Environment and Sustainable Development

The House of Commons Standing Committee on Environment and Sustainable Development met to study greenhouse gas emissions reduction targets and Canada's progress toward them. Witnesses included Aaron Cosbey from the Commission on Carbon Competitiveness, Jerry V. DeMarco and Kimberley Leach from the Office of the Auditor General, Darren Christie, Jonathan Timlin, and Sean Maher from the Canadian Energy Regulator, and Dawn Farrell, Jeff Labonté, and Sarah Jackson from the Major Projects Office.

Jerry V. DeMarco stated that Canada has never met a greenhouse gas emissions target and is not on track to meet its 2030 commitment, with current projections showing a gap that has widened since the consumer carbon price was repealed. He said that being "on track" requires a plan with concrete measures that add up to the target, reliable modelling of expected reductions, and effective implementation resulting in significant year-over-year decreases. He noted that many experts agree a policy package with regulations and carbon pricing can support deep reductions if stringent enough and applied widely, and that the federal government has regulatory tools to lead even without provincial consensus.

Aaron Cosbey argued that industrial carbon pricing systems in Canada are in crisis and need serious fixing, with sectoral performance standards needing to be tightened and better tailored to different sectors. He said that in the long run, output-based pricing will struggle to protect against carbon leakage, so Canada must begin exploring mechanisms like border carbon adjustment, similar to the European Union's CBAM. He emphasized that an industrial carbon price is necessary but not sufficient, and must be supported by sector-specific enabling policies and a game-changing industrial strategy that chooses a small number of sectors to push hard on.

Darren Christie, Jonathan Timlin, and Sean Maher explained that the Canada Energy Regulator does not set climate policy but provides energy information and analysis, including scenarios looking out to 2050 that show increasing electrification, growth in renewables, and decarbonization of the electricity grid. They noted that the CER's commission considers a project's contribution to or hindrance of Canada's climate commitments when assessing whether it is in the public interest, and may impose legally binding conditions to reduce greenhouse gas emissions.

Dawn Farrell stated that the Major Projects Office aims to advance large-scale projects of national significance by strengthening the regulatory framework and ensuring financing, with a goal of bringing projects to execution within two years. She said that five projects and six transformative strategies have been referred to the office, including LNG phase two, critical minerals, nuclear, and high-speed rail, and that the office evaluates projects based on criteria including economic benefits, indigenous interests, and contributions to clean growth. Jeff Labonté added that the Building Canada Act allows for streamlined approvals but does not provide automatic exemptions from other legislation, such as the Oil Tanker Moratorium Act, and that the office's work on LNG phase two involves assessing remaining hurdles for a final investment decision, not additional environmental assessments.

The committee heard procedural debate about interpretation quality and the pace of questioning, and members requested that witnesses table documents including a summary of Ms. Farrell's climate assessment experience, details of projects submitted to the Major Projects Office, and the office's lobbying meeting records and financing guidelines.