Government Operations Committee on March 5th, 2013

[The Chair, NDP, Pat Martin]

Good morning, ladies and gentlemen. We'll call the meeting to order. We have a quorum.

Welcome to the 76th meeting of the Standing Committee on Government Operations and Estimates. We're just about to embark on a new study. The committee has expressed an interest in studying the issue of energy efficiency in government buildings and public works. Therefore, we've invited a broad array of witnesses to give testimony.

We want to begin by thanking our witness who is joining us by teleconference from Edmonton, Mr. Wayne Rogers, the president of Luminessence Lighting.

Mr. Rogers, welcome.

[Wayne Rogers, President, Edmonton, Luminessence Lighting]

Thank you. I'm glad to be here.

[The Chair, NDP, Pat Martin]

Great, we'll be coming to you shortly. I understand that we're having difficulty with one of the cameras. You won't be able to see your fellow witnesses, but will be able to see the committee. I hope that's satisfactory.

We also have Mr. Peter Love from the Energy Services Association of Canada. From the Building Owners and Managers Association of Canada, BOMA, we have Mr. Benjamin Shinewald and Mr. John Smiciklas. From the Real Property Association of Canada, Ryan Eickmeier, director of government relations and policy, is with us today.

It's up to you how you would like to proceed, but we invite you to give a short presentation and then be available for questions. I would like to hear all of the witnesses first and then open the floor to questions, if that's okay with the committee.

We will begin with BOMA. Whoever is giving the presentation for BOMA, you have the floor.

[Benjamin Shinewald, President and Chief Executive Officer, Building Owners and Managers Association of Canada]

Thank you. Good morning, Mr. Chair, and committee members.

I would like to thank you for inviting us to appear before the committee this morning. My name is Benjamin Shinewald and I am CEO of BOMA Canada.

I will begin the presentation and then my colleague, John Smiciklas, our Energy and Environment Director, will take over.

The Building Owners and Managers Association of Canada, or BOMA Canada, represents owners and managers that collectively own or manage over two billion square feet of commercial space in Canada. Our federated system includes 11 local associations that are active in all 10 provinces and all 3 territories and that collectively have around 3,300 members. We are also affiliates of BOMA International and have counterpart organizations in many countries around the world.

Several years ago, BOMA Canada took the initiative to develop a made in Canada program now called BOMA BESt, with BESt standing for “Building Environmental Standards”. This is a program for building environmental certification.

The program is a response to a true environmental challenge: how to address and minimize the environmental and energy challenges posed by Canada’s huge stock of existing buildings. The program is deliberately not about new building design, though there is a place for such programs too. Rather, our program, BOMA BESt, recognizes that the greater environmental and energy challenge arises from those buildings that already exist. The real solution to that challenge must arise from the effective and efficient management and operation of those existing buildings.

Today, BOMA BESt is the only Canadian-developed assessment and certification program of its kind for commercial buildings in Canada. The program provides a consistent framework for owners and managers to critically assess six key areas of environmental performance and management: energy, water, waste reduction and site, emissions and effluents, indoor environment, and environmental management system.

To date, over 3,500 buildings, representing nearly one billion square feet of Canadian commercial real estate, have applied for certification or recertification across our five categories: office, which is the most germane for you; open air retail; shopping centres; light industrial; and multi-unit residential buildings. We are very close to adding a sixth category for health care facilities, which have unique energy profiles. We are confident that there are markets for still many more categories.

Perhaps most importantly, BOMA BESt certification is exceedingly cost effective. Not only is the cost of certification extraordinarily low compared to other building certification programs, but BOMA BESt also provides energy and environmental targets that reduce a building’s environmental and energy footprint and therefore reduce building operational costs. The program pays for itself.

Indeed, a simple comparison of BOMA BESt buildings against the numbers identified in Natural Resources Canada’s commercial and institutional consumption of energy survey shows that: BOMA BESt level 2 certified buildings perform 6% better than the national average; BOMA BESt level 3 certified buildings perform 18% better than the national average; and BOMA BESt level 4 certified buildings perform 46% better than the national average.

The Government of Canada has recognized the benefits, both environmental and financial, of BOMA BESt. For instance, Public Works and Government Services Canada, which owns or leases approximately 23% of government real property, we understand, has mandated that every single one of its structures, whether owned or leased, must go through a BOMA BESt assessment. This is a win-win for the government, we believe, as it is saving significant funds while also showing tremendous environmental leadership. In fact, this building that we're sitting in right now is slotted to go through certification in the coming weeks.

