Public Accounts Committee on Feb. 8th, 2022

[Han Dong, Liberal, Don Valley North, ON]

Thank you very much, Madam Chair.

First of all, I too want to welcome all the witnesses for coming today.

My first question goes to the commissioner.

What percentage of Canada's GHG reduction can be attributed to federal measures, as opposed to things that other levels of government have done?

Let's put a time on this and say in the last 10 years.

[Jerry V. DeMarco]

I don't have that number off the top of my head. Over the last 10 years, there has essentially been a flatlining of emissions. There hasn't been a substantial reduction. That's a problem in itself. Our curve has gone up over the last 30 years instead of down.

The federal government is the one that signs international agreements like the Rio Convention or the Paris Agreement, so it has an obligation to take the lead on them, but it can't do everything. Under our constitutional division of powers, the federal government can do certain things and the provinces and other levels of government—

[Han Dong, Liberal, Don Valley North, ON]

That's exactly one of the biggest challenges right now.

I represent a riding in Ontario. In 2009, the Ontario government introduced a Green Energy Act, replacing 25% of its energy fleet from coal generation with renewable energy. Then in 2016, I think, the Ontario government chose the cap-and-trade system as opposed to a carbon tax.

I just want to point out that the federal government at the time gave the option to the provinces of choosing the method to reduce carbon emissions.

In your view—and I'm sure you talk to other levels of government and provincial commissioners and so on and so forth—what can the federal government do to ensure consistency with other levels of government so that when a policy is introduced...? For example, in Ontario right now they have cancelled the cap-and-trade system. To me, time is ticking. If we cannot move as a society constantly towards one direction and we're taking steps back, it's counterproductive and it's not responsible to taxpayers.

I'm sure you talk to other levels like other provincial commissioners and so on. In your view, what can the federal government do to ensure that this type of consistency in policies can happen in other levels of government?

[Jerry V. DeMarco]

Co-operation is ideal, but it's not always possible if there is a divergence of interests. You mentioned [Technical difficulty—Editor] done an audit of Ontario's plan, which we concluded was not based on sound evidence, at least not for the 2019 plan that we looked at.

You can see the problems if you rely entirely on co-operation with another actor whose plan doesn't add up. I would say what you need to have is minimum standards at the federal level that will make sure you achieve the outcome, but allow for provinces and territories to displace that mechanism if they have equivalent, effective mechanisms.

That's possible under carbon pricing. It's possible under methane regulations and other areas, like species at risk and so on, where the provinces can act, but if they don't, the feds should come in and make sure it is not a case of “Oh, well, we hoped they had done something on this, but they didn't.” The federal government, as the one that has committed to the Paris Agreement and other agreements, needs to have that backstop to say that if there isn't sufficient action at the local, regional, provincial or territorial levels, then their system will apply.

That's true for a couple of areas, like carbon pricing and methane regulation, but not others.

[Han Dong, Liberal, Don Valley North, ON]

Would you say that the general public understands points of this collaboration between the provincial and federal governments?

[Jerry V. DeMarco]

The general public looks to its governments as the expression of their collective will as to what they want the governments to do. They don't have a lot of patience for “not my department” or “not my level of jurisdiction” answers. They would really want their collective representatives at all levels to get together and work together. That's the whole-of-society comment we make in our report; we need everyone working together.

The federal government, though, with these global crises of climate change and biodiversity, definitely needs to take the lead. There is no doubt about that.

[Han Dong, Liberal, Don Valley North, ON]

Thank you.

I want to ask Ms. Thorpe a quick question. What role do you see the private sector playing in this grand picture of carbon reduction?

[Colleen Thorpe]

The private sector, which is made up of employees and individuals, has a big role to play. Several measures should be implemented to encourage companies to have strategies to achieve high greenhouse gas reduction targets. This can be done through different government mechanisms. For example, the awarding of government contracts could include climate performance criteria.

Companies certainly need to contribute to this effort, not only through their own operations, but also through awareness raising among their staff, as mentioned earlier. The discourse on climate change needs to change.

[The Vice-Chair, Liberal, Jean Yip]

Thank you.

[Han Dong, Liberal, Don Valley North, ON]

Thank you, Ms. Thorpe.

[The Vice-Chair, Liberal, Jean Yip]

Moving on to the third round for five minutes each, we'll start with Mr. Lawrence.

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

Thank you very much. Once again, the chair is doing a fabulous job.

I'll be splitting my time with Mr. Morrice.

Madam Clerk, would you mind tapping me in about two minutes or so?

The reality is that if economics didn't matter at all, we could get to net zero tomorrow and we could shut down all our industries. It is a weighing of balances. I don't see anything in this report about the impact.

