Environment Committee on Nov. 24th, 2014

[Dale Harley]

The reason for the high demand on the product is that farmers, through the field tests that we have done, whether just with the farmers or through OMAFRA, have demonstrated how effective our compost is at rehabilitating the soil, giving it structure, helping it retain moisture, which we want our farmers to be able to do. The other aspect is that it has a high nitrogen content, and I might add, higher in nitrogen when you put diapers in it.

As a result, it eliminates the need for chemical fertilizers, which quite frankly resemble a drug to land. It's the crack cocaine of soil rehabilitation. It just makes more sense to close the loop so that what comes off the farm eventually goes back onto the farm and helps rehabilitate that soil and provide the nutrient value that's required.

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

Are you able to share with us what your return on investment is on that particular product line?

[Dale Harley]

We're a private company. I would like to stress that we make our money at both ends of the process. Municipalities or companies in the ICI sector pay us a tipping fee to take their material. We then process it into compost and sell it at the back end as well. I don't want to encourage too much my competition to get as good at it as we are, but it is a viable business.

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

The reason I asked the question, obviously, is that if you have a solid return on that investment, you have a product where the demand is outstripping the supply and it allows you to sell it probably at a fairly good premium, like you say, because of the nitrogen additives that it already has. It won't have to have these other additives in the fields. It just comes back to that whole completing the circle.

We talk a lot about opportunities for investment. Ultimately, we know that the profitability margin is what will really drive the waste management cycle to the completion that we want. Do you see this coming in the future, Mr. Harley, that it will actually be able to drive itself?

[Dale Harley]

We've talked a lot about using plastics in kilns. In Canada, we actually would pay someone to take it right now, at a reduced tipping fee, to use it as a source of energy. In Europe, where the market's much more developed, they pay us. The long-term answer to your question is, yes, it will become more viable.

[The Chair, Conservative, Harold Albrecht]

Okay, we have two more questioners on the list at this point.

Mr. Choquette, and then Mr. Woodworth....

[François Choquette, NDP, Drummond, QC]

Does Mr. Woodworth want to start?

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

I can start if you like.

I am interested in asking some questions to Mr. Conrad about the energy-from-waste facility, and I'll come right to the point.

Forgive me, I should also say thank you for being here.

The energy-from-waste facility, I have to assume, produces energy. Is that electrical energy?

[Larry Conrad]

Yes.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

What is the output?

[Larry Conrad]

The output of our plant is yet to be determined. We went away from the energy-from-waste plant that was in Brampton for many years and we're developing another one. It's going to be about 300,000 tonnes a year and it's going to be probably, I think, but I'm not one hundred per cent sure, around 25 megawatts of power. But it will be electrical power.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

Now I just have to ask you a little bit more about that. You've changed plants recently from Brampton to where?

[Larry Conrad]

It started out that we had an agreement with the Peel Resource Recovery Plant, and through the years it was sold. It ended up being the Algonquin Power plant. We had a 20-year contract, which was extended to about 25 years, I believe. At the end of that contract, we couldn't come to a successful extension from a number of sides. After council said that Peel really needed to own its infrastructure, we decided that instead of going on and trying to do something with that plant, we needed to go out and develop a facility that would be our own.

We're anticipating that 2019 will be about the time we start to build that infrastructure. Peel really should have owned the energy-from-waste plant when it started, but it didn't start off on that path. Now we're going to own for the next 40 years. We're looking forward to the next 40 years, not the past.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

Is there going to be a gap or are you going to continue with the Algonquin Power plant until 2019?

[Larry Conrad]

Unfortunately, there's a gap now. About a year and a half ago we stopped going there. We're going to the landfill and we're using the money saved from the tipping fees that were going to that plant to help offset the costs of building the new facility in Peel.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

What do you expect the total capital cost of building the new facility will be?

[Larry Conrad]

The new facility costs right now are in and around $500 million.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

You mentioned in the course of your testimony two federal funding streams that you were applying for, but I don't know if that was in relation to the construction of this new facility or not.

[Larry Conrad]

One was for the compost and getting that compost marketing into agricultural applications. The other one was a little bit earlier and we were looking at an energy-from-waste scenario, mixing sorted and dried municipal waste with sewage sludge. We got a grant there, but unfortunately, the economics at the time wasn't quite right for that.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

Do you have any plan to access any of the green infrastructure funding that the Government of Canada has available in its myriad infrastructure funding plans for this $500-million facility?

[Larry Conrad]

Yes, of course we do.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

Do you have an expectation, or at least a hope, of how much of that $500 million might be available from the Government of Canada?

[Larry Conrad]

I know we're talking about it and I know we're going to make the applications for it, but we're still at the point where we don't even know yet what our plant is going to cost us. We've gone through the request for expressions of interest and in March of 2015 we'll actually go out with some requests for proposals. Until we get that we don't really know how much we should even be asking for.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

Will the new facility be an incineration facility entirely, or not?

[Larry Conrad]

We have a facility in Peel. It's a marvellous facility. It's three football fields long, split down the middle. Half of it's a MRF, a materials recovery facility, and half of it is a waste transfer station and our composting facility.

The concept is that we will relocate the MRF and the energy-from-waste plant will be built there. Then in the future we'll also be able to co-locate an anaerobic digestion facility there, or a front end if we do a project at one of our sewage treatment plants for co-digestion.

It's a marvellous piece of land and that's where it will be. It's owned by Peel in Peel, close to the 407 off Torbram Road.