I call the meeting to order.
Good afternoon, everyone. It's a special day, with a lot of new faces at the table today.
Before we get started, I would just like to acknowledge MaryAnn Mihychuk, whom we have on the Liberal side, and Pierre Breton. Welcome to the committee.
Leona, welcome. I don't know if you've had a chance to participate on the environment committee before, so it's good to see you here.
Shannon Stubbs will be joining us.
Today we're starting a study on international leadership. This flows from the pan-Canadian framework on climate change. Last spring our committee decided that we would do a number of short studies, usually about six hearings. For this particular study coming from the pan-Canadian framework, we had determined on February 1 that we would agree to study Canada's international leadership as part of our study on clean growth and climate change in Canada. There are really three pieces that flow from the framework.
The first is delivering on Canada's international climate financial commitments. In this, Canada committed $2.65 billion by 2020 to help the poorest and most vulnerable countries mitigate and adapt to the adverse effects of climate change.
Second, we're looking at acquiring internationally transferred mitigation outcomes. The Paris Agreement had allowed for mitigation outcomes to be transferred between countries, but the mechanisms had not been fully developed, so Canada's first priority was ensuring that any cross-border transfer of mitigation outcomes should be based on rigorous accounting rules to be developed with input from experts.
Finally, engaging in trade and climate policy with our international partners was the third aspect. In that, we talked about how Canada has raised trade and climate policy issues in international forums and is positioning the country as a global leader on clean energy and innovation, as well as aiming to support business opportunities for Canadian clean energy companies.
That was the basis for the six sessions that we have coming up, including today.
With us today we have Environment and Climate Change Canada and Global Affairs Canada. Each department will be given 10 minutes for introductory comments, and then we'll get into our usual questions and answers.
I know many of the department officials have been here before, so I am going to use the yellow cards. When you get to one minute left in your presentation, I will show the yellow card. When you are out of time, I will show the red card and you should just try to wrap up as quickly as possible.
For anyone who is new at the table, the same holds true for you. When you get the red card, wind it up and we'll move on to the next person so that everybody gets a chance to participate in today's dialogue.
With that, we will go to Environment and Climate Change Canada's Isabelle Bérard. Would you like to start?
I am pleased to be here today to speak about Canada's climate leadership on the international stage.
My name is Isabelle Bérard and I am the assistant deputy minister of the international affairs branch at Environment and Climate Change Canada, or ECCC.
I am joined today by colleagues from my department: Matt Jones, Assistant Deputy Minister of the Pan-Canadian Framework Implementation Office; Catherine Steward, Canada's Chief Negotiator for Climate Change and Director General for Multilateral Affairs and Climate Change; Lucie Desforges, Director General of Bilateral Affairs and Trade Directorate; and Erin Silsbe, Acting Director, G7 Task Team. I am also joined by my colleague from Global Affairs Canada, Anar Mamdani, Director of Environment.
I would like to begin with an overview of ECCC's international engagement. I will then turn to my colleague from Global Affairs Canada who will describe her department's activities on climate change from the broader development assistance perspective.
When it comes to international engagement, the United Nations Framework Convention on Climate Change, UNFCCC, is the primary forum for advancing global climate action. I’m very pleased to note that Canada is a key player in this arena. There is a lot of growing momentum, by all actors, on climate change. The growth in size and scope of the UN climate change conference, or COP, is a clear reflection of this reality.
Under the UNFCCC, the Paris Agreement, adopted in 2015, establishes global climate goals, including to limit the increase in global temperatures to well below 2°C and to pursue efforts to limit the temperature increase to 1.5°C.
Canada is a strong advocate of the Paris Agreement because it has obligations for all parties. Under the UNFCCC, what we are doing now is negotiating the implementation guidelines for the agreement, often referred to as the Paris rule book. In general, these guidelines will set out how each party will communicate its plans and actions to address climate change, how it will measure and report transparently on progress and how this information will be used to measure global progress.
The robust and effective implementation of the Paris Agreement is a top priority for Canada. We know that the adoption of common and robust guidelines for all countries will promote ambitious, credible and transparent climate action.
