Evidence of meeting #34 for Finance in the 40th Parliament, 3rd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was research.
A recording is available from Parliament.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Gotcha.
How close is the solar industry to being self-sustaining? Another way to say that is, when will solar energy be attractive in its own right, without government incentive?
President, Canadian Solar Industries Association
What we're looking at right now is a program to bridge from where we are now, which is just on the precipice, to a four- or five-year period where we would work with government to look at how we could do it. We are very aware that you don't want us to be taking public money forever. And, frankly, we're entrepreneurs, so we would also like not to have this.
So our proposal is four or five years. During that time, we'd work with government on what would help us transition. Some of those could be assistance with, say, mortgages, etc.—Phil has some great ideas—and also trying to find a way to deal with regulatory challenges and perhaps turn them into opportunities.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Okay.
What's the differential in cost? What are the alternatives to the consumer right now? They can get conventional energy from their local hydro company or they can go solar. What's the difference?
Representative, Canadian Solar Industries Association
The cost of energy to produce solar hot water across Canada is about 7¢ a kilowatt hour, which is comparable to grid energy. Grid energy, averaged across Canada, is about 7¢ or 8¢ a kilowatt hour. It's less in Quebec and higher in places like the Maritimes. The challenge is that the consumer who chooses to do this has to spend money up front to buy the system to get the energy savings in the future. So what we need to do is bridge that gap, to help them bridge the gap, to get the payback time shorter and shorter and shorter as the industry grows and expands and get economies of scale.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Thank you.
For the Recreation Vehicle Dealers Association of Canada, would you elaborate, if you can, about the proposal that was introduced, the loan guarantees that you're asking for, a guarantee of secondary loss position? Is it basically that the government would come in and say to a bank, “We'll backstop your loans to RV dealers; if they go bust, we'll cover your loans”?
Representative, Recreation Vehicle Dealers Association of Canada
A secondary position, yes.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Right.
To any limit? Is there any precedent for this in any other industry?
Representative, Recreation Vehicle Dealers Association of Canada
Our proposal was always up for discussion. The lenders who we have been talking to might only need $3 million or $4 million of secondary loss backstop. The losses in this industry typically are between 30 and 75 basis points. We've proposed a secondary loss guarantee starting at maybe 100 basis points.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
But the risk is significant enough that the banks are cautious about proceeding without additional support?
Representative, Recreation Vehicle Dealers Association of Canada
The banks aren't willing to lend to the recreation vehicle industry on a floor plan basis any more than what they do right now. So we're trying to entice other lenders into this market.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
All right. It's an interesting issue.
The last question. Your second recommendation or request is a national tourism strategy that provides dedicated funding to the RV industry. Was that the same loan guarantee program or something else?
Representative, Recreation Vehicle Dealers Association of Canada
I was being cut off there so I skipped a few paragraphs. Sorry about that.
Conservative
The Chair Conservative James Rajotte
Mr. Devenish, could you just back up a bit? We're getting some feedback on your microphone here.
Representative, Recreation Vehicle Dealers Association of Canada
Okay, sorry.
That was a secondary position, over and above what the recommendation is for the loss guarantee. It was just to provide more funding to the RV industry in tourism.
Representative, Recreation Vehicle Dealers Association of Canada
It's just general exposure, an increase in exposure.
Conservative
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Okay.
I have another minute.
Let's talk a little bit further then about this loan guarantee issue. I have met with representatives from your organization, and the gist of it is that they want to increase their inventory, but the banks won't provide them with financing to do that. Is that correct?
Representative, Recreation Vehicle Dealers Association of Canada
Currently there's only one floor plan national lender and it's GE.
Conservative
Representative, Recreation Vehicle Dealers Association of Canada
There's very little competition among the Canadian banks, and it's only on a very selective basis. The banks have withdrawn from this market, so tomorrow there could only be GE. The next day GE could say they're going to withdraw. We're in an extremely vulnerable position right now, and we're trying to get some secondary lenders into the lending market.
Conservative
Conservative
Paul Dewar NDP Ottawa Centre, ON
Thank you, Chair.
Thank you to our guests. It has been very compelling testimony, and I appreciate the fact that you had to combine a lot of your presentation into a short time. I understand that. We go through a lot around this table, and one day we'll actually be able to have a committee approach that will give us more time to discuss these ideas.
I want to start with solar. We believe we should go with what has worked in the recent past, and we have recently come out with a proposal to the government, which I hope it takes, and that is to go back to the ecoENERGY program and invest in it substantially, at the same time reducing the costs for those who are going to see their energy bills go up. We saw it as a balance, because right now we have consumers right across the country who are going to be paying a lot more on their hydro and heating bills. Our proposal is to reduce the amount paid for that through the HST/GST, but at the same time to bring back the ecoENERGY program.
I am interested in what I've heard around the table on multipliers. If we're going to look at investment, I want to make sure we're going to have a multiplier on our investment. The recession in 2008 wasn't just about the capital markets tumbling. We're in a transition in our economy. I'm afraid we haven't really woken up to that.
Can you share with us, if we were able to support through the government's budget, what the multiplier effect would be in terms of jobs with regard to ecoENERGY?