Finance Committee on June 13th, 2023

[Kathy Bardswick]

In the road map, we've identified where the benefits are. Fundamentally, we will not experience being able to leverage those benefits as a country, and that's pretty serious stuff. When you look at an inability to be an attractive target for FDI, an inability for our domestic players to appropriately be able to embrace and execute on the shared understanding of what truly is transition, our ability as a country to ensure that we're directing the appropriate amount of capital to the right targets over the right time frames and our ability to effectively and accurately measure our progress and take corrective action when there is a requirement to take corrective action are all at stake.

[Ryan Turnbull, Liberal, Whitby, ON]

Your report on the road map talks about this being an essential piece of financial infrastructure. I think that's the term that's used. It seems to me it really underpins and adds credibility to all of the financial products that are issued throughout our economy that claim either to be green or to be in transition.

Is that underpinning of credibility, the clarity and consistency that Ms. Zvan talked about, what's really at stake here?

[Kathy Bardswick]

Yes, absolutely. I couldn't say it better.

[Ryan Turnbull, Liberal, Whitby, ON]

Okay. That's great.

In terms of legal entrenchment—this is a question I've had for a while now—I note that you've identified a three-tier governance model, which I accept and think is an interesting model. What I'm wondering, from the government standpoint or a policy-making standpoint, is what the most important legal entrenchment is for the taxonomy. Do you have any views on that, Ms. Zvan or Ms. Bardswick? I'll ask the other witnesses after that.

[The Chair, Liberal, Peter Fonseca]

Yes, in a short answer, please.

[Barbara Zvan]

I don't think we have opined on the exact legal entrenchment. We have said that there are objectives in the report, or requirements. We need to maintain scientific integrity, so that means no political influence or no undue influence from any one stakeholder. That's a key requirement in the structure of that organization.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, MP Turnbull.

Members and witnesses, we are moving to our third round of questions. We're starting with the Conservatives.

MP Hallan, you have five minutes, please.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Thank you, Chair.

This question is for every one of the witnesses. Do you believe Canada should shut down its oil and gas production?

It can start with you, Ms. Zvan.

[Barbara Zvan]

As noted in the taxonomy effort, we explicitly included the fossil fuel industry. It helped decarbonize current production. I think that is an indicator that we are not asking for the—

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Just a yes or no. Over time do you believe that Canada should shut down its oil and gas production?

[Barbara Zvan]

We have noted that it needs to align with the 1.5°C scenario. That will change and evolve over time.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Does that include the oil and gas sector or not?

[Barbara Zvan]

It will include all sectors in Canada.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Okay.

[Kathy Bardswick]

My response is similar. I think that we need to align our economic activities for ongoing prosperity with a 1.5°C scenario. That includes the oil and gas sector aligning itself.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Mr. Stewart.

[Keith Stewart]

We look to the IPCC, the IEA's 1.5°C scenario and say that's the trajectory we need to be on. In the IEA it's that overall global oil and gas production is down by 25% by 2050. I do think oil and gas is going to be phased out within my children's lifetimes, but perhaps not within mine. I'm also mid-fifties, so take that with what you will.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

That's fair enough.

Anyone else?

[The Chair, Liberal, Peter Fonseca]

There are Ms. Segal and Mr. Darwall.

[Rupert Darwall]

The answer is no, it would be an act of economic suicide. With that, unless demand for oil and gas falls globally, all you're doing is transferring wealth, effectively, to other players across the world, particularly in the Middle East and Russia.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Hear, hear!

[Julie Segal]

Thanks. I would give my earnest respect to the people in communities who have devoted their lives to those industries up until this point. I would point to the need to align with limiting global warming to 1.5°C to limit the devastation that we've been experiencing from wildfires, and other climate catastrophes, in many of those same communities. I would point to the conclusions of the IEA and the IPCC for how to get there.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Ms. Segal, you brought up forest fires. Can you give me two direct examples of how green financing will stop those forest fires?

[Julie Segal]

I'd say the clear line here is climate-related risks occur in greater numbers as temperatures continue to rise. Temperatures continue to rise from more emissions.

Getting the financial sector in the right direction to invest in a trajectory that lowers emissions, that lowers Canada's emissions and lowers global emissions, would keep us on track for a safer world with less warming.

I think the other really important piece to keep in mind here is investments in climate-related resilience, so ensuring that green finance investments go towards building infrastructure that in itself is resilient to increased climate-related damages, and that as well keeps people across Canada safe from those climate-related damages.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

I didn't hear any direct examples in that answer, but I'll move on.

Ms. Bardswick, in Calgary some pretty big hailstorms happened in 2020. I was wondering if you could give two examples of how green financing would help stop those and how long it would take.