Public Accounts Committee on Dec. 2nd, 2022

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

According to Canada and the UN Secretary General, drilling for oil is a crime against humanity. We have to stop subsidizing fossil fuels. Canada has promised to eliminate these subsidies as of 2023. Over the past few years, Canada has continued to subsidize fossil fuels to the tune of $8.5 billion US dollars. I should also remind you that 2023 will be upon us in 28 days.

Ms. Hogan, is it realistic to think that Canada will no longer make any investments whatsoever in fossil fuels in 2023?

[Christine Hogan]

Thank you for the question.

On this issue, I think the commitment that Canada has made around eliminating inefficient fossil fuel subsidies has been well communicated, with the phase-out next year, in 2023, as you mentioned, and we are working towards that end.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Is it really realistic to think that we will be able to achieve this?

Do you believe that we will meet this target, and that as of January 1st, 2023, which is in 28 days, Canada will no longer invest any money whatsoever in fossil fuels?

[Christine Hogan]

Mr. Chair, I think the response is “in 2023”. I don't think it was as of January 1, 2023.

That is the objective. The government has made that clear on numerous occasions. It is articulated in our emissions reduction strategy and has been reiterated domestically and internationally.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Thank you very much.

Mr. Hannaford, I would like to talk about the businesses in British Columbia that specialize in carbon capture. Two technologies are used. One is a kind of vacuum that sucks up air and, thanks to a certain process, allows carbon to be buried in the ground. The other technology is a kind of filter. It is marketed at big industrial emitters that can incorporate this technology into their systems.

Lots of people are saying that this is dangerous. The greenhouse gases aren't being eliminated, even if carbon is buried in the ground. If ever there were an earthquake or some kind of similar catastrophe, for example, it could be extremely dangerous.

[The Chair, Conservative, John Williamson]

I'm sorry to interrupt, Mr. Trudel, but your time is up.

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

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

I want to thank the witnesses for being with us today on this important work.

I want to thank the office of the commissioner of the environment and sustainable development for being with us as well.

In previous appearances at this committee, the commissioner of the environment and sustainable development actually delivered a scathing audit on Canada's failure to achieve its climate targets. I'm certain that the Auditor General's office and the commissioner of the environment remember this.

I and many Canadians have a serious lack of trust in the emissions plans when we see results like the ones we're seeing from the emissions reduction audit we're reviewing today. You can imagine how incredibly important it is that at a time like now we actually try to reinforce principles that unite Canadians so they have confidence in structures and, in particular, our ministries when they're doing the work of trying to deliver the results that so many Canadians are relying on as we face a really catastrophic situation: the effects of climate change.

I'm concerned that Environment and Climate Change Canada is relying on some very unrealistic assumptions, as pointed out in the audit, about how these policies actually play out on the ground. As evidence of this, you can turn to exhibit 3.5 and paragraph 3.60. It makes this quite explicit in that statement, which I'll read for you now:

Environment and Climate Change Canada provided us with a comprehensive list of assumptions for both cases. We found that the department relied on some inflated and overly confident assumptions when modelling measures to reach the 30% emission reduction target for 2030.

This is something that I want the members who are with us today to take quite seriously in terms of the fact that it will have a detrimental effect on building confidence for the outcomes that Canadians truly need.

There's a list of assumptions and facts that I could go through under the same exhibit 3.5, under “unrealistic assumptions”. Some of these include the following. Under “Assumption”, it states:

An increase, starting in 2022, in shell (elements of the building structure, such as the walls, windows, etc.) energy efficiency of all buildings by a target of 2% each year for residential and 2.5% for commercial.

Under “Facts”, it says:

These levels of increase would require major retrofits in the industry. Between 1990 and 2017, overall energy efficiency (lighting, heating, shell, appliances) for the residential sector improved on average by 1.6% per year and for the commercial and institutional sectors by 0.7% per year.

You can see that there's a huge gap there. That's the situation that I think Canadians want an explanation for. We need to find ways to actually build confidence in the solutions you're going to be offering today.

Now, here is my question: How can Canadians have confidence in Environment Canada's modelling when the gaps between assumptions and facts are so massive?

That's for Environment Canada, please.

[Christine Hogan]

I want to thank you for that question.

I would like to start by reassuring people that Environment and Climate Change Canada's modelling processes are robust and reliable, and they're in line with international guidelines and standards.

In the emission modelling of Canada's climate plans, and when assessing progress towards the country's emission reduction targets, ECCC follows international guidelines that are established for reporting on progress to targets. What we do in these instances, as we did with the strengthened climate plan and again in the emissions reduction plan that was released in March, is that Environment Canada models a package of measures together to estimate the GHG reductions associated with all of the measures contained in the plans. This is consistent with the existing UNFCCC reporting guidelines, the UN Framework Convention on Climate Change—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Let me interrupt you there, just because there's a limitation of time.

