Public Accounts Committee on Feb. 8th, 2022

[Jerry V. DeMarco]

Not that I'm aware of....

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

That is absolutely zero, despite the impact of the carbon tax.

What would the cost of the carbon tax have to be—$500 a tonne or $1,000 a tonne—to have any meaningful impact on carbon emissions, because it hasn't as of yet?

[Jerry V. DeMarco]

I wouldn't attribute the lack of progress to the relatively new carbon tax. The carbon levy is in effect and will be scaling up in increments of 15 megatonnes per year. It's intended to achieve behaviour modifications, so you won't flip a switch and see a carbon levy having an immediate effect on emissions. It's more of a long-term trend.

I can't say for sure what the effect will be. I can't say what the magic number is for the amount, because it depends on all of the other programs the federal government is implementing—

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you very much.

Just to conclude, before I throw my time over to Mr. Morrice.... In the last seven years, we've failed. In 2019, we had a 1.1% reduction when we were supposed to have 30% or 17%, depending.... We have failed to hit one single target during this government's time.

It's over to you, Mr. Morrice.

[Mike Morrice, Green, Kitchener Centre, ON]

Thank you, Philip. Thank you for the opportunity to have a chance to chat this afternoon.

My question is with respect to lesson 8 in the report. I'll draw out the words that are similar to what we heard from Ms. Thorpe as well. Lesson 8 from the report says that “Climate change is an intergenerational crisis with a rapidly closing window for action.”

Commissioner DeMarco, you mentioned in the report that the first time we talked about phasing out fossil fuel subsidies was back in 1985. You also mentioned that, essentially, the emissions reduction fund is another net new fossil fuel subsidy introduced this past year, which, in fact, continues on at a time when.... I know that in the report we don't have the specific numbers, but the IISD has shared that we continue to subsidize oil and gas by about $18 billion. As well, there's talk of a new tax credit—another new subsidy for oil and gas that we know we can expect in this upcoming budget.

Ms. Thorpe or Commissioner DeMarco, can you comment on the juxtaposition between what you're sharing—a rapid need to take action on the climate crisis—and the current government's intention to continue to increase fossil fuel subsidies?

[Jerry V. DeMarco]

I can start and then pass it over to Ms. Thorpe.

The emissions reduction fund is a fossil fuel subsidy, and we have a performance audit report on that very subject that we released in November.

The current government has committed to eliminating fossil fuel subsidies. The most recent commitment says it in plain terms. It no longer uses the word “inefficient” before those words, which was the subject of quite a lot of debate over the years. There is a current commitment to phase out fossil fuel subsidies by the government, and we'll be watching to see how well they progress on that commitment.

Ms. Thorpe, do you have anything to add?

[Colleen Thorpe]

Of course, Équiterre shares the view according to which fossil fuel subsidies are not being eliminated or are not being eliminated quickly enough. Yet commitments have been made in that respect.

What we really want to emphasize here is the importance of consistent government action. In other words, departments must work together. The government must understand that, without that consistency, a good activity may be cancelled out by another activity.

[Mike Morrice, Green, Kitchener Centre, ON]

Thank you for both of those responses.

Mr. Viau, if you'd like to jump in, I would welcome that.

Do I have another 30 seconds?

[The Vice-Chair, Liberal, Jean Yip]

I'm sorry, that's all the time we have.

We'll have to move on to the next six-minute speaker, Mr. Fragiskatos.

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

Thank you, Madam Chair.

Thank you to the witnesses.

It is a very interesting report. There are a number of things that could be asked here, but I want to begin by looking at what was said about COVID-19 and the emergency response and how that might apply to the crisis of climate change.

In the report, it says the COVID-19 pandemic “suggests that Canadians can draw crisis management lessons” from it, and that “economic recovery efforts will provide opportunities for the emergence of a stronger, more climate‑resilient society—if governments at all levels, citizens, the private sector, and civil society work together.”

That's a profound statement. I'm not disagreeing with it. I think there are lessons to be taken from the pandemic and applied to a range of different challenges and, indeed, crises such as climate change. I wonder if you could elaborate.

I suppose this goes to Mr. DeMarco. I wonder, sir, if you could elaborate on how exactly to do that, because what's being called for is straightforward, but at the same time, I think it would be enormously complex to have the federal government implement. What would be some pragmatic ways to move ahead?

[Jerry V. DeMarco]

I'm going to link my answer to in lesson 8, the lesson relating to longer-term planning and intergenerational equity.

These two crises have some similarities, but they have important differences. COVID-19 has shown that we can respond to immediate crises and marshal the resources necessary to do that. The longer-term crises are where society has more difficulty dealing with them.

The climate change crisis is both a long-term crisis and now a short-term one, as we're seeing with the increased frequency and magnitude of extreme weather. We need to address equally both short-term crises like COVID-19 and long-term crises. That would mean changing some of the approaches the government takes to long-term planning.

For now, at present, it's quite frequent for governments to focus on short-term deliverables like this year and, in the private sector, this quarter perhaps. The future may be discounted in those sorts of decision-making fora.

On decision-making structures—and we've heard some comment about that in terms of the chair representing future generations in the example Ms. Thorpe provided—we do need to change our decision-making structures so that the long-term future, our children and their grandchildren, are not discounted in present-day decision-making.

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

Thank you very much.

I think it's something that we and all parliamentarians ought to continue to think about. COVID-19 is a very immediate crisis as is climate change, but it also has such a large long-term element that there's attention there that needs to be further considered.

