Good afternoon, ladies and gentlemen.
Thank you for the opportunity to appear before the committee as you deliberate Bill C-377.
The Canadian Gas Association represents natural gas distributors across Canada who deliver gas to around six million customers—individual homes as well as businesses and institutions.
I will touch upon three points in my remarks. I'll give you a brief overview of how we situate in the economy, give you specific comments on Bill C-377, and then wrap up by speaking to the opportunity to move forward and make real, meaningful, and quantifiable reductions in greenhouse gases.
Quickly, around natural gas and the economy, although in most public policy discourse you hear nothing about natural gas, we are a significant part of the economy: 26% of the energy end use—the numbers are in front of you—and something bigger when you look at individual homes for heating and businesses.
It's interesting. When looking at natural gas, as with any other fossil fuel, you look at where our emissions come from. The entire upstream delivery, transmission, and distribution account for a quarter of the emissions for our sector; 75% of the emissions occur at the end-use point, the six million homes and businesses whom we deal with. Our particular part of the emissions is actually fairly insignificant, less than 1%.
So where do we stand as an industry? We do believe in and are committed to being part of the solution to get Canada toward a carbon-lean future, as we would like to call it. We worked on our piece and our own emissions reductions. Our numbers are publicly available. We have reduced our own emissions, and we've been part and parcel of the conversations initially with Natural Resources, and subsequently with Environment Canada, to develop a regulatory framework for large industrial emitters. We think you need that framework. However, we also believe that without turning our attention to the other 50% of the economy, we cannot meet our obligations and our aspirations of actually getting to a carbon-lean future.
So what have we been doing with our customers? In addition to our own operations, we have been working with customers on conserving energy and on a variety of demand-side issues. We have seen progress, with the intensity of use and average use per customer declining in the past decade or so.
In my estimation, we have reached the point where we need to do something more than we have been doing. For the past two, almost three decades since the seventies, we have been focusing on discrete component improvements, meaning higher efficiency standards for discrete appliances and turning our attention to buildings. In our minds, the only way to actually meet the challenge of substantially reduced carbon in the long term is to have an integrated strategy for managing the energy demand in our communities.
I have specific comments on Bill C-377, and then I'll come back to the communities agenda and what I think is lacking in our current perspective and perhaps warrants some attention from you, ladies and gentlemen.
On Bill C-377, we agree with the need for federal leadership. The intent is laudable. We think we need federal signals that we are serious about reducing the carbon footprint of the economy. We'd like to see this issue transcend partisan discourse around whether this is real or not—we'd rather focus our energies collectively on getting ourselves there.
I don't quite think the bill makes the intent. I have a couple of reasons and some general comments.
Legislation is not the place, in our estimation, for this level of detail. The more detail you have of the nature that we see in Bill C-377, the less stable a platform you have for long-term action. Also, we look at the bill and wonder whether it's trying to afford the framework and the authorities where they already exist, and if they already exist, why do we need to set the legislation again?
Although it's not explicitly stated, the bill has definitely the flavour of again focusing on the large industrials alone. I said already that we believe the large industrials need a framework, but we also need a more economy-wide signal and a focus on the other 50%.
With respect to specific issues with the bill, the short-term targets are problematic. The various analyses done by the provinces recently in the National Round Table report would suggest the 2020 target of minus 25% is not actually doable, given where we stand today. Having us revisit the conversation on baselines we've been having for the past 10 years and trying to determine what happened 17 years ago, I think, is a bit of a distraction from focusing on what can be done on moving forward.
Not to repeat myself—but I will repeat myself—we do believe the large final emitters need to have a regulatory framework, but we also do believe that you need to focus on the other 50%. How you turn your attention to the other 50% matters. For the past 15 years, we've focused the discourse in this country entirely on the large final emitters. I'm not encouraged by the level of sophistication I see on the other 50%. We tend to flip-flop between thinking that good thoughts will get us there, or we absolutely need to be draconian and regulate lifestyle. I don't believe either of those are feasible options or ones that we should pursue. There's ample experience and enough evidence to suggest that a systems-integrated approach to our communities is what we need.
We need to look at our energy system as an integral part of the environmental question, not as a problem. The upstream energy sector exists to meet the demand for energy at our communities and businesses. So without focusing on the demand side, we're not going to get very far because that demand, as evidenced by the track record of the past 20 years, will continue to grow. So look at energy and environment as an integral whole; look at the community space.
Municipal governments have done very interesting experiments across Canada. The City of London did a model of an integrated plan versus business as usual. In their estimation, they can achieve up to 55% energy reductions within the community. Not only that, they bring in on-site renewables at a price-competitive range. They take advantage of the existing energy infrastructure, both gas and electric. They bring their on-site renewables. They look at waste in water and harness the energy from that. There are innovative, interesting solutions that need to happen. So why aren't they happening?
We don't have a price signal for carbon throughout the economy, and we need to have a consistent price signal throughout the economy, close enough to the point of consumption so that people who make decisions can see the impact of their choices and their decisions.
We are very encouraged by the recent focus of the National Round Table's report on the other 50% of the economy and would very much support paying a lot more attention to that space. It's an interesting space. It's diffuse. It has a large number of players, and it will require three levels of government working closely with one another, but it's doable. We're seeing examples appearing all across Canada, and we would like to see price signals that would allow us to replicate the demonstrations and actually move along with it.
In conclusion, I repeat that we support the need for an articulated vision and target to reduce the environmental footprint of economic growth, or both of them will deteriorate. Serious action, in our estimation, requires more than, but includes, the regulatory framework for large industries. It needs a price signal for carbon throughout the economy. Policy initiatives should reflect the need for an integrated approach to all our systems: water, waste, energy, land use. Bill C-377, although laudable, falls short of achieving that.
Thank you.