Finance Committee on May 2nd, 2023

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz.

MP Morantz, that did exhaust the time.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Can you—

[The Chair, Liberal, Peter Fonseca]

We are moving now to MP Chatel for five minutes.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

I'm sorry, Mr. Chair. I have a point of order.

[The Chair, Liberal, Peter Fonseca]

Go ahead, MP Morantz, on a point of order.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

My time should not be docked for—

[The Chair, Liberal, Peter Fonseca]

We didn't. You reached the five minutes. That was the time.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

I was done? Great. I will pick this up in my next round.

[The Chair, Liberal, Peter Fonseca]

Okay, MP Morantz.

We'll go over to MP Chatel for five minutes, please.

I do pause the time, members, when there is a transition with witnesses. Also, I'm going to ask witnesses to make sure that your voices are heard through the mikes and to make sure the mikes are well positioned so members can hear you.

Go ahead, MP Chatel.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you, Mr. Chair.

Ms. Brimmell, I have questions about division 11 of the bill.

As we speak, my community and many others in Quebec are experiencing the effects of the climate crisis yet again. Many areas have been flooded. Unfortunately, two firefighters are even missing in Charlesvoix. The climate crisis is having tremendous repercussions, and we are feeling them more and more.

I'm glad to see the government has addressed the crisis in the budget, even proposing to make Montreal the host city to the new NATO Climate Change and Security Centre of Excellence. When we were hit by floods in 2017 and 2019, the armed forces had to be deployed to the Outaouais. The armed forces and NATO are paying more and more attention to climate change security. With this NATO centre being set up in Montreal, how will Canada benefit?

[Blair Brimmell, Head of Section, Climate and Security, Security and Defence Relations, Department of Foreign Affairs, Trade and Development]

Thank you. I am Blair Brimmell, head of the climate and security policy section at Global Affairs Canada. I am also the acting director for this new NATO Climate Change and Security Centre of Excellence.

Canada will benefit from this new centre of excellence in many ways. The centre will help Canada, its allies and international partners better understand all the ways that climate change will impact our security interests.

The centre's work is meant to help Canada and its allies come up with policies and measures so that armed forces can better adapt to a security environment affected by climate change. The centre will also be a way for Canada to identify best practices and share information with international partners.

Lastly, the centre of excellence will help Canada and its allies find ways that armed and security forces can reduce their climate impact and greenhouse gas emissions. This will address the global necessity to reduce greenhouse gas emissions.

[Sophie Chatel, Liberal, Pontiac, QC]

I am very glad that Montreal will be the host city for this important NATO centre. May our leadership of this very important mission Canada has taken on meet with every success. Great work.

Now, I'm going to turn to you, Mr. Turcot, to discuss division 25 of the bill. Much has been said about Canada lagging behind when it comes to business productivity and innovation. The budget contains additional funding for the National Research Council of Canada. Can you give us concrete examples of how this funding will stimulate business innovation and productivity, especially among small and medium-sized businesses? How will the research council be able to help them?

[The Chair, Liberal, Peter Fonseca]

It's a great question, but we're almost at the end of the time, so maybe give one example really quickly, please.

[Marcel Turcot, Director General, Policy, Strategy and Performance, National Research Council of Canada]

Thank you very much. My name is Marcel Turcot, and I am the director general of policy at the National Research Council of Canada, or NRC.

The NRC provides small and medium-sized businesses with access to centres, plants and other infrastructure. These are facilities they could not build themselves. The NRC provides businesses with expertise they wouldn't otherwise have. They're able to test out new products and grow their research and development knowledge to improve goods and services processes for Canada.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chatel.

Now we'll go to the Bloc for two and a half minutes, please.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair. My question is about division 36 of the bill, so it's for the environment officials. Are they already with us?

[The Chair, Liberal, Peter Fonseca]

They are making their way to the table right now. We will pause the time for that transition.

The floor is yours. Go ahead.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

Currently, the carbon tax that big polluters pay is used to fund green projects in the province where it was collected. If the oil companies don't have any green projects, they lose the money at the end of the year. It's a bit like the infrastructure money for municipalities: if the work isn't carried out by the end of the year, they lose the money.

If Bill C‑47 is passed, division 36 will make it possible to put the money aside for future use. That could incentivize oil companies to take their time, so they would be in no rush. Do I understand the division correctly?

[Paola Mellow, Executive Director, Low Carbon Fuels Division, Department of the Environment]

Thank you.

My name is Paola Mellow. I'm the executive director of the low-carbon fuels division at Environment and Climate Change Canada.

If I understood your question correctly, it was with respect to carbon pricing.

What we are talking about here today is an amendment to the Canadian Environmental Protection Act. Carbon pricing is not associated with that act. We are speaking about the clean fuel regulations. These regulations impose a life-cycle carbon intensity reduction requirement on fossil fuel producers and importers in Canada, like, for example, refineries.

Basically this change enables a compliance fund mechanism. What that means is that regulated parties—for example, refineries—will be required to come into compliance with their obligations every year. If they choose to come into compliance with 10% of their annual obligation through contributions to the fund, they will need to do that in their compliance year. The fund will then have five years to deliver real short-term reductions with those funds.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

I'm going to stay on the same topic. If division 36 of Bill C‑47 is not passed, what will happen to those refineries and oil companies?

[Paola Mellow]

There is a suite of compliance options underneath this regulation. As I stated, the option to comply through investment into the compliance fund mechanism is only 10% at most in a year. The regulation itself is based on a credit market. Regulated parties, such as refineries, need to retire credits equal to their debits at the end of every compliance year. Those credits can be created in a suite of ways.

There are generally three credit creation categories we talk about. The first one is GHG reduction projects along the life cycle of fossil fuels, like, for example, carbon capture and storage at a refinery. We also talk about a second credit creation category, which is low-carbon-intensity fuels, such as blending gasoline with ethanol. A third credit creation category is advanced vehicle technologies, such as EV fleets.

A regulated party needs to retire credits equal to their obligation each year. They can generate credits by taking actions in the three compliance categories I discussed. They can also purchase credits from other credit creators—that could be regulated parties or voluntary parties—or they could make use of compliance flexibility, such as, for example, this compliance fund.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Mellow.

Thank you, MP Ste-Marie.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Now we will go to MP Blaikie, please, for two and a half minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much.

My question is in respect of division 16 in part 4. It would amend the Immigration and Refugee Protection Act “to provide that a claim for refugee protection made by a person inside Canada must be made in person and, with regard to a claim made by the person other than at a port of entry, that the Minister of Citizenship and Immigration may specify the documents and information to be provided and the form and manner in which they are to be provided.”

I know that recently the government adopted the Conservative position on the safe third country agreement and that the implementation of that agreement will change substantially as a result. I'm curious to know whether these changes are tied to that in any way. How will the interaction between what's being proposed here and the safe third country agreement happen?