Opening Statement to the Standing Committee on Environment and Sustainable Development

2006 Report of the Commissioner of the Environment and Sustainable Development

3 October 2006

Johanne Gélinas,
Commissioner of the Environment and Sustainable Development

Mr. Chair, I am pleased to appear to discuss my sixth Report as Commissioner of the Environment and Sustainable Development. I am accompanied by Neil Maxwell, Richard Arseneault, David McBain, and Kim Leach.

This Report is the fruit of 18 months of work. It deals mostly with the federal government's approach to climate change covering up to mid-June 2006.

In the course of our audit work, we have tried to answer three basic questions:

• Is Canada on track to meet its emission reduction obligations?
• Is Canada ready to adapt to the impact of climate change?
• Is the government organized and managing well?

The answer is no to all 3 questions.

It has become more and more obvious that Canada cannot meet its Kyoto Protocol commitments to reduce greenhouse gas. In fact, instead of decreasing, greenhouse gas emissions in Canada have increased by 27 percent since 1990.

Let me walk you through each of the five chapters of my report.

Chapter 1—Managing the Federal Approach to Climate Change

Chapter 1 addresses how the federal government is organized to manage its climate change activities, whether it is able to report the costs and the results of its efforts, and on what basis it developed key targets for reductions in greenhouse gas emissions.

It also addresses new tools the government has chosen to help achieve its climate change objectives – a domestic system of trading greenhouse gas emissions and Sustainable Development Technology Canada, a foundation set up to help reduce greenhouse gas emission through technological innovation.

Government action has not been well organized or well managed. The government has not defined its leadership role, nor has it identified the responsibilities of each department.

It has been unable to come up with the basic tools that it needs to measure its progress. Even though more than six billion dollars of funding have been announced since 1997, the government still has no system to track the spending and results of its climate change activities. In other words, the government has no way of reporting returns on its investment.

Another major problem with the government's approach is its failure to address the biggest greenhouse gas emitters—transportation and heavy industry, which together represent the lion's share of all gas emissions in Canada.

In the transportation sector, which produces 25 percent of all gas emissions, the only well-defined measure in place is a voluntary agreement with the car industry to reduce emissions by 5.3 million tonnes by 2010, which is only 2 percent of the overall reduction needed to meet Kyoto's commitment. In addition, we found that the agreement falls short in a few key areas for voluntary agreements—chiefly, the lack of a third party independent verification of the model, data and results that will be used to determine progress.

As for the industry sector, which is responsible for 53 percent of all emissions, the government has steadily, since 2002, lowered greenhouse gas reduction targets. The reduction now expected from that sector could be only 30 million tonnes, of a total of the expected 270 million tonnes of reductions needed to meet Kyoto's commitments.

In other words, according to the data that we collected during this year's audit, the two sectors that are responsible for 78 percent of all of Canada's emissions could contribute only around 20 percent of the expected emission reductions. Even if the proposed measures are implemented, they will only, at best, slow down the growth in greenhouse gas emissions, not reduce them.

The two principal tools for reducing emissions—the system of large final emitters and the national emissions trading system—are still under construction, after more than four years. Problems plague the system's development, and the emissions trading system could end up costing taxpayers a lot of money. It is unclear whether and how the government will move forward with the key pieces of the previous plan, the large-final emitters system, the emissions trading system, the climate fund and the offset system.

Chapter 2—Adapting to the Impacts of Climate Change

Chapter 2 deals with adaptation—that is, helping Canadians cope with the impact of climate change. Canadians have to be ready to face the spread of pests and diseases, more frequent droughts in the Prairies, and longer and more frequent heat waves and smog alerts.

Unfortunately, we found that adaptation is where the efforts of the government were especially disappointing. Despite commitments to take action going back to 1992, there is no federal strategy to specify how the effects of a changing climate would be managed. A strategy would also specify which department would do what and how decision makers would have access to critical climate information. For example, new data on the effects of heavy rains could point to a need for changes in the design of storm sewers.

