Government Operations Committee on March 28th, 2024

[The Chair, Conservative, Kelly McCauley]

Thank you very much. That is our time.

Premier Higgs, thank you very much.

We will suspend for a few minutes to bring in our next witness.

[Blaine Higgs]

Thanks, everyone.

[The Chair, Conservative, Kelly McCauley]

We're back.

Premier Smith, welcome to OGGO.

The floor is yours for five minutes, please.

[Danielle Smith, Premier of Alberta, Government of Alberta]

Thank you so much.

I appreciate the opportunity to speak to the committee, especially knowing that it's a constituency week. Thank you for taking the time from that; I know how important that is to you.

I'm here on behalf of Albertans and Canadians who are struggling with severe financial pressures. They are increasingly desperate because they're facing a cost-of-living crisis not seen in decades. Over the last two years, inflation and high interest rates have driven up prices on everything from food to gas to housing—things that Albertans rely on every single day.

Families are being forced to make tough choices just to put food on the table. Businesses are having to make sacrifices to keep the lights on, and social services are under intense strain as more of our people reach out for help, many for the first time in their lives. Albertans and all Canadians need common sense, compassion and responsible government to prevail.

That's why I'm urging you today to heed the calls of Canadians across the country and suspend the increase in the carbon tax on April 1. The carbon tax has contributed to and worsened Canadians' stress and financial pain. Despite the federal government's claims that Canadians benefit from rebates, the carbon tax, on a net basis, will cost Albertans more than $900 this year if it is implemented.

The federal government's own Parliamentary Budget Officer has also said that the cost to each Albertan will more than triple in the next six years to a staggering expense of $2,700 net by 2030-31. This isn't just reckless; it's immoral and inhumane. The added pressure will ruin countless lives, futures and dreams. It is a weight that Canadians can't bear. That's why, since 2019, Alberta has been calling on the federal government to eliminate the carbon tax.

Let me repeat what I've said many times before: We understand the importance of achieving carbon neutrality and we can manage it together as a nation without punishing everyday Albertans. We've demonstrated as much in Alberta, where we are making significant strides towards reducing emissions. We're doing that without compromising jobs and hurting the industries that have created so much wealth and prosperity for our country and that will continue to do so if the federal government will just let them.

Our province has a long history of climate action, with more than two decades of programs and policies that have led emissions reductions and inspired other jurisdictions to follow our lead. Provinces and territories must be able to create emissions reduction plans that reflect their distinct needs and priorities. Alberta's industries are steadily lowering emissions with new technology and investment even as they compete with foreign suppliers who ignore the need in order to improve their own performance. Things don't have to be this way. We can effectively reduce emissions without punishing Canadians for trying to stay warm or drive to work or school or a medical appointment. Alberta is already doing it through our carbon trading market. It's the technology, innovation and emissions reduction regulation just launched actually on NGX this month and through our emissions reduction and energy development plan, which I released last April.

The only thing the federal carbon tax is achieving is higher costs. In fact Minister of Environment Stephen Guilbeault said it would take until 2060 for it to have an impact. As of April 1, Albertans will pay around 35¢ in federal taxes for every litre of fuel, along with the carbon tax, which also includes the federal excise tax and the GST, which is a tax on tax. The price of natural gas, which Albertans rely on, will also be affected by the carbon tax increase. The carbon tax increase on natural gas is going up to $4.09 a gigajoule, which is more than double the base price of natural gas, which today stands at about $1.72 a gigajoule.

The so-called solution of the federal government is to increase the carbon tax on something that is life or death for Albertans in the extreme cold of winter. I will say again that it is inhumane. It begs the question: How far will the federal government go to make life even more difficult and expensive when so many Canadians are already struggling.

Alberta municipalities, schools, and health care providers are telling us that they need to make cuts and borrow from elsewhere in their budgets just to accommodate the upcoming carbon tax increase, yet we hear repeatedly that affordability remains a top federal priority.

I'm calling on the federal government to match words with actions. This means working with the provinces to ease Canadians' burdens and strengthen the Canadian economy. Serious challenges, like affordability and emissions, demand serious responses, and an increased federal carbon tax is nothing of the sort. Canadians don't want it. You only need to look across the country to see premiers across party lines—seven of us—and the people they represent standing up against it.

If the federal government wants to protect Canadians' quality of life, it should step up and cancel the carbon tax increase immediately. At the very least the federal government should apply policy equally across the country. We've heard the Quebec representatives say several times that Quebec does not pay the fuel tax, and we would also like to see an exemption on all forms of home heating, not just ones that are centred in Atlantic Canada and on a particular type of fuel.

