Public Accounts Committee on Oct. 28th, 2022

[Graham Flack]

Sure. I'll start, and then Malcolm can complete.

We have an approach. It's an approach used by our colleagues, the General Services Administration in the U.S., NASA and Harvard. It's an approach that looks, for example, at the energy retrofit area where you take a building at the front end, you cost in a detailed way the upgrades, and the savings that are going to emerge from those upgrades through a life-cycle cost analysis. That gives you up front when you are taking those decisions the costing that you need to be able to do that and calculate the greenhouse gas emissions.

In addition, we track greenhouse gas emissions by individual buildings in government. We have a methodology that is used by other leading international organizations.

Malcolm has been instrumental in helping that development. Maybe he can elaborate on this.

[Malcolm Edwards]

As I said, we focus on the upfront cost to enable decision-makers at the beginning of the project to know essentially the value and amount of carbon savings they're getting out of that project. It's based on a life-cycle cost analysis and total cost of ownership.

We recently met with the Canadian Institute of Quantity Surveyors. These surveyors are the professionals who cost, for example, real property projects. They're developing an international coalition with the U.S., U.K., and many other countries right now to develop an international costing standard on real property, which includes emissions reduction, which is very similar to the approach we've had in place now for a couple of years.

I'll give you a very quick example of what we do on real property. We essentially ask for the life-cycle cost over 40 years, which is normally the lifespan of a building before it gets retrofitted. We ask for the cost of business as usual if you build it to code. We ask for the cost of taking it all the way to zero, and we ask for the cost of being cost neutral. Cost neutral would be essentially by the utility savings we'd have over that 40 year period of time, and the cost of carbon we would be saving in terms of lower carbon fuels.

Very quickly, for fleets, we've looked at total cost of ownership. For light-duty vehicles, it's now more cost-effective for the government to buy an electric vehicle than a classic combustion vehicle, because you save 80% on fuel costs, save half on maintenance costs, and you don't pay any carbon taxes on it. It's actually more cost-effective now for the government to directly buy a low-emissions vehicle.

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

Thank you.

Commissioner DeMarco, what should we expect to see in the next revision of the greening government strategy? What do you think we should see next?

[Jerry V. DeMarco]

We're expecting another version. We've had the 2017 and 2020, and I believe the next version will be 2023.

We would like to see, first of all, all of our recommendations implemented in the strategy, those that are directed toward Treasury Board. We would like to see some of the things that were optional in the first strategy to become mandatory, for example, Crown corporations, as Mr. McCauley was just talking about.

We would like to see a better grasp of scope 3 emissions, and a more robust approach to cost savings than what was just described by Mr. Edwards. That would contain the items in paragraph 2.62 of our report. For expenditures as large as this, the upfront costing is great and the savings are great, but in terms of being able to course correct, we would like to see more ongoing monitoring of progress, regular reporting, and so on.

Those would be some of the elements that we would like to see in the new strategy.

[The Chair, Conservative, John Williamson]

Thank you. Sorry, but Ms. Yip is out of time.

We now go to Ms. Sinclair‑Desgagné for six minutes.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Thank you, Mr. Chair. I'm sorry to see you're not in your usual spot.

My sincerest thanks to the many witnesses who are with us today.

My thanks to the commissioner for releasing this report, which casts serious doubt on the government's desire to meet its targets and make sure it has the tools to do so. Is the government setting itself up for success when it comes to meeting its own targets for reducing its contribution to global climate change?

A number of sections in the report suggest that the drop in greenhouse gas emissions, or GHGs, reported was attributable to the pandemic, as you pointed out in your answer to the member's question. Two things are missing right now to show that the government has the tools and the ability to meet its targets: meaningful answers and equally meaningful actions.

I have a lot of questions for the commissioner about his report, but first, I'd like him to quickly go over the main challenges he identified in his report. Then, I'll ask my questions.

[Jerry V. DeMarco]

All right.

For the Department of National Defence, we did not have assurance that it would meet its targets. The department, itself, said it needed additional funding to meet the targets. That's a case where the goals and targets, as well as the plan to achieve them, fall short. In order for the Department of National Defence to meet its targets, more details and probably more funding are necessary. That's one of the shortcomings we identified in our report.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Did the department ask for more funding? Did it figure out how much additional funding it needed and submit a request to the Treasury Board?

[Bill Matthews, Deputy Minister, Department of National Defence]

As we've already indicated, the Department of National Defence has some work to do before finalizing its plans to reach its emissions targets for 2050. We could speed up our progress with more funding, but we have work to do to identify new ways of meeting the 2050 targets. We still have work ahead of us.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

When do you plan on doing that work, Mr. Matthews?

[Bill Matthews]

We will be doing it in the next few years. We have 25 years to reach the 2050 targets, and we are currently on track.

