Public Accounts Committee on Dec. 2nd, 2022

[John Hannaford]

We're on track for the next progress report next year.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

When is it due?

[John Hannaford]

I believe it's March. Is that right?

[Sébastien Labelle]

I believe so, yes.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

How much time do I have left, Chair?

[The Chair, Conservative, John Williamson]

It's time. I just wanted to confirm that it was March. The microphone is flicking on and off.

Thank you very much.

Ms. Bradford, I'm afraid that is the time, just a few seconds over.

Mr. Trudel, you have the floor for two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Hannaford, I will leave you for now. I may come back to you later.

Ms. Hogan, what is Canada's carbon tax set at currently?

[Christine Hogan]

It is $50 a ton.

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

The tax will go up in January. What will it be then?

[Christine Hogan]

It will be increasing by $15 each year in April, not in January.

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

So it will be going up to $65 a ton. That means that when our conservative friends say that the carbon tax will be tripled, they are talking through their hats. That is not going to happen.

However, according to the Organization for Economic Development and Cooperation, the OECD, the tax would have to be set at $175 per ton in 2030 to be efficient. Many experts in the world are saying that if we want to reduce greenhouse gas emissions, one of the most useful tools would be a tax.

Isn't Canada's carbon tax far from being what it should be?

[Christine Hogan]

I have to confess that I'm not specifically familiar with the OECD report you're referring to, but as you know, putting a price on pollution is one of the foundational building blocks of Canada's climate plan, and we have laid out a trajectory through to 2030. That will take us to $170 a tonne.

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

Earlier, I mentioned UN experts, including the Secretary General, who stated that we have to leave oil in the ground if we hope to hit our targets.

In the meantime, Canada has given the green light to the Bay du Nord oil project off the Newfoundland and Labrador coast, which should churn out 500 million to 1 billion barrels over the next 30 years.

Isn't that rather incompatible with the 40 to 45% greenhouse gas reduction targets announced by the government last April in its budget?

[Christine Hogan]

I would ask if you could just repeat the question. I'm not sure I fully—

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

My question is about the Government of Canada's Bay du Nord project. This oil project off the coast of Newfoundland and Labrador will be producing between 500 million and 1 billion barrels over a period of 30 years. The UN, however, is stating that we should leave the oil in the ground if we want to reach our goal of keeping the increase to 1.5 degrees. What's more, Canada has set a greenhouse gas reduction target of 40 to 45% for 2050.

Doesn't that commitment clash with this type of project?

[Christine Hogan]

Mr. Chair, the Bay du Nord project is one that I'm familiar with. It's somewhat outside the scope of our discussion here today. We'd be happy to come back and talk about those issues.

[The Chair, Conservative, John Williamson]

Thank you very much.

Members, I did allow more time there because the witness did not understand the question, so I allowed Mr. Trudel to repeat it. I know he went well over his time, but sometimes, given the challenges of translation.... I wanted to allow that. If you're watching the clock, I know that he was over, but I think we ended up at the right place.

Mr. Desjarlais, you have the floor for two and a half minutes.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

If we can, I want to return to the deputy minister of environment.

In my previous round of questioning, we heard that in relation to the two models—and I'll be as clear as possible—one of those models projects existing policies and investments, and the other one projects what the Office of the Auditor General and the commissioner are calling “assumptions”. We just heard from the director general of your department that it's the policy intention to adopt some of these policies over time and to build them into the plan.

They sound more like goals than a solid plan where we could project with credibility a guaranteed reduction in emissions. If we're lending this much credibility to what is defined in the commissioner's report as assumptions, have you actually spoken to the minister directly about adopting these principles that are within your reporting to hit the targets that he has committed to?

[Christine Hogan]

Thank you very much.

One thing I would like to say in response, Mr. Chair, is that of course if you go from the strengthened climate plan to the emissions reduction plan that came out some 14 or 15 months later, the modelling that went into the strengthened climate plan evolved to reflect the actions, decisions, policies and measures that the government had taken and then updated again. This continues to be how the modelling work progresses and I—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Would you define it as incremental? It seems to me that it's more like action by increment than firm action by policy decisions.

If there's a magic list of policies you have that the government needs to adopt to actually get to the targets that are set out as per the plan, has the government actually invested in those solutions? One of those solutions from the plan that I would like to remind you of is in relation to the greening of our energy grid. How much money has the minister committed to that?

[Christine Hogan]

I think the response is that, if you look at the emissions reduction plan on its own, it contained $9.1 billion of investments across the economy in various sectors, and there were subsequent investments made in budget 2022—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

On this specific one, the report says—

[The Chair, Conservative, John Williamson]

I'm afraid that is the time, Mr. Desjarlais. Pardon me.

I'm turning back to Mr. McLean.

You have the floor for five minutes, please.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Mr. Chair.

I'm not going to try to pick on any of the witnesses here, so this is for whoever wants to answer this question.

We've talked about this incremental approach we're going to have to take in our infrastructure system, particularly in our gas infrastructure system. We'll put 5% hydrogen into the gas mix, first of all, and then move it up from there—three to five years each time—and see what happens from an effects perspective.

Was it prudent, then, for NRCan to move forward with a transformative approach, as opposed to an incremental approach, in looking at what the outcome would be as far as emissions go?

That question is for anyone.

[John Hannaford]

I think that's probably for me.

As I mentioned at the outset, the intention of the strategy was to set out full potential. Since the strategy was released, we've taken a series of measures at NRCan, including through the clean fuels fund, to look at specific applications of clean fuels. That includes hydrogen as a significant area of focus.

Recent announcements were of $800 million, and there will be subsequent announcements before too long. Those are specific investments in specific projects that will continue to move along the technology and the applications of the technology.

In addition to that, I mentioned earlier the tax credit that has been included as a fiscal measure recently, and that's—