Public Accounts Committee on June 7th, 2022

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Thank you.

[The Chair, Conservative, John Williamson]

Thank you very much.

Ms. Yip, I'm afraid that is the time, as well.

Mr. Blanchette‑Joncas, you have the floor for six minutes.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chair.

I'd like to acknowledge my colleagues and the witnesses who are with us today.

My first questions will be for the commissioner.

Mr. DeMarco, it's a pleasure to meet you. Thank you for being with us today.

I'd like you to tell us about the audit. The report that you and your team produced clearly indicates that the government has no formal governance plan or mechanism. In addition, the government has not consulted with the public and it has no system for tracking results.

You summed things up nicely earlier. Since 1992, Canada has been increasing its greenhouse gas emissions and it's lagging far behind other countries around the world, especially the G7 nations.

Are you optimistic about the government's targets to reduce greenhouse gas emissions by 40% from 2005 levels and achieve net zero by 2050?

[Jerry V. DeMarco]

Thank you for your question.

In this line of work, you have to be optimistic. I'd like our planet to be safe for our children and future generations. I'm an optimist in general.

With respect to the new emissions reduction plan tabled on March 19, we haven't completed an audit. We will study and analyze this plan to see if it will be sufficient to meet the 2030 and 2050 targets.

I think everyone knows that there are gaps in the plan. Some details are missing, including the cap on greenhouse gas emissions in the oil and gas sector. We're going to look at the plan and analyze it. We can already see some gaps, but I hope the government will provide the details that are critical to achieving the 2030 and 2050 targets.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. DeMarco.

I really like your optimism, and I share it. However, I'd like us to be more realistic.

Speaking of realism, the government is almost eight years behind in implementing a plan. The next deadline is 2030, eight years from now.

So I'd like you to tell us why you really believe that the government can implement a plan when they are currently eight years behind.

[Jerry V. DeMarco]

I can't predict whether the targets will be met. Personally, I'm optimistic.

Having said that, when I look at the curve from 1992 to today, I see that Canada is the only G7 country whose emissions are increasing rather than decreasing. Looking at its track record, the pessimist and realist in us could say that Canada hasn't been able to meet any of the targets it set for itself in its plans or in the international agreements in Rio, Kyoto and Copenhagen. Canada will perhaps not succeed in meeting the goals of the Paris Agreement either; we will have to wait and see.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. DeMarco.

History tends to repeat itself. I look forward to your upcoming audits.

I will now turn to Mr. Hannaford.

I know you've been with the department for a short time, since January, and I congratulate you on your appointment.

I'd still like to hear from you about what the commissioner's audit report found regarding the absence of defined governance roles and the lack of accountability.

If people are given a mandate by the government but don't have clear instructions, who is responsible for saying that clear instructions are needed to draft legislation?

[John Hannaford]

I would say that the work that has been under way to address the issues that are addressed in the audit is multi-faceted. We have established a governance structure pursuant to suggestions that have been made at both the director general level and the director level, in order to ensure that we have appropriate co-ordination and tracking of the progress that has been made with respect to the just transition. We have also, as I mentioned, launched processes with at least three of the provinces right now, with a plan to address in more detail the other provinces in the coming months. The intention there is to further refine what it is that we collectively are seeking to achieve in order to advance towards our net-zero objectives. All of this is against the backdrop of our very detailed emissions reduction plan, which is obviously subject to further elaboration over the course of time.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Hannaford, I believe you didn't quite catch my question. Who is responsible?

This is what it says in point 1.31 of the audit report:

We found that the federal government had not established a governance structure, roles, or responsibilities to guide federal departments in coordinating and collaborating to support a just transition to a low‑carbon economy.

Mr. Hannaford, I understand that you may not have been in the department at the time. Perhaps someone else from your department could respond.

You can see that there is no governance role, no defined role. You must have a mandate from the government to draft legislation, but absolutely nothing was defined.

Who sounded the alarm in your department to say that this wasn't working?

[The Chair, Conservative, John Williamson]

I'm sorry, but your time is up.

Thank you very much.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I'd like a response in writing, Mr. Chair.

[The Chair, Conservative, John Williamson]

Okay. You will have the opportunity to ask further questions.

We'll turn now to Mr. Desjarlais.

You have the floor for six minutes please.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

I want to welcome the new members of our committee. Thanks for being present today.

Thanks to the witnesses who have provided testimony.

This is probably the worst audit—and in so many ways—that we've seen at this committee. Eight years, as my colleague just mentioned, is what this government has had to deal with what is a matter of our future. This is the biggest issue that this generation will face. Literally, our children may not have a planet to live on, and that is a fact we can't ignore. The fact that some of my colleagues here are in denial about the reality of the deteriorating climate is disappointing.

