Dominique Barker in conversation with the Honourable Lisa Raitt discussing the role of government in moving the sustainability agenda forward.
Dominique Barker: Welcome to The Sustainability Agenda, a podcast series focusing on the evolving complexities of the sustainability landscape with a view on addressing current issues in a concise format to help you navigate and take action. I'm your host, Dominique Barker. Please join me as we explore today's most pressing matters with special guests that will give you some new perspective and help you make sense of what really matters.
Dominique Barker: Do you think that the Canadian public know that there's a problem with climate?
Lisa Raitt: Absolutely. And as a result, this notion of running on abandoning a carbon price is not as a foolproof way of getting power, either federally or provincially.
Dominique Barker: On today's episode, I'm speaking with Lisa Raitt, Vice-Chair, Global Investment Banking at CIBC. She was the Conservative Party Deputy Leader in Canada and was a member of parliament from 2008 to 19, including roles as Minister of Natural Resources, Minister of Labour, Minister of Transport. And she has her dog with her today, so we might hear that in the background. Welcome, Lisa, to The Sustainability Agenda.
Lisa Raitt: I really appreciate it, Dominique. Good to be here.
Dominique Barker: So today I would like to focus on the role of government in moving the sustainability agenda forward. I think we can all agree that after covid-19 there is a general recognition that climate change is the next existential crisis that we all have to fight as a global community. So, Lisa, let's start with your view of the role of government in fighting climate change. What are some of the tools at government's disposal in order to achieve that goal?
Lisa Raitt: Well, there's not a lot. I mean, how you can achieve a desired result is either through taxation, you can make regulation or you can make investments. And basically, those are the three things that a government can do. And what this federal government has done right now is they have set out with their climate plan is and they've got five pillars to it and they've set about in the last couple of weeks talking about their investments that they're going to be making, as well as some of the new regulations that they're bringing in. It's all very interesting, though, because something you touched on just then, Dominique, is something that I think is kind of different this time around in terms of climate agenda, and that is through the pandemic, what the world has seen is that when governments want to intervene, they can come in in a big and heavy way. This was possibly some of the most government intrusive policy we've ever seen in our lifetimes outside of a war effort. And as a result, perhaps some folks around the world are wondering, well, why can't we do that for climate? That is going to be a discussion that's going to be had I think.
Dominique Barker: That's interesting. I was listening to something out of the Norway Investment Bank today and they made exactly that point, that politicians can move fast and they can fast track decisions. So that's interesting. And what is your opinion on how do you rate Canada's scorecard in this regard? I certainly have the impression that we are not as aggressive towards fiscal green stimulus as we've seen out of Europe, UK in Asia. Am I correct in that assumption? What are your views?
Lisa Raitt: I think on a scale you're probably seeing more come out of Japan and out of Europe and the United States, but on a proportional basis, Canada probably is where it should be or maybe just a little bit behind. And the reason being is that although we are a G7 nation, we are very small. And as a result, we have to have resources to get into the bigger game of making these kinds of investments. And quite frankly, we don't have a huge budget that is brought in through taxation. And what you see is we talk about deficits all the time is that there's not a lot of real spending that's available to have new projects come on board. You've got a whole bunch of money that has to go into our current system of either old age pension, EI or federal transfers for health or for social services. And that leaves just a little bit behind, about one hundred billion in total when we're talking about how much money we have for departments and for special projects. So there's not a lot of cash, quite frankly, available unless you're going to be borrowing in order to bring in some new projects. So Canada's probably where it can be. And that's why what you hear from Deputy Prime Minister Freeland is we need the private sector to invest. We need investment coming from private sector, not just from Canada, because we can't shoulder it all our own with respect to government revenues and with respect to taxpayer dollars.
Dominique Barker: Ok, that's very interesting. Thank you, Lisa. Maybe I'll just switch over to carbon. Carbon tax, Lisa, I think you'll agree, has been a bit of a lightning rod in Canada politically. And we have been touted as leaders in terms of having a carbon tax that skills upwards to 2030, which will have an impact on all of our individual wallets. But it's been an area of controversy and it's not clear to me why it's been so controversial. Can you put a political lens on it, please?
