Environment Committee on Sept. 23rd, 2022

[Sam Soliman]

Thank you for the question.

I can give you a simple example. As a house owner, I have a gas bill that comes to approximately $1,800 to $2,000 a year. This is the cost of natural gas delivered to our property. If we eliminate that, this is the number one saving. The homeowner would put zero dollars toward the fuel. Our fuel is water. The cost of having water on our property is very minimal compared with other fuels. There are also savings that will come from not producing any greenhouse gas emissions, so the pollution is zero. That's another saving.

Regarding the return on investment, if we take an example of saving approximately $1,800 a year for five years, that's a saving of around $6,000. Basically, the cost of our unit is within this range.

I will leave the cost and the details to Mr. Fairfull. He can elaborate more on that. I will leave him to answer more about the question of the cost of our technology.

[Colin Carrie, Conservative, Oshawa, ON]

I'm curious about that, and also about the engineering of it and the commercialization.

Mr. MacDonald is there; he's your manufacturing consultant. Is this something that could be manufactured and commercialized here in Canada? Are there any support programs that are available from the Government of Canada to help you on the commercialization side of things?

[Doug MacDonald, Manufacturing Consultant, Kleen HY-DRO-GEN Inc.]

Tom, would you like me to answer that?

[A voice]

Yes.

[Doug MacDonald]

Thanks very much for the question, Mr. Carrie.

There's no reason whatsoever that we could not produce this product in Canada, whether it be in the province of Ontario or elsewhere across the country. Regarding commercialization, the design is where the IP resides. As for the manufacturability of the product, it's highly manufacturable. Tom shared this with me several years ago. I've been keeping an eye on him from afar on his progress.

This is a highly disruptive technology. I've worked in the past with hydrogen fuel cells for storage, and I can assure you that from all the data that Kleen HY-DRO-GEN has shared with me, this is a very safe system.

Sam alluded to the fact that the by-product is water. The fact that it regenerates that water and that it is utilized in the actual furnace makes—

[The Chair, Liberal, Francis Scarpaleggia]

That's perfect. Thanks very much.

We'll go to Ms. Thompson now for six minutes.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you, Mr. Chair. I welcome the witnesses.

The conversations today are very interesting. As I am from Newfoundland and Labrador, anything to do with hydrogen and an actual application of clean resources is very important. I would be remiss if I didn't acknowledge that the weather system that's approaching Atlantic Canada is a real indication that we have to move quickly, so I'm delighted to be part of this conversation.

I'd like to start with Mr. Soliman and carry on quickly from the previous questions. Could you speak, please, to a couple of the practicalities around target timelines and availability, for example? How do you intend to scale to market objectives and demand? I'd be interested in that. What do you see as a cost for a homeowner for the unit?

[Sam Soliman]

Thank you for the question.

I would like to pass it to Mr. Tom Fairfull. He would answer more precisely.

[Thomas Fairfull, President, Kleen HY-DRO-GEN Inc.]

Thanks for the question.

We've been working on this project now for probably a good 20 years. It's been a long time in the working. We're working full time on it now. We're pushing ahead quickly with bringing people like Doug MacDonald on board, with his manufacturing experience.

It's anticipated that to convert your average house to burning clean hydrogen would come in, at the end of the day, at around $9,000. You can see that the five-year money-back aspect is in the picture here. In the beginning, it might be six years, but as Doug ramps production up, the price will come down.

Doug, maybe you'd like to speak on production and ramping up. We're about to convert our first total green home here in Ajax very shortly and have it in full operation for demonstration by the end of November, I'd say.

Maybe you could elaborate on the manufacturing and whatnot, Doug.

[Doug MacDonald]

Thanks, Tom.

