Evidence of meeting #20 for Government Operations and Estimates in the 40th Parliament, 3rd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was company.
A recording is available from Parliament.
Liberal
The Chair Liberal Yasmin Ratansi
Committee members, the clock says 3:30. We are continuing our study on the renewable energy process.
We have before us witnesses from Upper Canada Solar Limited. Mr. Joe Jordan, is the director. We also have Canadian Solar Solutions Inc., and Mr. Milfred Hammerbacher, president, and David Arenburg, vice-president of business development.
I understand you have some opening remarks. Shall we start with you, Mr. Jordan?
Joe Jordan Director, Upper Canada Solar Ltd.
Sure. Thank you, Madam Chair.
I apologize in advance to the interpreters--
Liberal
The Chair Liberal Yasmin Ratansi
If you can keep it between five and seven minutes, it would help us.
Thank you.
NDP
Pat Martin NDP Winnipeg Centre, MB
Madam Chair, I think Mr. Jordan can have the amount of time he needs. He says he has about a 15-minute presentation. I don't think there are any urgent time limitations on us today.
Director, Upper Canada Solar Ltd.
Five minutes is fine.
I do want to apologize in advance to the interpreters. I don't have a copy for them, nor do I have a copy for the committee. The confirmation for this appearance wasn't given to me until last Friday, so I didn't have time to prepare.
I thought I'd just give you a brief introduction to the company and then the sequence of events that led to our company's name being on a document that was then submitted to Industry Canada.
By way of introduction, I am a director but not a signing officer in the corporation. I do hold a small equity position in the company.
The company was started in the fall of 2006, it was incorporated in October 2007, and it has progressed in that time from a non-revenue-producing startup in the solar energy sector to a multi-million-dollar company. The corporate year-end of UCSG is July 31. It has now reported for two years ended in July 31, 2008 and 2009. The first year as a startup it reported no material revenues, but it was successful in obtaining in excess of $100,000 in equity financing. For the year ended July 31, 2009, its first full year of operations, the company reported gross revenues of just over $391,000. During the first and third quarters of the current 2010 fiscal year, the company has reported gross revenues of more than $191,000. Going into quarter four of 2010, it has a group backlog order book in excess of $2 million, which relates to purchase orders signed and expected to be executed through the remainder of 2010.
Over the last 18 months, the company group has successfully developed a unique 10-kilowatt single access tracker that's being marketed specifically to the OPA microFIT programs in Ontario. The company is continuing to test and develop the unit, with intentions to seek letters patent on the device. I make that point, Madam Chair, because Upper Canada Solar Generation is a company, it has revenues and employees, and it pays taxes.
I'll just take you through the timeline that led to the inclusion of our company's name on the document that went to Industry Canada, and I will supply the committee with these documents.
On Tuesday, June 16, 2009, I met Mr. Glémaud at a lunch that involved about eight people who had various connections to the solar industry. It was an informal lunch with a number of people connected to renewable energy companies. Mr. Glémaud was introduced as a lawyer who had done some private work for one of the executives of Canadian Solar, which is the company that supplies our panels for our installations. He had been a private lawyer for that individual over the years and was presented as somebody who was getting into the renewables industry, which in Ontario was becoming an increasingly crowded space.
Although the primary topic of conversation was about the delay in the launch of the Ontario government feed-in tariff program, at one point Mr. Glémaud indicated that there was potentially a new federal infrastructure program that might cover photovoltaic solar projects. After a brief discussion, it was determined that we should check to see whether the criteria for this program matched any of the components of the various projects we were working on.
The project was not listed on the NRCan resources page for renewable energies, nor was it listed on the website for the Canadian Solar Industries Association, which is the national industry association for solar, so it was a new program. Subsequently I checked, and I think it was actually launched at the end of May of that year. So this was the subsequent week.
