Evidence of meeting #41 for Transport, Infrastructure and Communities in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bus.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Jean-Pierre Baracat  Vice-President, Business Development, Nova Bus, a Division of Volvo Group Canada, Inc.
  • René Allen  Vice-President , Product Management and Strategy, Business Development, Nova Bus, a Division of Volvo Group Canada, Inc.
  • Chris Stoddart  Vice-President of Engineering, New Flyer Industries Inc.

8:50 a.m.

Conservative

The Chair Merv Tweed

Good morning, everyone. Welcome to the Standing Committee on Transport, Infrastructure and Communities, meeting number 41. The orders of the day are pursuant to Standing Order 108(2), a study of innovative transportation technologies.

Joining us today from Nova Bus, a division of Volvo Group Canada, Inc., are Jean-Pierre Baracat, vice-president, business development; and René Allen, vice-president, product management and strategy, business development.

From New Flyer Industries, who had some exciting news this past week in Manitoba, Chris Stoddart, vice-president of engineering.

Thank you for joining us. I'm sure the clerk has given you instructions on presentation, and then we'll move to questions from the committee. I'm not sure who wants to start. Have you tossed a coin?

Okay, Mr. Baracat, please.

8:50 a.m.

Jean-Pierre Baracat Vice-President, Business Development, Nova Bus, a Division of Volvo Group Canada, Inc.

We'll do the presentation in French, if you don't mind.

I will start by telling you who we are, and then I will let Mr. Allen take over to talk about emerging technologies.

As you mentioned, Nova Bus is part of the Volvo Group, which is all over the world and has 118,000 employees. In Canada, we are the representatives of the Volvo Bus Group. We are responsible for public transit products for all of North America.

Nova Bus has three plants, two in Canada and one in the United States, in order to meet the requirements of the Buy American Act. In Canada, we are the leader with a little over 50% of market share. We employ about 1,000 people, 800 of them in Canada. About 1,000 buses are sold per year, with sales of about $0.5 billion.

I will now let Mr. Allen talk about innovative technologies.

8:50 a.m.

René Allen Vice-President , Product Management and Strategy, Business Development, Nova Bus, a Division of Volvo Group Canada, Inc.

Regarding innovative technologies, we can ask ourselves three questions. How can we better use what we already have today? How can we better use the technologies available elsewhere in the world? Finally, how can we maximize our investments in research and development?

Concerning the way we can better use what we have today, there is an emerging technology called BRT, bus rapid transit. This technology allows us to use existing buses and have transit that costs a lot less. In Ottawa, there is a pretty effective example of BRT, which is having bus lanes and organizing a bus system that is much closer to a subway or train system.

BRT has very significant advantages both environmentally and financially. If there is a 3 km/hr increase in commercial speed, the average speed of a bus on a given route, pollution is reduced by half. It is therefore very significant environmentally. The time for routes is also reduced significantly. It is the factor that most encourages people to take the bus rather than their car. With BRT, people realize quickly that they can reach their destination in less time than if they took their car. Finally, there is the fact that people stuck in traffic mean big economic losses. In 2006, Transport Canada determined that these losses were between $2.7 billion and $3.2 billion per year for Canada.

We will send you more information by email describing exactly what bus rapid transit is. This system has different characteristics that are very important: exclusive bus lanes; level-boarding, so that people do not have to go up any steps; prepayment outside the bus, which is very important because it greatly reduces the time needed to get on and off; priority at intersections so that buses travel more quickly than vehicles; passenger information; traffic control; and, especially, high-capacity buses.

Current systems are comparable, in terms of capacity, to light rail and subway, but they cost a fraction of the price. With a $1 billion investment, 8 km of subway can be built, 40 km of elevated rail, but 310 km of bus rapid transit. Three hundred and ten kilometres are therefore covered with $1 billion, which is much less expensive than building a very demanding system like a subway or a rail system.

How can you help us set up these systems? BRT must be promoted and supported. It is important to invest in exclusive lanes and to help transit companies that want to set up BRT. Often, they want to do so, but either the train or the subway is more attractive. If you support transit companies that want to build something new, you will reduce traffic congestion as well as investments in transit infrastructure.

The second way you can help us is by harmonizing standards and certifications. For example, environmental standards should be changed regarding motors. Canada's standards are the same as those in the United States. European standards are a bit different, even though emissions in Europe are roughly the same and a little lower, depending on the year. In general, they're not tested in exactly the same way, so the standards do not match.

Systems from elsewhere in the world cannot be used in Canada if they do not meet these standards. Harmonization of international standards is very important, because it will avoid having to certify motors again in Europe and the United States. The cost of that is very high, tens of millions of dollars, which currently come up every three years.

A large part of Volvo's investment budget is used strictly for truck and bus motors. Consequently, all other innovations are set aside. If we were able to harmonize these standards, we could use the money available for other innovations. Canada could allow as is the use of motors that meet European standards and that are available today. That would allow us to provide those motors and not have to obtain a certification.

It would also be good if you supported the harmonization of international standards. It is a very long process, which started a number of years ago. A good boost is needed to reach the goal more quickly. All sorts of technologies that are available elsewhere could also be available here.