As far as production capacity goes, there are going to be a couple of factors that are going to play a major role, and it's really the supply and demand curve. We feel that with this technology, if there were any sort of an incentive or grant from the government to offset the initial costs for the homeowner the way we had in the photovoltaics industry a number of years ago.... I worked intimately in that space in Canada and Europe. When the German government had a subsidy for homeowners converting to PV, to solar panels, with a cost-per-watt incentive, it was amazing. We had to quadruple the supply overnight in order to meet the demand. As soon as that subsidy was taken away, the demand dropped overnight. Consequently, the German government reinstituted it.

The reason I bring this up is that this is an opportunity for Canada to really help us drive to reach our greenhouse gas emission targets with this type of technology. Hydrogen hasn't been as in vogue as many other types or sources of fossil fuels, for sure; it doesn't mean that it's not very viable. From a manufacturing point of view, we could certainly ramp up in the Ontario marketplace to meet a reasonable demand. We obviously are not going to try to open a large facility without having some indication of what that pull-through is going to be. The government would have a huge impact on the way the marketplace embraces this technology.

As Mr. Fairfull said, with our operating unit, we'll be able to validate to the consumer and show them what it looks like and what the actual cost savings are.

For myself personally, with rural properties it would be just wonderful to have this type of system. It's particularly difficult in rural areas. We don't have natural gas in northern Ontario. We have to rely on propane. It's extremely expensive.

If you think about where we would be manufacturing-wise.... Certainly, Tom and I have spoken about our international rollout of this product. I think Canada could really lead the charge in distributing this technology globally. If we had this available in the U.K. right now, I wouldn't even want to guess what the magnitude of demand would be, given the situation in Europe with the cost of fossil fuels and the lack of natural gas.

[The Chair, Liberal, Francis Scarpaleggia]

You have time for a comment, Mr. Fairfull.

[Thomas Fairfull]

We've also filed for global patents on this process. Ridout & Maybee is a very good patent firm. One of the senior partners is on our board of directors, so our patents are going to be very strong.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you. Now we're out of time.

Next is Monsieur Trudel.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Thank you, Mr. Chair.

My questions will be for Mr. Breton. Even though I know him very well, I'll avoid addressing him in an overfamiliar manner.

Thank you for being here, Mr. Breton.

You testified here in 2020 as part of a study on developing zero-emissions regulations. The committee at the time unanimously recommended introducing just such a federal standard, and the government made a commitment to introduce it. We'll see what happens.

I have two questions, and here's the first: what effect will that zero-emissions standard have on the ongoing transportation electrification issue?

[Daniel Breton]

That's a very important question because many people think we can achieve our objectives associated with the adoption of electric vehicles without regulating. Some automotive manufacturers—though not all—say the market should be allowed to operate on its own.

The problem with that point of view is that markets are increasingly being regulated around the world, in the United States, for example, where some 15 states have net-zero emissions standards, and in Quebec, British Columbia, Europe and China. If the federal government doesn't adopt a net-zero standard, the country will be headed for a deficit because automotive manufacturers will prioritize shipping their electric vehicles to regulated markets.

Here's another extremely important aspect. If we want to discuss the future of the transportation electrification economy in Canada, we'll have to introduce a net-zero emissions standard guaranteeing that we meet our electric vehicle adoption targets as established by the federal government, which call for sales of net-zero emissions vehicles to rise to 20% in 2026, 60% in 2030 and 100% in 2035. That would establish some market predictability. Automotive manufacturers, infrastructure providers, electricity suppliers, distribution channels, construction companies and people engaged in research and development will want to come to Canada for that simple reason.

And I can prove it. Six months ago, the federal government officially announced that it would adopt a net-zero emissions standard, and, since then, $15 billion worth of funding has been announced for transportation electrification in Canada.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

What priority is attached to accelerating the transition to and adoption of transportation electrification?

[Daniel Breton]

We talk about four pillars at Electric Mobility Canada. There's the whole regulatory aspect that we just discussed, particularly the net-zero emissions standard. There are also the Clean Fuels Regulations, which Ms. Stilborn discussed, because that concerns the oil sector as much as the transportation electrification sector. Then there's infrastructure deployment. The federal government announced $900 million in spring to install charging and refuelling infrastructure for net-zero emissions vehicles.