I'll ask you a straightforward question, hoping for a numeric, empirical answer. If we wanted to get to net zero by 2025, what would the economic impact be? What loss in our GDP would we have?

[Jerry V. DeMarco]

To get to net zero by 2025 would be quite ambitious. I would say that it's probably impossible to do without serious disruption. That's only three years from now, and we were at something like 700 megatonnes of emissions in 2019. To get down to zero in three years—2050 seems a long way off, but 2025 is probably too soon.

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

When you say “disruption”, to be clear, that would mean a significant downturn in our economy. Would we not impoverish millions?

[Jerry V. DeMarco]

To go to net zero within three years.... I haven't seen any modelling about that, but I would say I don't think anyone seriously thinks that we could bring about a just transition that rapidly in a country like Canada, which has such resources—

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

Is there a report, or will there be a report, showing the economic impact overall if we were to reduce net zero to 2025 or to 2030? Are we going to see any side of the other equation?

For example, there are thousands of oil and gas workers who are dependent on oil and gas for their very livelihood. Are we going to have any comment about that, or are we just looking at one side of the equation?

[Jerry V. DeMarco]

No, we need to look at the whole part of the equation. I'm just saying that 2025 is too soon a target to look at. I don't think it's really feasible to do that quick of a transition to zero when we're at 700 right now.

Perhaps if we had started on this earlier—

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

Thank you very much.

I'm sure we'll hear the exact same line of questioning from the member of the Green Party.

[Mike Morrice, Green, Kitchener Centre, ON]

Thank you, Mr. Lawrence, for your collaborative approach, particularly given the difference in our line of questioning.

I want to point out again that, in the report, the commissioner points out that the majority of Canadians want more ambitious climate action. I really appreciate that the folks from Équiterre were at COP26 this past year, so I want to direct my questions towards them.

Specifically about this, what's the point in learning a lesson if you're not going to apply it? We're not going to have another 20-year plan. If we have this kind of failure after failure, 20 years from now the question about survival of our species is at hand.

Constructively, we have the current governing party talking about this tax credit for carbon capture, which is another fossil fuel subsidy, as called out by 400 academics across the country.

I wonder if Ms. Thorpe or Mr. Viau would like to comment on the importance of apply this lesson that has been called out here with respect to the incoherence of investing in fossil fuel subsidies and buying a pipeline with respect to then trying to take action on climate at the pace that science requires us to.

[Marc-André Viau]

I'll answer first, then I'll let my boss, Ms. Thorpe, add her comments.

You raised several points in your question.

Earlier, we talked about the effectiveness of carbon pricing. I recall that 96% of Canadians voted for parties that offered some form of carbon pricing. So I think the goal of carbon pricing has been accepted.

We've talked about the effectiveness of carbon pricing, but now let's talk about the effectiveness of carbon capture.

You mentioned the letter from the 400 experts. You have to understand that we're talking about carbon capture of 0.1% of emissions, never mind that emissions are growing. This will not reduce greenhouse gas emissions at all. However, Canada does need to reduce its greenhouse gas emissions.

That said, the committee members are asking very good questions and addressing the right issues.

A little earlier we talked about the just transition. The issue of jobs is central. About 450,000 jobs are related to this industry, 170,000 of which are directly dependent on it.

We need to think in these terms if we are going to get to the point of reducing greenhouse gas emissions.

This reduction is imperative. Earlier we talked about the impact of climate change on the cost of living. Let's be honest: these impacts are greater than the impact of carbon pricing. At the moment, the cost to agriculture is immense, because of droughts and floods. We need to address that, or we're going to have a big problem.

[Colleen Thorpe]

I would like to supplement my colleague's response by reminding you that natural infrastructure is the most effective way to capture carbon. Maintaining natural infrastructure, such as forests and different environments, is the most cost-effective way to reduce greenhouse gas emissions in Canada. This is better than investing in unproven carbon capture solutions.

[Mike Morrice, Green, Kitchener Centre, ON]

Do either of you want to share the impact that could have if we were to use those same funds to invest in the job security and retraining of workers?

[Marc-André Viau]

In fact, that's what we have to do.

There are definitely going to be climate impacts. We have to use resources to make a transition that is planned, that is regulated and that will make sure that no community is left behind. That is the priority. We need to make the transition to renewable energies, but that does not mean that we should abandon communities. On the contrary, it means looking after those communities and those groups.

We see that investors are becoming more and more skittish and that insurers are becoming more and more worried. So there is a movement that means that we will not be able to continue like this.

[Mike Morrice, Green, Kitchener Centre, ON]

Thank you to each of the witnesses for your testimony, and thanks again to my colleagues for the chance to be a part of this conversation.

Thank you.

[The Vice-Chair, Liberal, Jean Yip]

Now we move on to Ms. Shanahan for five minutes.