44th Parl. 1st Sess.
November 8, 2023 02:00PM
- Nov/8/23 5:30:36 p.m.
- Watch
Madam Speaker, we are here to talk about report that was done a long time ago. Little time was given to prepare to talk about it in the House today. Unfortunately, this report was mishandled on the Standing Committee on Public Accounts. Let me explain.
We called witnesses and they were only able to give their opening remarks. After that, the committee was interrupted and we had to leave the room to vote. In the end, the witnesses got nowhere and left without hearing a single question or making a single comment.
Luckily, we were able to ask some of the questions at the next meeting, but suffice it to say that the subject was not a popular one. So that surprises me. I am very happy to see the Conservatives so interested in the green transition and in going green that they are now bringing back a report that they themselves mishandled.
First, let us talk about the purpose of this audit. The commissioner of the environment and sustainable development was trying to establish whether the government had taken the necessary steps to meet six targets laid out in the greening government strategy. This audit therefore focused on the Treasury Board, the Department of National Defence and the Department of Transport in terms of efforts made.
The main findings are quite damning. The government simply has not put in the resources needed to achieve its targets. That is nothing new; we say it fairly often. It came as no surprise to committee members.
Another important finding is that the departments of transport and national defence have no risk management strategy. That is pretty disturbing in the 21st century. Even companies are starting to adopt a number of risk management strategies, particularly for climate risks. When we talk about climate risks, we are talking about risks that are systemic and physical. Of course, there are potential floods and risks that can completely change operations, in other words, operational risks. There are also reputational risks. There are a multitude of risks associated with climate change. Most companies are already in the process of identifying them, because they know that climate change is happening now and it will have an impact on the economy. However, government departments, which are supposed to be at the forefront, have no risk management strategy. That is a pretty scathing observation.
The next observation is that Treasury Board simply lacked the necessary data to determine whether it was going to meet its targets. Not only was it unlikely to meet them based on the commissioner of the environment and sustainable development's observations and audit, but Treasury Board had also failed to collect the necessary data. Obviously, the first step is to collect the data and then to organize, analyze and use them. This means there is no data and no analysis. Good luck advancing a strategy that way.
Furthermore, Crown corporation GHG emissions were not accounted for. I know that this topic was raised by a colleague who I am pleased to sit with on the committee. Still, the fact that Crown corporations were left out of the government's GHG tally, when they account for a large part of government, is a big problem.
Let me give a brief reminder about Crown corporations. We are talking about organizations that are responsible for implementing the government's public policies. They receive large sums of money and spend it as they see fit, without being accountable to the government or the public in the same way that government departments are required to be.
The government's new strategy is simple: spend as much money as it can in the form of tax credits or funds allocated to Crown corporations that they themselves manage. It is very simple, and no one will know where taxpayers' money is going. No one will know whether Crown corporations are participating in the greening government strategy or whether they are really trying to come up with a strategy to make a green transition. There is no way to track what Crown corporations are doing. Let us just say that it is very useful for the government.
At one of the first committee meetings, we heard from PSP Investments.
It is important to point out that this is the federal Crown corporation that manages the pension fund. In the fall of 2021, it was described as lagging behind other pension funds in terms of its sustainable development strategy. It was very difficult for parliamentarians and even for my team to get access to the actual dollar amounts for workers' pension funds. It was very hard to determine how much money was sent to oil companies in western Canada, for example, because the fossil fuel energy category was folded into the broader energy category. I think that we can all agree that investing in wind energy and investing in oil are two very different things. How are we supposed to know whether the Crown corporations are doing the right thing? At this juncture, it is basically impossible because of their lack of transparency. That is another point that was rightly raised by the commissioner of the environment and sustainable development.
The last point might make some people smile and others cry, unfortunately. The reductions in greenhouse gas emissions that were reported during the pandemic are purely a result of the pandemic. They had absolutely nothing to do with the government's strategy to reduce greenhouse gas emissions. That was a great finding by the commissioner of the environment and sustainable development.
The Conservatives are bringing up a report that, for whatever reason, they did not seem so interested in when we were in committee, but they absolutely want to debate it in the House now, more than a year later. How odd. I notice that they are bringing it up at a time when we are hearing a lot of noise about the carbon tax.
If I may, I will put on my teacher hat and give a little lesson on what is happening in Quebec in terms of fighting climate change and how it is using economic tools to fight climate change.
Quebec has a cap-and-trade system.
To reduce greenhouse gas emissions in Quebec, the Government of Quebec applies a price per tonne of carbon emitted.
I wonder if people are following what I am saying. I am looking at a certain bench in particular to see if they are following me. I have uttered only one sentence.
Quebec's chosen strategy, which was initially implemented in 2013 and then expanded to include distributors of fossil fuel products in 2015, is a carbon market that applies to [Quebec's] major emitters. Moreover, it is worth bearing in mind that, in Quebec, road transportation has been the main source of rising greenhouse gas emissions since [then].
Instead of imposing a fixed price for each tonne of carbon emitted, the Quebec government imposes a total emissions cap and lets emitters divvy up shares of that cap among themselves.