You must do this for the sake of fairness for all Canadians. The people of this country deserve nothing less.

Thank you for your time. I'm happy to take questions.

[The Chair, Conservative, Kelly McCauley]

Thank you, Premier Smith.

We'll start with Mr. Hallan. Before we do, though, just to keep on time and respect the premier's time, we're going to stay exact to our timing. I will cut off right at the six- and five-minute marks, so please watch your time.

Mr. Hallan, go ahead, please.

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

Thank you, Chair.

I'll just start off by saying that I feel it's very shameful for the finance committee chair, Peter Fonseca, to go into hiding as soon as the premiers came calling to have a meeting at their request.

Premier, thank you for being here and thank you for joining 70% of Canadians and six other premiers, including a Liberal premier, in telling the Liberal-NDP government to spike the hike on the road to axing the tax by a common-sense Conservative government.

The PBO once again reconfirmed that families are at a net loss on average because of this carbon tax scam. For example, in Alberta a family will pay $2,900 into this carbon tax scam. The finance minister herself was bragging that Alberta families get $1,800 in rebates and that somehow Albertans should be grateful for this.

Premier, can you please tell Canadians the human toll this carbon tax scam takes on Albertan families so that the Liberals can understand the real pain it causes?

[Danielle Smith]

I can tell you a couple of things.

The way I think most Albertans look at it is that the government is taking a dollar and promising to give back 75¢. Everybody knows that's not a good deal. We've seen in the polling that people don't support the increase. They don't support the tax.

I can tell you that an MNP report from October 2023 showed that 51% of Canadians are $200 or less away from being unable to meet their financial obligations. We also find that 51% of people in Alberta say that their level of debt is concerning to them, and 71% say that they are worried about their ability to repay their debts.

We took a number of affordability measures in order to be able to offset these costs over the last number of years. Those represented forgone revenue of $7 billion. I'd be happy to itemize that if the member would like to ask me about it. We are now at a point where we have to run a balanced budget as well, and we're just asking for the federal government to recognize that it's their turn to do their part to ease the affordability crisis.

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

Thank you, Premier.

As you mentioned, in Atlantic Canada, when Liberal MPs were revolting because their poll numbers were tanking, Atlantic Canada got a carve-out. Alberta got no such carve-out, nor did the rest of Canada. Do you feel this is just another blatant attack on Alberta?

[Danielle Smith]

Look, I know the question about the Supreme Court decision on the carbon tax has been raised. I believe the Supreme Court decided in favour of the government on that because they were making the argument that it was such an important national issue that it needed to be dealt with in a national way and the rules needed to apply equally across the country. However, we heard the Quebec member say that they don't pay a carbon tax. We have heard as well that in Atlantic Canada the most polluting home-heating fuel in fact, which is home-heating oil, now has a reprieve for three years. Meanwhile, many of the provinces in the west made the decision years ago to switch to cleaner-burning natural gas, and we're getting punished for it.

I would just appeal to this committee that, if you want to apply the carbon tax, it has to be applied equally across the country in all provinces for all types of fuel. If you're not going to apply it in that way, then you need to give a reprieve across the country so everybody is treated fairly. I think it's creating a national unity crisis. I do believe it's the obligation of the members around this table representing all parties to ensure fairness in the way each citizen is treated in the country. They have a mandate to do so.

[Yasir Naqvi, Liberal, Ottawa Centre, ON]

Chair, I'm just going to raise a point of order.

[The Chair, Conservative, Kelly McCauley]

Go ahead, Mr. Naqvi.

[Yasir Naqvi, Liberal, Ottawa Centre, ON]

My sincere apologies to the premier. I don't want to be disrespectful.

I see that Mr. Hallan has a prop on his computer. Yesterday you deemed that to be a prop, so if he would not display that while he's on the screen, I'd appreciate it.

[The Chair, Conservative, Kelly McCauley]

Sure. I can't see from the angle I'm at.

Oh, yes. Mr. Naqvi has a point. If you wouldn't mind....

Thank you, sir.

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

Too bad the Liberals are triggered by a sticker once again.

Premier, when you talk about a national unity crisis, I think of Steven Guilbeault, who, as far as I know, is the only minister who has been in handcuffs and an orange jumpsuit.

Can you please speak a little bit about how dangerous his ideology is, when it comes to our clean, responsible, low-carbon energy sector, for Alberta's and Canada's prosperity?

[Danielle Smith]

I should make sure that the committee knows exactly why Steven Guilbeault faced law problems. One was for the stunt he pulled on the CN Tower. The other was that he climbed on the roof of our premier Ralph Klein's house when his wife, Colleen, was home, terrifying her.