I'd like to point out that zero-emissions vehicles include both battery electric vehicles and hydrogen electric vehicles.

Infrastructure deployment is extremely important. Just a few weeks ago, Natural Resources Canada published a report on charging infrastructure needs across Canada by 2025, 2030 and 2035

There's also the education aspect, which is fundamental. There's so much misinformation out there, and social media contributes to it. People have to be made to understand the need to switch to electric vehicles for environmental reasons, obviously, to reduce greenhouse gas emissions and air pollution. In that connection, I would note that Health Canada stated in a study published last year that the economic cost of air pollution was estimated at $120 billion. Most of that air pollution comes from two sectors, transportation and oil and gas.

Consequently, by switching to electric vehicles, we'll save thousands of lives because 15,300 premature deaths can be attributed to air pollution. That's eight times the number of deaths caused by traffic accidents. We would be saving thousands of lives and billions of dollars.

Lastly, there's the training aspect. I have to talk about that. If any of you have considered buying a partly or fully electric vehicle in recent years, you've probably noticed, as I have, that an enormous amount of work has to be done at dealerships, not all of them, but many of them. You get the impression they've received a lot of new vehicles but haven't really understood the ecosystem. Given the amount of misinformation and half-truths conveyed when sales staff talk to customers, many people get the impression they're making a risky economic and environmental bet in buying those vehicles.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Some witnesses here have mentioned the red tape and delays involved with federal programs promoting the development of clean technologies.

Can you tell us a little about that?

[Daniel Breton]

Earlier we talked about developing a battery supply chain. The potential is extraordinary, and the U.S. government has understood that. The Chinese government also understood it 20 years ago. If we want to catch up to the countries that have taken the lead on transportation electrification, particularly in the battery sector, the mining sector will have to cooperate with the first nations, for example, to accelerate projects and do so in cooperation with their representatives. I've been in touch with some of those representatives to ensure that the electrification gamble is a winning one for all parties, both economically and environmentally, so everyone feels respected.

[The Chair, Liberal, Francis Scarpaleggia]

Good.

[Daniel Breton]

Right now, the process is taking so long that we may miss major opportunities.

[The Chair, Liberal, Francis Scarpaleggia]

Pardon me for interrupting, Mr. Breton, but we now have to give the floor to Ms. Collins.

[Laurel Collins, NDP, Victoria, BC]

Thank you so much, Mr. Chair.

Thanks to all the witnesses for being here.

My question is for Electric Mobility Canada.

You spoke about those four categories—regulatory, infrastructure, education, training. Can you speak a little more about the roadblocks right now that could slow down the adoption of electric vehicles in Canada in each of those areas and the recommendations you have to overcome those roadblocks?

[Daniel Breton]

I would say that the first roadblock has to be about lack of education or information regarding electric vehicles, because a lot of people seem to think that if you have an EV, you can't drive in the winter. I've been driving partial and full EVs for more than 20 years now. I regularly drive in the winter from Montreal to Quebec City, to Saguenay, to Ottawa, to Toronto.

Education is very important, and training as well.

Another part of the roadblock is that we need new qualified workers. We need to make that transition for workers who work in industries in decline to come and work in the electric mobility sector, because, as I mentioned, it's the fastest-growing sector in the world right now. From mining to assembly to R and D to sales and marketing, we are looking for workers. I even had someone mention to me that when the announcement was made that there would be a huge battery plant in Windsor, some business people were not happy because, as they said, "We're going to lose our workers."

We need to help those workers become qualified for those future jobs. They are going to be sustainable jobs in a sustainable industry, and they will be well-paying jobs.

[Laurel Collins, NDP, Victoria, BC]

You mentioned a new International Energy Agency report that shows approximately 50% of energy jobs are in clean energy. As the world shifts towards clean energy, there are going to be way more opportunities for these jobs in renewables and electric mobility. How do we help? How does the federal government help Canadian workers make the best of this transition?