Mr. Speaker, I am proud that Canada has worked to put carbon pollution pricing at the centre of our plan to deliver on our commitment to reduce Canada's greenhouse gas emissions by 30% by 2030. Experts in Canada and globally recognize carbon pollution pricing as an essential tool for reducing greenhouse gas emissions at the lowest possible cost and for stimulating investment in green infrastructure and low-carbon technology.
A report issued on May 29 by an international panel of experts led by Nobel laureate Joseph Stiglitz and Lord Nicholas Stern, former chief economists of the World Bank, concluded that a well-designed carbon price is an indispensable part of a strategy for efficiently reducing greenhouse gas emissions while fostering economic growth. Carbon pollution pricing uses the market to drive clean investment decisions, encourage innovation, and reduce emissions.
Carbon pollution pricing can do all of this for a number of reasons. First, it provides flexibility. Instead of government deciding what actions must be taken, pricing allows businesses and consumers to take advantage of their own least-cost options for reducing greenhouse gas emissions and to continue to reduce their emissions as long as it is cost-effective for them to do so.
Second, carbon pollution pricing will help Canada to transition to a low-carbon economy. Carbon-intensive goods become more expensive. This encourages consumers to shift their purchases toward less carbon-intensive goods and for investors, industry, manufacturers, and retailers to respond to the growing demand for low-carbon products.
Third, carbon pollution pricing will help position Canada to compete in the low-carbon economy. Carbon pollution pricing provides an ongoing incentive to innovate, especially if the price on carbon pollution is expected to gradually increase over time. Canadian businesses and investors know that carbon pollution pricing will foster innovation and create new job prospects. That is why many of Canada's leading companies from diverse economic sectors, such as Suncor, Canadian Tire, and General Electric, strongly support a price on carbon pollution and already account for an internal price on carbon pollution in their investment decisions. Canadian business leaders know that carbon pollution pricing is one of the most economically efficient ways to reduce emissions, stimulate investments in clean innovation, and position Canada to be competitive globally in the emerging low-carbon economy.
Governments across Canada also know and recognize this. On December 9, 2016, Canada's first ministers and indigenous leaders finalized the pan-Canadian framework on clean growth and climate change. The pan-Canadian framework is a collaborative plan to meet Canada's Paris agreement emission reduction target of 30% below 2005 levels by 2030 and to grow the low-carbon economy.
Central to the framework is the pan-Canadian approach to pricing carbon pollution. This pan-Canadian approach to pricing carbon pollution gives provinces and territories the flexibility to design their own pricing systems in a way that makes sense for their specific circumstances.
It also sets some common criteria that these systems have to meet to ensure fairness and a price on all key sources of carbon pollution across the country. Under this approach, provinces and territories can put a direct price on carbon pollution, as is done in British Columbia and Alberta, or they can adopt a cap and trade system, like Ontario and Quebec. Ninety-seven per cent of Canadians live in provinces that already have a price on carbon pollution or are working towards one. Every province except one has indicated it will have a price on carbon pollution to reduce emissions while growing its economy. It is only fair that polluters pay and that there is a price on carbon pollution across Canada.
A federal carbon pollution pricing system will apply in provinces and territories that do not have a carbon pricing system in place that meets the national benchmark by 2018. We are in the process of developing this federal option, and on May 18, 2017, we posted a technical discussion paper outlining the proposed design of the federal system and seeking to obtain feedback.
The proposed system applies the carbon price in two ways. The first is a levy on fossil fuels used for heating and transport. The second applies the price to pollution from large industrial facilities. Those that pollute more will pay more than cleaner competitors.
The more a facility reduces its emissions below its limit, the more it can benefit by selling credits to less efficient competitors.
This system will avoid adverse competitiveness impacts by minimizing the total costs paid by industries that compete internationally, while still creating an incentive for companies to innovate to reduce their emissions. Whichever system is implemented, federal or provincial, revenues will go back to the jurisdiction where they are collected
Revenues can be used for different purposes, such as to cut taxes or invest in clean innovation and infrastructure, or they can be given straight back to Canadian families.
The overall approach to pricing carbon pollution will be reviewed by early 2022. The review will include expert assessment of stringency and effectiveness that compares carbon pricing systems across Canada. The review also will also account for progress and for the actions of other countries in response to carbon pricing, as well as recognition of permits or credits imported from other countries. The review will be completed by early 2022 to provide certainty on the path forward.
While we support transparency for consumers and accountability to Canadians, the government opposes this motion for a number of reasons. First, as I have just outlined, first ministers have already agreed to work collaboratively to review and report on pricing carbon pollution, and a federal study would be incompatible with this collaborative approach.
The motion also proposes a Standing Committee on Finance study, including a requirement for a dedicated line item on invoices and receipts. As my hon. colleague outlined earlier, such a requirement is not part of the approach agreed to by first ministers and runs counter to the principle of providing provinces and territories the flexibility to design their own systems.
Canadians know that carbon pollution does not come without a cost. We see the costs of carbon pollution in droughts, floods, and extreme weather events related to climate change.
Our government remains steadfast in its commitment to price carbon pollution to meet our commitments under the Paris Agreement, promote clean growth, and position Canada to compete in the future low-carbon economy. It is the right thing to do for our children and grandchildren, and it will create good jobs as we generate clean growth and participate in the global transition to a low-carbon economy.
We understand the clear economic opportunity. The 21st century will be the clean-growth century. We also understand that we need to leave a more sustainable planet to our children and grandchildren.