Natural Resources Committee on June 13th, 2023

[The Chair, Liberal, John Aldag]

Good afternoon, everyone. I call this meeting to order. Welcome to meeting number 69 of the House of Commons Standing Committee on Natural Resources.

Pursuant to Standing Order 108(2), the committee is meeting for a briefing by the commissioner of the environment and sustainable development and officials, or other lead investigators, I'm assuming, on the 2023 reports 1 and 5.

We're in a hybrid format. Mr. Angus is online. He knows the drill and so do our colleagues here who have been before us, as well.

I'm going to use the handy clock system, so I will give 30-second notices with the yellow card, and I'll use the red card when time is up. Don't stop mid-sentence, but finish your thought, and we'll move to the next speaker.

For this first panel, I would like to welcome our witnesses. From the Office of the Auditor General, we have Jerry DeMarco, commissioner of the environment and sustainable development; Kimberley Leach, principal; and Isabelle Marsolais, director.

Welcome to all of you.

Mr. DeMarco, you have five minutes for an opening statement. When you're ready, I will start the clock, and then we'll get into rounds of questions after that.

[Jerry V. DeMarco, Commissioner of the Environment and Sustainable Development, Office of the Auditor General]

Mr. Chair, thank you for this opportunity to discuss reports 1 and 5 of our 2023 reports to Parliament entitled “Forests and Climates Change” and “Emission Reductions Through Greenhouse Gas Regulations—Environment and Climate Change Canada” respectively. Our reports were tabled in the House of Commons on April 20. Joining me today are Kimberley Leach and Isabelle Marsolais, who were responsible for these two audits.

I would like to acknowledge that this meeting is taking place on the traditional unceded territory of the Algonquin Anishinabe people.

The five reports I presented to Parliament in April, including the two that we are discussing today, show that climate change and biodiversity loss are intrinsically linked. These two crises need to be addressed together through decisive and concerted actions.

I will start with our audit report on forests and climate change. The federal government launched the two billion trees program, which aims to counter climate change, enhance biodiversity and support human well-being. We found that given the number of trees planted so far, this program is unlikely to succeed unless significant changes are made.

Although Natural Resources Canada nearly met its goal to plant 30 million trees in 2021, it fell well short of its 2022 goal of 60 million trees. Delays in signing agreements with planting partners have significantly challenged the department’s ability to plant the number of trees it had planned for 2022, and these delays will spill over to affect subsequent years, which have much more ambitious goals.

Since our audit, we understand that some progress has been made in signing additional agreements, but work remains to get the program on track to reach two billion trees planted by 2031. Even if that goal is achieved, the program’s initial targets for carbon sequestration by 2030 and 2050 will not be met.

In addition, we found that the program missed opportunities to enhance biodiversity and habitat-related benefits over the long term. Natural Resources Canada disagreed with our recommendation to provide additional incentives for habitat restoration, as it believes that doing so could reduce available funding to meet the number of trees planted and climate mitigation objectives. However, habitat restoration is part of the solution to the twin crises of climate change and biodiversity loss.

We also found that Natural Resources Canada, working with Environment and Climate Change Canada, did not provide a complete and clear picture of how Canada's forests affect greenhouse gas emissions. For example, emission estimates varied significantly in reports over the years because of recalculations prompted by data updates. This changed whether forests were reported as a net source of emissions rather than capturing emissions, making it extremely difficult to make informed decisions.

I must stress how important it is that we do not give up on solutions such as the two billion trees program and that instead we change course to successfully implement these initiatives.

I will now turn to our audit report on emission reductions through greenhouse gas regulations. This audit examined whether the regulations achieved their targets and contributed to Canada's long-term climate change mitigation goals.

Environment and Climate Change Canada did not know the extent to which the greenhouse gas regulations we examined contributed to meeting Canada's overall emission reduction target. This was because the department's approach to measuring emissions did not attribute results to specific regulations, recognizing that it is challenging to do so because of interactions among policy measures.

When we looked at individual regulations, we found mixed results. The regulations aimed at reducing emissions from power generation achieved their performance targets, but some of the regulations that aimed to reduce emissions from vehicles did not. The department was also very slow to develop new regulations, such as those for clean fuels.

Regulations are an important element of achieving Canada's overall emission reduction target. However, without comprehensive impact information, the federal government does not know whether it is using the right tools to sufficiently reduce emissions to meet the target.

In conclusion, the twin crises of climate change and biodiversity loss are chronic, insidious and too often ignored because their gravity becomes apparent over the long term. The government can better use the policy tools it has to address these issues.

Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have.