The Paris Agreement also offers the possibility to co-operate with other countries using market-based measures. Markets can help increase mitigation ambition and provide the incentive for public and private investment to achieve the necessary shift toward low-carbon pathways.
Last, if we are to successfully implement the Paris Agreement, we know that we need to continue to deliver on climate finance. As you may know, Canada is delivering $2.65 billion over five years to help developing countries transition to low-carbon, sustainable and resilient growth. Canada has already announced over $1.2 billion of this commitment, providing direction and stability to developing country partners. I will leave it to Anar Mamdani to provide further details on this commitment.
We believe fundamentally that the Paris Agreement will help drive global ambition on climate change. But there are other ways that Canada is providing global leadership on this front.
For example, on the margins of COP23 last year, Canada and the United Kingdom launched the Powering Past Coal Alliance, which is a voluntary coalition of governments, businesses and organizations that are helping to end the use of unabated coal power around the world. The Alliance continues to grow, with 74 members now who recognize the value of this initiative.
Canada has also demonstrated global leadership this past year through the G7 presidency. Just this past September, hosted the G7 environment ministers' meeting and co-hosted the G7 joint ministerial session on climate change, oceans and clean energy.
We had good exchanges among G7 ministers and representatives of business and civil society on several important issues related to environment, oceans and energy. For example, we saw a number of countries, such as Jamaica and Norway, as well as major multinational businesses, such as Unilever and Volvo, make important commitments to reduce plastic pollution by supporting the Oceans Plastics Charter announced at the Charlevoix G7 Summit. G7 members also came together to establish a G7 Innovation Challenge to address marine plastic litter.
I would like to highlight a few more international initiatives that my branch has helped to further this past year.
For one, Canada, along with China and the European Union, launched the ministerial on climate action, and has co-hosted two meetings among ministers to identify common ground towards adopting the Paris “Rulebook”.
Last May, also hosted the “Climate Leaders’ Summit: Women Kicking It on Climate”, which brought together high-level women influencers from all sectors to develop climate change solutions that contribute to gender equality and the empowerment of women.
My branch also does a lot of work to advance our bilateral relationships around the world. ECCC works in close collaboration with several countries to advance Canada’s international climate change and environmental protection agenda.
For example, in North America, Canada undertakes co-operative work with the United States and Mexico under the Commission for Environmental Cooperation, the CEC, which is a trilateral organization that has facilitated environmental work since 1994. Under the CEC, parties are committed to continuing this existing co-operation as part of a new environmental co-operation agreement that is being negotiated.
In November 2017, Canada joined with like-minded U.S. states and Mexico to create the North American climate leadership dialogue, committing to work co-operatively on clean transportation, vehicle efficiency, and clean power, and on reducing short-lived climate pollutants. In September 2018, a new statement was endorsed in San Francisco.
Another key partner that we have been working with is China. During visit to China in December 2017, he and his Chinese counterpart issued a joint leaders' statement on climate change and clean growth. This statement establishes the new ministerial dialogues on climate change, environment and energy and recognizes the leading role that Canada plays in the China Council for International Cooperation on Environment and Development, CCICED, for which is the international executive vice-chair.
We also have considerable engagement with Europe. Canada and the EU have strong bilateral relations on the environment and climate change. On May 24, Canada hosted the Canada-EU high-level dialogue on climate change to share expertise on climate change issues and negotiations.
On April 16, 2018, the France-Canada climate and environment partnership was signed in the presence of and President Macron. The partnership includes nine areas of co-operation.
Canada is also working with the U.K. on issues such as climate change adaptation, carbon pricing and phasing out traditional coal under the Canada-U.K. partnership, which was announced by and Prime Minister May in September 2017.
ECCC also works closely with Global Affairs Canada to advance Canada's trade and environment objectives which are based on the principle that trade and environment are mutually supportive. A prime example is the new United States-Mexico-Canada Agreement (USMCA).