In fact, we're actually ahead of schedule for the next five years, but we have work to do to identify additional initiatives to reduce emissions across all three areas—vehicles and building retrofits but also the emissions caused by our planes, ships and other vehicles like that.

There's work to do. We have some time, but I think the importance of this report is that it does indicate where we are on track in the short term and where there's work to do in the long term, and we'll keep going.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

You say you are on track in the short term, but I'm sure you would agree that the pandemic is the main reason. I hope you wouldn't deny that.

[Bill Matthews]

There's no doubt that our operational activity was reduced during the pandemic. Of course, that had an impact. We believe it led to a 7% reduction in emissions.

We have factored that into our calculations, and we know that our operational tempo will go back up, so we can't take too much credit for the 7% reduction, because of COVID activities. That's been factored in.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

If everyone had stayed healthy and no one had gotten COVID‑19—so, in an ideal world—what percentage of emissions reductions would you have achieved, do you think?

[Bill Matthews]

Mr. Chair, I think that even without COVID, we were still on track to meet the 2025 target ahead of schedule. With the 2050 target I mentioned, that 7% is kind of our estimate of the impact of COVID.

I believe it was said in the report that we think we'll achieve a 63% reduction by 2050. With additional resources, we've identified up to 83%. That leaves a gap, so we still have some work to do.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Very well. Thank you.

Commissioner, had there not been a pandemic, how many departments would be on track?

[Jerry V. DeMarco]

It depends on whether we're talking about scope 1, 2 or 3, so direct emissions, indirect emissions or all emissions, including those produced by Crown corporations. For that reason, I couldn't give you a specific number.

It's true that, for scope 1, departments are on track, as illustrated in exhibit 2.2 of the report. That's just one aspect of all the emissions, however. Scopes 1 and 2 represent roughly 2 megatonnes, while scope 3 represents about 5 or 6 megatonnes. As you can see, there's still a lot of work to do.

Something else I should mention is covered in paragraph 2.4 of the report. While it is true that there is still time before 2050, the more quickly the reductions in emissions occur, the greater the benefit to the environment will be given how long GHGs stay in the atmosphere.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Yes, it's a cumulative effect.

[Jerry V. DeMarco]

That's why it's not acceptable to say that there's still a lot of time. This is a climate crisis.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Yes.

[The Chair, Conservative, John Williamson]

Your six minutes are already up, Ms. Sinclair‑Desgagné. Time is flying today.

Mr. Desjarlais, you have the floor now for six minutes, please.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair, and, of course, all of us miss that you're not here with us today.

I want to thank all the witnesses for being present with us again. I know the last meeting.... It's tough when we have the testimony and then have a bit of a break, but we've now returned to this. I want to thank everyone here for their time.

I want to thank the commissioner for his report.

This is a pretty large issue for Canadians, particularly in relation to the pandemic. The pandemic has certainly changed how the government and regular Canadians look at their own emissions. We've seen across the country and the world a global reduction in greenhouse gases because of the pandemic and reduced activities.

I think it was Mr. Matthews who mentioned that the percentage was calculated into the 40.6% reduction.

Can you explain the methodology and how you calculated that 7% of emissions, beyond the pandemic reductions?

[Bill Matthews]

Certainly. I can start and other colleagues may wish to weigh in.

Essentially, we know our operational tempo was down—workers in buildings, actual activity with our vehicles, and things like that. Travel was way down. It's back up this year to about 80% of prepandemic. That was the data that went into it. TBS, as was already mentioned, provided departments with some models and tools, but I'm not sure.

Saleem, do you want to add details about the methodology itself?

[Saleem Sattar, Director General, Environment and Sustainable Management, Department of National Defence]

Prior to the pandemic, our emissions at National Defence were at 31%, and then we saw them go up to 38%. That's where the 7% gap is.

The COVID impact versus the impact from emissions reduction initiatives is hard to attribute or allocate. There's no question. The reduction in operational activity tempo contributed to that 7%, but we're also confident that the measures we've taken to reduce emissions are also contributing to that reduction.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

This is the hard part for me to grasp, and if it's hard for me, I think it's going to be difficult for Canadians to understand.

I heard Mr. Flack talk about your being on track. A member from the Liberal bench did as well. That sounds great and all, and it should be a good lesson for Canadians. However, my fear is that it's because of the pandemic. Without a strong rubric to calculate that.... I don't think Canadians can trust that these reports are, in fact, accurate if we don't understand the methodology. How you're actually measuring the reduction due to COVID versus your actions is a difficult question, I understand, considering this is a very rare moment.

Commissioner, in your perspective, and in your review of this—beyond COVID's reduction in activities across the government—is the departmental plan for Defence, which you reviewed, sufficient for hitting their 2025 targets?