Lisa Raitt: Sure. And it goes back many, many years. I mean, if you recall the first time we would have talked about a carbon price or a carbon tax was Stéphane Dion in his election campaign in 2008 for the Liberals, where he talked about the green shift. The conservatives at the time decided that they were going to come out hard and heavy against this new carbon tax and just said to Canadians, you don't want to pay a carbon tax. But here's the adage, Dominique. The adage in society, or at least in politics, is you can't sell a solution until the public knows that there's a problem. So let's fast forward to 2015 and 2019, those two elections. Do you think that the Canadian public know that there's a problem with climate? Absolutely. And as a result, this notion of running on abandoning a carbon price is not as a foolproof way of getting power either federally or provincially. So what's going to happen now? Conservatives definitely have a point of view that a carbon tax, as it is put out, is heavy handed in the sense that federally you're trying to tell provinces what they're going to do. And that's what is before the Supreme Court right now, whether or not a federal government is the right mechanism to be charging a carbon price on pollution or a carbon tax in general. And that decision is probably coming out fairly soon. And we'll get a lot of clarity around carbon pricing and carbon taxation after that, because as you may know, what's happening right now is that in four provinces, it's the CRA is remitting the tax to the federal government who then cycles it back into taxpayers hands. In the other provinces, what's happening is that CRA remits the carbon tax directly to those provinces and they could do what they want to do with it. So after the clarity of the carbon tax decision at the Supreme Court, it may very well be a moot point in terms of how we perceive on a political basis fighting a carbon tax or not fighting a carbon tax because the decision is going to be made.
Dominique Barker: Ok, well, in my opinion, I do think we do need to price carbon if we are going to get to net zero and that's to incent projects. And that brings us to the next topic, carbon capture. If we can have visibility into carbon pricing, we can probably help finance carbon capture projects. And I've really seen it enter the narrative in the press and media and on Bay Street recently. Carbon capture is really captured the imagination. Can you put a political lens on it? Why do you think that is right now, right here?
Lisa Raitt: Because we need it,
Dominique Barker: OK. (laughs)
Lisa Raitt: Well, we need it because we are rich in natural resources, including natural gas. And in order for us to be able to hit our net zero, we have to deal with emissions coming out of the oil sands. And one way of dealing with the emissions coming out of the oil sands is through carbon capture technology. And the piece is the tech is there. We know the technology is there. It's too expensive. But there are means and ways in which to encourage that tech utilization. And I know, Dominique, one of your favourite topics and one of my favourite topics that we always talk about is the hydrogen economy. And for Canada to utilize natural gas in order to create blue hydrogen, you need to have carbon capture in order to do that. Otherwise, you have grey hydrogen because you're just burning fossil fuel. So the whole piece around carbon capture is incredibly important to our trade exposed oil and gas sector, which is an important sector in our country. And it's one thing that you can see this conservative opposition agreeing with the Liberal government that carbon capture is something that we need to do. So we're all on the same page. The question is how. How do you incent financing? How do you incent investment in this by the large corporations that are going to need it? And that's where the government does come in. That's why you're seeing so much discussion around it, because they're just making sure that the public understands that we need carbon capture in order to utilize our fossil fuels going forward and have it as that bridge to completely net zero emissions.
Dominique Barker: Right. And the other way the private sector can play a role is by putting a price on carbon. And that's what I was alluding to. And when we think about Canada, geologically, because we were rich in oil and gas, we have a lot of places to store that CO2. And so eventually, if we can get direct air capture to work, for example, at a reasonable level, still a high price, but a reasonable pricing level, say one hundred dollars a tonne. This would be an interesting area of growth for places like Alberta. And that's my thinking.
Lisa Raitt: It's true. And we are trade exposed, right? And we are a small country. So as a result, we will be looking very carefully as to what's going on with the United States. If the United States makes very bold moves in carbon capture technology, if they're utilizing it, and if they decide to implement a border carbon adjustment tax. Those are things that are going to drive provinces to make sure that they do have carbon pricing. And as I said, when the Supreme Court decision comes out, it may very well be all in the hands of the provinces as opposed to a federal carbon tax.
Dominique Barker: And just to end off, Lisa, we're asking all of our guests this question. What is something that you or your family has done personally, or your dog, in the past year to help reduce emissions or inequalities in society?
Lisa Raitt: It's a great question. And what I have done in terms of inequalities is from my time as being a campaigning politician, I have a great collection of young volunteers from high school, and a lot of them are racialized Canadians from underprivileged families and I'm their mentor. So I'm actually right in the midst, Dominique, of helping right referral letters for universities and for scholarships and meeting with these guys and helping them with interviews and skills. And I get more out of it I think than they get out of it to be honest, but it's the part that I really enjoy. And then the second piece is, I'm probably one of the few profile conservatives that will come out and say that you do need a carbon price. And my job is to help socialize that with other conservative minded folks out there, that this is something we're going to need for a whole bunch of reasons. And it's not about building a bigger government. It's about making sure that our trade exposed industries are protected and that we're moving together for betterment of our entire economy.
Dominique Barker: Thank you very much, Lisa. Thank you for your leadership at CIBC and also thank you very much for your leadership over the years for Canada and our society.
Lisa Raitt: Thanks, Dominique. I appreciate that.
Dominique Barker: Please join us next time as we tackle some of sustainability's biggest questions, providing different perspectives to help you move forward. I'm your host, Dominique Barker, and this is The Sustainability Agenda.
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