Environment Committee on June 10th, 2014

[W. Scott Thurlow]

There are some exceptions, but it really comes down to the individual obligated parties. There are some that will choose to use home heating oil because they sell a lot of it into a very specific area, and there are some that won't. That flexibility is important. We support that flexibility, but we disagreed with the exclusion.

[Megan Leslie, NDP, Halifax, NS]

It's fascinating to me that we used to have a requirement and now that requirement has been taken away.

I would like to chat with the—

[The Chair, Conservative, Harold Albrecht]

You'll have to be very quick.

[Megan Leslie, NDP, Halifax, NS]

Hopefully I can come back, because I have some questions. Mercury and cars made me think about a 2013 report from Environment Canada that talked about the fact that we weren't prepared for the onslaught of CFL light bulbs and their proper disposal, and how that the mercury would end up in our domestic landfills as well. I was wondering if I could get an update, but perhaps the update can come after.

[The Chair, Conservative, Harold Albrecht]

If you can do the update in 20 seconds, I'll let you proceed, or maybe you could wait until there is more time to respond to that.

[Megan Leslie, NDP, Halifax, NS]

We'll probably have two more rounds.

[The Chair, Conservative, Harold Albrecht]

Let's wait.

[Megan Leslie, NDP, Halifax, NS]

I can come back.

[The Chair, Conservative, Harold Albrecht]

You can make note of the question and be prepared to respond.

We'll move to Mr. Toet for five minutes.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Thank you, Mr. Chair.

Mr. Thurlow and Ms. Labrie, you both made a comment about commercialization of technology being important, about how funding should be there not just for R and D but actually for commercialization, to bring a product to the marketplace. How important is that, especially in light of the industry sectors that you're in and the government's support of that?

[Marie-Hélène Labrie]

It's critical.

If you look at second-generation biofuels, those are really breakthrough technologies that are being developed as we speak. Without the support of government to really have the policies in place to attract private investment, it wouldn't be possible to take those technologies from R and D to a commercial stage.

When we talk about the government's support, we talk about a series of public policy tools and programs. I see, really, three pillars.

One is the regulatory environment that opens the marketplace with the renewable fuel standards. This was really key for us to track private investment. We were able to raise $240 million in private capital to grow the company, to scale up our technology, and to invest in our first full-scale plant.

Next are the capital programs, such as the SDTC's next generation biofuels fund. This one is helping the other project we're developing in parallel to the Edmonton one. It is in Varennes, on the south shore of Montreal, and it will take non-recyclable construction and demolition wood to produce ethanol. This is really key to helping bridge the gap in finance, since banks are not supporting projects at that stage because those are new technologies. Until they become fully commercial and have been used for more than three years—that's usually the rule of thumb—you're not able to finance in a really traditional way.

The third pillar is operating or fiscal incentives that can really help on the operational side during the first years of operation.

Those are the three pillars that are key to supporting the commercialization of our innovations.

[W. Scott Thurlow]

I would just add one very simple point to that.

As I said in my response to a previous question, these are lending mechanisms. These are providing surety to financial institutional lenders that this is going to be able to get up off the ground, and then, at a certain end point, it will absolutely be viable on its own.

The only thing I would add is that it's not limited to our industry. It's any new advent of technology. The government has done an excellent job, across several political parties that have been in charge, of fostering that investment in Canada.

What I would like to see in the future is an understanding that for these innovations to continue to happen in Canada, you need to see those types of strategic investments. In our report, we detail how the Government of Canada's investments in our sector actually create a two-to-one return. Every dollar you put in gets two back.

[Marie-Hélène Labrie]

You talked about lending organizations. I just want to mention that in the case of a new company with a new technology, you don't even have those organizations. If you're a mature organization and you're doing an innovation, then that's different. You also have those supporting lending organizations. But for a small company like ours, a private company, developing a breakthrough technology, those lending organizations are not there yet to really support you.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

They haven't been for a long time. I think back to my business days of having a mortgage on my house because we were doing something outside the box that nobody liked. But, yes, I understand where you're going there.

I think it's important. We have also made strides in 2014 in our budget to actually direct some more finances to support commercialization. I'm glad to hear that industry sees this as very important to Canada's economic growth and to our competitiveness in the world. It's good to know we're heading in the right direction with that.

Mr. Thurlow, you said that with Enerkem, Canada has the first waste energy facility in the world.

[W. Scott Thurlow]

For waste biofuels and biochemicals, it's the first on a commercial scale.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

I found that very interesting. Some of the things I've heard today, as we've gone through the testimony, have been that we face all these challenges, that we're behind, and things like that, yet we're the first in the world to do this particular process. So something has to be working in the right manner.

[W. Scott Thurlow]

I'll defer to Marie-Hélène because it's her innovative global leading company that made those investments and put themselves out there as the first company to do this.

But you're right, and one of the reasons I am so proud to work in the industry is that we're willing to make these strategic investments for the good of both the environment and the economy.

[The Chair, Conservative, Harold Albrecht]

I'd love to defer to Marie-Hélène as well, but Mr. Toet's time is up.

I'm sure she'll have an opportunity to work that in.

Mr. Choquette, you have five minutes.

[Megan Leslie, NDP, Halifax, NS]

No, it's me.

I'm going to start, if that's okay.

[The Chair, Conservative, Harold Albrecht]

That's fine, but we have Mr. Choquette on the list .

Go ahead. You're much better....no.

[Some hon. members]

Oh, oh!

[Megan Leslie, NDP, Halifax, NS]

Be careful.

I would like to ask CELA if there's any update about where we are with those CFL light bulb disposal regulations.

[Theresa McClenaghan]

I don't have an update for you on those specific regulations.

Earlier you were asking about the preparedness of domestic landfill and waste programs to take the CFL light bulbs. I can speak specifically to the Ontario situation. There is a combination of take-back programs through retailers, working in part through stewardship programs that are mandated by the province. As well, most municipalities have hazardous waste programs, either operating routinely or on certain days a year. With a certain amount—probably not enough—of public education and outreach that people shouldn't be putting those straight to landfill, people will typically take their batteries and CFL light bulbs to those take-back days.

[François Choquette, NDP, Drummond, QC]

You spoke about your report on mercury, with respect to cars. You could send this report to the committee and it would be translated and consulted. I think it would be worthwhile because you did speak about it during your opening remarks.

On the subject of mercury, do some aspects fall under federal jurisdiction? For example, you referred to the Canadian Environmental Assessment Act and the Canadian Environmental Protection Act. There may be other federal laws or regulations given that we are talking about federal jurisdiction.

What do you think is important in this report? Would you have any recommendations to make to us?

[Theresa McClenaghan]

We did look at the other jurisdictions, specifically at the European Union and Japan, both of which are also big vehicle manufacturing jurisdictions. In general, we found that most countries that have large vehicle manufacturing industries do have legislation specifically governing end-of-life vehicles and the rules around how that should work safely, except for the U.S. and Canada, interestingly.

They generally set targets specifically around overall volume, as well as specific components, like mercury. They have increased their recovery of both hazardous and recyclable materials considerably, so that was one thing we learned.

In terms of jurisdiction, of course, in Canada we do have CEPA. We do have sectoral regulations under CEPA, particularly when we're talking about things that are destined for export or shipping across the country. There is more room for exercising jurisdiction, but provinces share jurisdiction too, and they can be important pieces of the puzzle as well.