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Environment Commissioner Jerry DeMarco says a price on carbon emissions is an essential tool for climate action, but Canada needs to do more to ensure it is fair and equitable. DeMarco also criticized the government for failing to move on a plan to help energy workers transition from fossil fuel jobs to clean technology.

The Canadian Press

Ottawa is failing to deliver on key climate policies and may be overstating the effectiveness of others, according to a series of new reports by the federal environment commissioner that cast doubt on the Liberal government’s credibility on emission-reduction plans and projections.

Taken together, the five reports released Tuesday by Commissioner of the Environment and Sustainable Development Jerry DeMarco paint a picture of a government struggling to execute on critical aspects of its climate agenda. The reports covered the following areas: transitioning workers away from fossil-fuel industries, the greening of government operations, climate-resilient infrastructure, hydrogen, and carbon pricing.

Mr. DeMarco pointed to disorganization across multiple departments, a lack of data and reporting, “unrealistic assumptions” related to Canada’s hydrogen strategy, and questionable funding decisions. In one case, federal dollars distributed under a program meant to support communities affected by the transition away from coal-fired electricity were actually used to renovate a college property to provide summer accommodations to seasonal workers in Atlantic Canada.

“The Canadian government needs to be more up front and transparent about its efforts,” Mr. DeMarco told reporters after his assessments were tabled Tuesday morning in the House of Commons. “They’ve got to follow up their words with actions.”

The commissioner’s reports come in the wake of a flurry of federal spending pledges aimed at expanding existing climate programs and creating new ones for clean hydrogen as well as carbon capture, utilization and storage (CCUS). In addition to Ottawa’s $9.1-billion plan to reduce greenhouse-gas emissions by 40 per cent below 2005 levels by the end of the decade, the government included in the most recent budget a suite of tax credits and a new $15-billion investment fund to leverage private capital to help the country meet its climate targets.

Delivering on those goals will require steep changes: In his report released last fall, Mr. DeMarco determined that Canada had the worst emissions record in the G7 since the 2015 Paris climate deal was struck. The Paris agreement seeks to hold global warming to no more than 1.5 C above preindustrial levels.

While Canada’s greenhouse-gas emissions dipped 9 per cent during the first year of the pandemic, the reductions were driven primarily by the COVID-19 recession and the decline in road and air travel owing to provincial lockdowns. Emissions are expected to bounce back up in Canada’s next inventory report to the UN.

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Mr. DeMarco’s five audits covered different time frames, but most looked at a period from some point in 2017 or 2018 to the fall or winter of 2021. The hydrogen report covered the period from early December, 2019, to mid-January of this year.

On carbon pricing, the commissioner found problems with the systems Ottawa set up to add a cost to carbon pollution on consumers, as well as a second system that applies to the country’s biggest polluters. If a province or territory doesn’t develop a carbon-pricing plan of its own, or if it’s below the federal standard, it must adopt a “backstop” that applies the minimum price through federal taxes.

Mr. DeMarco found that Ottawa approved a patchwork of systems at the provincial level that leads to weaker standards for some large emitters. He pointed to Ontario as an example of a province with a “relatively weak” large emitters system. The design of the large emitters program, he said, undermines the “polluter pays” principle.

In the case of the consumer carbon price, Mr. DeMarco said Indigenous groups and small businesses are disproportionately affected by the policy, despite government attempts to lessen the burden. He found that the systems in Newfoundland and Labrador, Prince Edward Island and New Brunswick don’t meet federal standards.

Environment Minister Steven Guilbeault told reporters Tuesday that his government is negotiating with the provinces and territories to make the carbon-pricing system for big polluters more stringent. The government, he said, is planning to add more certainty and “fairness” to carbon pricing across Canada.

The commissioner’s report on hydrogen found that the federal government likely overstated the role that the chemical element can play in meeting the country’s 2030 emissions targets. Mr. DeMarco noted that Natural Resources Canada’s projected emissions reduction from clean hydrogen technologies is three times higher than the 15 megatonne cut projected by Environment Canada. The natural resources department’s projections were so optimistic that they compromised the credibility of the federal hydrogen strategy, Mr. DeMarco found.

Since the audit period for the report ended, the government committed to introducing tax credits for clean technology investments and CCUS. In an interview Tuesday, Mr. DeMarco said those new policies improve the economics of hydrogen but there are still other elements of the government’s assumptions that must be addressed, including technology development and infrastructure needs.

In an interview with The Globe and Mail in Edmonton on Tuesday, Natural Resources Minister Jonathan Wilkinson said the government’s hydrogen strategy was meant to be aspirational. “It’s directional,” he said. “It essentially sets a direction as to where we want to go.”

The commissioner also looked at the matter of a “just transition,” which refers to the government’s promise to support those affected by a move away from fossil fuels and to minimize the economic impact of the transition to a low-carbon economy. In 2016, the Liberals announced an accelerated phase-out of traditional coal-fired electricity in Canada by 2030 – a move that primarily affects workers in Alberta and Saskatchewan, but also New Brunswick and Nova Scotia.

Although Natural Resources Canada was appointed the lead department to deliver just-transition legislation in 2019, Mr. DeMarco said it “took little action until 2021″ and has yet to introduce the act. Various departments and regional agencies used a “business-as-usual approach” and “relied on existing program mechanisms that were not designed to support a just transition,” the commissioner found.

Pointing to the 1990s collapse of the northern cod fishery and its effect on the labour force in Newfoundland and Labrador, Mr. DeMarco urged Ottawa to conduct an analysis to see which policies and programs should be scaled up to support a transition away from fossil fuels.

Mr. Wilkinson emphasized that his government is not phasing out the use of fossil fuels entirely. The world will still use oil and gas in the decades to come, he said, but instead of combusting it, it will be used in things such as lubricants, petrochemicals or asphalt.

“I think sometimes in this country we get into this view that somehow fossil fuels are the enemy of climate change,” he said. “But it’s actually carbon emissions that are the enemy of climate change.”

Mr. DeMarco’s two other reports centred on the “greening of government” and climate-resilient infrastructure. On the former, Mr. DeMarco found that multiple departments haven’t done enough to make their operations more environmentally sustainable. On the latter, he determined that Infrastructure Canada doesn’t have enough information to judge whether federally funded climate-ready projects are actually resulting in more resilient infrastructure.

With a report from Emma Graney in Edmonton

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