Evidence of meeting #72 for Government Operations and Estimates in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cost.
A video is available from Parliament.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Well, the government indicated that it believes that the spending the government is making towards the construction and production of batteries will pay for itself over a five-year period.
We have not verified or calculated this potential return ourselves. We have just looked at the construction phase.
Liberal
Parm Bains Liberal Steveston—Richmond East, BC
Is there a reason that you chose not to do that work? Is that the reason?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It requires details that we do have but that could also risk disclosing, indirectly, Volkswagen's production schedule. Personally, I wasn't sure whether that would be a breach of the confidentiality provisions.
Also, even if we were fine with disclosing that, we were running out of time to do that analysis. That would conflict with our aim to provide you with a report before Parliament rises for the summer.
Liberal
Parm Bains Liberal Steveston—Richmond East, BC
Again, with regard to long-term benefits of the new plan, it's hard to consider those long-term benefits in the report. Is that accurate?
Liberal
Liberal
Parm Bains Liberal Steveston—Richmond East, BC
Those are all the questions I have for today. Thank you.
Conservative
Conservative
Adam Chambers Conservative Simcoe North, ON
Thank you, Chair.
I appreciated all the questions and the discussion back and forth about the carbon tax. I'll continue on with it for a moment.
Businesses in general don't receive a rebate, correct?
Conservative
Adam Chambers Conservative Simcoe North, ON
Our farms and farmers are one of the groups that are heavily affected, so I appreciate this discussion about which families are being impacted. It seems to me that whether or not you consider farms as providing a significant subsidy for the funding that happens for the rebates, it's actually quite substantial, including those families who happen to live in rural parts of the country, with different lifestyles, different impacts and different choices of vehicle, for example.
Is that fair?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It's a fair statement of facts.
Conservative
Adam Chambers Conservative Simcoe North, ON
Right, and I certainly appreciate trying to quantify the costs of doing nothing—however that would look in a model—but there's also a point about what Canada's pro rata contribution is to that cost. We're not responsible for all of the climate change effects that happen in the world, correct? We can't all of a sudden take a 100% of the cost and say that we're going to solve it by implementing policies that will affect—what?—2% of emissions.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes, and that points to one other difficulty, in my opinion, of costing a scenario in which we do nothing. Whether it's Canada that does nothing and is a free rider and lets other countries do their own emissions reductions or whether it's the entire world doing nothing, which is a catastrophic scenario, that leads to various different hypotheses and assumptions.
If we take Canada as a free rider, in that case there would be a cost, but it would probably be much more than economic. It would be diplomatic. It would be commercial. There are various considerations that become very tricky and delicate in estimating a scenario in which we do nothing.
Conservative
Adam Chambers Conservative Simcoe North, ON
The Bank of Canada produced a report last year that said the carbon tax in general added about half a point to inflation. Would it be safe to assume that since the clean fuel standard also impacts the price of fuel and energy, which is one of the more significant contributing components of inflation, it will be inflationary to some degree?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes, to the extent that energy and gasoline and diesel are part of the consumer price index. If you increase one of the components of the CPI, it increases inflation, although marginally.
Conservative
Adam Chambers Conservative Simcoe North, ON
Thank you.
I want to pick up on my colleague Mr. Perkins for a minute. We don't know the spending profile for the Volkswagen contract, correct? We will eventually know the spending profile because it will show up in the public accounts.
Conservative
Adam Chambers Conservative Simcoe North, ON
Do you have an idea why the government thinks it's commercially sensitive today but that it will eventually not be commercially sensitive when we all find out?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
No, I don't know. It may be because it involves secrets or commercially sensitive information when it comes to ramping up, or the capacity of a business to ramp up production, and then sales of electric vehicles, but I don't know.
Conservative
Adam Chambers Conservative Simcoe North, ON
Okay.
In 30 seconds, I have a quick question: If the government is banning petrol vehicles, what's the point of the carbon tax?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
That's a good question. I think it's to reduce the use that would be made of fossil fuels—gas, gasoline, diesel—for cars that will still be on the road, and the use for heating systems and industrial processes.
Conservative
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
We might get rid of cars, but maybe not of other uses.
