Public Accounts Committee on Feb. 15th, 2024

[The Chair, Conservative, John Williamson]

I call this meeting to order.

Good afternoon, everyone. Welcome to meeting number 100 of the House of Commons Standing Committee on Public Accounts.

Do we have a cake, Clerk? It's number 100. It's a milestone meeting.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room and remotely using the Zoom application.

This is a reminder that all comments should be addressed through the chair.

Pursuant to Standing Order 108(3)(g), the committee is resuming its study of 2023 Report 1 of the Commissioner of the Environment and Sustainable Development, entitled "Forests and Climate Change", referred to the committee on Thursday, April 20, 2023.

Before I begin, as you are all aware, the bells are going to ring at 5:15 for a 5:45 vote. As I've done in the past, I'm going to seek unanimous consent so that we sit until 5:30 and then vote at 5:45. Doing so will give us more time with the witnesses.

I only need a couple of minutes for some business at the back end. If I have unanimous consent, I'll move the committee business by about 10 minutes to 5:20 to give you guys more time with all our witnesses. As you can see, we have a full house today.

Do I have UC from members to run this meeting until 5:30?

Yes, Ms. Khalid.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

If it's okay with you, can you revisit that question once the bells start ringing?

[The Chair, Conservative, John Williamson]

No, because as I said, that will pre-empt.... If I have it now, we will hear from the witnesses until 5:20. If I don't have it, I'm going to proceed with committee business at 5:10.

I'm looking for UC. You can deny it if you like, and I'll just proceed with committee business at 5:10.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

In that case, I'll deny it, Chair.

[The Chair, Conservative, John Williamson]

Okay. Very good.

This is a meeting we've been wanting to get to, so I want to thank all the witnesses for coming in.

From the Office of the Auditor General, we have Jerry DeMarco, commissioner of the environment and sustainable development. It's good to see you again.

We also have Marie-Pierre Grondin, director, and Kimberley Leach, principal. Thank you for coming in today.

From the Department of the Environment, we have Jean-François Tremblay, deputy minister; Derek Hermanutz, director general of the economic analysis directorate; and Lindsay Pratt, director of pollutant inventories and reporting.

From the Department of Natural Resources, we have Monique Frison, director general of the trade, economics and industry branch; Michael Vandergrift, deputy minister, appearing by video conference from London; Glenn Hargrove, assistant deputy minister; and Jeff Labonté, associate deputy minister.

I believe each of the three institutions has an opening statement.

Mr. DeMarco, you have the floor for five minutes.

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

Thank you, Mr. Chair.

I would like to acknowledge that we are gathered today on the unceded territory of the Algonquin Anishinabe people.

We are happy to be appearing before your committee to discuss our report on forests and climate change, which was tabled in the House of Commons on April 20, 2023. With me today are Kimberley Leach and Marie-Pierre Grondin, who were responsible for the audit.

Our audit focused on the design and implementation of the two billion trees program and on how Canada tracks greenhouse gas emissions from forests.

The federal government launched the two billion trees program to counter climate change, enhance biodiversity, and support human well-being. Through the program, trees will be planted across Canada, including on Crown lands, indigenous lands, in municipalities and on private lands, such as farms. The majority of tree planting activities are cost-shared with partners; however, certain groups, such as indigenous partners, will also be supported with grants focused on capacity building, often with no cost-sharing required.

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 not only significantly challenged the department’s ability to plant the number of trees it had planned for 2022, but will also affect subsequent years, which have much more ambitious goals.

We understand that since the end of our audit period, some progress has been made in signing additional agreements. On the other hand, the department has announced that it is now counting trees planted under another department's program that has different objectives as part of the two billion trees program. If this program is no longer focused on planting two billion incremental trees, then the benefits of the program will be reduced.

