Environment Committee on Sept. 20th, 2022

[Francis Bradley]

I thank the member for the question.

There are different approaches that need to be taken for different circumstances. I mentioned there are 10 provincial and three territorial electricity systems.

To the member's point, there are significant differences in the requirements for rural, remote and indigenous communities. So far, we are pleased to see that, at least in the evolving clean electricity regulation, there was a recognition that off-grid electricity will seemingly be treated differently from on-grid electricity systems. That is at least one example where we seem to see a recognition that there are differences between the connected systems and the disconnected systems.

To your point, there is a disproportionate amount of non-renewable generation that is required in these areas, and we need to ensure that we're bringing forward policies and programs to help those rural and remote communities.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Are independent power producers considered in that mix? When you were talking about off-grid.... I have always thought that, especially when you get into the rural areas, the distribution grid is under some tremendous challenges as utilities are trying to get power out to those rural areas. Have there been any more discussions among the old utilities across Canada, some kind of plan for how they're going to deal with independent power producers to actually achieve these goals? Is there any policy change happening to address this?

[Francis Bradley]

Well, within our association, we have both the incumbent utility companies and the largest independent power producers. They are members of our association, and they are also active participants in the discussions that take place among the CEOs around the boardroom table about the policies for the electricity sector writ large. We're not the association of electric utilities. We're the association of all the companies that are generating, transmitting and distributing electricity. Those views are part and parcel of what we bring forward.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Is there any concern about the decentralization of the electrical grid as it expands so much? That could spell trouble for reliability. Where is that conversation happening?

[Francis Bradley]

That's a terrific question. I think what we're seeing, and what we're going to continue to see, is two forces happening at the same time—both expansion and contraction taking place at the same time. To be able to meet those long-term targets that we have with respect to greenhouse gas emissions, we're going to have to significantly increase our grid-connected and grid-level power, but we're also going to have to massively ramp up what happens at the individual consumer level and at the community level. We're going to be seeing customers themselves increasingly becoming producers and part and parcel of this market.

So we're going to see the grid itself expand, but we're also going to see the role of individual consumers and distributed energy resources and community-level resources expand. All of those are going to be happening at the same time.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Okay.

There are many rural and remote communities that are having difficulty just accessing electricity or enough electricity. There's a company in my riding that's just starting a greenhouse to grow tomatoes locally. One of the main challenges they're facing, before they begin construction, is sourcing the electricity to operate, which is raising not only their electricity cost but also their operational cost to even get started.

How important is access to affordable energy for economic growth in Canada?

[The Chair, Liberal, Francis Scarpaleggia]

I think we have to go to Mr. Weiler now. We're out of time. But you can answer that question in answering another question.

[Francis Bradley]

In one word, it is foundational. Absolutely.

[The Chair, Liberal, Francis Scarpaleggia]

Okay.

Mr. Weiler, go ahead, please.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you, Mr. Chair.

My first question will be for Mr. Bradley.

You mentioned the need to fast-track projects, as well as the short timeline for Canada to start shipments of green hydrogen to Germany, along with the agreement that was signed last month. Earlier this spring, Canada announced the regional energy and resource tables to align priorities in the low-carbon economy, funding and financing opportunities, and policy and regulatory approaches with different orders of government, business, labour and indigenous groups. With this policy, one of the areas that were highlighted with respect to Newfoundland was hydrogen.

How important do you see this type of process being to our ability to take advantage of the major opportunities that are going to be there when we're in a globally competitive market?

[Francis Bradley]

Thank you for the question. It is going to be critical that we have co-operation and collaboration between different levels of government, between different stakeholders. The energy and resource round tables have the potential, I think, to be important and critical as we move forward. We would like to see them rolling out with greater speed, because at least they will be bringing to the table the players who need to be part of these discussions and these dialogues at a regional level.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you.

You mentioned that one aspect of the framework that's in place is the price on pollution. The Government of Canada has proposed bringing in what are called carbon contracts for differences to be able to provide long-term certainty that the price on pollution won't be rolled back. How important do you see this type of policy being to driving investment in clean tech as well as renewable energy in Canada?

[Francis Bradley]

I think those kinds of approaches are going to be critical. We're talking about—particularly with the larger projects—assets that will last for decades. To be able to make investment decisions on assets that will last for decades, the certainty with respect to the business environment within which you're operating needs to be beyond the medium term.