The other reality is that some of my other colleagues want to simply kill this plan by delay. It's denial and delay, and it just seems like the “Liberal, Tory, same old story” situation. We can't continue to do this, and my colleagues know that. Each and every one of my colleagues knows that.

I'm from the province that this hits the hardest. My family.... I've talked to this committee before about this. People have made real sacrifices in order to make sure they can survive in this environment and this economy, and we're not even approaching some of the people who have the solutions to this.

The unions were made mention of in the consultations. In some of this report.... As the commissioner mentions, there was barely any consultation. We've talked about that. There has been barely any consultation. I've spoken to the unions. They still haven't been engaged. Where are they at the table? They have some of the solutions to this.

We have no federal implementation plan, no formal governance structure and no measuring or monitoring system. I quote: “Overall, we found that Natural Resources Canada and Employment and Social Development Canada were not prepared to support a just transition to a low-carbon economy for workers and communities.”

That is independent advice to this committee about the reality of this plan. How are Canadians supposed to have faith in this? No one around this room is taking this seriously. We have a serious obligation to do this work on behalf of Canadians and to make sure that we can actually hit some of these targets, but it's very clear, as was mentioned by my colleague previously, that we haven't hit one of our targets since—not one of our international targets. That's shameful.

This is a committee about accountability to a government commitment, when the government has done so little—so little. Our own audit here displays that.

Commissioner DeMarco, I sympathize and empathize with you in your role to remain optimistic, but how can Canadians remain optimistic with some of this very clear evidence that the support toward a just transition is just not there?

Even in our Prairies Economic Development board, for example, per your report, they're being forced to utilize existing programs to deliver a just transition framework, programs that were never meant to do that. No one is taking this seriously.

The Natural Resources deputy minister who is here today mentioned consultations. Eight years...? We have to stop talking about this and start doing something. I didn't want to hear that we're going around and making some more plans. The energy minister mentioned a big round table discussion. There is information here. The fact that our Auditor General's office has more information than Natural Resources, the lead department, is ridiculous.

Canadians deserve so much better than this.

Mr. DeMarco, in your advice here, is Natural Resources Canada even the appropriate department to be doing this, or should Canadians look at instituting a different department or a different framework, because the question I have is this: Is this system we have right now going to actually be successful?

[Jerry V. DeMarco]

Thank you for the question.

That is a policy choice of the government in allocating mandates to various departments to implement domestic and international commitments, and this just transition commitment is both. There's a domestic commitment and a commitment arising from the opening words of the Paris Agreement from 2015.

I share your concern. An international agreement that dates back seven years that included the notion of just transition has been in place, and a Canadian commitment to that from day one in Paris when Canada signed that agreement. I was surprised when we opened this file. The question I had was, is that all there is? Five or six years after the commitment was made, there's no governance structure, no legislation and no implementation plan....

I am pleased that the four organizations clearly have accepted all of our recommendations and have now committed to getting things in gear, but I am disappointed that it takes our opening up an audit file for things to get moving again. This department, Natural Resources Canada, was able to create from scratch the emissions reduction fund without a criterion regarding job retention during the pandemic. It chose to put this file, the just transition file, aside during that period. That's a choice it made and is one of the reasons why they're behind in implementing this very important commitment for Canadians, the affected communities and the affected workers.

[The Chair, Conservative, John Williamson]

Mr. Desjarlais, you have about 10 seconds, so you can make a quick brief statement, or you can—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Sure. I'll be very quick, Mr. Chair.

I'll circle back on this to some of the other respondents, but thank you very much for that answer, Mr. DeMarco.

[The Chair, Conservative, John Williamson]

Thank you very much.

Now, for our second round, we have MP Bragdon, who is returning to this committee.

Richard, you have the floor for five minutes.

It's over to you, my friend.

[Richard Bragdon, Conservative, Tobique—Mactaquac, NB]

Thank you, Mr. Chair. It's much appreciated. It's good to be here again on the public accounts committee.

Thank you to all the witnesses who have shared today and to each of my colleagues here.

As a preface, I may start with the proverbial “if a tree falls in the forest” statement. Here's a scenario to consider, perhaps, for our commissioner of the environment.

If a tree falls in the forest in a jurisdiction where there is no replantation plan, where there is little to no regulation, where there is less than adequate compensation for the work being done and human rights violations are very high, or if you have the choice of harvesting that tree in a jurisdiction like Canada, where reforestation is likely to happen, where there's high-paying compensation and wages for that particular worker or individual, and where there's much more environmental regulation and oversight of that particular harvest, the same principle could apply to the energy sector as well: Is it better for us?

