Natural Resources Committee on June 13th, 2023

[Charlie Angus, NDP, Timmins—James Bay, ON]

I noticed that you said of the 399 progress reports that were supposed to be produced by Environment and Climate Change Canada, they only produced one. Is that complacency? Is that lack of staff? What is it?

[Jerry V. DeMarco]

You're now turning to one of the other reports, which I do happen to have with me, on species at risk.

Yes, there are a number of problems with respect to Environment and Climate Change Canada's capacity to keep up with the growing number of species at risk in Canada. I would be pleased to return to this committee and speak about our suite of biodiversity-related reports, which are of equal importance to the ones we're talking about today.

[The Chair, Liberal, John Aldag]

We're going to have to stop there.

We're going to go into a second round, which is going to be five minutes, five minutes, two and a half, two and a half, five, five, and then we'll see where we are at that point.

First for a five-minute round I have Mr. Patzer.

Whenever you're ready, Mr. Patzer, the floor is yours.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Fantastic, thank you.

Thank you, everybody, for coming. It's much appreciated.

I will obviously go to you, Mr. Commissioner. On page 15 of report 5, it mentions how the phase-out of coal is on track by 2030, but I also know that in another one of your reports in regard to the just transition—we had it when we were on public accounts—it talked about the complete failure of the government to support the communities who were going to be phased out by this. In fact, the government lost two years. It did nothing for two years on this. I'm just wondering if you considered looking at that as well while you were going through this and looking at it and seeing that the government is still on track for that, but not making any mention of the communities affected.

[Jerry V. DeMarco]

On our just transition report—and Principal Leach who is here with me today was also responsible for that report—we'll consider doing a follow-up on that if we see some tangible progress that can be followed up on. Even when we reported on that issue and we commented that there still wasn't framework legislation in place to transition workers, or sustainable jobs, whatever the new phrase will be for that program, we still don't have that framework. There's not that much point in revisiting it just yet because not a lot has happened on that file since our report.

Part of transitioning the economy towards a more green economy and a more sustainable economy means also opening doors for those affected: the communities, the workers, and so on. That's certainly possible with a green shift towards a more renewable economy, but it needs to be done deliberately rather than in a reactive manner. Our recommendations stand from our just transition report that we should not be leaving people behind in the transition and be more proactive in opening doors and not just looking at softening the blow from closing doors.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

It's pretty ironic that the only thing they seem to be on track for is shutting down those plants, which is going to devastate those communities. To the point that you just made, there is no framework yet for those communities and what they're going to do, and yet the clock is ticking.

I want to pick up quickly on a point you made earlier on tree planting. You referenced agreements with provinces for planting. I'm just wondering which provinces those are.

[Jerry V. DeMarco]

The number of agreements and agreements in principle has grown since the close of our audit period. I believe in the opening statement from the department officials, which you'll hear in the second hour, they will be able to give you specific numbers. They may be able to tell you which provinces have newly signed agreements.

We know from media clippings and so on that there's been an announcement from British Columbia, with the minister making an announcement there. As for the other provinces, I would direct your question to the departmental officials in the next hour.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Okay. We'll look forward to doing that.

Paragraph 5.24 states the following: “For the coal-fired regulations, the sensitivity analysis was not extensive and did not report estimated greenhouse gas emission reductions.”

Can you elaborate on that a little bit? I think that's a pretty damning statement. Can you just elaborate on what that means?

[Jerry V. DeMarco]

Yes. We're encouraged by the department's response that they're going to up their efforts on sensitivity analysis. This is essentially looking at the various sources of uncertainty in their model and how those sources of uncertainty affect the model's results and the variation. It's looking at correlations and things like that.

This is part of this attribution question that we got at earlier. In order to course correct and actually meet a target, such as the 2030 target or the interim goal before then, they need to not only have timely information, which we don't have in Canada—we often have to wait two years to see the emissions data for the country in terms of the reports under the NIR—but also better track, with all of these measures that are going on, which ones are having more of an effect on bending the curve and which ones aren't. There's—

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Okay. I have only 30 seconds left here, so I'll ask you one last question.

With regard to clean fuel regulations, you mentioned earlier that the other crisis is the loss of biodiversity. Have you looked into the amount of loss of grasslands and forest lands that will be attributed to pursuing growing more biofuels rather than focusing on growing food—or even preserving those grasslands for agricultural purposes?

[Jerry V. DeMarco]

Yes, we will be looking at the interplay between agriculture and climate change in future audits. It's an important point you make, though, because it's important to look at the full picture and not have a squeezing of the balloon, which can occur when you attempt to fix one problem and it just creates another problem elsewhere. Certainly, there have been concerns in especially the mid-continent of Canada and the U.S., where there has been habitat loss created by subsidies toward ethanol and so on.

It needs to be done in a way that doesn't simply transfer the problem somewhere else. I think that's what you were getting at.

[The Chair, Liberal, John Aldag]

We're out of time for this round.

We'll go next to Mr. Chahal, who has five minutes.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you, Chair.

Thank you, Commissioner, for joining us today and for your work.