However, we also believe that there is more the government can do. I'll ask my colleague, John Smiciklas, to continue.

[John Smiciklas, Director, Energy and Environment, Building Owners and Managers Association of Canada]

Thank you, Benjamin.

In our remaining moments, I'm going to suggest that there are two key things that the Government of Canada can do to further its environmental performance and save taxpayer dollars at the same time. Both of these ways would optimize the management of the government's own stock of buildings in contrast to the excellent taxation-related proposals advocated by our colleagues at REALpac, which would improve the environmental and energy performance in the private sector stock of buildings.

First, there are nine custodial departments that are responsible for federal buildings. As Benjamin mentioned, BOMA BESt certification has demonstrated value in lowering energy consumption and costs for the buildings to which it is applied. Sometimes these environmental and cost savings are quite striking.

We therefore would urge the government to put the approximately 77% of its buildings that do not fall within the purview of Public Works through BOMA BESt assessment. This is the most environmental and cost-effective manner for the government to achieve its environmental and fiscal goals.

While a great number of federal buildings fall into our office category, we recognize that many other buildings, particularly those that fall outside of Public Works, will not fit within our current BOMA BESt modules. For instance, laboratories, prisons, and military bases each have their unique energy and environmental profiles given their particular uses. However, BOMA Canada is ready to work with other federal departments to assist in developing new assessment protocols and new modules that can be based on the unique needs of these buildings.

Second, with BOMA BESt’s demonstrated average energy reductions being 46% or better than the national average at the very highest level of certification, clear direction from the government to certify its buildings to the highest level of certification—level four—would translate into major reductions in energy usage and operational cost savings. While many buildings may require capital improvements to reach this level of environmental sustainability, the federal government is ideally suited to demonstrate the environmental and financial benefits to the commercial sector and society.

Setting targets for all federal buildings, not just those managed by Public Works, first to be assessed, then certified, and then to graduate to the highest level of certification is the very best way that the government can both respect taxpayers’ dollars and demonstrate its environmental leadership.

Thank you very much. Merci beaucoup.

[The Chair, NDP, Pat Martin]

Thank you very much, sir.

Next, I think we'll introduce Mr. Ryan Eickmeier, director of government relations and policy for the Real Property Association of Canada.

Mr. Eickmeier, five to 10 minutes, please.

[Ryan Eickmeier, Director, Government Relations and Policy, Real Property Association of Canada]

Thank you.

By way of introduction, REALpac is Canada's senior national industry association for owners and managers of investment real estate. Our members include publicly traded real estate companies, real estate investment trusts, private companies, pension funds, banks, and life insurance companies, each with investment assets in excess of $100 million. We're further supported by large-owner occupiers and pension fund advisers, as well as individually selected investment dealers and real estate brokerages. All told, we represent about $180 billion in assets across the country. REALpac members have enjoyed long-standing relationships with federal government tenants as owners and managers across Canada. They have an inherent interest in the topic of today's committee hearing.

I am delighted to be here with fellow industry representatives to speak to you about a policy area that has long been a priority for REALpac and its members companies: sustainability in commercial real estate. REALpac recognizes the significant environmental, social, and economic impact of Canada's commercial real property sector, the need for an industry-driven approach supporting national and commercial provincial strategies on greenhouse gas reduction, the importance of reasoned discourse with political and policy officials, and the value of persuasive arguments for sustainable economic growth. We also recognize the need for industry-wide green benchmarking data and shared best practices, and we continuously work with our constituents and national and international counterparts to ensure that the sector is well positioned for a sustainable future.

This is why REALpac prides itself on being a leader in this space. We were the first in North America to draft and publish a green office lease, now in its third version. We also, to our knowledge, published the first office building normalization methodology in the world and challenged our members to meet and exceed voluntary energy targets.

To paint an overall sustainability picture, the last several years have seen significant achievements for the Canadian real estate market in regard to the environment and energy efficiency. While improvements to design standards and energy introductions have not stalled, REALpac believes that it is imperative for the federal government to work hand in hand with our sector to maintain highly efficient and effective buildings. We believe improving the energy and water performance of buildings will undoubtedly help support the government's economic goals for the country while substantially reducing the nation's overall economic footprint.