The USMCA incorporates the most ambitious environment commitments Canada has ever included in a trade agreement. It integrates substantive environmental provisions into an environment chapter, subject to dispute resolution, which aims to level the playing field by ensuring parties do not lower their levels of protection to attract trade or investment.
This chapter also includes new commitments to address a range of global environmental issues, such as illegal wildlife trade, sustainable fisheries and forestry management, species at risk, conservation of biological diversity, air quality and marine litter.
To conclude, I would note again that Canada's significant engagement on climate change on the international scene is designed to build trust and capacity among parties for progress on climate goals, to ensure that leading emitters—developed and developing countries—are accountable, and to create conditions for innovation and clean growth for all.
Thank you for your time.
I would now like to turn to my colleague from Global Affairs Canada.
Thank you, Mr. Chair. I am pleased to be here to speak about the approach of Global Affairs Canada on climate change, focusing on our ongoing support to developing countries.
Canada is helping to lead global efforts to support a low-carbon, sustainable and climate-resilient future for all and is delivering on its pledge to provide $2.65 billion by 2020 to assist developing countries most vulnerable to climate change.
Canada's climate finance is contributing to the ambitious global effort to reduce greenhouse gas emissions while placing a strong emphasis on support for the most vulnerable people, communities and countries, including small island developing states.
Our climate financing is aligned with Canada's feminist international assistance policy, which places women and girls at the heart of our efforts. Women and girls are disproportionately affected by climate change. Moreover, their important roles as entrepreneurs, farmers and household decision-makers mean that their voices and experiences are needed to contribute to climate change solutions.
However, according to the OECD development assistance committee, in 2014 gender equality dimensions were integrated in only 31% of bilateral climate official development assistance from all donors. To address this gap, Canada's feminist approach to environment and climate action is focusing on supporting women's leadership and decision-making; ensuring that climate-related planning, policy-making and financing address the particular challenges of women and girls; and, supporting employment and business opportunities for women in the renewable energy sector.
One example of the work that we are doing is in the area of increasing the access of women and girls to clean energy, which can create economic opportunities while reducing greenhouse gas emissions. For example, Canada is investing $20 million over five years to improve access to clean cookstoves in Haiti, thereby reducing health problems associated with indoor air pollution while opening new business lines for firms in product design, production and marketing.
In terms of delivering on our climate finance commitment, to date more than $1.2 billion in funding has been announced as part of Canada's $2.65-billion climate finance commitment. These initiatives are the result of joint efforts involving both Environment and Climate Change Canada and Global Affairs Canada.
While the majority of our climate finance is channelled through multilateral partnerships, a significant portion is also delivered bilaterally. Canada's bilateral funding has emphasized support for developing countries to adapt to the challenges of climate change. The funding has supported priorities such as clean technology, climate-smart agriculture, sustainable forestry, watershed management and climate resilience. Our bilateral climate finance has already supported 20 projects in climate-vulnerable areas in the Caribbean, Africa and Asia-Pacific, totalling $137 million over five years.
Women's livelihoods in climate-smart agriculture are being supported, for example, through a $3-million project in Ghana, which aims to increase food security and nutrition for families. The project provides financial and technical training to women farmers to increase agricultural production, strengthen links to markets and diversify food production.
Canada also recognizes that small island developing states have particular vulnerabilities in the face of climate change. To help address the challenges of Caribbean states in the face of catastrophic climate events, Canada is providing $25 million to the innovative Caribbean Catastrophe Risk Insurance Facility. The facility provides quick liquidity to countries to enable restoration of critical infrastructure and address humanitarian needs. Following the severe Atlantic hurricanes in late 2017, this facility provided payouts of $50 million to nine significantly affected states. At the G7 leaders' summit on June 9, Canada announced that it will invest a further $162 million to support coastal resilience in climate-vulnerable countries, including small island developing states.