In your opening remarks, you talked about how climate change and biodiversity are linked. Can you speak further to how the “two billion trees” program supports biodiversity?

[Jerry V. DeMarco]

Absolutely, especially if the department revisited its response to our recommendation on linking tree planting with habitat restoration. You all know the old adage of not being able to see the forest for the trees. This is a perfect example of that. If we focused just on tree planting without looking at restoring the habitat or the ecosystem in question, we wouldn't be maximizing the benefits.

If the tree planting is done in a deliberate way, where the co-benefits for biodiversity and for human well-being, such as recreation, shade or mitigating urban heat islands and so on, are done in a deliberate way, instead of just looking at, “Oh, let's just meet our number of trees”.... An unfortunate scenario would be if there's a proliferation of monoculture tree plantations that aren't really forests. There are some natural monocultures in Canada, so it's not a case where you should never plant the same tree species on a site, but generally speaking, there will be more biodiversity benefits accruing with a more diverse planting approach. We have a recommendation about that in terms of dovetailing the tree-planting goals with habitat restoration.

That's become all the more important because of the Montreal biodiversity framework from the latest Conference of the Parties, where there's a new target—I believe it's target two—about restoring 30% of degraded lands. Here's a great opportunity, through reforestation rather than just tree planting, to restore forests rather than just creating tree plantations.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you.

You talked about how in 2021 we hit close to our targets—we hit our targets—and you also mentioned in your opening remarks that there were challenges in dealing with our partners. Can I say that those are supply chain issues in obtaining enough trees to be planted? Can you talk a bit more specifically about those challenges with our partners?

[Jerry V. DeMarco]

Well, there are numerous challenges—rightly so. For private industry working in the nursery area, if they're going to supplement their current approach—because there's a lot of reforestation going on just in the normal course of forestry, so this is supposed to be two billion incremental trees, not just double-counting the ones that would be done for forest management generally—they don't want to make those investments in seedlings unless they know there's going to be a demand for them.

The federal government can't create that demand on its own because most Crown land in Canada is provincially controlled, so that's a key partner, right, with those agreements with the provinces. If the provinces agree with Canada as the federal government to enter into long-term agreements, then you'll have that certainty for industry to invest in the massive amount of seedlings that would be needed on top of the current stock that's used for typical forestry management.

[George Chahal, Liberal, Calgary Skyview, AB]

You said there were many issues. What were some of the other issues?

[Jerry V. DeMarco]

I think I'll turn to Principal Leach to discuss some of the other issues, because there are a lot of actors at play here in terms of provinces, territories, communities and indigenous communities and so on.

Ms. Leach can elaborate on that question.

[Kimberley Leach, Principal, Office of the Auditor General]

Yes.

Thanks very much for the question.

The difference between achieving the 2021 target and not achieving the 2022 target was the lack of agreements with the provinces. Provinces are the group that will plant the most trees. Almost 70% of the trees that are to be planted through this program will be by provinces and territories.

In 2022, they decided that they wanted an agreement in principle with the provinces before they started to have project proposals accepted. That was really the significant challenge that happened in 2022.

[George Chahal, Liberal, Calgary Skyview, AB]

Do you think the two billion trees program is a valuable program and we should continue with it?

[Jerry V. DeMarco]

Absolutely it's a valuable program, especially if it's done in a way that maximizes co-benefits with biodiversity and human well-being.

Even on carbon sequestration, even if the initial targets for 2030 and 2050 won't be met, there will be significant sequestration, as illustrated in exhibit 1.4 of our report. It just takes a little longer because of the pace of growth and the fact that most of these trees are being planted in the last part of the program rather than the first part.

It's certainly worthwhile doing if it's done in a deliberate and informed way that truly does try to maximize those benefits I spoke about and provide additional benefits to species at risk and biodiversity generally.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you.

[The Chair, Liberal, John Aldag]

Thank you.

Next we're going to Mr. Simard, who will have two and a half minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

After reading your reports, Mr. DeMarco, I got the feeling that the government established principles and rules without necessarily having a feedback loop to ascertain whether those principles and rules were effective.

It brings to mind your 2021 report on the emissions reduction fund. After reading that report, I learned that, far from reducing emissions, the program had led to an increase. The same is true of the two billion trees program. The government established a principle but didn't come to an agreement with the provinces regarding the planting of those two billion trees. The government doesn't have a feedback loop.

You talk about regulating and reducing emissions, and Minister Guilbeault said a while ago that it was necessary to stop providing the fossil fuel sector with financial support and inefficient subsidies. However, we don't know what constitutes an inefficient subsidy.

I don't want to put words in your mouth, but is the government quicker to establish principles than to consider how they are put into practice and what results they have?

[Jerry V. DeMarco]

The government needs to pay a lot more attention to results, which is a common theme in our reports. The government also needs to be realistic with its programs. You brought up the emissions reduction fund report, but there's the two billion trees program report and the hydrogen report. All three reports pertain to the same department, and the same problems are flagged from one report to the next, so I'd like the department to take the lessons learned from 2021 and focus on results, not just plans and targets. Now, we need to see results.