Later on that afternoon I sent an e-mail to Canadian Solar, our panel supplier, which contained a document entitled, “Briefing Note, Eastern Ontario Solar Project”, outlining the current projects our company was involved in. At no time did it ask for money. It was just an overview of the activities that we had and were undertaking in eastern Ontario.
I spent little time on this. I did not believe anything we were doing would qualify for federal funding. And the reason I say that is that the FIT program in Ontario is a provincially subsidized program. This particular point in time was a period between when the old program, called RESOP, was suspended and the new program, called FIT, had not yet been launched. So there was a lot of angst within the industry about whether the rules were going to change dramatically. We were in the process of trying to secure financing for a number of major projects, and that was consuming any extra time I had.
The other reason I didn't think this federal project would cover it is that under the RESOP program there was a clawback, which meant that the province clawed back any federal programs you piled on; they weren't prepared to allow a double subsidy. In the case of ecoENERGY, for example, which was a federal program at the time, if you qualified for ecoENERGY, all or part of it was clawed back by the provincial government, because they were already subsidizing the project. They also maintained and kept the carbon credits. They weren't going to allow the power-generating company to keep the carbon credits, because again, they were subsidizing the project.
So my predisposition was that this was essentially a waste of time, that it wasn't going to fit. But I sent the document in to Canadian Solar, and that was the last I heard of it. The document then ended up positioned as an application, I guess, although I'm still unsure whether or not it technically was an application. It certainly wasn't an application from our company.
Canadian Solar then more or less circulated the document I sent. There was a little bit of back and forth. That was the last I heard about it; it was on June 17, 2009.
You can imagine my surprise when I was confronted with the fact that our company was listed on this document, which was then positioned in the media as some kind of formal application under this funding program, which I didn't even know existed.
In the interest of full disclosure, I did have a couple of further contacts with Mr. Glémaud. They had to do purely with the company as a photovoltaic project installer. Mr. Glémaud had informed me through e-mail that they had some property or that he had access to some property in Bancroft and that they were looking at putting a solar installation there, which is what Upper Canada Solar Generation does. I put him in touch through e-mail with our technical staff. They met with him twice, toured the property, and it was determined that the proximity to the hook or the substation to get on the grid was too far and that it wasn't a viable product. I have not heard from or had any contact with Mr. Glémaud since that time.
When the story came out that somehow our company was attached to an application for funds, I immediately phoned the Office of the Commissioner of Lobbying and offered my full cooperation, if they were going to be looking at the issue. They took me up on my offer, and I spent about an hour and a half about a month ago going through exactly what I just went through with the committee here today.
I'm not sure what more I can add or be helpful on, but I'm at the committee's disposal and will answer any and all of your questions.
Liberal
Milfred Hammerbacher President, Canadian Solar Solutions Inc.
Sure, Madam Chairman.
I'd like to give a brief background on Canadian solar and Canadian Solar Solutions.
As stated earlier, I'm the president of Canadian Solar Solutions. This is a subsidiary we created about a year ago, in June of 2009. We are wholly owned by our parent company, Canadian Solar Inc., which is a publicly traded company on NASDAQ. It's an incorporated company in Ontario, founded in 2001. We have manufacturing and other employees worldwide, about 6,000. We're the eighth largest solar manufacturer in the world. We started this new subsidiary here in Ontario when the Green Energy Act developed by the provincial government was announced.
This is probably one of the most exciting and busy times for me in my career. I've been in solar for 22 years now, and the Ontario program has actually made Ontario the centre of the world in solar energy, believe it or not. We have currently plans under way to do another rare thing, to actually bring jobs from China back to Canada. We are going to be building a 200-megawatt module facility by the end of this year here in Ontario that will employ approximately 500 people. And then, on top of that, all of our customers, such as Upper Canada, are busy training and adding staff to handle all the installations and design of the systems that are going to show up on a lot of buildings, residential rooftops, and on large farms as well.
