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Not all pathways to net-zero are created equal: Aaron Henry discusses Bill C-12 at Environment Committee

Not all pathways to net-zero are created equal: Aaron Henry discusses Bill C-12 at Environment Committee

On May 20, the Canadian Chamber’s Senior Director, Natural Resources and Sustainable Growth, Aaron Henry, appeared at the House Standing...

On May 20, the Canadian Chamber’s Senior Director, Natural Resources and Sustainable Growth, Aaron Henry, appeared at the House Standing Committee on Environment and Sustainable Development, on the topic of Bill C-12. Henry commented that the Canadian Chamber supports Bill C-12 in principle, however noted several areas where opportunities for improvement exist.

Aaron Henry’s opening statement:

Check against delivery.

Chair and Honourable members, it is a pleasure to appear before the Environment and Sustainability Standing Committee to share comments on Bill C-12, An Act respecting transparency and accountability in Canada’s efforts to achieve net-zero greenhouse gas emissions by the year 2050. Thank you for the invitation.

For those I have not met, my name is Aaron Henry. I am the Sr. Director, Natural Resources and Sustainable Growth at the Canadian Chamber.

The Canadian Chamber is in principle supportive of Bill C-12, though we believe some of the details of this proposed legislation and its mechanisms of execution need greater clarity and improvement before it can enjoy the confidence of Canada’s business community.

I want to start with the potential value of Bill C-12. If developed well and in consultation with Canada’s business community, the Bill could lend to greater policy certainty in Canada and the creation of mutual trust among government, business, and Canadians in the pursuit of our efforts to decarbonize.

As many other speakers in this committee have noted, we have a history of setting climate goals and failing to meet them. Not only does this undermine our efforts to meaningfully contribute to global efforts to combat climate change, and pose a risk to Canada’s reputation, it creates the risk for radical swings in Canada’s policy environment as successive governments introduce new measures and more stringent regulations to close ground on lapsed targets.

Swift changes in policy, especially climate policy, creates additional financial, and political risks for Canadian businesses. As such, in principle, legislation that increases the transparency and accountability in our efforts to achieve net-zero has value, especially given we are discussing policy choices over the span of decades.

However, while the Chamber recognizes the value of this legislation, we believe the legislation could be improved in several significant ways.

First, climate change is a challenge that has many different dimensions and how we approach net-zero will have consequences that go beyond simply reducing emissions. There are implications for social inclusion. There are implications for Canada’s economic prosperity and labour forces. Implications for rural communities, and as some of the witnesses who attended yesterday will attest, even public health dimensions. In short, not all pathways to net-zero are created equal. Some pathways will carry higher trade-offs than others, some of them will achieve the desired environmental outcomes, but at the unnecessary expense of other social and economic factors. 

While the goal of reducing emissions falls squarely within the remit of Environment and Climate Change Canada, these other dimensions rest in the portfolios of other Ministers. For this reason, the Canadian Chamber advises that the legislation be amended so that rather than it being the sole discretion of any Minister to approve a five year plan, that the decision be shared amongst cabinet as a governor in council decision. We propose this change because while the object of the legislation is accountability for Canada’s GHG reductions, the means to achieve this object requires the expertise and consideration of many other departments.

In addition to this, we remain concerned that there are few mechanisms described in this legislation to ensure full consideration of the economic opportunities and consequences that are attendant to pursuing net-zero. The goal of developing sectoral decarbonisation strategies has the potential to create closer collaboration between government and industry to ensure greater policy certainty.

However, the legislation as proposed lacks the mechanisms to achieve this goal. Two gaps come to mind.

First, there need to be a clear economic lens built into the legislation. This lens should set parameters to ensure that the sectoral strategies developed by the proposed advisory body, adhere to parameters, such as economic competitiveness, job creation, international opportunities for emission reductions, and potential export advantages in commodities and clean technologies that Canada can leverage. At a minimum, there needs to be an economic lens that makes the criteria through which different sectoral decarbonisation strategies are selected, transparent and clear for all concerned stakeholders.

Second, the net-zero advisory board as proposed sets a very high task.  In particular, the task set to an advisory board of 15 people to successfully develop decarbonisation plans for multiple economic sectors over multiple years, is a heavy task. The challenge seems even greater given the absence of the direct inclusion on the advisory board or through other mechanisms, of industry expertise in developing these sector strategies. It is our recommendation that the legislation be amended to ensure that industry stakeholders, the stakeholders who are closest to the technological and business opportunities to lower emissions for their sector, are given a clearer and formal role in developing sectoral decarbonisation strategies. Addressing this gap will strengthen the legislation, create deeper collaboration across government, industry and civil society, and ensure strategies are cost effective and enjoy the confidence of industry.

Last, the scope of the legislation and how it will interact with provincial jurisdictions and climate ambitions set by provincial governments is unclear in the legislation as it is proposed. Amendments must clarify how the targets set by provinces will be integrated. This will be critical in calibrating offset policy and carbon credit creation; this will be especially important to ensure certainty around which technologies are eligible for offset creation and those which get tagged as part of a business as usual in a provincial or federal net-zero strategy. Issues like these will require strong coordination with the provinces to ensure companies are not subject to duplicative regulations or uncertainty around new business models they may pursue. 

Thank you for your time and consideration. I look forward to discussing the bill in greater detail with all of you.

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