In addition, the program missed opportunities to enhance biodiversity and habitat-related benefits over the long term by not being designing with specific funding considerations for habitat restoration for all funding streams. For example, in the 2021 planting season, Natural Resources Canada funded more than 270 monoculture sites, accounting for 14.4% of the total trees planted. Monoculture plantings sequester carbon and may be appropriate in certain habitats. However, in the vast majority of circumstances, they do not support biodiversity and other benefits related to environmental and human well-being as much as more diverse plantings do.

Beyond the two billion trees program, Natural Resources Canada, working with Environment and Climate Change Canada, did not provide a clear and complete picture of the role of Canada's forests in 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.

We found a lack of transparency about the effects of human activities and natural disturbances on forest emissions. Specifically, the department's reporting on how changes in forest management affected emissions was incomplete. Forest management activities such as clear-cutting, partial harvesting, slash burning and creating reserves for biodiversity were not clearly or separately reported on. In addition, Canada's forests are becoming a net source of emissions because of forest fires and disturbances caused by insect outbreaks. A lack of transparency and accurate reporting makes it very difficult for decision-makers to make informed decisions and for Canadians to hold government to account.

This concludes my opening remarks. We would be pleased to answer any questions the committee may have.

Thank you.

[The Chair, Conservative, John Williamson]

Thank you very much. You were right on time. We appreciate that.

We'll turn now to the Department of Natural Resources.

Monique Frison, you have the floor for up to five minutes, please.

[Michael Vandergrift, Deputy Minister, Department of Natural Resources]

Mr. Chair, it's Michael Vandergrift here. I'll be making the opening statement, if that's okay with you.

[The Chair, Conservative, John Williamson]

It certainly is. We'll go over to you.

[Michael Vandergrift]

Very good. Thank you so much.

Thank you, Mr. Chair.

Thanks to the committee for this invitation. I’d also like to thank the Commissioner of the Environment and Sustainable Development for this audit on forest and climate change.

The recommendations in this audit are important. As shown in our response and our action plan, the recommendations will help us implement the program. We also appreciate the conversations we've had with the commissioner on the subject.

Forests and other nature-based solutions are an integral part of the fight against climate change. Trees generate many long-term benefits, revitalizing fire-ravaged areas, creating green jobs and enhancing the well-being of Canadians for generations.

Planting two billion trees is a marathon, not a sprint. As we move forward, we keep our foundational principle top of mind: to plant the right trees, in the right place, for the right reasons.

We have made significant progress in implementing this program. In fact, we have agreements signed or under negotiation to plant over 393 million trees. We have allocated funding for first nation, Metis, Inuit and cross-distinction organizations and governments, while acknowledging the different needs and priorities of each distinction.

We have also sought ways to support urban planting that will support increased quality of life for Canadians in small and large cities.

These advancements are in line with commitments made in our action plan and in response to the recommendations in the audit. We have also, for example, developed an operational plan and have provided guidance for applicants on single-species planting to respond to the recommendations.

Having jurisdiction over 90% of Canada's forests, provinces and territories are key partners in implementing the government's objective of planting two billion trees. Working closely with them, we now have a total of nine agreements in principle and eight contribution agreements signed, which is five AIPs and four contribution agreements more than we had at the time of the audit, with more to come. Minister Wilkinson has engaged with his counterparts to reiterate his commitment to working with them. We seek to support their plans, whether to restore habitat for species at risk, to recover after a wildfire or to adapt and help manage their forests in a changing climate.

As I mentioned, this is a long-term program, and we need to be constantly looking at what adjustments we need to make. The wildfire season has caused us to reconsider how best to go about increasing Canada's forest cover. We have an opportunity ahead of us to think about how the two billion trees commitment, in light of this current and unprecedented context, will ensure that our forests are resilient to a changing climate. We are actively engaged with all partners to align agreements, partnerships and funding in order to best move ahead.

On forest carbon, we'll continue to partner with Environment and Climate Change Canada to produce world-class greenhouse gas emissions estimates, using methodology supported by more than 100 peer-reviewed research papers. We continue our efforts to stay current with the latest advancements in this field. For instance, the 2023 budget, as part of its investment in forests and forest workers, included funding to improve our forest data and reporting.