That is why it is called a cap-and-trade system, because instead of putting a price directly on each tonne of carbon emitted, there is a quota. It is regulated by quantity, and then the market itself determines what price companies should pay per tonne of carbon.
Under this system, the government grants a certain number greenhouse gas emission allowances equal to the total amount of emissions it wants on its territory for a given period and auctions them off. The emitting businesses then have to compete to obtain allowances if their activities produce carbon. All things being equal, as the number of emission allowances goes down, based on the emissions reduction target set by the jurisdiction, their price goes up.
Among the emitters, every business distributing more than 200 litres of fuel and fossil fuels a year, or emitting more than 25,000 tonnes of CO2, has to have emission allowances. Refineries in Quebec are also subject to the cap-and-trade system, not only for their refining activities, but also for their activities as wholesalers and distributors. However, for their refining activities, they get free allowances distributed by the Government of Quebec that cover 95% of the emissions produced, a ratio that should gradually go down.
I want to mention that in my role as a professor, I received a lot of help from the research chair on taxation and public finance, who is doing a great job working to educate the public on the effects of the cap-and-trade system.
I hope this topic will be spoken of in the House in a more logical and realistic way from now on.
To continue:
The purchase of emission allowances increases the cost of distributing fuel and is reflected in the price at the pump (affecting the price before tax). Consequently, although [cap-and-trade] levies are not directly reflected in the price of gas paid by the end purchaser, they are nonetheless paid by the end purchaser.
I think this is an important point. The consumer picks up part of the tab. That should be of interest to the people here. Consumers end up paying a small share. I will be getting to that soon. I know that everyone is waiting to find out how much the consumer pays for the cap-and-trade system in Quebec.
Here is the answer: “Therefore...since 2015, the effect of the [cap-and-trade system] on the price of a litre of gas has increased from approximately 4¢ in 2015 to nearly 9¢ in 2023”. We therefore know the impact of the cap-and-trade system on prices at the pump in Quebec.
However, experts with the Université de Sherbrooke research chair on taxation and public finance noted that:
...a portion of the tax revenue goes toward maintaining and developing the road network. In the context of fighting climate change, these fuel taxes can also be viewed as a disincentive to use this greenhouse gas-emitting product. After carefully examining the taxes levied on fuel, the authors [of the report that I am quoting] found that, in Quebec, these taxes have had a limited effect on the recent fluctuations in the price at the pump...
However, fuel is subject to other taxes, such as the GST, the QST and the excise tax. All of those taxes were considered together with the cap-and-trade system. Once all of these levies were put together, the authors found that they “have had a limited effect on the recent fluctuations in the price at the pump and that their level in constant dollars has remained stable over the past 10 years, whereas their weight in the economy is dropping and they remain relatively low in comparison to the taxes being charged elsewhere in the world”.
That is how Quebec used existing economic tools to fight climate change. The Conservatives are saying that it has been eight horrible years where everyone in Quebec has been complaining about the extra 9¢ a litre on gas. That is not the case. People have not been complaining that much. On the contrary, Quebec has accepted that it must take responsibility in the fight against climate change.
There is a very important example that shows just how well these measures are working. By 2015, Quebec had reduced its greenhouse gas emissions by 8.8% compared to 1990 levels. It is working. Governments need to be able to introduce certain measures to combat climate change.
This should serve as another reminder to the House that Quebec often stands alone in fighting climate change. In 2014, Quebec linked its cap-and-trade system with California's. It had to go south of the border to find someone willing to open this carbon market with it, because unfortunately, people here in Canada were too focused on other issues to realize that fighting climate change was an important issue and that this type of economic tool works. Quebec linked its cap-and-trade system up with California's. Members may recall that Ontario joined the system with great fanfare, only to pull out two or three years later.
Quebec may have been ahead of the game back then, but this is not the first time I have said that in the House, nor will it be the last.
To set the record straight again, the cost of climate change is higher than the cost of fighting it.
I can give many examples of this. Several years ago, I had the opportunity to work as an economist at Ouranos and prepare a report commissioned by the Government of Quebec to determine how much climate change in Quebec would cost over the next 50 years. This fascinating report was published in 2015. We studied the costs of climate change and identified six areas where those costs would be especially high. In terms of infrastructure, there was the issue of permafrost. Rising temperatures are causing the ground to thaw, allowing greenhouse gases to escape more quickly. This is happening all over northern Quebec and, obviously, in the rest of Canada as well. Erosion is another area we identified. Climate change and rising water levels are eroding shorelines. As we know, erosion is very expensive.
Sometimes roads and houses have to be moved. Should a disaster hit, this can often even cause landslides.
Then there is flooding, as I mentioned. We know that with climate change, flooding will be not only more frequent but also more severe. Both the frequency and intensity of these events will increase. We know that the cost of climate change is enormous.
