Government Operations Committee on Oct. 2nd, 2012

[Caroline Weber]

Yes.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

What happens if a department doesn't meet its goals?

[Caroline Weber]

Public flogging.

[Voices]

Oh, oh!

[Caroline Weber]

It will be the responsibility of the deputy heads to explain that.

Although, again, this is where colleagues in Environment Canada might be better placed to respond to this question, the Commissioner of the Environment and Sustainable Development is also reviewing our performance here, so I'm sure it will be much discussed in various fora.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

There are spotlights on this along the way.

Just moving on in a different direction now, I'm curious to know about the implementation of solar panels. In what case does the addition of solar panels make sense in terms of the business case? In what case does it not make sense? Does it make sense in all cases? Talk to us a little bit about the use of solar panels.

[John McBain]

There are far more qualified people than me to speak on this particular subject, but certainly from my experience in working with our portfolio, it starts with the first question, which is how many days of sun a particular location gets. Wind might be a better alternate source of energy than solar—for example, in parts of Newfoundland and Labrador. But the first question is days of sun.

The second question is what the particular energy regime is in that municipality or that jurisdiction. Do you have a feed-in tariff where you can actually contribute back to the grid?

Third, can the panels and the cost of the panels provide a reasonable return on investment in terms of reducing the operating cost of the facility?

Those are all things we take into account in terms of looking at the investments.

Also, there is an impact on structure, on the architecture of the particular facility, having the panels up there, understanding what they do in wind situations, with snow loads, etc. How does that work in terms of the overall cost and the benefit?

[Geoff Munro]

There is also continual improvement in technology. You may have seen in the rural parts of the country places where the panels actually move with the sun, so that they get the maximum expression of the panel surface to the sun. On the actual panel itself, we're now seeing that micro-reflectors can concentrate the sun's rays before they actually hit the panel surface, in a way that improves the performance. So the technological improvement that is going on in solar panels is also adding to the cost factor that John is talking about in terms of which panel you're using and under what circumstances.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Is the awarding of contracts to implement solar panels on a particular federal building done through traditional RFP processes? Are there programs that encourage the use of Canadian technology in this regard?

[John McBain]

Certainly in the experience we've had to date, it's been part of the overall building retrofit proposal. It isn't a one-off, of itself. I don't know if FBI itself encourages or has had experience with solar panels, but in our cases it's been as part of an overall building renovation.

[Geoff Munro]

Part of the FBI program demands that there first be a feasibility study of the facility. Within the same parameters John is talking about, in terms of how a solar panel array might fit into the possibilities for that building, the energy company would make that recommendation. Then, based on the cost and the potential return dates of the finances, the building owner would decide whether it was an appropriate decision to proceed with.

[Carol Buckley]

In some cases, it's client-driven. If a particular department has a particular interest in a technology, they will express that interest. Then the private sector will return with the feasibility of how it could be included and what the economics would be. The department would have the final say. In some cases, the extremely good economics of other measures will help more leading-edge measures make more sense, so you can bundle these together in an overall investment.

[The Chair, NDP, Pat Martin]

Thank you, Peter. You're well over time.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you.

[The Chair, NDP, Pat Martin]

That actually concludes our first round of questioning.

If you don't mind, I'd like to ask one question leading from what we've heard from witnesses. I'm a little concerned about the lack of pickup on the federal buildings initiative. I think some questioners alluded to that. I'm wondering what kind of promotion or what kind of RFP, if you will, has gone out to the private sector to tell them that we have this block of building stock that they are welcome to bid on if they can help us save energy. Is there active promotion going on out there?

[Carol Buckley]

In the federal buildings initiative, we concentrate our promotional activities on our client base; that is, the departments that can use the federal buildings initiative. We choose various venues to ensure that managers who have custodial responsibilities are aware of our services, because the FBI is, in effect, a service organization for other departments. We are marketing to our clients to say that we're here, we're available, and we have these services to help you put in place building retrofits, which we list.

We concentrate our marketing, per se, on the client departments, and we try to reach different levels of the decision-making chain—senior managers and more operational people. We also use the community of practice to get at the technical people so that they can understand where FBI might fit in their departments.

With respect to the private sector, we don't market per se. We treat them as our stakeholders in delivering the federal buildings initiative, because we couldn't deliver the program without the private sector. It's not marketing per se. We work with them to ensure that they are qualified to meet the requirements of working for the federal government, and we assess their financial, technical, and managerial capacity.