Directly speaking, your modelling includes assumptions that are.... For example, under that same exhibit 3.5, it states, “Increased sales shares in line with the California policy on zero-emission heavy-duty vehicles”, while here in Canada no such policy exists.

How can you be confident in the results of the modelling when the assumption is that there are going to be policies that just don't exist right now?

[Christine Hogan]

I'm going to invite my colleague, the director general of our economic analysis directorate, to comment and respond to that specific question.

[Derek Hermanutz, Director General, Economic Analysis Directorate, Strategic Policy Branch, Department of the Environment]

Sure.

The UNFCCC accounting framework and guidelines allow for two different scenarios, and this is how Canada approaches the modelling. One is the reference case scenario, and that includes policies that are legislated, implemented or funded. That's the baseline analysis that we do—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

That's the realistic one.

[Derek Hermanutz]

—as defined by the UNFCCC. That's, yes, funded, legislated and implemented.

Then the UNFCCC also allows for an additional measures case. That is where countries can estimate the impacts of policies that have been announced but are not yet fully funded or implemented.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Why would the department rely on this form of modelling to communicate its objective with Canadians when the real model exists? I think that's what the Auditor General is pointing out: the fact that the government is relying on policies that are, in this instance, utilizing unrealistic and largely huge assumptions that we're communicating to Canadians. When we do that, we don't see those outcomes.

[Derek Hermanutz]

We publish both the reference case and the additional measures case. The additional measures case is the one we use to show progress to the target.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Or, in this case, the lack thereof—

[The Chair, Conservative, John Williamson]

That is the time, I'm afraid, Mr. Desjarlais. Thank you very much.

We'll turn to our next round.

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

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you very much, Mr. Chair.

Thank you to all the witnesses for being here this afternoon.

The audit makes many references to a document titled “A Healthy Environment and a Healthy Economy”. This document was released in December 2020. I remember it was important enough to warrant a press conference by the Prime Minister himself.

Who wrote this document?

[Christine Hogan]

This is a Government of Canada document released by Environment and Climate Change Canada but obviously reflecting the whole-of-government approach and strategy for climate change. In short, it is referred to as the “strengthened climate plan”.

[Michael Kram, Conservative, Regina—Wascana, SK]

Yes, I realize it says “Environment and Climate Change Canada” on the cover, but how did we get to this point? Does the document come from the PMO and then the cover gets slapped on top? How does the whole contents of the document come together?

[Christine Hogan]

Mr. Chair, I would simply say that this is consistent with most or all government plans that you see released publicly in this way. They are a function of considerable policy work and decision-making and, ultimately, the decision of the Government of Canada and the Minister of Environment.

[Michael Kram, Conservative, Regina—Wascana, SK]

Okay.

Now if we come back to the audit document and go to page 23, paragraph 3.62, I would like to read a quote from about halfway through the paragraph. Referring to Environment and Climate Change officials, it says:

Moreover, departmental officials told us it is not in the purview of Environment and Climate Change Canada's modelling group to develop cost-effective decarbonization pathways. According to the department, this responsibility is disseminated across several federal organizations.

I am wondering if someone could shed some light on how that works. There seem to be a lot of different inputs into coming up with the document, but no one seems to be responsible for coming up with the pathways that are actually feasible. Can anyone speak about that?

[Christine Hogan]

I can make an attempt, Mr. Chair.

The strengthened climate plan and the emissions reduction plan that followed suit in March are extremely comprehensive. They cover a multitude of sectors of the economy and, therefore, are products of a lot of detailed work done internally within departments and then worked up collectively in a whole-of-government way across.

Obviously, we at Environment and Climate Change Canada work very closely with our partner departments, whether that be Transport Canada in the transportation sector, Natural Resources Canada on energy and natural resources issues, or the like. There are a lot of detailed efforts that go into, then, compiling those plans and telling a whole-of-government story.

That may be sufficient for the moment, but Derek Hermanutz may also be able to elaborate on more of the mechanics.

[Derek Hermanutz]

I think that's right, Deputy.

The projections are done to represent the government's existing policies. That's done in coordination with other federal departments, as the deputy said, including Agriculture, Natural Resources Canada and Transport. The end result is that Environment and Climate Change Canada models the whole package and estimates what the global impacts will be on emissions reductions for Canada.

[Michael Kram, Conservative, Regina—Wascana, SK]

Which of these several federal organizations are responsible for developing the “cost-effective decarbonization pathways”?