Environment Committee on Feb. 15th, 2018

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you all for coming before us here today.

I'm going to start talking about housing in the north, specifically to Mr. Wong at first. Perhaps Mr. Fournier could jump in, and maybe Mr. Hewitt.

There's a company near my hometown in the Okanagan Valley, British Columbia—it's not the north. This company started out producing a modular heating system that basically took a heat pump, stuck it in a box so that it could capture the heat produced when the house was being heated, and used that to create electrical energy so that people could save on their electrical costs. NRCan thought this was a good idea for the north. He went up to Paulatuk and demonstrated it there. While he was there, he looked at the buildings in Paulatuk and thought we could do better.

Mr. Wong, you mentioned—and I'm not sure where I heard the testimony—some of the problems building in the north: the sealift homes, where you're bringing in material in one year and that material sits around and then the next year tradespeople come up and help build the homes; you have the material lying around, there are problems with mould, and so on.

This company I'm talking about has developed a modular home that can actually be flown in with one big planeload and built by local people. He has a demonstration video of local teenagers building this home in the Okanagan in three days.

I'm just wondering if those are the kinds of innovations that might help building in the north. This building is totally designed for energy efficiency. I don't know how it would stand up for passive home construction, but it's apparently considerably better than what is there now. I wondered if you could comment on those kinds of innovations and whether that would be something welcomed in the north.

[Gary Wong]

I'm not aware of that innovation, and I would be very interested to get more information on that.

The question around premanufacture versus stick-build on site is not a new kind of question in housing delivery in the north. Going right back to the 1970s, they were prefabbing panels for social housing delivery across the north, as well as potential partial modules. There's no question that prefabrication occurring in a southern jurisdiction—in terms of the controlled environment, time, energy, and waste materials—should be more efficient. From a cost perspective alone, at that point in the process it should be more cost-effective as well. The issue really is the logistics. Once again, you have to get those larger pieces up to a northern jurisdiction.

In our jurisdiction, the only way is by boat, because if you fly anything, you increase the costs even further. If you send them up by boat, the boat costs are all based on volume and weight, but sometimes something that doesn't even weigh a lot costs a lot because of its volume and the space it takes up. I've seen in the past a lot of the balance between premanufactured components and components that are site-built. At the end of the day, their costs tend to be fairly comparable, because the efficiencies of the premanufacture get lost in the logistical cost of moving to sites. Having said that, the capacity part—both in terms of what these products are and the ease of maintenance, alteration, renovation, and upgrade—is part of that question as well.

We are open, of course, to both delivery methods. We actually have an RFP out right now. The evaluation process isn't complete, so I can't really go through the details of it, but in general we've asked for a social housing build of a number of fiveplex units in a couple of communities. It's design-build, and we've asked the proponents to propose whatever delivery method they want. Whether they want to do it modular, prefab panelling, or stick-build, we leave it up to them, but they have to work within the performance specs that we gave. We want total delivery, therefore they have to work out the logistical costs. That's going to be a very interesting result in terms of RFP compared to our standard stick-build process, so we can use that as a comparator of what kind of solution gets proposed versus what we've been working.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Mr. Fournier.

[Alain Fournier]

I concur as far as possible. It has been my experience over many years that both systems really cost the same. Some years prefab won over stick-built, but in the end....

What's new, perhaps in the last 15 years, is that now Inuit communities want the economic spinoff and the capacity building. They want the stick-built. I can tell you that in Nunavut they have crossed out prefabrication on that basis, because they want the unit to be built locally by their manpower. They have gone with manpower training.

Sometimes, of course, it's not feasible—it depends on how many units you have to build—but I can tell you that this is a strong trend. They want to build them themselves to get the spinoffs and to learn how to build and continue with it.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I have three more really good questions.

[The Chair, Liberal, Deb Schulte]

Time goes fast, doesn't it? There is going to be time at the end, so hold on to them.

Mr. Amos.

[William Amos, Liberal, Pontiac, QC]

Thank you, Madam Chair. Thank you to all three of our witnesses.

I'm going to focus my questions on the comment made by Mr. Hewitt, in no small part because he's a neighbour and because I've seen one of his homes, too.

I feel like one of those people who is newly initiated to the universe of net zero, and I must say I really didn't know about it. I think that probably characterizes the vast majority of Canadians' experience with the built home environment: they are not even aware that you could have a home that would contribute to the grid rather than pull from the grid. It's an exciting notion. I think many Canadians will be excited, and it's only going to feed this trend. Hopefully it can move well beyond custom building, because it's not just well-heeled Canadians who ought to have the opportunity to live in a healthy, energy-efficient home built to the net zero standard.

You mentioned the cost of window imports. You also mentioned the costs associated with technologies such as HRT.

[Thomas Hewitt]

It's HRV.

[William Amos, Liberal, Pontiac, QC]

HRV; thank you.

We have recently signed trade agreements; for example, with Europe pursuant to CETA. I expect this would mean that a number of tariffs that have previously been applied to high-tech products such as windows or HRVs would drop significantly, and the average homeowner might also be able to benefit from cheaper access to high-value products such as these.

Is this something that is discussed in the building sector?

I would invite the other witnesses to comment as well.

[Thomas Hewitt]

It is, but there are problems with it. A lot of it, especially in the built environment, has to do with service and maintenance and such things. For example, in the case of windows, a local manufacturer can send you a replacement window sash in a matter of days, in contrast to our waiting for them to come on boats from Europe, in which case so we're talking about 12 weeks. There still are definite advantages to having things manufactured in Canada—or, let's say, in the U.S. or in another manufacturing plant close to where it's actually used. For sure, there are still advantages in that.