[The Chair, Liberal, John Aldag]

Thank you for those opening statements.

Before we get started, I'd also like to welcome Ron Liepert, Joanne Thompson and Mike Morrice to our committee today.

Our first round is going to be six-minute questions, and first up we have Ms. Stubbs.

Ms. Stubbs, when you're ready, the floor is yours.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, Chair.

Thank you to all of you for being here today.

I have a question off the top.

You noted in your reporting that the overall trajectory of emissions has been going upwards, except for one year. Could you clarify the rationale for emissions declining in that one specific year?

[Jerry V. DeMarco]

The overall trajectory of emissions in Canada is conveniently pictured on the cover of one of our previous reports. This is the trajectory from 1990 to 2019. There has been a drop since then that coincides with the economic downturn associated with the COVID pandemic.

It's not possible for us to attribute exactly how much of that drop is pandemic related and how much is related to measures.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you. I appreciate that. It was related to the economic downturn through the course of the pandemic.

Your conclusions, I think, are quite stunning. They should alarm every single Canadian, no matter what perspective they come from on this debate about policies and tools to reduce emissions.

Regardless of the debate on timelines or how to get there, or whatever one's perspective might be, I think it's stunning and shocking and ought to concern every Canadian that you have concluded the government does not measure the outcomes of specific regulations and does not seem to be able to attribute results attached to their words and various policy proposals.

Do you see this as a systemic problem overall, as an accountability issue, as a lack of will? What is your response in general to the department's rationale that it is difficult to make those assessments because of the interplay of various different policies?

[Jerry V. DeMarco]

There are definitely interactions amongst the many measures that Canada has employed to address climate change. However, that's not an excuse for a failure to monitor or at least estimate the effectiveness of the key policies, whether it's carbon pricing regulations, as is the subject of this report, subsidies or the other tools that are available. We recognize that there are interactions amongst the measures.

It wouldn't be so troubling if Canada's trajectory, as you noted, was going in the right direction from 1990 to now. Given that Canada's the only G7 country that's had an upward trajectory since 1990, we feel that more work needs to be done to isolate the problems, which measures are working and which ones aren't, recognizing, of course, that there are some challenges with respect to tie-ins or interactions between various measures.

[Shannon Stubbs, Conservative, Lakeland, AB]

I would say, especially given the major consequences for the cost of living on everyday Canadians on their lives, on literally everything they buy or their transportation choices, that it is absolutely incumbent upon a government to be able to measure and attach results and outcomes to its policies and words.

Are you satisfied with the department's response about those challenges in measuring those outcomes? Can you give us any specifics? Do you have any confidence in the department's response so far that it actually will be improved and that Canadians will be able to have the information they deserve about this government's policy framework?

[Jerry V. DeMarco]

For this report, the department agreed with our recommendations. I'm pleased that is the case.

With respect to the challenges of attributing specific reductions to specific measures, we do recognize, as I indicated in my previous answer, that there are some challenges. However, we would like to see them make more of an effort to do that.

Even if there are certain bundles or batches of measures that need to be assessed together, that's okay, too. It doesn't necessarily have to be going through all of the 80 to 120 measures that are found in the emissions reduction plan one by one. For the key ones, we do believe that they should be able to track them.

I say this because, as you'll note at paragraph—

[Shannon Stubbs, Conservative, Lakeland, AB]

Can I clarify, sir?

Do you have confidence the department will be able to do that? Have they given you any indication that would assure you that some kind of change is happening and that will occur?

[Jerry V. DeMarco]

I would say I won't be assured of that until I see the results.

That's a common theme in my responses to questions about predicting the future. I do prefer to see actual results rather than good intentions.

[Shannon Stubbs, Conservative, Lakeland, AB]

Likewise.

We agree wholeheartedly with your point about the importance of forests and biodiversity acting as carbon sinks. I also find it quite alarming that it looks like the current plans for tree planting are on track to only be about 3.8% of the overall promise.

You noted something in your reports that I've actually heard from growers over the last couple of years. They've been very reticent to raise it because of their concerns that they would potentially face some sort of retribution or not be able to benefit from the various commitments or agreements that are being undertaken.

Would you expand specifically on your concerns around the hardiness and survival level of trees, whether or not that will be improved, and also the status of any provincial agreements? What are the holdups?

[Jerry V. DeMarco]

I'll start with the survival issue.

Obviously, one can't assume that 100% of the trees will survive to maturity. There are many reasons for mortality in the forest. Some of those are increasing because of climate change itself, in terms of the number of forest fires.