Canada's contributions through multilateral mechanisms help to address common challenges faced by climate vulnerable countries and enhance their resilience. Canada has contributed $30 million to the Least Developed Countries Fund, which supports the world's 51 most vulnerable countries, including Afghanistan, Nepal, Senegal and Tanzania, in their efforts to adapt to the effects of climate change. This support has directly helped to improve the lives of over 4.4 million people and bring over 1.5 million hectares of land under more climate-smart management.
Canada has pledged $300 million to the Green Climate Fund, which was established as the financing mechanism for the United Nations Framework Convention on Climate Change to address both adaptation and mitigation needs.
The estimates for the financing required to tackle climate change run into the trillions, and this cannot be met by the public sector alone. Public sector climate finance can help leverage the private sector to advance innovative and viable climate solutions. That is why Canada will be providing $1.8 billion of our climate finance through repayable contributions, including through dedicated private sector facilities at multilateral development banks.
This funding incentivizes the private sector to do business in a way that contributes to a low-carbon future. Canada has been a pioneer in this regard. We were the first donor to establish dedicated climate finance funds at the International Finance Corporation, the Inter-American Development Bank and the Asian Development Bank. These investments have been pivotal in helping to catalyze private sector investments in renewable energy and private-sector-led climate mitigation and adaptation projects in developing countries.
Thank you, Mr. Chair, for this opportunity to present this overview of Global Affairs Canada’s approach and key achievements on climate change to date.
From an international perspective, what we're doing in Canada on carbon pricing is of great interest internationally.
We are part of a lot of different carbon market forums where we are asked to come and speak and talk about the Canadian experience, but there are also different forums where we go to share experiences and lessons learned from others. For example, recently I co-chaired a carbon markets platform in Halifax with Germany, where we brought together other governments, subnational governments, businesses, think tanks, academics and other interested parties that were interested in talking about carbon pricing and different pricing policies, as well as carbon markets. There is a huge interest in what we're doing and also in the international community on carbon pricing and carbon markets writ large.
From a negotiating perspective, parties recognize that there's a value to carbon markets and international emissions trading as a way of accelerating GHG emission reductions. That's why we have article 6 of the Paris Agreement. That's what I'm working on as chief negotiator for climate change, to ensure we have rules under the Paris Agreement that ensure real and verifiable emissions reductions so that we're not double counting. For example, if two parties are engaged in emissions trading and one person wants to claim the offsets, the other party shouldn't be claiming those offsets as well.
As an example, a lot of what we're doing under our negotiating on the rule books on article 6 is to ensure that double counting isn't there, as well as to ensure we have a system of carbon markets trading that is credible and transparent and that we all understand. This is very important work that we're doing right now in our Paris Agreement negotiations on the work program.
My role is to ensure that we get the guidelines that will enable Canada to conduct emissions trading and recognize current activities that are already under way in Canada. Carbon markets are part of the ambition cycle of the Paris Agreement. Businesses, as an example, are very interested in carbon markets and are very keen to showcase what they're doing to advance clean technology and innovation.
Thank you, Chair. Thank you, witnesses.
I appreciate the testimony that we've heard so far. Of course, climate change is a major issue when we're dealing with pollution. One of my huge concerns is plastic pollution in our oceans. That is regularly discussed, but I think Leona brought up the very important issue of pollution and pollutants going into the air. Canadians are getting sick, or in some cases losing their lives, because of pollutants that are in the air we're breathing.
In the case of Volkswagen, the United States was on top of this. It was a $14.7 billion fine in the U.S., and it appears so far that Environment Canada has not enforced it, and that's a big concern.
Isabelle, you mentioned that there are people within the department, enforcement people, who would be very willing to come here. In international leadership, which is what this study is about, it appears to some that Canada may have dropped the ball on this, so your offer to have somebody come here, I think, was very appreciated. I'd like to read that notice of motion and then go back to questions for the witnesses.
The notice of motion is
||That the Standing Committee on the Environment and Sustainable Development undertake a study of no less than two meetings on the deceptive emissions tests from the auto manufacturer Volkswagen and call on Volkswagen officials to testify as well as officials from Environment Canada and any other government department the committee sees fit to invite and that the committee make recommendations to the government.
