Government Operations Committee on June 14th, 2023

[Yves Giroux]

We haven't assessed it ourselves. The government did it and provided us with the data. The government has arrived at estimates of around $0.17 per litre for gasoline and $0.16 per litre of diesel, once again, in 2030, when the Clean Fuels Regulations will be fully in force.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

That additional $0.17 per litre consumed will be added to the first carbon tax, won't it?

[Yves Giroux]

Yes, that's correct, in the provinces and territories where the carbon tax applies.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

However, from the moment the carbon price per tonne is set by the federal government, it's all the same whether or not you have a carbon trading system as is the case in Quebec.

[Yves Giroux]

The reason why the federal carbon pricing scheme doesn't apply in certain provinces, such as Quebec and British Columbia, is that the federal government views their schemes as equivalent to its own. So you may logically conclude that the impact on the gas price will be roughly the same. It may not be exactly the same, but it will be roughly the same so that the federal scheme is comparable to that of those provinces.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

As you know, if a province—

[The Chair, Conservative, Kelly McCauley]

Thank you very much, gentlemen. That is your time.

Go ahead, Ms. Thompson, please.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you, and welcome back to committee.

I'm going to circle back to something that we spoke about the last time you appeared, and it's part of the conversation today. Certainly there's a cost to the Canadian economy from climate change, and earlier today it was referenced as an exceptional event, but I would argue that it's probably very much a regular event.

A CBC article said that the B.C. fires to date have cost $100 million, and that's before fire season begins. I'm not using this as an accurate amount, but we know it's a significant number whether it's that number or not, and that's just one place where fire has raged in our country.

We certainly have referenced the impact of Hurricane Fiona, which we are still trying to work through in the Atlantic region. There were floods in the past, and significant events with huge costs attached to them.

How is that cost captured? Are the costs captured in a way that's associated with the impact of climate change on our finances and the economy?

[Yves Giroux]

For different reasons, it's very difficult to accurately capture the cost of these climate events. One reason is that it's difficult to determine, with a reasonable level of certainty, what part of it is due to climate change and what part is due to regular occurrences, or whether there are other factors, such as more human activity in forests, as opposed to climate change.

I'm not a climate scientist and I don't pretend to know, so I rely on experts who know more about climate events. That's why we have tried to estimate the impact of climate change by relying on internationally recognized studies on the relationship between a rise in temperature, which leads to an increase in precipitation and average temperature in Canada, rather than by trying to determine which one of the exceptional events is due to climate change.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you, but how do you capture the actual costs of recovery, let's say, from Hurricane Fiona, or the cost to the country of fighting the forest fires? How do you capture the actual costs of the weather event or the climate event?

[Yves Giroux]

It's relatively easy to capture the costs of these events themselves. What is difficult is to determine with a level of certainty is whether they are due to climate change or whether an event would have occurred regardless of climate change.

What we know is that the frequency of these events will increase, but whether the costs of recovering from these disasters will be higher or whether we will adapt to mitigate the adverse impacts brings a lot of uncertainty for a long period of time.

[Joanne Thompson, Liberal, St. John's East, NL]

I'm drilling down on this because when I look at your report, and it's quite thorough, Hurricane Fiona, which is very close to my home.... We know that the costs associated with that weather event are significant. Now we're seeing more events coming in real time, one after the other. Those costs are part of a financial statement, but where would they appear in the financial statements? We're not necessarily budgeting for the extent of the weather systems, and we wouldn't budget for forest fires that happened before the forest fire season began, so where would those numbers be carried?

[Yves Giroux]

The costs to recover and to fight these extreme weather events would be accounted for in provincial books when they are provincial responsibilities, or with insurers when they have to compensate policyholders for these events or in the private sector when the costs are absorbed directly.

[Joanne Thompson, Liberal, St. John's East, NL]

There are significant federal dollars that roll into this, so where are those federal dollars? How is that captured?

[Yves Giroux]

I don't think that would be in one part; it would be spread across a multitude of departments. It could be Fisheries and Oceans, if they had to repair piers and docks, or Public Safety, for example. It's spread across multiple organizations.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

Do you—

[The Chair, Conservative, Kelly McCauley]

I'm afraid that is our time.

Miss Vignola, go ahead for two and a half minutes, please.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you very much.

Phoenix still isn't working very well. Some informal groups or even forming, consisting of people who support each other when they're in trouble.

An additional $468 million is currently authorized to renew the resources of the government's pay system.

How can that amount be explained? Do you have any estimates of the total cost to stabilize and replace Phoenix? Have you gotten the impression thus far that changing programs would be like changing four quarters for a buck, from the standpoint of costs and the perspective of chances for success?

[Yves Giroux]

I believe that the last time we looked at the Phoenix pay system to estimate its costs was in 2019. A lot of water and money have flowed under the bridge since then. And I was somewhat surprised when I saw in the last budget that additional hundreds of millions of dollars had been allocated to improve Phoenix. I raised the matter with Department of Finance officials, who told us that this was the last time and that, this time, the system should be repaired.

So I share your scepticism. However, apart from expressing my own surprise, I haven't received a response, since my more recent report on the subject dates back to 2019.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Do you have any information on the next-generation system that we're putting in place? Have you seen any amounts or heard any rumours that the tests currently being conducted are a success?

[Yves Giroux]

Unfortunately, no. I have no up‑to‑date information on the system, which should improve matters. I apologize for that.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Mr. Johns, it's over to you.

[Gord Johns, NDP, Courtenay—Alberni, BC]

There are a couple of things.

In your 2020-21 report, you determined that spending levels were not high enough to meet operation and maintenance costs to provide clean water for first nations.

Have you analyzed the funding levels for clean water programs in the 2023-24 estimates. and if so, is this enough spending to meet first nations' clean water needs?

[Yves Giroux]

In 2021 we estimated that the capital spending was sufficient but that the operations and maintenance spending was not sufficient. We have not updated that study since then, unfortunately.

[Gord Johns, NDP, Courtenay—Alberni, BC]

But right now, given the information you have, it would be pretty easy to say that it's not sufficient.