We do recommend that they do a better job at modelling, assessing and monitoring the survival of these trees and not just assume that all of them will reach maturity. You can hear from the department directly in the next hour about their efforts in that regard.

I'm getting a red signal here.

[The Chair, Liberal, John Aldag]

We're out of time on this one. We may be able to pick that up on a future round.

Next up we have Ms. Lapointe, who will have six minutes.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you, Chair.

Commissioner, thank you for your report and for taking the time to appear at committee today to help us deepen our understanding of the recommendations that you've made.

This morning, Minister Blair confirmed that this is Canada's worst wildfire season in a century.

Do you believe that the two billion trees program is a valuable program in light of the damage from wildfires that we will continue to see?

[Jerry V. DeMarco]

Yes, it is a worthwhile program.

I should add that the concerns over this issue have become more obvious this year with the wildfire season. I would point you to paragraph 1.1 of our report where we mentioned, back in April, that climate change “will increase risks and negative effects for Canadians because of, for example, the number of heat waves and forest fires.” I wish that paragraph hadn't been so prescient for this year's fire season, but it was. We need to step up efforts to both mitigate and adapt to climate change.

The two billion trees program is worthwhile, and that's pretty much illustrated in exhibit 1.4. The payback period is long, though, so I'm pleased that this department is willing to take on a program that has such a long payback period. This is because, often, governments discount the future and do not necessarily favour long-term decision-making over short-term, which is lesson number eight from our climate report from 2021 on lessons learned.

There is an important payback in terms of carbon sequestration. It won't start to accrue until after 2030 or so, and that's illustrated in exhibit 1.4. Once those trees start getting more mature, there is a large degree of carbon sequestration that would result.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

You mentioned in your report that there were delays in signing agreements with provinces and territories. To your knowledge, what contributed to these delays, and have you noted any progress on this front?

[Jerry V. DeMarco]

Since the closure of our audit period and the publication of our report, we understand from the department that they have signed quite a few more agreements and agreements in principle, and that the number of trees to be planted that are in the hopper—in the signed contracts—has increased significantly.

It's still a small percentage of the overall two billion, and obviously, the last six years of the program are when they really have to plant the majority of those trees. In the next hour, perhaps you could get an update from the department on the exact number of new agreements that have been signed since the close of our audit.

Our audit was an attempt to do an early stage assessment with the hope that they could course correct and catch up, and hopefully we will see that. I can't predict whether they will or not, but there has been some improvement since the close of our audit.

[Viviane LaPointe, Liberal, Sudbury, ON]

I noticed that you made some comments around the emissions reductions through greenhouse gas regulations. You said that your department had recently enhanced carbon pricing across Canada and brought the clean fuels regulations into force. The regulations focus on reducing emissions from electricity generation, oil and gas production, transportation and landfills.

Can you tell us why these measures are important and what the consequences would be of not taking these actions now?

[Jerry V. DeMarco]

We assess the performance of the regulations brought in by Environment and Climate Change Canada or Natural Resources Canada. We aren't responsible for the decision to make those regulations or the contents of them.

Overall, regulations are an important part of the tool kit, along with carbon pricing and other measures, such as subsidies, procurement policies, education and so on. All of these combined together form Canada's approach to reducing greenhouse gas emissions.

In terms of the expectations of those new regulations in the four areas you just mentioned, I would suggest that you pose that question to the assistant deputy minister for Environment Canada, who will be here in the next hour.

[Viviane LaPointe, Liberal, Sudbury, ON]

Can you tell us if you've seen any progress by the ministry in implementing any of your recommendations that were contained in the report?

[Jerry V. DeMarco]

Since April, we have seen an uptick in the number of agreements. I'm going over to the two billion trees audit for the time being. We have seen an uptick in the number of agreements and agreements in principle signed, so that is a good sign that they're taking the matter seriously.

Our main finding was not that they won't make it to two billion trees; it was that they wouldn't make it unless they made significant changes. If they make those significant changes, they can reach the two billion trees target. They won't reach their sequestration targets for 2030 and 2050 as initially projected, but they will receive some benefits in the future, although on a slightly longer time horizon than they had originally foreseen.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

[The Chair, Liberal, John Aldag]

We will now go to Mr. Simard.

Over to you, Mr. Simard, for six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Thank you very much for being here, Mr. DeMarco.

I get the sense from your report that you've made a stark observation, at least for 2022, when the department missed the target by a mile. That will necessarily have a domino effect. If the government fell that short of its 2022 target, the rest of the planting effort will presumably be affected.

You said that the government was unlikely to reach its target unless significant changes were made. Are those significant changes achievable, and does the government currently have a plan to make those changes?