Yes, there are concerns about the stability of the policy environment within which we're operating, and these types of contracts are certainly one approach that a number of my members are very interested in seeing move forward. The concern is that we would see potential rapid policy change and policy whiplash. We've seen that in some jurisdictions.

They may say that nature abhors a vacuum. Business and business decisions abhor chaos, and what we need is stability.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you.

My next question is for Dr. Hoicka.

You mentioned that there are gaps in terms of the areas where Canada should move on better supporting clean tech deployment. Canada, to this point, has accelerated the capital cost allowance for business investment in clean energy equipment and a 50% reduction in corporate income tax for manufacturers of net-zero emissions technologies, and in the budget this year we announced an investment tax credit of up to 30% for clean tech. From your point of view, where does the government have to go further than these particular tax measures?

[Dr. Christina Hoicka]

Thanks for summarizing that, and thank you for the question.

Those tax measures appear to me to be more on incubating and accelerating technology. Is that correct?

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

They're investment tax credits.

[Dr. Christina Hoicka]

Okay.

Where I would say there needs to be more support is.... There are different stages of technology diffusion. One of the areas where technology tends to get really stuck is in the diffusion stage, which means making it into markets and making it into communities. What we need are basically the market pull types of regulatory and economic instruments and administrative supports, and I would say that Canada can uptake those.

Another piece is that you can also do targeted research support. For example, as I mentioned, that's targeting things like technology that will address congestion in cities, which is where most of the energy growth and electricity growth will go. That's a big piece. You can also target materials for different types of clean technologies, which are finite resources, and you can target things like wind turbines in Arctic areas.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Ms. Vignola, you have two and a half minutes.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you, Mr. Chair.

Ms. Hoicka, in recent decades, some LEED certified houses and buildings have gone up. This is not a required standard, however, and new buildings keep going up that are concrete blocks with little or no energy added value.

Firstly, what incentives would encourage the construction of buildings that are energy efficient, self-sufficient in energy, or even energy producers?

Secondly, will we have to completely revamp our urban planning models in order to adopt models with significant benefits not only for preserving environments, but also for energy use and production? Which aspects should be considered in establishing such models?

[Dr. Christina Hoicka]

This is a really good question. Those are absolutely what we should be thinking about and where we should be going.

Addressing climate change and energy use at the urban scale is a really critical lever that we have. For example, having waste heat capture and usage on the neighbourhood scale would be a really great way to reduce waste heat, and also, then, to use waste heat and reduce fossil fuel emissions. Getting people out of cars and into public transit and walking, or on cycle lanes, those types of things will also dramatically reduce the energy used.

In terms of buildings, most of our buildings are already built, so what I have argued for in the past is to have innovative business models: to put the innovation into the business model around clusters of technology that can retrofit buildings, and to focus on convenience and also on cost, making sure that we reach the widest population possible. In terms of new buildings, I would say, again, that it's innovative business models in terms of the targets you wish to reach. All of those are really critical going forward, because this has to do with equity issues, with comfort and with climate change.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

You have your time, all of you who remain, but if you could come in under time, I'd be eternally grateful.

Ms. Collins, you have two and a half minutes.

[Laurel Collins, NDP, Victoria, BC]

Thank you, Mr. Chair.

Ms. Hoicka, how big a role do energy conservation and energy efficiency have to play?

[Dr. Christina Hoicka]

It's a very big role, as big as we can get it.

[Laurel Collins, NDP, Victoria, BC]

Can you speak a bit more about deep building retrofits? What do we need to do when it comes to energy efficiency and on the conservation side?

[Dr. Christina Hoicka]

A deep building retrofit can bring down energy use in a building by 50% to 80%, whereas a regular retrofit—when we're not thinking in terms of systems—is only 20% to 30%. If we focus on the method by which we'll do it, we can get those really deep reductions. That's how we're going to support populations, households and businesses in this energy transition, and concerns around any rising costs—for example, the inflation we're experiencing right now. That's a very protective aspect. It will also improve comfort and resilience for building occupants.

As I said, the technologies are out there. The innovation needs to be around business models that address labour, address investment and address convenience. A lot of these types of renovations are not convenient for people.