Recommendation 7 calls for enhanced collaboration among all actors. How did you put it here? It says, “Enhanced collaboration among all actors is needed to find climate solutions”.

Yes, how can one disagree with that? But I'm looking for a particular issue. On which particular issue or issues would you call for enhanced collaboration? What should be the most immediate areas of focus for collaboration?

There are any number of things.... You say “all actors”, but for our purposes, let's focus on governments here. Where can the federal government work with other levels of government? I know that another concern you have is making sure there's greater collaboration between the federal and provincial governments. On what particular issues? Is it climate adaptation and mitigation? Is it helping the transition to green energy? Do you have any ideas on that?

[Jerry V. DeMarco]

Thank you.

I'm going to use this meeting as an example of that enhanced collaboration and involving all actors.

Just as this committee has for decades held the government to account on financial matters and program implementation, taking this step today shows that this committee is willing to expand its view and look at issues that traditionally have been seen as environment and sustainable development, separate from social and economic.

I'm very pleased that this committee has invited us here today to speak about this issue because it is a sign that this lesson is being learned and being implemented.

It's important in all three of those areas. As I mentioned, climate change is not just an environmental issue anymore. It's an economic issue and a social issue, so that all of our structures that typically focused on other matters at the expense of the environment and sustainable development now bring them into account.

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

Thank you very much.

I have a short amount of time remaining. I know you can't answer it because it's such a complicated question, but many observers have made the point that we won't reach a net-zero outcome and we won't live in a net-zero world unless there's an embrace of nuclear energy.

What is your view on that particular issue?

[Jerry V. DeMarco]

Those are policy choices for governments to make in terms of what the mix will be to reach net zero. It's also impossible to know exactly what technologies will advance further between now and 2050.

As you foresaw, I can't answer the question in terms of what role it will play. It is presently part of the mix in energy in Canada and other countries. It remains to be seen what percentage of our energy mix will be provided by nuclear between now and 2030, and then between 2030 and 2050 in terms of the next two targets.

[The Vice-Chair, Liberal, Jean Yip]

Thank you very much.

Now for the next six minutes we have Madame Sinclair-Desgagné.

Please go ahead.

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

Thank you, Madam Chair.

I would like to begin by thanking the witnesses for joining us today so that we can benefit from their expertise and their knowledge.

I think this is the first time the Commissioner of the Environment and Sustainable Development has appeared before the committee. So I welcome him and congratulated him on his appointment.

My question is for the commissioner and his team.

In recent years, a huge amount of money has been disbursed to oil companies. One of the things I am thinking of is green support that was probably intended to lead those oil industry businesses toward a transition. However, when we read your report, we see that those changes have probably not taken place, and that the situation in terms of greenhouse gas emissions has not improved.

I actually have two questions for you.

When money is disbursed to oil companies, shouldn't accountability be demanded in return? If accountability and results are lacking, shouldn't funding for the oil sector be completely cut off?

[Jerry V. DeMarco]

Thank you, Madam Chair.

This is in fact the first time I am appearing before the House of Commons Standing Committee on Public Accounts. I am happy to be here and I thank you for the invitation.

Subsidies are an important issue. I recommend that you read our report on the emissions reduction fund, another report we published in November. We need accountability, as you said. We need to see whether these kinds of subsidies have a positive impact on reducing greenhouse gas emissions. We also need accountability regarding the fund's other objectives, including in terms of employment.

As I said earlier, the current government said it would eliminate subsidies for the gas and oil industry, so we will look into this issue over the next few years to make sure that those subsidies have really been eliminated.

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

That's great.

Don't you think the government could go further and ask for things such as all financial institutions disclosing their climate risks, as the Bank of Canada requested in its latest report, in order to comply with the principles of the Task Force on Climate–related Financial Disclosures?

That way, it would follow the lead of countries such as the United Kingdom and New Zealand, which have asked their banks to disclose their climate risks, to ensure better financial stability over the medium and long terms.

[Jerry V. DeMarco]

That is actually another topic we are interested in and are considering right now.

I can tell you that the mandate letters of the Minister of Finance and the Minister of Environment and Climate Change ask them to implement rules on this and to require federal organizations to disclose their climate risks, as proposed by the TCFD. So this is underway.

I recommend that you look at section 23 of the new Canadian Net–Zero Emissions Accountability Act, whereby the minister of finance must disclose information on financial risks and opportunities related to the climate. I don't know when the Minister of Finance's first report will be published.

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

Thank you very much. Your answer is very enlightening.

How much time do I have left, Madam Chair?

[The Vice-Chair, Liberal, Jean Yip]

Sorry, Angela, how much time do we have left?

[The Clerk]

One minute.

[The Vice-Chair, Liberal, Jean Yip]

One minute.

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

That's great.

I will now put a question to the Équiterre representatives.

Two years ago, Équiterre published a report on federal subsidies for fossil fuels in Canada in 2020. All fossil fuel subsidies were then documented. The report concluded that

the reform and the phasing out of fossil fuel subsidies were a crucial step in securing a safe future in terms of the climate and a transition to a low-carbon economy. The report also stated that fossil fuels are undermining efforts in the fight against climate change, and that they are diverting significant government resources from sectors such as health care, education and social services.

Mr. Viau, are you surprised to see the government still continuing to fund the oil and gas sector, even though that is hampering the fight against climate change?