Again, this aligns with our commitments under the audit management action plan in response to the helpful recommendations on forest carbon reporting. We'll continue to work closely with Environment and Climate Change Canada to improve the transparency of reports on historical and projected forest sector emissions.

Our regular discussions with forestry experts and stakeholders mean we are aware of the best available science, data and practices, as well as where we can improve. Our modelling tools will continue to evolve thanks to scrutiny by experts and peer-review processes.

We're proud that our reporting methods align with internationally accepted practices, as the commissioner noted. This means we produce a big-picture report that collectively reflects human impacts, such as harvesting, regeneration, fire suppression and conservation. This method of reporting meets the reporting guidelines of the United Nations Framework Convention on Climate Change.

To conclude, there is no solution to climate change without forests. We remain committed to delivering the goals of the two billion trees program, and we continue to adjust and adapt to realities on the ground, thereby ensuring a flexible approach.

Thank you very much. I look forward to receiving questions from the committee.

[The Chair, Conservative, John Williamson]

Thank you very much.

Now, from the Department of the Environment, we have Mr. Tremblay, deputy minister.

You have the floor for five minutes.

[Jean-François Tremblay, Deputy Minister, Department of the Environment]

Thank you, Mr. Chair.

I'd like to begin by acknowledging that we are gathered today on the unceded territory of the Algonquin Anishinabe people, whom we acknowledge as custodians of the lands and waters of this region since time immemorial.

My colleagues and I are really happy to meet with the committee to discuss the commissioner's audit recommendations in relation to “Report 1—Forests and Climate Change”. This report focuses on the two billion trees program in particular.

Planting trees on a large scale is fundamental to mitigating climate change in Canada. It helps capture carbon, it helps restore wildlife habitat and it helps restore biodiversity. It makes forests and surrounding communities more resilient to risks such as floods and wildfires. Canadians saw that last summer.

Both Natural Resources Canada and Environment and Climate Change Canada welcome the findings of the report. The departments have formally agreed with the recommendations and have developed action plans to address them.

First, we agree on the importance of independent review in carbon reporting. Canada reports its annual emissions and removals in its national greenhouse gas inventory report, which is submitted each year under the United Nations Framework Convention on Climate Change.

ECCC also reports its projected 2030 GHG emissions and policy impacts in the biennial reports, also under the UNFCCC.

Both reports include the emissions and removals that result from the management of Canadian forests. They both undergo an in-depth, science-based technical review by independent experts, in accordance with international guidelines. They are both published online for transparency.

International reporting documents can be quite complex and hard to follow. Canada must ensure that information is clearly communicated to the public, especially for the decision-makers. ECCC needs to demonstrate more clearly how past and future changes in land management practices affect projected emissions, for example.

In 2022, the department started publishing more detailed data on land use, forestry emissions and accounting projections on its open data portal.

ECCC also continued to explore other ways to provide additional open data as a supplement to the national inventory and the biennial report.

That's why engagement is so important for us.

The department is working to identify information gaps in carbon reporting and get the complementary inputs that are needed.

ECCC is engaged with experts and stakeholders through multiple fora, and we will continue to do that. We have also engaged in dialogue with environmental groups that have published reports critical of forest carbon reporting in Canada. The issues these partners raise and the improvements they suggest will be addressed in future versions of the interdepartmental “Improvement Plan for Forest and Harvested Wood Products Greenhouse Gas Estimates”.

Together—NRCan and us—we are considering using more contextual information when reporting on progress towards the 2022 to 2026 federal sustainable development strategy greenhouse gas target.

The commissioner is right. There is no solution to climate change in Canada that does not include forests. Reaching the government's objective of planting two billion trees is important for reaching our target, and better reporting on ECCC science related to forest emissions is part of it. ECCC and NRCan are determined to overcome challenges.