The last point, which is much more about new technologies, deals with supporting electric buses. Nova Bus, a division of Volvo Group Canada, Inc., has a modular approach to electromobility. It would allow us to meet the needs of our clients. Since 2006, we have been making hybrid vehicles. To date, we have sold hundreds. To get to the electric bus, we are continuing in that direction by electrifying all of the major components. Last year, in 2011, we introduced our first electric bus on the North American market. We work on its deployment and its design. There are significant challenges on the components side, but it is especially challenging when it comes to the quantity of energy stored to allow acceptable autonomy for our clients.

And that is the focus of our request for assistance. The first thing would be to make green funds available for development, then to simplify and facilitate comprehension of as well as access to different forms of federal aid. For us, it is not always easy. Some forms of aid are only accessible to transit companies. There need to be some for industrial companies. Finally, we are asking you to support and help companies that work on battery systems, storage elements and charging. It is very important. In fact, it is the basis of electric vehicles. Once advanced technologies in this field are available, we can integrate, use and develop them.

That is the main message we wanted to communicate to you this morning.

9 a.m.

Conservative

The Chair Merv Tweed

Thank you.

Mr. Stoddart.

9 a.m.

Chris Stoddart Vice-President of Engineering, New Flyer Industries Inc.

Good morning. My name is Chris Stoddart. I'm here representing New Flyer. Thank you for having me today.

To tell you a little about New Flyer, we are the leading heavy-duty transit bus manufacturer in Canada and the United States. We've delivered over 31,000 buses. We were founded in Winnipeg in 1930. We're still headquartered out of Winnipeg. We have manufacturing facilities in Winnipeg, and in Crookston and St. Cloud, Minnesota. We've a small fabrication plant in Elkhart, Indiana. We also have a parts distribution business, where, again, our largest facility's in Winnipeg, Manitoba, but we also have parts distribution centres in Brampton, Ontario; Erlanger, Kentucky; and Fresno, California. In the last couple of years we've recently started our own service centre, where we're trying to do commercial work on buses. That's located, actually, close by here in Arnprior, Ontario.

We're heavily focused on being the employer of choice. We've won many awards over the last half a dozen years. We have 2,200 employees and our revenues are, give or take, about $1 billion. We build maybe 2,000 buses, and our revenues are split, about $130 million of that billion is on the parts side.

The theme we're really trying to work towards is about life cycle value and providing the best bus value for life. I think that starts with making sure you offer the right product for the particular customer's needs. We build 35-foot buses and 40-foot buses. We build the 60-foot articulated buses. These are all heavy duty, which means that the bus is qualified for 12 years of life.

We have multiple types of propulsion systems. We have clean diesel. We have diesel electric hybrids, and we have those in a series. We have those in parallel. We offer electric trolleys, and we offer liquid natural gas, compressed natural gas, hydrogen fuel cells, all types of different buses. Last week, we unveiled our battery electric bus, the same as my competitors beside me, so that's very exciting stuff.

There's a picture on the notes here on the top left-hand corner. That is a medium-duty bus and that's market space that we don't play in today, but we've just had a partnership established with Alexander Dennis Limited out of the U.K. These buses are all over Europe. They've built more than 16,000 of these. Essentially, it's a smaller-scale bus, 30 feet, and a little narrower, much lighter bus.

This is an agreement we've just signed with them, and we're going to be producing these in North America. They've been introduced in North America before, but never really took off, so we think it's a great opportunity to have fit-for-use buses for smaller shuttle service or feeder routes for bus rapid transit or rail rapid transit. That's a new product we're getting into in the next year.

On a priority basis we're really focused on reducing, again, life cycle costs, on fuel consumption and emissions. The focus is on lightweight design.

We recently launched our latest platform, the Excelsior bus, and we went through great pains to ensure we reduced the weight as much as possible, because there's almost a direct correlation between weight and fuel economy. We've done a lot of cool stuff with our steel structure and composites to ensure we probably took about 10% of the weight out of our bus.

The other thing is that we see a big opportunity when you're again looking at life cycle costs and fuel economy for our customers. There's really neat stuff you can do on the technology side, but one thing that can swing fuel economy is just driver behaviour. So we've introduced something called New Flyer Connect. It's like on-board telematics. Selfishly, on our side, it collects all kinds of data for what's going on in the bus and tells us how the bus is performing. It helps to provide feedback so that we can design a better bus. We'll provide the same to our customers so that it can help optimize their maintenance frequency and reduce their costs.

The other thing it has is on-board driver monitoring. Most people, as they drive their cars and see the instantaneous fuel economy, will notice their driver behaviour and how gently they drive the vehicle. That probably has the most prominent influence on fuel economy. We want to be in a position to provide that to our customers so that drivers can get real-time feedback on how they're doing. Hopefully, that can make, sometimes, a 10% or 13% difference in fuel economy right there.

Again, one thing that is very important in our industry, which was touched on in the other presentation, is the EPA requirements. They change every three years: 2004, 2007, 2010, 2013. You won't be able to sell a bus in North America unless you meet these. They're very stringent requirements, so we have a lot of focus on getting prepared for 2013.

