Opening Statement before the Standing Committee on Environment and Sustainable Development
Strategic Innovation Fund’s Net Zero Accelerator Initiative—Innovation, Science and Economic Development Canada
(Report 4—2024 Reports of the Commissioner of the Environment and Sustainable Development)
4 December 2024
Jerry V. DeMarco
Commissioner of the Environment and Sustainable Development
Chair, I am pleased to be here today to discuss our report on the Strategic Innovation Fund’s Net Zero Accelerator initiative, which was tabled in Parliament in April 2024. I would like to acknowledge that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinaabe people. Joining me today is Nicolas Blouin, the director who led the audit team.
The Net Zero Accelerator initiative aims to lower greenhouse gas emissions by incentivizing Canadian industries to decarbonize their operations. Our audit focused specifically on manufacturing, and we looked at whether Innovation, Science and Economic Development Canada managed the initiative to decarbonize the manufacturing industries in accordance with Canada’s climate goals and with due regard to value for money.
We found that Innovation, Science and Economic Development Canada had failed to attract the country’s largest industrial emitters. At the time of the audit, from a potential of 55 large-emitting companies, only 15 applied for funding under the initiative, and 2 signed agreements. The application process is lengthy and complex, taking on average 407 hours to complete. This has likely not helped the department’s efforts to attract more applicants.
Only 2 large emitters and 15 smaller emitters signed contribution agreements, worth a total of $3.2 billion. But only 5 of these companies had a signed commitment to reducing their greenhouse gas emissions. These commitments totalled just 6.2 megatonnes, which is less than 1% of Canada’s total emissions.
We also found that there was no industrial decarbonization policy that involved all relevant government organizations. Such a policy would provide Innovation, Science and Economic Development Canada with a clearer picture of which industries are most in need of funds to reduce emissions.
Our audit uncovered significant gaps, and the department provided vague responses to our recommendations. I am therefore concerned about what the department plans to do to address these gaps.
Chair, this concludes my opening remarks. We would be pleased to answer any questions the Committee may have. Thank you.