You can imagine how Albertans feel about how this is the person now responsible for enacting emissions policy. I would say that we've been able to work constructively with the federal government on a number of areas. It has worked with us on establishing a net-zero petrochemical plant with the Dow Chemical Company and a net-zero hydrogen plant with Air Products. We're in the process of getting to the final finish line on a net-zero cement plant with Heidelberg. It's worked with us on De Havilland to make sure that we have water bombers being built, not only in our province but also to help the rest of the country.

I don't want to say that it's uniformly negative, but the spirit of co-operative federalism means that you do not take unilateral action in an area of provincial jurisdiction. It means that you work collaboratively. I think the court has chastised the federal government, led in this area by Steven Guilbeault, on two occasions: the Impact Assessment Act and the plastics ban.

The approach that I would like to see the government take is to work collaboratively with us the way it has, not come through with a cap on a particular industry—oil and gas emissions, which it has announced—or a cap on methane, which it has announced, which will disproportionately impact our province. Its proposal for a net-zero power grid, outside the Constitution under section 92, clearly demonstrates that it doesn't understand how our electricity market works. Net-zero vehicles, having 20% of vehicles sold by 2026.... We know that will simply kill our auto sector and reduce our ability—

[The Chair, Conservative, Kelly McCauley]

Premier, I apologize. I have to ask you to wrap up.

[Danielle Smith]

Those are just some examples.

That's not to mention that the minister doesn't seem to want to build roads. It's like he hasn't ever left downtown Montreal. It's a big country.

[The Chair, Conservative, Kelly McCauley]

Thank you very much, Premier.

Thank you, Mr. Hallan.

Mr. Sousa, you have six minutes.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Thank you, Mr. Chair.

Premier, I appreciate your being here. I apologize for those earlier points of order. As you can appreciate, a Conservative chair brought you here without the consultation of this committee to talk about the main estimates, but now we're talking about something else completely different, which is meant for the finance committee.

Yesterday, we put forward a motion, the last motion, which the Conservative chair did not allow us to pass. He adjourned, which made it very clear what the will of the committee was, notwithstanding the misinterpretation of an earlier motion.

I want to preface that by saying to you that we appreciate your being here, but we also recognize the politics involved and the partisanship that's taking place.

Can you advise us on when you were contacted to appear before this committee?

[Danielle Smith]

We wrote a letter on March 26, asking to appear before the finance committee.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

No, I'm talking about the OGGO committee. When were you approached to appear at OGGO?

[Danielle Smith]

After we had written our letter, we were approached on the same day, March 26, to appear before the committee.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Thank you for that.

Another item is the notion of reducing emissions in Canada and reducing emissions across all provinces, trying to make Canada competitive. You reaffirmed very eloquently that initiatives that are being taken, not just in the province of Alberta but everywhere, with respect to trying to be innovative, to have a green economy, to do things concurrently.... We are still a big oil and gas country. We still net a lot of revenue and recognize the importance of that export. We also recognize the importance of making it cleaner where possible to get it through. Those are important initiatives. I worked out in Calgary for many years in the early 1980s, as did many of those from out east. I appreciate the industry. However, for our kids' sakes, for your sake, for all of our sakes, we want to make Canada even better, notwithstanding.

In Ontario, where I had the privilege of being for some years the minister of finance, we also brought in the cap-and-trade system, similar to Quebec—we were part of the Western Climate Initiative—to be exempt from the federal alternative, to be competitive and to reinvest, dollar for dollar, in innovative industries while being competitive.

We have cement plants. We have a lot of things. As for you in Alberta, you do trade. You talked about some of the credits that you take advantage of. Ontario was netting $1.5 billion or so in net earnings to be reinvested. Then a Conservative government came in and did away with that to pick a fight with Justin Trudeau, the Prime Minister, on the carbon tax, when it was unnecessary.

Here we have an opportunity to do things. I need to understand the incentive now that Alberta has been taking to innovate and bring forward all of these great reductions to emissions. Why are you doing that?

[Danielle Smith]

We showed leadership back in 2007 by setting the first price on carbon, I believe, in North America. We've continued with our industrial carbon pricing ever since. It's been renamed the technology innovation and emissions reduction regulation. The way it works is that industry is expected to be able to meet a certain standard. If they are above that standard, they pay into the fund. Then we use the fund to be able to reduce emissions elsewhere.

Since 2009, we have seen over $2 billion invested through Emissions Reduction Alberta.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Those are fantastic. Why not expand it further? Why did you not take it a step further? Because we all recognize the importance of pricing carbon.... Do you believe pollution should be free?