The failure to make significant progress on adaptation efforts risks Canadians' social and economic well-being.

Chapter 3—Reducing Greenhouse Gases Emitted During Energy Production and Consumption

Chapter 3 looks at three Natural Resources Canada (NRCan) programs that each received $100 million or more to reduce greenhouse gases emitted during energy production and consumption: the Wind Power Production Initiative for renewable energy, the EnerGuide for Existing Houses for energy efficiency abolished in May 2006, and the Ethanol Expansion Program for renewable fuels. We found that while these programs yielded results, it was difficult to assess whether they reduced emissions as planned because their targets were unclear. There was also limited reporting of the results these programs achieved with the money spent. We expected Natural Resources Canada to tell Canadians how successful the programs were at reducing greenhouse gases, but with unclear targets and inconsistent public reporting, we wonder how parliamentarians could assess whether these programs are working.

Chapter 3 also looked at the federal efforts to tackle emissions produced by the oil and gas industry. We found that in its battle with climate change, the federal government has not taken into account the unprecedented boom in that sector. Emissions resulting from the increased exploitation of oil sands could double by 2015, cancelling out any other efforts to reduce greenhouse gases.

Chapter 4—Sustainable Development Strategies

Chapter 4 concerns sustainable development strategies, which the federal government sees as one of the most important tools for achieving sustainable development.

Our findings this year represent good news, to a degree. In three quarters of the cases we examined, departments are making satisfactory progress on their strategy commitments.

Where we found departments making unsatisfactory progress, poor management systems were usually to blame. It is troubling that, after 10 years of experience, some departments are far from making progress.

The government still has not met its longstanding commitment to develop an overall environment and sustainable development plan, most recently promised for mid-2006. Your committee may wish to ask the government why the commitment has not been honoured.

Chapter 5—Environmental Petitions

Chapter 5 contains two parts: the annual report on petitions; and the results of an audit we conducted on a commitment made by NRCan, Environment Canada and Public Works and Government Services Canada to purchase 20 percent of their power from green sources by 2006.

It is interesting to note that, increasingly, Canadians are raising the issues of climate change and air quality in environmental petitions. Canadians are informed and concerned about climate change.

Most responses addressed questions raised; some did not. An example of a response that did not address the questions posed is that of Finance Canada to petition #158 concerning Subsidies to the Oil and Gas industry and federal efforts to address climate change.

Your Committee may wish to get Finance Canada to clearly explain the extent to which the sector is subsidized.

We found that the government has not been able to deliver on its commitment to buy 20 percent of its power from green sources by 2006, as it committed to in response to a petition in 2002. It has not been contributing as expected to greenhouse gas emission reductions in Canada as a result.

Conclusion

At the end of our audit, my conclusion is this: the federal government has done too little and acted too slowly on Canada's commitments to address the challenge of climate change. Looking forward, a massive scale up of effort is needed. I have identified five areas that I believe are crucial:

• Provide sustained leadership
• Integrate energy and climate change
• Develop a plan to reduce greenhouse gas emissions
• Push ahead with adaptation
• Assure governance and accountability

Each area is important but the call for leadership by the federal government applies to them all.

I believe that there is an important opportunity for parliamentarians to pursue the concerns I have raised in my report. Clearly, there are many issues that government officials need to explain, among them:

• What progress is being made in developing a robust system for collecting and reporting information on expenditures and results?
• How will departmental roles and responsibilities be clarified, and what mechanisms to co-ordinate federal activities will be put in place?
• What was learned during the Treasury Board led review of climate change programs and, how is it being shared and used?
• How will departments go about clarifying what they expect to achieve with their emission reduction programs and how actual results will be reported?

The federal government has accepted all of my recommendations. Therefore, I expect the government's new plan to spell out clearly how these recommendations will be taken into account.

So when the new climate change plan is available, parliamentarians will be able to see how the government has responded to the specific recommendations made in my report, and the five areas I identified as crucial to future progress.

Mr. Chair, that completes my opening statement. Now I will be happy to respond to your questions.