I have included in the package submitted to the clerk a more detailed briefing of ways we think the federal government can make considerable advancements in green policy, and in particular increase the adoption of green building principles. But I'd like to take the next few moments to outline several key points for what we call a robust federal sustainable development strategy.

Sustainability in today's real property environment is driven almost equally by social and economic factors. However, these factors differ considerably based on whether we are looking at the construction of a new building or whether we are examining the possibility of a major retrofit to an existing one. From a new construction standpoint, the cost of building green is increasingly palatable because of innovative building techniques, the ability to set rents at a level to offset these expenditures, and the realized energy cost savings. In this light, REALpac has long been a supporter of certification programs like LEED for new construction, and BOMA BESt for ongoing targets and certifications. We would like to challenge the federal government to mandate and achieve high-level certifications for any new buildings, either leased or owned. Not only will this commitment speak volumes about top-down leadership; it will also have a net-positive effect on energy reductions across the country, given the considerable portfolio buildings within your inventory.

In addition, a clear commitment should be made by all federal government buildings and buildings receiving federal funding to achieve ongoing targets for energy, water, recycling, use of materials, and indoor air quality. What a program like this allows for is continued monitoring of performance to ensure that all new federally owned and occupied buildings are operating at the desired level.

The case for new construction and lease agreements in green buildings, then, is relatively straightforward. So I would like to touch on the more difficult task of making major energy retrofits to existing buildings, many of which the federal government currently owns or occupies as a tenant from REALpac members.

From a financial standpoint, major energy retrofits can be extremely cost prohibitive. Depending on a variety of factors, major energy retrofits can easily creep into the tens of millions of dollars for larger buildings across Canada. For government-owned buildings, these retrofit costs are necessary to maintain continued leadership in the environmental space for our industry to follow. However, for privately owned buildings, with long-standing government tenants, major energy retrofits do not always carry a sound or attractive business model. With the tendency for costs to skyrocket, depending on age and intensity of work needed, REALpac believes that favourable tax treatment for energy efficient equipment will help property owners conduct these major energy retrofits.

Currently, large expenditures like boilers and chillers are treated like any other fixed capital investment, generally allocated a tax depreciation rate of only 4%. REALpac is advocating for tax incentives that would provide a 50% average depreciation rate, and if designed correctly, would deliver increased investment in major energy retrofits and a renewal of Canada's building stock, all while enhancing job creation and profitability, and reducing energy consumption, greenhouse gas emissions, and air pollution.

This favourable tax treatment would undoubtedly be utilized by a broad array of buildings and building owners, including those with federal government tenants, making the business case for major energy retrofits all the more attractive to the benefit of the government, the economy, and the environment.

In closing I'd like to reaffirm that sustainability in the real property sector is no longer a pipe dream or something with financially crippling ramifications. It is a necessary action for future generations of Canadians to enjoy the same quality of life this generation has, and REALpac is a firm believer that these goals can be achieved through a strong working relationship between government and industry, a clear commitment from government to conduct its business in sustainable ways, and investment in energy-efficient retrofits in the short term so we can realize the significant social, environmental, and economic gains in the long term.

Thank you.

[The Chair, NDP, Pat Martin]

Thank you very much, Mr. Eickmeier. That's very interesting. I hope you get a chance during the questioning period to expand on the tax initiative you brought to the table.

Next, because he's been waiting so patiently, we will go to Edmonton, to Mr. Wayne Rogers with Luminessence Lighting. Sir, if you would like, take the floor next for five or 10 minutes.

[Wayne Rogers]

Thank you very much.

First of all, my name is Wayne Rogers. I'm an electrical engineer with both Luminessence and ReLumen Engineering, companies that have specialized in energy efficiency and energy-efficient lighting since 1987.

Our focus has primarily been lighting because it represents 20% to 25% of the energy consumption of any building. As an example, we have helped to develop energy-efficient lighting standards for the University of Alberta and implemented their use in over a million square metres of large and medium-sized buildings on its multiple campuses. The lighting systems are meeting an average overall density of less than 0.05 watts per square metre, or less than 0.55 watts per square foot. This is about one-third the current energy-efficient practice, as established by the IAS and ASHRAE 90.1.

Both companies have provided design and design-build services for Government of Canada buildings. Many of them have been complexes consisting of several buildings. Many are considered smaller buildings.