We have nine firms at this current point in time. Together they have a financial capacity of $700 million. We know that there is industry capacity to take up any demand the government might have, but we concentrate our marketing on federal government clients to try to draw more clients who we can serve through the program.

[The Chair, NDP, Pat Martin]

Thank you, Ms. Buckley. That helps to clarify that.

We'll go to our second round of questioning, then, beginning, for the NDP, with Jean-François Larose.

Jean-François, you have five minutes, please.

[Jean-François Larose, NDP, Repentigny, QC]

Thank you.

Your program is interesting, but it raises many questions. So I would like to ask you a few.

Unless I am mistaken, the return on investments is much higher. I am not talking about the environment, but about financial aspects. The return on investments is much higher than it is for investments in a building.

[Geoff Munro]

The simple answer to that is yes. When we work with the FBI program, the savings are guaranteed by the energy company. There's no question that you are going to get your money back. It's more a question of the time element associated with the payback period. Depending on what approach is used in which building, that could be as low as two to three years, or it could be a 10- or 12-year investment.

[Jean-François Larose, NDP, Repentigny, QC]

Thank you.

Buildings that belong to the federal government take up 24 million square feet. Why are you looking at buildings for lease and not permanent buildings? Why are permanent buildings not being given priority? In 2020, there will be many buildings which will not belong to us, but in which we will have invested. I have no objection to making buildings that will no longer belong to us greener, but it may be a good idea to take care of permanent buildings directly.

[John McBain]

PWGSC's inventory totals just over seven million square metres, or probably 72 million square feet. Half is crown-owned and half is leased. Our investments for greenhouse gas reduction targets are crown-owned. That's where we spend our money.

I mentioned earlier that we sometimes invest in leases. That depends on the nature of the leases. Some leases are triple net—the crown pays all costs. If it's a long-term lease, 15 years or so, improving the heating system in the building would pay us a dividend, because we would pay less for heating. But that's the rare occasion.

What we're talking about for the most part in this presentation, far and away, is the crown-owned inventory. For us, for Public Works, that's about three and a half million square metres, or 37 million square feet.

[Jean-François Larose, NDP, Repentigny, QC]

I have a feeling that's an excellent program. Unfortunately, I have difficulty understanding why there is so much reluctance involved, if it's as efficient as you say, provided we all try to tighten our belts and find more efficient methods, which is completely normal. Considering the number of buildings we have in Canada, we need a much more dynamic program that will help us tackle problems much more quickly. However, cuts are being made and many civil servants are losing their jobs. I agree with you in saying that this is an interesting measure to consider, precisely in order to reduce funding. However, I don't understand why, if the return is so big, we are not targeting more buildings and why more investments are not being made.

[John McBain]

It is a good question.

I would start with the simple fact that the average age of Public Works' inventory is 43 years; our buildings are on average 43 years of age. That puts them very old in terms of how they were designed and constructed. To bring new technologies to some of these buildings is a major undertaking, so I need to look at that in the context of the life of the building, how long we plan to occupy it. Also, to do some of these renovations would require us to move everyone out, occupy leased space, for example. In those cases, for some of our longer-term view, the return on the investment is not there because we would have to spend so much money to do this, and maybe in that particular community the building won't be used for that long. We are, as you saw in some of our numbers, addressing the parts of the inventory for which it makes sense. For others, fiscally, when you take the large picture into account, it does not make, in our mind, a good investment.

[Jean-François Larose, NDP, Repentigny, QC]

That still remains on the table. A comprehensive strategy that would make it possible to consider all the angles, rather than one single option, would help achieve excellent results. Currently, the approach is, once again, overly timid. I agree that we may not be able to tackle 24 million square meters, but we could certainly achieve much better results. We understand your enthusiasm, and we agree with you. It's extremely interesting. We are very pleased with the work you are doing, but it would be nice to do a great deal more faster, especially with the addition of the environmental aspect. I think that, with all the red flags when it comes to the environment, time is of the essence.

Thank you.

I'd like to share my time with Linda, please.

[The Chair, NDP, Pat Martin]

I think your time is up as well, Jean-François. Thank you very much.

Next, Costas Menegakis. Welcome, Costas.