As we know, we're tackling climate change and dealing with these issues. They are international in scope. What happens in one jurisdiction obviously affects other jurisdictions. Would it not be better for us as Canadians to make sure, while the world is still largely dependent upon and looking for energy from reliable and safe places, of the jurisdictions under which the best environmental regulations are put in place, where the workers are properly compensated and where we can get a good return on investment for the production of energy? Would it not make more sense to make sure that Canadians are employed and have the opportunity for making a good livelihood and providing for their families, rather than outsourcing those jobs to other jurisdictions that are far less regulated and do not have near the environmental regime in place that we have here in Canada?

For you, Mr. Commissioner, I think many Canadians are asking that question. They are wondering why we are putting all of the emphasis on shutting down our sectors or transitioning away from our resources while the world is still needing them and, in fact, increasingly demanding good, safe, reliable sources for their energy supply, which is going to be needed for the foreseeable future. I think Canadians want answers to that question, and they would ask this committee and others to say: “Hold on just a second: Why won't we prioritize Canadian workers where we have some of the best regimes in the world under the environment?”

I put that to you, Mr. Commissioner. Are you as well seeing and hearing that feedback from Canadians with those types of concerns?

[Jerry V. DeMarco]

It's absolutely a legitimate concern and something that I share. We do not want to just do better than a regime driven by a dictator or with human rights abuses and so on—that's a pretty low bar. What we want to do is to do our part in the international community in meeting what is the greatest challenge of our time, which is climate change.

You're right that at least until the transition is complete, we need to provide the energy necessary to sustain society and economies around the world, and it is preferable to do that in as sustainable a way as possible, but recognize that the amount of fossil fuels used to drive that energy doesn't have to be fixed. The International Energy Agency foresees a drop over the long term—and we're talking about the long term, from 2030 to 2050, not just this year or next year. There is going to need to be a drop, because the assimilative capacity of the atmosphere for all of these greenhouse gas emissions has already been reached for maintaining a stable temperature—

[Richard Bragdon, Conservative, Tobique—Mactaquac, NB]

Thank you, Mr. Commissioner—

[Jerry V. DeMarco]

—so we have to transition the energy sources—absolutely—and Canada is blessed with renewable and non-renewable sources of energy that it could use.

[Richard Bragdon, Conservative, Tobique—Mactaquac, NB]

Thank you, Commissioner.

I'll pivot to one of the landmark pieces or signature policies that the government has implemented, which is the carbon tax. From what I understand—and you can help me with this—right now we do not have any metric in place that we know of to measure how many megatonnes of carbon emissions have been reduced as a result of the implementation of the carbon tax.

We have heard from Canadians from coast to coast to coast that they are seeing a direct, increased burden on their pocketbooks and their cost of living as a result of the carbon tax.

[The Chair, Conservative, John Williamson]

Mr. Bragdon, I'm afraid you're going to have to come back to that for an answer and I suspect you will.

We're moving now to Mr. Fragiskatos.

You have the floor for five minutes.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you, Chair and thank you to our witnesses.

I've noticed our Conservative colleagues speak with passion here today, but I haven't heard much about what was achieved when the Conservatives were in power for nearly a decade it terms of just transition. We still have time here today, so maybe we'll hear more on that.

Mr. DeMarco, thank you for your work, sir.

Looking at the report, I think it's important to put Canadian policy on this in a context—a global context, to be specific. Your report does give examples of the European Union, New Zealand and Scotland in terms of governance structures One assumes—I don't think it's written here exactly—that these could be emulated by NRCan and ESDC. I will have a question on governance structures a bit later.

Mr. DeMarco, which countries are doing just transition well, in your view? What are real models and real examples? Do we look the European Union, New Zealand and Scotland? Are those the examples or are there other countries that stand out?

[Jerry V. DeMarco]

You're referring to exhibit 1.2 of our report. We selected some examples on this particular part of the report related to governance structures. We used, as you mentioned, the European Union, New Zealand and Scotland because they have actual governance structures. They're taking it seriously and they've put in place a mechanism. They've put those mechanisms in place in a proactive manner without necessarily needing an audit to get things moving in terms of, in the example of Canada, the governance structure that's now being set up in response to our recommendations. Those would be examples.

Obviously with the scope of our audit we couldn't look at every country to see all of them and rank them, but we did use those three examples of the European Union, New Zealand and Scotland as ones that had proper governance structures in place.