Thank you, Mr. Chair.
I am Al Cormier, representing Electric Mobility Canada, which is an organization of industry members that are devoted exclusively to the promotion of electric mobility as a readily available made-in-Canada solution to our country's increasingly complex energy and environmental problems. Accompanying me today is Phil Cahley, president and CEO of the Canadian Courier & Logistics Association, as well as the chair of my government relations committee, Mike Elwood.
We are here to talk about the possibility of accelerating the use of hybrid electric technology in Canada's commercial fleets. The current situation is that we don't pay enough attention to commercial fleets in terms of their contribution to the environment. They operate mainly in urban areas and in constant stop-and-go traffic. They frequently stop for deliveries and pickups, and there is a lot of idling involved. They consume large quantities of fuel and produce significant amounts of smog-related emissions. Our research shows that even though they only drive about 12% of the mileage, they contribute about 25% of the ground-level emissions.
Hybrid electric vehicles in commercial fleets can be an important contributor to a reduction of smog and an improvement in air quality. They can reduce overall fuel consumption by 40% to 50%. An important point to remember is that when it is idling, the engine in the hybrid electric vehicle shuts down. There is no fuel consumed, and therefore zero emissions while idling. We estimate that running about 10,000 commercial electric hybrid vehicles would have the same environmental impact as removing all cars from the streets of Toronto for 30 days. To put it another way, one commercial hybrid electric van equals 17 Toyota Priuses in terms of emission.
Our member companies produced the technology used in these vehicles. The technology is used in several types, including the delivery vans used mainly by our members of the Canadian Courier & Logistics Association. Canada has a vibrant but nascent industry in this field, involving names like Orion Bus in Mississauga; Nova Bus of Saint-Eustache; New Flyer Industries Canada, of Winnipeg; Overland Custom Coach of Thorndale, Ontario; Unicell Ltd. of Toronto; Azure Dynamics of Vancouver; and others who provide products for commercial hybrid electric vehicles. They have invented these leading technologies, but are not yet at a commercial mass production stage.
As with all new technologies, their initial premium costs are high, due to low sales volume. Currently extra costs for these vehicles range between $25,000 and $200,000, depending on their size. We're talking from delivery vans right up to urban city buses. The payback period is therefore up to 8 years, which is not really acceptable for most commercial decisions.
That's why we are here today. We're proposing to you a three-year program of financial incentives for commercial vehicles, to reduce the premium cost of the hybrid electric technology to acceptable levels so that the payback period could be three years, which is acceptable for most commercial decisions.
We're proposing a three-year financial incentives program for commercial vehicles to offset the high cost associated with the use of electric hybrid vehicle technology.
By introducing 10,000 electric vehicles into the marketplace for commercial vehicles, our members believe we would reach a tipping point that would bring us to mass production levels and reduce the cost and the payback period. Our proposal calls for a program of $200 million over three years, which would lead to an average of about $20,000 per hybrid vehicle purchased by commercial fleets. That could be in the form of tax credits, direct funding programs, or other vehicles. Such a program would reduce GHG emissions by about 110,000 tonnes and NOx by 1,700 tonnes.
Investments we propose can be used now to acquire technology that will bring the desired result now in a measurable and quantifiable way. Other countries have many similar programs. We'd be glad to provide you with details, which were submitted in our detailed proposal.
In summary, we're advising that commercial hybrid vehicles are a practical solution to environmental problems. They are available now; the technology is proven, it's Canadian made, and it can make a major and quantifiable impact on air quality. Canadian companies are leaders in this area, but need government support to fully commercialize their technology and create jobs in industrial development in our country.
Establishing the financial incentive we propose would be a win-win situation for our environment and the economy. The Canadian courier industry is a major client of this kind of technology. For example, Purolator has purchased 20 of these already, and are planning to get another 110. They are already realizing a fuel saving of 40%. The technology is available. The interest is there. The benefits are quantifiable and supportable.
Thank you for your time.