Lighting technology has been changing at an increasing rate over the past 20 years. Most recently, light-emitting diode technology has matured to the point where it is useful in commercial applications. However, it is more expensive than the alternative fluorescent technology, which is more efficient and has less light depreciation. Proven fluorescent technology called linear T8 and T5 has been effective since 1992, and manufacturers have steadily improved it, making it highly reliable and cost-effective. Despite this, over 70% of older buildings in Canada are fitted with old 1940s T12 lighting technology. There is a long way to go.

The Government of Alberta has been leading the way in upgrading most of its large buildings using energy-efficient performance contracts. All new buildings, including schools, must meet LEED silver standards. This includes all P3 projects. While this is a relatively high standard, efforts are being made to further enhance lighting in the leases negotiated with leased facilities and to have the landlord improve the lighting efficiency.

Our federal government experience includes an RCMP detachment in Jasper. A relatively simple, small project in 1992 was subsidized by Alberta Power and became the first example of a federal efficiency upgrade. The RCMP had no money for their 50% share of the cost, so ReLumen Engineering created a $15,000 lease for the RCMP for three years. It cost the government nothing, and the savings continued for the next 17 years.

For Parks Canada in Banff, Luminessence Lighting entered contracts to design and construct lighting upgrades for the museums and information centre in 1997. These projects have less than a five-year payback, and the contracts were very simple.

For Agriculture Canada, both ReLumen and Luminessence have been involved in auditing and implementing lighting upgrades in research facilities, including laboratories from Prince Edward Island to Alberta. These facilities have been completed using the department's limited budgets for their work.

For Public Works, there was an extensive study done in approximately 2004 of its Canada Place building in Edmonton. The study included lighting, but it took over two years, and there were three options that were mocked up to show high-quality, efficient lighting. Since then, simple technology replacement has been implemented and there's been no optimizing of the savings.

As for the opportunities going forward, we have asked about but not been able to confirm the total area of the federal government's building inventory. However, in 2010 we obtained office information for buildings throughout Canada, amounting to about 320-million square metres of space. If we simply use 100-million square metres of space as a reference for government buildings, including those leased to government, we could think of saving 10 watts per square metre simply by retrofitting the lighting. Those areas would include ones that have already been upgraded with technology replacement. If the lighting operates for a conservative 3,000 hours per year, with an energy value of 10¢ per kilowatt hour, then the value of those savings would be $300 million per year with a net CO2 reduction of over two million tonnes per year.

If the inventory of all buildings leased and owned were developed with energy efficient standards being established for all buildings, then a realistic objective for energy savings could be established. All upgrades need to include data for the upgrades done to date.

If further lighting upgrades were done, we could expect to have less than a five-year payback for every one of them. A very simple process needs to be established to allow projects to be implemented on a wide basis.

To date the cost of doing the paperwork with the federal government for energy efficient projects has been complex and time consuming.

We would like to thank you for this opportunity.

[The Chair, NDP, Pat Martin]

Thank you very much, Mr. Rogers. I hope you'll be available for questions from committee members when we've finished the presentations.

[Wayne Rogers]

Certainly.

[The Chair, NDP, Pat Martin]

I think your presentation is a good segue to our next presenter from the Energy Services Association of Canada, Mr. Peter Love. You have five to 10 minutes, please.

[Peter Love, President, Energy Services Association of Canada]

I'm delighted to be here. Thank you very much.

That was a very interesting segue. I haven't met Wayne actually, but he referred to two projects, Banff and the RCMP. I think I sent the staff a flyer, and two of the case studies on our flyer are Banff and the RCMP building using an energy performance contract.

My name is Peter Love and I'm the president of the Energy Services Association of Canada. I'm the former chief energy conservation officer for the Province of Ontario.

I've had a long career in the energy efficiency business. I was involved in and the founder of a company in Ontario that delivers the R-2000 program in Ontario. I developed the Energy Star for new homes program. I've also worked very closely with Natural Resources Canada and I've been a member of the Office of Energy Efficiency's national advisory committee on energy efficiency for 10 years.

I want to make a general comment about energy efficiency, and I know your committee is looking into it.

People talk about the benefits. There are obviously environmental benefits, which I'm sure you're focused on. There are cost-saving benefits, which some of the other speakers have talked about. One of the other really strong benefits is employment. Energy efficiency and energy conservation are labour intensive. It requires people to do energy conservation work.