I want to thank all members of the committee and the commissioner for their important work. I look forward to discussing this with you.

[The Chair, Conservative, John Williamson]

Thank you very much.

We will begin our first round now.

Mr. McCauley, who's joining us virtually, you have the floor for six minutes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks, Mr. Chair.

Commissioner DeMarco, thanks for your report.

Before I start, Mr. Vandergrift, congratulations on your appointment. I think this is the third department we've seen you with at committee.

Commissioner DeMarco, your comments on the failures of Natural Resources and Environment Canada seem to mirror very closely the issues brought to light in your study on green hydrogen. What is the issue with the departments? Is it a lack of communication? Is it a lack of leadership? Is it a lack of appointing one department in charge?

[Jerry V. DeMarco]

We've seen a pattern of problems in our various audits relating to climate change in the last three years with respect to Environment and Climate Change Canada and Natural Resources Canada. Here we see some similarities with problems we identified in our emissions reduction fund report regarding double counting. That's an emerging issue with the two billion trees program. We see unrealistic assumptions as well.

[Kelly McCauley, Conservative, Edmonton West, AB]

How do we get past the problems that seem to come from these two departments?

[Jerry V. DeMarco]

We have a long list of recommendations trying to get at that very thing. We are in the midst of trying to consolidate those recommendations in our next climate report for the fall, which I hope to be back for to speak to as well.

Coordination, realistic assumptions and avoiding double counting are among the patterns we've seen. More reasonable modelling, more transparency.... There's a litany of issues that if we could see some progress on, we'd have much more credible numbers from Canada. We would also, hopefully, start to see real progress ultimately in reducing greenhouse gas emissions.

[Kelly McCauley, Conservative, Edmonton West, AB]

With this program from the government, were they too focused on an announcement and not focused enough on the actual delivery, or was it just too impractical to begin with? We're far, far away from our goals.

[Jerry V. DeMarco]

This program was announced as a federal initiative, but as you know, most Crown land in Canada is managed by the provinces and territories. As I've termed it before in previous appearances before other committees, the federal government was essentially an obligate collaborator with other entities for this to work. It was rolled out before those agreements were in place. You could say, perhaps, the cart was ahead of the horse somewhat, because the important-sounding objective of two billion trees was announced before the ducks were in a row and we had the agreements with those who would be needed to implement it.

[Kelly McCauley, Conservative, Edmonton West, AB]

Yes, we call it A for announcement, D for delivery.

Am I reading this right? Paragraph 1.22 of your report indicates that this plan would be a net contributor to GHG emissions at least for close to another decade.

[Jerry V. DeMarco]

Yes. If you look at paragraph 1.22 and exhibit 1.4 together, you see that this is a long-term project. In the first 10 years, there's not going to be any help in sequestering carbon.

[Kelly McCauley, Conservative, Edmonton West, AB]

That's right, but let me interrupt you. This program is going to add to our GHG emissions. You say it's a long-term project, but from looking at the numbers, we may never even come close to achieving our planting goals. Then there's a comment further on in the report about the issue of whether the trees will be reharvested right away, so will we actually get to a point where it reduces greenhouse gases?

[Jerry V. DeMarco]

We should.

Having regard to the issues you're raising with respect to survival rates and permanence, we shouldn't abandon programs just because they don't show returns in the immediate future. Climate change is a long-term problem, and addressing it on the tree-planting side means the payoff is multiple decades from now, not in the first 10 years.

[Kelly McCauley, Conservative, Edmonton West, AB]

How far back has achieving our goals been pushed by the inability to achieve the tree-planting goals?

[Jerry V. DeMarco]

They're off to quite a slow start, and there's a dispute between our office and the departments as to what should count in terms of double counting from another program. However, looking specifically at our report, we noted they were roughly on track in year one, 2021, but fell well behind in 2022. We audited this at an early stage with the hope of helping them—