Government Operations Committee on March 19th, 2013

[The Chair, NDP, Pat Martin]

Kelly, now you are over time. Thank you very much.

John McCallum, for the Liberals.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you, Mr. Chair.

Welcome to our guests.

Mr. Mueller, when did the federal government begin the LEED projects?

[Thomas Mueller]

I think it was, from our records, in 2006. The federal government was actually one of the first public agencies in Canada to adopt a LEED gold policy.

[John McCallum, Liberal, Markham—Unionville, ON]

Yes, that's what I thought.

[Thomas Mueller]

You were very early on, yes.

[John McCallum, Liberal, Markham—Unionville, ON]

I think it was 2005, actually.

[Voices]

Oh, oh!

[A voice]

January 23, to be precise.

[Thomas Mueller]

But you were not the first ones.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

I was a bit surprised. I think I heard you say that the private sector was much more efficient and effective than the public sector in terms of producing energy-efficient buildings and that they had no choice. The public sector didn't have much in the way of plans. You said that, I believe.

[Thomas Mueller]

Not exactly. I think what I was trying to say is that when the federal government started, the private sector was nowhere to be seen. Just like Stephen, I never thought that we would sit in the same room with them, ever. But they have come a long way very quickly recently, over the last three years. On the new building construction, I think the federal government and the private sector are actually on par, even though we see a lot more private sector projects now that are aiming for LEED platinum, because it's a market competition thing. On the existing buildings side and using LEED for existing buildings on the larger properties, right now the private sector is ahead of any level of government in Canada—ahead of the municipalities, the provinces, and the federal government as well.

[John McCallum, Liberal, Markham—Unionville, ON]

I don't understand why, because the private sector is there to make money, not to be energy efficient for the sake of energy efficiency—unless they could also make money that way.

You're saying that the governments don't care? Why are the governments behind the private sector in terms of existing buildings?

[Thomas Mueller]

Well, the private sector is doing it because they make money, because the existing buildings now have to compete with the new buildings for tenants. That's the business. They're competing for tenants. They want the buildings fully occupied. The federal government doesn't have the same objective. You don't have the objective of filling your buildings with tenants. You don't have a profit margin to it. Your objectives are more driven by good policy, around maybe environmental policy, carbon reduction policy. But there are also aspects—albeit I don't know this, but am just speculating here. It might also be that you're providing a good workplace for employees so that they are healthy and productive, because you have a huge workforce. So you're driven by different things than the private sector.

[John McCallum, Liberal, Markham—Unionville, ON]

You're saying that the main motive for the private sector is that they're driven by profit?

[Thomas Mueller]

It's corporate social responsibility, profit, and also tenants or tenant demand for green office space—those three things.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

For Mr. Seymour, I have a question that's perhaps similar to what Kelly was talking about, namely these energy performance contracts. I think the two main costs are the performance guarantee fee and the financing charge. How are those determined? Are they determined competitively? We did a study of PPPs. Sometimes it seems like a black box; we don't know how these things are determined. How are those determined?

[Dave Seymour]

In the process that's used, the federal buildings initiative is a completely open-book process. So the performance fee that you're referring to and the financing are shown as separate line items. So anybody entertaining that kind of project would know to the penny what those costs would be. They're covered up front as part of the proposal effort.

[John McCallum, Liberal, Markham—Unionville, ON]

So is there some sort of competitive process?

[Dave Seymour]

Well, the individual energy service companies bring the various financial institutions to the table as part of their offering. I have to tell you, there's not an overabundance of this business out there. I'm talking about the performance contracting business with the federal government. It has really tapered off in the last number of years. So there aren't a huge number of banks going after this business.

Is it competitively bid? Yes. But if you count two or three competitors as competitively bid, we could probably have a discussion.

[John McCallum, Liberal, Markham—Unionville, ON]

Okay, thank you very much.

[The Chair, NDP, Pat Martin]

Okay, that's great, John. Thank you very much.

Next then, for the Conservatives, we have Jay Aspin.

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

Thank you, Chair, and welcome to our guests.

This is an important topic, a productive topic, if we're talking about efficiencies and savings these days.

Just as an overview question, I'd like you gentlemen to react to this.

Mr. Seymour, you alluded to the fact that in North America the buildings maybe aren't being built to the standards, savings-wise, as those in Europe. How closely do you work as energy scrutineers, as I would call you, as a general group? How closely is your industry working with architects? How much have architects changed their ways these days in Canada?

[Thomas Mueller]

Actually, the Canada Green Building Council was originally started by architects and we work very closely with RAIC, the Royal Architectural Institute of Canada, which is still one of our main stakeholders. It was the architects, initially, who wanted to design buildings that are better, not just in terms of energy, but also electricity, water, well-being, lighting, all kinds of things. The architects, particularly the RAIC and the OAA—all the associations—are very supportive of a sustainable design. They still make up a significant portion of our membership, but our membership is more diversified yet.

The architects have a target that is called Architecture 2030. It's again a North American target that buildings need to be carbon neutral by 2030. So the Royal Architectural Institute supports that target, and we support it, along with many other organizations. I think some engineering organizations probably do as well.

The architects play a very important role because they're typically the project proponents. But the architect by him or herself cannot produce a building that's highly efficient in many ways. They need the engineers and they need the commissioning agents and they need a good builder. It's a multi-professional task to produce a good building, and we're very much proponents of an integrated design so that all of the parties involved can produce a building. From the owner to the interior designer and the landscape architect, they talk about how they can achieve high performance in building. It's a process issue, not necessarily a target issue. But all of the processes have used what we call an integrated design approach, and these buildings are all performing extremely well.

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

So can I take it from your comments that architects use people like yourselves as one of the resources available to design their buildings, and that they're changing their ways as well?

[Thomas Mueller]

Yes, they are, and for quite some time now.