There are all sorts of studies, and the presentation that I sent to you has some of those studies that compare the energy-efficiency employment opportunities. They're very large, and they tend to be very regional. This isn't just employment by making things in Korea or Vietnam. This is local employment where the projects are being done. I think it's a huge driver, which I certainly focused on when I talked to government officials about energy and the benefits of energy conservation.

I now talk to business leaders and home owners about it, because everybody knows someone who's underemployed. Everyone has a son, a daughter, or a wife who is looking for new opportunities, and energy efficiency is a huge employment opportunity. There's some interesting work being done on that, which I want to emphasize to you.

I'm here representing the Energy Services Association of Canada. It was formed in 2010. It's made up of eight of the largest energy performance contracting companies in Canada, and you'd recognize their names. Our industry does about $450 million a year of these performance-based solution contracts. These eight members represent over 90% of the industry. So that's the industry itself.

One of the key barriers to energy efficiency, which some of the previous speakers talked about, is that up-front cost. It can be large, and for private businesses that's difficult; there's competition for capital. A recent study identified capital availability as being one of the major barriers to energy efficiency. For governments it's even more critical, especially in these times when money is scarce.

The energy performance contract is an opportunity to overcome that financial barrier because it's the private sector that takes on the technical and financial risk associated with an energy project. These companies go in and do a very detailed audit—and I mean very detailed, because their money is at stake. They put up the money and they guarantee the results through the savings that are achieved during the life of the project. If the savings aren't there, the companies pay the difference, so you can imagine how detailed they are on their evaluations. This has been going on for a number of years now.

The federal government has a program, which I'm sure your committee members have heard of, called the federal building initiative. It's been very successful and has been going for 20 years. They've retrofitted about a third of the federal buildings now, and there is about $312 million in leverage funding, with 80 projects across Canada. We estimate that there's a saving of about $43 million a year in energy costs from these projects, with typical energy savings in the 15% to 20% area.

One of the interesting features that the government has found with these contracts is that they are less expensive, especially when they include all the management costs. To undertake a major energy-efficiency retrofit, you could be dealing with many different contractors and suppliers and many different contracts. If something goes wrong, you've got many different fingers pointing in different directions, but with an energy performance contract there is one contract, one party responsible, and their money is at stake, so if there is a problem with a project, it's very clear whose responsibility it is and how it gets remediated.

It's a major opportunity for the federal government. It's interesting that the Province of Ontario is looking to develop a program, which will be partially modelled on the federal program. You're to be complimented on the work that's being done. Two-thirds of the buildings out there have still not been retrofitted. Some of the ones that were done 20 years ago probably need to be redone. There is a huge opportunity here, and the thing to emphasize, again, is that this is not using federal money. This is using the private sector to put up the money to do the work, and it guarantee the results of that project. The technical and financial risks are absorbed by the private sector, which is what it is very good at. As I said, it's one contract that comes in.

There are a number of case studies in that flyer that I sent around. There are eight of them with federal buildings. We have 37 others on our website. Natural Resources Canada has a number of other case studies. It's a very important opportunity, and it's one that I encourage committee members to look at. One of the ideas that was mentioned earlier, which I think is very important, is to set some targets and have an objective for the federal government. It's something that other governments have done—the U.S., Ontario, B.C.—and it really forces departments to focus on achieving a target, if it's very clearly spelled out. I'd encourage the government to look at establishing those more clearly.

You have a great mechanism. The federal building initiative, as I said, has been going for 20 years. It assists other departments in doing this work, but we would like to see many more contracts being done by the federal government using this mechanism.

I look forward to your questions and your responses.

[The Chair, NDP, Pat Martin]

Thank you very much, Mr. Love.

Thank you to all the presenters. I'm sure you've whetted the appetite of the committee members and generated a lot of interest.

Our routine is that we do five-minute rounds of questioning. If you could, please keep the answers as succinct as you possibly can. Sometimes you can finish thoughts in response to following questions.

We will begin with the official opposition, the NDP, and our spokesperson Linda Duncan.

Five minutes, please, Linda.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you very much, Mr. Chair.

I want to thank all five of you, not only for your fantastic testimony but also for the materials you provided. They are exactly what I was looking for. We, in our party, are particularly interested in the cost savings side. We're in a time of fiscal restraint across the world, and that's why we're particularly interested in looking at this. Obviously there are environmental benefits to it as well.

