Thank you very much, Madam Chair and members, for this great opportunity to address you today on what our industry feels is society's greatest challenge, which is the fight against climate change and how we tackle that through reducing greenhouse gases from the industry building sector and the transportation sector.
The cement and concrete industry represents a direct and indirect economic contribution of about $73 billion to Canada, and we employ about 151,000 Canadians. Our industry supports strong action on climate change, including putting a price on carbon. As of this year, all cement facilities in Canada but one operate in a province that already has a price on carbon.
As governments move towards carbon pricing, they have had to consider the impact of carbon pricing on competitiveness, especially for energy-intensive, trade-exposed industries. Cement is among the most trade-exposed, energy-intensive industries in Canada, and we are very vulnerable to our competitors in the import and export markets that do not have similar carbon-pricing systems, such as almost the entire United States, with the exception of California.
Thankfully, though, with the exception of British Columbia, carbon-pricing systems across Canada, including the federal backstop carbon-pricing system, on the whole strike the right balance between incentivizing emissions reductions while introducing other measures to protect and even enhance Canadian industry and competitiveness as we transition to the low-carbon economy.
Why are carbon pricing and energy-intensive, trade-exposed industries important to a discussion about climate change and the built environment? Because, while well-designed carbon-pricing systems can foster low-carbon innovation in industries that support Canada's built environment, these innovations cannot flourish in a policy environment that does not actively pull them into the built environment decision-making discussion.
Consider that, on aggregate, all three levels of government purchase, directly and indirectly, some 60% of all building materials consumed in Canada, and concrete makes up the majority of those building materials. Further consider that our building and energy codes are minimum codes. Our building codes are not the gold standard that you or most Canadians believe them to be, and unless they are significantly changed, they will serve to impede low-carbon innovation, not accelerate it, as Michael Giroux mentioned in his comments.
Procurement decisions made by governments in general emphasize low-cost tenders. We always award tenders to the lowest-cost bidder, and only rarely do they ever consider GHGs or climate adaptation. When governments have considered climate change in a built environment, they've done so with prescriptive policies—for example, policies like “wood first”, rather than leveraging markets towards comprehensive and systemic clean energy or clean growth innovation.
Let me offer an example. Our sector recently came together in total across Canada to promote a new cement, portland-limestone cement, as an opportunity to reduce greenhouse gases from concrete. Portland-limestone cement will reduce the GHG footprint by 10% at no cost. If adopted as a full replacement for all cement sold in Canada, portland-limestone cement could yield annual CO2 reductions of almost one megatonne and, as I said, at no additional cost.
While portland-limestone cement meets the same performance standards as general use cement, has been used in Europe for decades, and is recognized in the 2010 national building code of Canada, it does not enjoy deep penetration across Canada. This is because construction industry codes and standards bodies in the public procurement agencies responsible for planning and commissioning infrastructure projects do not yet value or incentivize new innovations in the low-carbon construction materials and design industry.
Governments, as purchasers of more than half of all concrete produced in Canada, with the stroke of a pen could make portland-limestone cement the default cement in the majority of all projects across Canada, yet our industry's efforts to get this done are inexorably rebuffed. With this one innovation, we can address about 2% of the emissions gap that this government has identified and needs to fill to realize our 2030 target.
Pavement infrastructure offers an important example. Robust third-party life-cycle assessments irrefutably demonstrate the cost and climate benefits of concrete pavements over asphalt pavements. Asphalt pavements last seven to 12 years. Concrete pavements last 40 to 50 years, cost less over their life, and can actually improve fuel efficiency by 7%. These properties alone could result in savings of up to 12,000 tonnes of GHGs per lane kilometre over a 50-year lifespan, compared with a typical asphalt road.
Contrast those two examples with the incessant political interventions in building codes across Canada and the hundreds and hundreds of millions of dollars spent by federal and provincial governments, being poured into championing wood products, especially tall wood buildings, as a significant carbon mitigation strategy. You can then see where our exasperation lies.
The implications of such policies on the built environment, including the prospect of a robust, open, and competitive market-driven clean growth strategy for buildings and building materials, are profound, yet the underlying assumption that wood buildings yield net carbon benefits over alternatives has never, ever been fully articulated, let alone subject to a comprehensive peer review. This is all the more troubling considering the increasingly well-documented shortcomings with the current understandings of the carbon profile of wood products.
Research on GHG impacts of commercial logging suggests the effect on the carbon profile of wood products is significant. A Bureau of Land Management report in western Oregon proposes that when land-use change impacts of deforestation are taken into account, even accounting for regrowth, some 13 tonnes of greenhouse gases are lost to the atmosphere for every tonne sequestered in a wood product. That's a far cry from the carbon neutrality claimed by the wood industry and federal and provincial natural resource ministries.
You can therefore understand our frustration when we saw in budget 2017 that this government is spending some $40 million to support preferential treatment of wood building materials at the expense of other building materials across our country, or recently, your vote on Bill C-354, which has passed second reading, attempting to tilt the playing field towards wood in government infrastructure despite a growing body of evidence that this in fact may increase greenhouse gas emissions and make our buildings more vulnerable to climate change.
In Canada, the most significant carbon impacts from buildings relate to heating and cooling. These operational energy needs account for over 90% of the global warming potential for buildings. Even if the claims the wood industry makes that they are carbon neutral were true, and they're not, the impact that the substitution of wood for steel or concrete would have on the life-cycle emissions of a structure would be marginal. In fact, concrete's thermal mass capabilities can play a significant role in reducing greenhouse gas emissions by reducing operational demands. Today, the strategic use of thermal mass has reduced operational energy needs of large commercial buildings, such as Manitoba Hydro Place, by over 70%.
We need stronger building codes. We need stronger energy codes, and concrete can play a significant role in affordable strategies to meet the much sought-after net-zero building target. Only a robust cradle-to-cradle life-cycle cost and life-cycle climate change assessment can draw out these GHGs and cost-saving performance attributes. Policies by politicians that favour one building material over another without considering the whole are definitely not in the public interest.
More exciting but less understood is the role that concrete will play in the emerging game-changing class of technologies known as “carbon dioxide utilization”. Concrete is a critical source and sink for captured carbon. By virtue of the sheer volume of concrete consumed every year, more than any other material on earth with the exception of water, our sector will be pivotal in developing technologies that will ultimately reduce carbon.
Canada's clean growth strategy for the built environment must look to the future it wants, a low-carbon climate-resilient future, and make space for transformative innovations that will get us there.
Let me be clear. We're not asking for government to mandate concrete roads or buildings, nor are we disparaging the competition from other building materials. We are simply asking that government take a sector-neutral approach to planning and using tools focusing on GHGs as we transition to low-carbon and climate-resilient economies.
In conclusion, our primary request is that you recommend that the Government of Canada mandate the use of full life-cycle and environmental assessments for all federally funded infrastructure projects at all three levels of government.