Another cost that we did not study at the time, but that should be studied, is the effects of climate change on forest fires. The cost of forest fires is also huge, and we in Quebec paid the price this summer. It was catastrophic. I am thinking in particular of all the forestry workers we are trying to support and the people of Abitibi-Témiscamingue and Nord-du-Québec who have suffered enormously because of these forest fires caused by climate change.
There are also health implications.
Heat waves are going to have a huge impact on health. Many seniors' residences do not even have air conditioning yet. Human lives have been lost. Unfortunately, there is a price to pay for this loss of life, because human life obviously has a value, and that value can be determined.
Then there is pollen. People tend not to think of that when they think about the economic consequences of climate change, but climate change is increasing the prevalence of allergies and reactions to pollen. Some people are highly allergic to pollen, and I am lucky not to be one of them. When these people are unable to go to work, they are obviously less productive, and that has an economic cost.
Finally, there are zoonotic diseases, diseases transmitted by animals. Rising temperatures are causing zoonotic diseases to spread in Quebec. There is West Nile virus, a virus that is transmitted by mosquitoes. As the climate changes and temperatures rise, mosquitoes are heading further and further north in Quebec and infecting more people. This has a cost. It is an extremely powerful virus, and the people who catch it become very unproductive.
Then there is Lyme disease, which is gaining a lot of ground in Quebec. If an individual who contracts this disease does not act quickly, they may have to deal with very serious consequences for many years or for the rest of their life. This disease needs to be treated quickly, but in Quebec, people may not be used to checking for symptoms of Lyme disease. When someone is bitten by a tick, they need to find out whether the tick is infected with Lyme disease, but not everyone knows that. Those are some of the economic consequences of climate change.
I want to do a quick cost-benefit analysis of measures to combat climate change. On the one hand, there is the additional cost of 9¢ per litre, and on the other hand, there are all the costs I just mentioned, which amount to billions of dollars. I will let people draw their own conclusions. I personally think that we know how to do things in Quebec, and that, in the end, we do them well. We can always ask ourselves whether or not we want to continue working with the government. Right now, we do because we want to develop a green strategy. That said, perhaps the government should take a closer look at what Quebec is doing, because we are doing pretty well, and we are proud of that.
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- Nov/8/23 5:50:46 p.m.
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Madam Speaker, yes, I know there are areas in which the government has made progress. Still, if I may offer a sobering reminder, when we are barely over the starting line, it is easy to pat ourselves on the back and say we have made progress. However, there is still a long way to go, and the government needs to focus on what is left to be done.
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- Nov/8/23 5:52:08 p.m.
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Madam Speaker, I would like to thank my colleague for that question. Often, we see that the Conservatives are not doing anything to help themselves or their country to make progress in the fight against climate change. There is a lot of filibustering. We see it in every committee. We see it in the House. Unfortunately, that does not help anyone, even their constituents, in the fight against climate change.
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- Nov/8/23 5:53:12 p.m.
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Madam Speaker, I thank my esteemed colleague with whom I do have the pleasure of sitting on the Standing Committee on Public Accounts. We definitely tend to agree on these issues.
I will not be giving the government a grade today in the House. However, I can say that, if I did, it would not be a passing grade, since the government is not even capable of achieving its own objectives. It cannot pass a test. I will not give it a grade, but, what I do know is that it would be well below 60%, which is the passing mark.
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- Nov/8/23 5:55:09 p.m.
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Madam Speaker, I thank my colleague for mentioning that figure, because it is really very important. It shows that, when it comes to the government, the right hand does not know what the left hand is doing.
On one hand we have a minister who is quite pleased to talk about strategy and say that it is fantastic, that the government is good and that the friends at Équiterre are happy with the government. On the other hand, $50 billion is being sent to an extremely polluting industry that pockets exorbitant profits.
It is really problematic that there is so much hypocrisy in the government, a government that does not know how to walk and chew gum at the same time. It is disastrous. As I said in my speech, if we do nothing, the cost of inaction on climate change is very high.
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- Nov/8/23 5:56:56 p.m.
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Madam Speaker, I must say that I rather agree with my hon. colleague. These repeated attempts to change the agenda and talk about certain things that, for whatever reason, are of interest to them, amount to filibustering.
The Conservatives apparently got up this morning thinking that they were very keen to talk about a greening government strategy, which was studied in committee over a year ago. Those people who watch us and follow politics a bit know that this is a broad strategy to obstruct the work of Parliament.
I think it is frankly deplorable that a party that claims to be deserving of taking power is obstructing the work of Parliament, an institution that said party is supposed to want to represent. I think it is a real shame, even though it gave me an opportunity to give a lecture on environmental economics, which I am always happy to do.
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- Nov/8/23 5:58:47 p.m.
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Madam Speaker, as the former leader of the Bloc Québécois likes to point out, unfortunately, Canada is all about French and simultaneous translation. It is such a shame to see that many people, especially those I was talking about in my remarks, did not listen to me, and if they did listen, they probably did not understand what I was trying to say.
It is a shame because it was an opportunity for them to learn more about environmental economics, about their carbon tax, and maybe even understand that although it does not apply in Quebec, even if it did, it would not be the end of the world.
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