This is the notice of motion that I will pass to the clerk.
Ms. Stewart, I find your testimony interesting. Are we going to meet our Paris targets? We have just over a year.
Sure. There are a number of things there.
In terms of carbon pricing, I'm not the expert on carbon pricing. We have a dedicated team in Environment Canada that have come before this committee several times. I can't delve into any great detail on the design of the carbon pricing system, but it's certainly been a topic of lots of debate.
In terms of the impact, there was a study released recently, publicly, on the impacts associated with our proposed policies. In developing a policy, there are a number of steps that must be cleared in terms of internal analysis, consultation and engagement. For any regulations to pass, you need to work through the Canada Gazette process and other things. All of our modelling and all of our analysis is there, and all those steps are there to ensure that we understand the impacts exactly and minimize those impacts at the design stage. That's how we've gone about the development of our policies.
In terms of our progress towards the target, the pan-Canadian framework and the collection of policies that were developed there were part of a fairly lengthy and intense process of developing policy options, sifting through those, and picking out the best policies and the right tools for the right sources of emissions, in consultation with provinces, external experts and others, but specifically for the purpose of achieving the 2030 target.
That's what that policy package is designed to do. There are variables, as oil and gas production has gone up, as GDP has gone up, and as population goes up. These are currents that you're swimming against. You project how much you think those will go up. Sometimes it's more, and sometimes it's less.
It is a national approach, so the contributions of the individual provinces can vary. At any given moment in time, there may be some provinces with quite comprehensive policies, and sometimes less so. There certainly are variables. We can't say, to the tonne and to the day, exactly when the target will be met, but the policy package is designed to achieve that target, and we're working to implement it as quickly as possible, and, as I mentioned, we'll adjust if we have to.
The urgency is very clear, as we see with the recent IPCC report that just came out. We need to take effective action, and very quickly, to stay under 1.5° C and also to avoid the worst damage.
Public concern across the country is clear. An Abacus poll from this year shows that the top two concerns among Canadians are health care and climate change. We need to recognize that climate change is causing severe health issues, for example, from air quality and from mental health issues around floods, fires and evacuations. We certainly saw major impacts across Canada this summer from floods, severe heat, wildfires and even tornadoes.
On a personal level, our summer in the interior of B.C. was quite horrific. We had 20 days when we were advised to stay indoors because the wildfire smoke was so bad it was choking. One could hardly see across the street. We went from floods and landslides almost straight to wildfires, and it impacted us in our communities very personally.
For example, a friend of mine who had a baby under one year old was renovating the kitchen, so she had an outdoor kitchen, and she's very concerned about long-term impacts on her young baby's developing lungs from all that fine particulate matter he breathed.
Another example is my elderly neighbour, who had burning lungs for weeks. My neighbour went to the doctor and was told, “Yes, we're seeing a lot of people like this. Some people have to go the emergency room, but really the only thing they can do is send you home and tell you to close your windows and hope you have an air filter.” It became really personal in our area.
We understand that climate change is an international problem and that emissions need to reduce rapidly to stay below one and a half degrees or two degrees. It's also clear that the differences in the impacts of a one-and-a-half-degree world and a two-degree world are quite significant.
We have concerns about stranded assets and public investments in the oil and gas sector here in Canada, as the world needs to move quickly away from fossil fuels. If we want the goals of the Paris Agreement to succeed, we need to start redirecting investments now.
Already, impacts from climate change are causing huge economic impacts. recently stated that losses from floods and fires are causing Canadian taxpayers $1 billion a year, and the future costs of doing nothing or very little will continue to increase—for example, ever-worsening wildfires, floods, superstorms, droughts, ocean acidification, sea level rise and climate refugees.
For me, it gets pretty scary when you look the problem directly in the eye.
What do we do about this problem? Our organization believes that a steadily rising price on carbon pollution needs to be the foundation of any climate plan. It certainly isn't the only tool, but we believe it is the most cost-effective way to accelerate the transition to a cleaner economy and to produce innovative solutions.