In this process we've interfaced with lots of companies. You can imagine that this kind of environment has created a lot of entrepreneurs. A lot of people have knocked on our doors and said: “We have a project. Would you be interested in it?” We pretty much have an open door policy. We don't turn anything away until we get more facts on it. Because of that, in November of last year we made 397 megawatts of applications for the feed-in tariff here in Ontario, which is the largest group of projects of any company. In April, 176 megawatts of those projects were approved, and currently we're in the process of doing environmental and archeological studies of these sites to get ready to deploy our product on them in 2011.
That's basically a background on why we're here in Ontario and why we really think this is a great opportunity for renewables.
Liberal
The Chair Liberal Yasmin Ratansi
That's fair enough. Thank you very much.
Now we go to the first round of questions, with Ms. Coady for eight minutes, please.
Liberal
Siobhan Coady Liberal St. John's South—Mount Pearl, NL
Thank you very much.
We certainly appreciate both your companies' being here today and thank the three of you for joining us.
This is a very interesting study that we have undertaken, and I'm hoping we'll be able to get some answers from you today that will shed a little bit more light on this whole circumstance.
First of all, if I may ask, I understand from Mr. Jordan that he talked about Mr. Glémaud at one particular meeting.
Have you ever met with Mr. Jaffer, or were his services ever presented to you by Mr. Glémaud?
Director, Upper Canada Solar Ltd.
Not at all.
Obviously I know Rahim, as a former member of Parliament. I haven't spoken with him since before he was defeated, and I don't even remember how long before that it was.
Liberal
Siobhan Coady Liberal St. John's South—Mount Pearl, NL
Okay.
Mr. Hammerbacher, have you ever met with Mr. Jaffer, or was Mr. Glémaud ever talking about services that he could provide?
President, Canadian Solar Solutions Inc.
I've never met with Mr. Jaffer. I had two meetings with Mr. Glémaud. I should back up and say that we have two offices here in Ontario, one in Kitchener, where I'm located, and then David runs our Ottawa office. Last summer, on two of my visits to Ottawa, Mr. Glémaud was there to talk about potential projects that he might be able to bring to us.
Liberal
Siobhan Coady Liberal St. John's South—Mount Pearl, NL
What interactions did you have with Mr. Glémaud? What did he present to you at that particular time?
President, Canadian Solar Solutions Inc.
It was very informal. Essentially, one of his interests was trying to work with municipalities to put rooftop systems on the buildings of municipalities. As the conversation ended, I said, show me a business plan, which is generally the statement I make to a lot of people who come to us with project ideas. I never got a business plan.
Liberal
Siobhan Coady Liberal St. John's South—Mount Pearl, NL
So what I'm understanding from you, Mr. Hammerbacher and Mr. Jordan, is that you did not know that these proposals were submitted to Mr. Jean, the parliamentary secretary, on behalf of your company, looking for a significant amount of money for a particular project.
Director, Upper Canada Solar Ltd.
Not only did I not know, but also I don't think they were submitted on behalf of our company. We certainly were not signatories to any document, and Industry Canada never sent a rejection letter to us. So my view was that this was a proposal submitted on behalf of their company.
Liberal
Siobhan Coady Liberal St. John's South—Mount Pearl, NL
Have you ever had any government money put into your projects? I know that both of your start-ups are fairly new, and I ask this more specifically of Canadian Solar Solutions, because I know that your other companies have publicly traded.
President, Canadian Solar Solutions Inc.
In my career...I've actually been in Canada since 2000. In a former company I worked with Industry Canada, and we did receive funding through Industry Canada.
Canadian Solar did receive some CIDA funding back in 2001, I think, to help with some initiatives in China.
Since then, David, you might have better knowledge, but I don't believe any other funding has been received.
The first involvement I have had with the current government was that we did look at the possibility of getting some SODP funding for a factory we're looking at building.
Liberal
The Chair Liberal Yasmin Ratansi
I'll have to suspend this meeting, because there are votes taking place.
Committee members, please come back after the votes.