[William Amos, Liberal, Pontiac, QC]

I will ask you, shining a light on how this all happens, whether as a homebuilder you are sourcing your products from all over the world, or do you have enterprises you primarily interface with? How does an individual who is trying to be at the cutting edge of net zero construction go about sourcing materials? Beyond the additional costs, you're mentioning logistics here. Give me a sense of what—

[Thomas Hewitt]

It's definitely more challenging. Yes, we are sourcing stuff from all over the world. Luckily we have the web, so we basically go online and find the best products in the world and then track down a way to get them into the country.

Right now it is mostly through intermediaries, who tend to be people from other countries. I import my windows typically through a gentleman out of Toronto who has recently moved over from Europe. He has a connection already with the company, and he started a company here in Canada to import their windows.

Most stuff is like that. I import all my tapes from an Austrian family who live just an hour away in Ontario. They are the sole importer of this very specialized tape in all of eastern Canada.

That's basically how we're doing it currently.

[William Amos, Liberal, Pontiac, QC]

My last question goes to the issue of retrofits. We've heard from previous witnesses that retrofitting is where the greatest gains may be made, as opposed to the new buildings.

What potential is there, or is there any potential, for residential building upgrades to net zero through retrofit, or does it have to start from zero because the building has to be tight to start?

[Thomas Hewitt]

A number of them have been attempted here in the region, and every one has not been a success. The costs have been more than that of starting over.

When we're talking renovations, there are two types: major renovations where you're going down to the studs and things like this. I don't believe we should be doing that type of renovation; it's not cost-effective. We should be taking that building down, and building a new one.

When we're talking minor renovations, such as changing windows or replacing a roof with something more efficient or something like this, there absolutely are benefits.

[William Amos, Liberal, Pontiac, QC]

Thank you. I have no further questions.

[The Chair, Liberal, Deb Schulte]

That's it. Thank you.

Mr. Lloyd.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

How long do I have?

[The Chair, Liberal, Deb Schulte]

You have six minutes.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

I want to thank you all for coming today, and Mr. Wong on the phone.

Mr. Fournier and Mr. Wong, I think this is a really important issue that we're studying, particularly in the north because of issues like northern sovereignty. If we don't have a viable way to live in the north, then we won't have the people up there, and if we don't have the people up there, then we lose our authority in those areas.

I'm wondering what you see as renewable energy, because diesel has to be imported. Looking at renewable energy, I'm sure some forms of renewable energy are more viable than others.

Mr. Wong, would you like to start to comment on that?

[Gary Wong]

Okay. I don't see diesel generation in the north being phased out in the foreseeable future for many of the reasons you just said. It's the most secure form of maintaining energy in the north and because of the location and climate, security of energy is most important.

Having said that, reducing the amount of diesel may be possible, and I think that's what is happening right now. That's the group they're working on. QEC, the power corp, for example, has some project proposals they're trying to get approval for, using higher efficiency generators that will use less diesel. As I said, many of their generators are close to 50 years old, so they're very inefficient. They're also looking at supplemental solar and wind systems to tie into the diesel generation system. I think that's very promising in lowering diesel use.

From our perspective in terms of the buildings and the people, I think the greatest effect has to do with the general energy efficiency of the envelope, meaning the appliances and LED lights, where a small passive approach makes the most sense.

This whole conversation, I think, is really two conversations, what may be appropriate goals for the south in moving toward the net zero economy, which would be very good, but also I think in the north, it's about trying to establish a good level of energy efficiency. I think it has to be at a lower level than the passive house standard, due to the numerous challenges, which have to do not just the economics of installation, but also the availability of materials, equipment, capacity, and skill sets of people who can install these things and work on them. There are no hardware stores up here.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Yes, that's for sure.

I'll just pass along the same question to to Mr. Fournier.

[Alain Fournier]

Yes, I agree with many of the things that Mr. Wong said.

Certainly there have been some advances in wind production. In recent years they've finally been used successfully on mining projects, and that's a start. It could be further developed because there is no question that anything that can reduce the consumption of diesel, whether it's by reducing the need for power or other...would be welcome.

There are also projects out there for dams in some communities where they have the appropriate conditions.

Then we've been talking about utilities being difficult. Utilities have been difficult, for some reason, and not allowing communities to really forge ahead with these projects, and yet these projects are critical.

Yes, the communities have taken it into their own hands to start developing independence from diesel consumption. It is ongoing and there is no question that more support in that area from the federal government would be more than welcome, because it's critical, it's central.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

To follow up, you noted in your testimony that the cost of construction in Canada's north is, in some ways, prohibitively high because of the lack of readily available materials and you may be saying that there might be a lack of expertise of the people up there.

How important is the housing and building construction industry in Nunavut? Approximately how many people does it employ? What is the impact on the economy of this industry?

[Alain Fournier]

I'll let Mr. Wong answer that one.

[Gary Wong]

In terms of local employment, the government has contract requirements that it puts in to try to stimulate the economy, which is part of the government's mandate, as Mr. Fournier pointed out, to try to have local involvement. The local involvement means not just local hires, but specifically local Inuit hires, and also using local businesses.

In general, for example, if we put the labour component of the project at 30% Inuit involvement in a contract, and there isn't a skilled workforce in that community, most of that Inuit involvement will be in the unskilled labour portion. But people will be hired for these aspects.

It is a very important part, but in terms of the local economy, it's a stimulator but I wouldn't say it's the main thing. Buildings are being built, but the skilled trade force typically all has to come from the south. There are some in the north but they also come from the south.