finance Committee on Oct. 24th, 2022

[Sophie Chatel, Liberal, Pontiac, QC]

My question is for Mr. Viau.

I'm worried, because what I'm hearing from opposition members is that we should put an end to the carbon tax, thereby allowing the provinces to keep polluting for free.

The federal regime doesn't apply to Quebec, which has its own system. Quebec will do its own work and charge its own price for pollution.

What will happen if the other provinces have neither their own regime nor the federal one? Will it cancel out the efforts Quebeckers are making?

[Marc-André Viau]

That's a very important question.

A number of provinces opted to bring in carbon pricing on their own and have begun taxing carbon because they understand the importance of charging for carbon pollution and internalizing those costs.

Everyone who has spoken today, particularly those who represent business, know that production costs exist. Carbon is one of those costs. No one can ignore that reality or the real consequences of carbon pollution, unless they're living in fantasyland. We have to internalize the costs of polluting — hence the carbon tax.

The federal government has introduced the carbon tax in provinces and territories that opted not to have their own systems. That resulted in some consistency, and we now have a system that works for the entire Canadian federation. The Supreme Court of Canada ruled in the federal government's favour, determining that the act could be implemented.

The elimination of that carbon pricing system would put some provinces at a disadvantage as compared with others. The provinces that had made the wrong choice — allowing polluters to go unchecked and keeping pollution free — would have the advantage over those provinces that had made the right choice — putting a price on carbon. Obviously, that's not the way to go.

Moreover, that's not the way to do things from an international standpoint. The focus is shifting to taxing imports at the border, so that countries whose production costs don't reflect carbon pricing pay for pollution.

In short, eliminating carbon pricing would fly in the face of common sense, not to mention GHG reduction efforts around the world.

[Sophie Chatel, Liberal, Pontiac, QC]

I share your concerns, especially when it comes to borders. More and more, the European Union is taxing carbon at the border.

Here, the official opposition does not support putting a price on pollution. We wouldn't be any farther ahead, though, since agricultural and other exporters would be hit by other countries' carbon taxes. Instead of paying a carbon tax here and reinvesting that money in our own economy, we would just be giving it to the Europeans and Americans. That's what our policy would look like when those measures came into force.

[Marc-André Viau]

You're right. We have to be very careful about how we approach carbon pricing and consider the consequences of not having our own regime. If the rest of the world keeps moving forward on that front while we move backwards, it puts us at a disadvantage in international trade.

Adjustments have to be made for the agriculture sector. Some measures have already been introduced, but we need to do more and help farmers make the transition. The Canadian Federation of Agriculture made recommendations on how to better support farmers, and we are rather favourable to a number of them.

Clearly, we aren't in favour of eliminating the carbon tax, but we do support some form of compensation.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Viau.

Thank you, MP Chatel.

On behalf of the entire finance committee, I can't thank our expert witnesses enough, those who are in Ottawa and those who are coming to us via video conference from coast to coast. We really appreciate it. You answered many questions that will really help us in terms of our pre-budget consultations and our report. Thank you so much. We really appreciate it.

Have a great evening. Thank you.

The meeting is adjourned.