Again, it's a similar story here. In an effort to reduce fuel consumption, you'll see the electrification of accessories. Those are things such as power steering, air conditioning, and air compressors. You've seen that trend in automotive. Again, we're following suit. It's just a way to optimize fuel economy.

Finally, again, the all-electric bus is a similar story. We're very excited about that. We actually see that in the next decade really being commercially viable. I think we really believe in the payback for that in reduced costs for ridership. That's a pretty exciting program. We just finished building our first bus. It's being tested on the streets of Winnipeg right now. We're hopeful that we will be putting in some production orders, maybe as early as 2013.

I don't have any specific asks today. I just want to talk a bit about some of the stuff we struggle with, I guess, as a company.

When we talk about product configuration management, if you look at automotive, they're at one end of the spectrum. If you want to buy a car, you can go online and pick between five different colours, power windows, and air conditioning, and all that. You can select from a configurator, but you can't ask for anything custom. That's just the way that world works. That's at one end of the spectrum.

Our industry's pretty much at the other end of the spectrum. Our customers dictate to us exactly what they want, and every order has custom engineering. For some orders, maybe it's a couple of hundred hours of engineering. Some orders can be 10,000 hours of engineering.

While we understand that our customers might be spending millions and millions of dollars and want their thumbprint on it, we'll never get to automotive. If we could get to somewhere in the middle, where there could be a little bit tighter constraints on how much customization our customers could demand, I think there would be huge efficiencies and cost reductions from the OEMs overall, and there would probably be better performance. Every time you customize, you stand some risk of having something go wrong, which ends up costing money. It's a huge issue our industry deals with all the time.

One of the other challenges, as we sell both into Canada and the United States, is the Buy America requirement. Essentially, at a high level, they want about 60% content. There's talk of that content increasing. It presents a huge number of challenges, particularly for companies that are headquartered in Canada, as we are. That has a lot of challenges.

On the flip side, there are the “buy Canada” requirements. Although it's not as dominant as it is in the United States, it's certainly beginning to catch on in Canada, and more so in Ontario. It just presents challenges, as you have to source material to meet those requirements.

I talked about New Flyer Connect. We have this data available that we want to use to optimize the design of our buses, to help our customers properly maintain their buses, and to give real-time driver feedback. I guess the issue we'll have to deal with is how well that's accepted. How are drivers going to feel about having that performance criteria and having that published? I think it's a great opportunity, as long as it's embraced and rolled out the right way.

Finally, on the battery-electric bus, I think the bus itself is probably the lesser evil for commercialization. Don't get me wrong; it has plenty of challenges. But we think the secret sauce is more the charging. I think over the next 10 or 15 years, it's going to be about the best charging methodology—kind of like they had with that VHS and Beta. Do you do induction charging? Do you have stuff from overhead? Do you put a lot of batteries on the bus and just plug it in at night? Do you put few batteries on it?

I think the challenges there, maybe even over the next 20 years, are somewhat coming to a global point where there are universal types of standards for charging.

Obviously, on the battery technology, whatever can be embraced for improving battery technology just makes the viability from a cost and performance perspective that much more so on the battery buses. Those are the obstacles that we deal with every day, and we just wanted to present that and open it up for any questions.

Thank you very much.

9:10 a.m.

Conservative

The Chair Merv Tweed

Thank you.

Ms. Chow.

9:10 a.m.

NDP

Olivia Chow Trinity—Spadina, ON

Good morning. Thanks for coming.

To both companies, how many buses do you have that you make in Canada? How many do you supply in Canada, of all the different categories? How many jobs would that net? Maybe I could start with Mr. Allen.

9:10 a.m.

Vice-President , Product Management and Strategy, Business Development, Nova Bus, a Division of Volvo Group Canada, Inc.

René Allen

I would say that at this time more than 70% of the buses are supplied to Canada.

9:10 a.m.

NDP

Olivia Chow Trinity—Spadina, ON

How many would that be?

9:10 a.m.

Vice-President , Product Management and Strategy, Business Development, Nova Bus, a Division of Volvo Group Canada, Inc.

René Allen

In 2010 it was probably 800.

9:10 a.m.

NDP

Olivia Chow Trinity—Spadina, ON

Of those, how many of them are hybrids?

9:10 a.m.

Vice-President , Product Management and Strategy, Business Development, Nova Bus, a Division of Volvo Group Canada, Inc.

René Allen

In 2010 we had something like more than 150 hybrids. The rest of them were a mix of diesel, 40-foot and 60-foot, so regular and articulated buses.

9:10 a.m.

NDP

Olivia Chow Trinity—Spadina, ON

Right.

For New Flyer, what number do you have?

9:10 a.m.

Vice-President of Engineering, New Flyer Industries Inc.

Chris Stoddart

Our Canadian volume really fluctuates. On average, I'd say probably only about 20% of our business is Canadian build, so that may be 400 or 500 buses in a year, give or take. About 80% of our business is U.S. On the hybrid side, it was a really quick adoption rate.

9:10 a.m.

NDP

Olivia Chow Trinity—Spadina, ON

How many?