This particular approach of focusing on carbon pricing as the major tool has been confirmed by the two Nobel prize winners in economics.
We can achieve the same end goal. As I said, I believe we all want to reduce greenhouse gas emissions. You can do it through carbon pricing and other tools, or you can focus more heavily on a regulatory approach. You get to the same end, but the difficulty with a regulatory approach is that it's extremely costly to administer and very inflexible. Our feeling is you should use that at a minimum, and focus on the pricing.
I assume you're familiar with the Ecofiscal Commission's work. They did a study that compared the two. They looked at the period from 2015 to 2020. They did the analysis to determine the difference between going with pure carbon pricing and going with the regulatory approach. The regulatory approach resulted in a 3.8% hit to GDP. That's a 3.8% decrease. There was very little impact from carbon pricing.
This isn't anything to do with politics. It's about finding where you get the best bang for your buck and how you can get the job done without impacting the economy as much.
Our primary ask is for price certainty for industry and households. We would like to see some confirmation that the carbon price will keep rising steadily at least past 2030.
The question raised earlier was about how high it has to go. We think the biggest impact is from that certainty. People in businesses know it's going to keep rising, and so they start to change behaviour. That's going to make a bigger difference than arguing about how high it has to go.
We also need to make sure the carbon price covers all emissions, including methane fugitive emissions, which are quite significant, and is as upstream as possible to have the biggest effect.
We also need to phase out fossil fuel subsidies and other supports for the fossil fuel industry, such as tax and royalty breaks. We've seen some progress at the federal level, and we hope that as a federal government you will also use some pressure on the provinces, in particular B.C. and Alberta, which have significant supports in place for a well-established fossil fuel industry that we need to transition out of.
The revenue issue is key so that carbon pricing isn't seen as a tax grab. We're seeing some push-back in B.C. right now because it's no longer revenue neutral. We also need to look at the carbon tax revenue so that it doesn't, as was mentioned here, disproportionately harm the poor.
Take, for example, the recent work by Mark Cameron at the Clean Prosperity Institute. He comes from a Conservative background. He has finally given us the clear evidence that we've heard you discussing in the House of Commons, the numbers on what this is going to cost.
Mark Cameron has done this, and we have left some copies of that here. He shows that if you return the tax revenue to households, poor and lower-middle-class people will come out further ahead and most of the burden will be borne by the wealthy. I hope you will have a look at that.
We feel that B.C. clearly shows... There was some mention earlier that the emissions did not decrease while the B.C. carbon tax was in place, and I need to correct that. There are eight independent studies that show that while the carbon tax was rising, emissions did fall and GDP wasn't affected.
We think there's an opportunity for Canada to be a leader in the world on market-based solutions to climate change.
I'd like to thank my colleagues for allowing this to happen today. I'm very happy to have Laura and Judy here.
In 2007, I got a cheque in the mail from the B.C. government, which set a positive tone for bringing in the tax in 2008. It's now been in place for 10 years in British Columbia. We were accountable for our emissions. I was with the provincial government, and we had to account for every kilometre that we drove. There was, in essence, a cost to claiming that.
In the next phase, the government was taking the money and putting it into a green fund. People with ideas that would help the environment and help reduce CO2 could apply for it and put that money to good use, so that was a second version of the model. In 2008, they also reduced taxes in such a way that there was a net neutral cost to people, so it was a carbon tax, yes, but they reduced other taxes to offset the carbon tax.
Then we went to this green project model. When I was mayor of Cranbrook, we were supposed to write a cheque for $60,000 to the province to cover our CO2 costs. They agreed that if we could demonstrate we were putting that $60,000 to use to improve energy, etc., in our communities, it was a worthwhile thing to do and we didn't have to write the cheque. It was all about incentives to reduce CO2.
In the model you prefer, having looked at a number of models, are you talking about returning an equitable amount to every Canadian? Is this why people who have a lower income would benefit, so that a person who is making a million dollars a year and a person making $20,000 a year would get the same amount of money in their rebate cheque? What is the model you actually prefer?