Just Transition to a Low-Carbon Economy

Opening Statement before the Standing Committee on Public Accounts

Just Transition to a Low-Carbon Economy

(Report 1—2022 Reports of the Commissioner of the Environment and Sustainable Development)

7 June 2022

Jerry V. DeMarco
Commissioner of the Environment and Sustainable Development

Thank you, Mr. Chair. We are happy to appear before your committee this morning to discuss our report on the just transition to a low‑carbon economy, which was tabled in the House of Commons on April 26. I would like to acknowledge that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinaabeg. With me today is Elsa Da Costa, the director who was responsible for the audit.

Our audit focused on Natural Resources Canada, Employment and Social Development Canada, and 2 regional development agencies. This audit covered 2 related areas: Canada’s preparedness for a just transition to a low-carbon economy, and Canada’s support for coal workers and communities affected by the coal phase‑out.

Canada has committed to moving away from fossil fuel dependence toward a low-carbon economy that reaches net‑zero emissions by 2050. Canada also committed to what is called a “just transition” for the workers and communities affected by this economic shift. However, the government has been unprepared and slow off the mark. We found that as Canada shifts its focus to low‑carbon alternatives, the government is not prepared to provide appropriate support to more than 50 communities and 170,000 workers in the fossil fuel sector.

In 2019, the government identified Natural Resources Canada as the lead department to deliver just-transition legislation. We found that the department took little action until 2021, and it did not have an implementation plan to address this significant economic shift. Without a proper just‑transition plan in place, the risks are comparable to what occurred with the collapse of the northern cod fishery in Atlantic Canada in the 1990s. In our 1993 audit, we found that the government was unprepared to deal with the consequences of the moratorium on cod fisheries on local communities and workers.

I would like to turn now to the coal phase‑out. Burning coal to produce electricity has significantly contributed to greenhouse gas emissions. Phasing out coal is an early part of the government’s plan to transition to a low-carbon economy.

We found that, without a coordinated federal approach to support a just transition, federal organizations relied on existing mechanisms, such as social assistance programs. These fell short of achieving a just transition for coal workers and the communities they live in.

As the coal phase-out is the first of several transitions to a low-carbon economy facing Canadian workers, communities, and governments, the federal government has an opportunity to learn from this experience to improve future policies and programs. The future will involve changes at a much larger scale than the coal phase‑out, so it is essential for Canada to make up for lost time and ramp up its approach to a just transition.

Our intent is to provide Parliament with useful information as the government works to meet some critical deadlines that it has set for itself. I trust that the findings and recommendations I have brought forward in this and in our other reports will help the government improve its performance in this area. Because climate change is an intergenerational crisis with a rapidly closing window for action, it is essential for Canada to translate its commitments and plans into action and results. Our future depends on it.

The departments and agencies agreed with all 5 of the recommendations in our report.

Mr. Chair, this concludes my opening remarks. We are happy to answer any questions the committee may have.