I have lots of things to ask. I'm glad that a lot of what you said is already on the record, and we'll try to follow up on it.

I have two key questions. In my first one, I want to commend REALpac for page 80 of your presentation on your package of reforms. These are things that I've been interested in pursuing for quite some time. It is really exciting to see it coming from your sector. I don't have time to get into all of these in detail, but it's absolutely fantastic information that we hopefully can follow up.

The question I would like to put to REALpac is about your specific recommendation to increase the tax depreciation rate for boilers, chillers, and so forth—essentially equipment for heating and cooling—to up to 50% to incent energy retrofits. You gave the example of a 100% tax deduction for the U.S. and the U.K. I wonder if you could elaborate a bit on how you think that might encourage retrofits. We're looking specifically here at investments by the federal government to improve its energy efficiency.

[Ryan Eickmeier]

As I said in my presentation, a number of REALpac members own or operate federally leased buildings. When it comes down to making major energy retrofits, it becomes a capital cost, a capital improvement project. Whether it's a federal tenant or a private-sector tenant, they still have to look at the costs and the relative payback and where they're going to get their money, and then they have to look at the relative business model.

So when we look at major energy retrofits and the four categories I mentioned in the appendix of the package I gave you, those have come from discussions with Finance and NRCan as we have tried to narrow down this project to a more manageable scope. We started out with a larger and really a broader realm of products, but to us these fall into the category of being cost prohibitive in terms of installing and purchasing high-efficiency boilers and chillers. Also there are major costs associated with installation and the work that comes with it. So it's not just simply a matter of attaching it to your old HVAC system. A lot of residual work comes with it.

When we look at the cost of it right now, there is a much better business case for installing a mid-efficiency boiler rather than a high-efficiency boiler. You are obviously going to get higher energy savings with a high-efficiency boiler, but the actual cost and the payback period do not quite make sense. For a number of our members who do have private-sector money as part of their business model of real estate investment trust publicly traded companies, they need to justify major energy retrofits, and major building retrofits in general, to their shareholders.

We think this would make the financial case and the business model a lot more favourable. It would allow them to spread the money out; it would allow them to get these high energy savings; and it would at the end of the day create more money for the federal government in the long term through tax revenue and through the additional work that comes with installation.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Okay, thanks. Any additional analysis that you've done on that would be welcome if you could send that to the committee and we could absorb that.

My second question I'd like to put to Mr. Rogers and Peter Love.

I would like to thank you, Mr. Love, for pointing out that very important point that energy efficiency is a huge local job creator. The energy strategy and the cost of carbon and so forth can be really important trigger points.

Mr. Love and Mr. Rogers, could you elaborate on what you think the prospect is for jobs in the energy efficiency sector?

[The Chair, NDP, Pat Martin]

You can start, but both of you will have to keep your answers down to a minute or so. We're just about over time.

[Peter Love]

Quite a bit of work has been done on this. In my presentation, I included one slide from the Empire State Building that looks at jobs per billion dollars invested in comparison with other energy generation. Natural Resources Canada has just undertaken a study on the employment benefits of energy efficiency. I have been asked to be on the advisory committee for it.

When I was at the Ontario Power Authority, we did a study about the employment impacts of introducing it, and here I'd be really interested in Wayne's comments. I did an opening at a project in Timmins in northern Ontario for a hospital that had been renovated. The energy performance company estimated that 80% of the jobs associated with that project were in Timmins. As the mayor looked around the town, he could see that “Joe” had hired a few guys and the mechanical guy and the civil guy. Those were local jobs.

There are some good studies on it. I made a presentation—and if there's an opportunity to follow up, I could send it to the committee clerk—to Natural Resources Canada last year, and it summarizes the studies that have been done in this area.

[The Chair, NDP, Pat Martin]

Thank you.

Mr. Rogers, would you like to comment on Ms. Duncan's question?

[Wayne Rogers]

There's absolutely no question that doing energy efficiency projects will increase employment. Just as an example, the project in Prince Edward Island was about a $150,000 lighting retrofit and 50% of that would have been labour. Of course, the luminaires had to be constructed, so there was a 50% labour component to it as well.

The point I'd like to make is that it needs to be dead simple. Lighting retrofits do not need to have performance contracts. We did about 200 schools in Alberta under performance contracting. Unfortunately those guarantees cost a lot of money, and there's a long selling curve to try to put the money in place to have those. Ten-year paybacks became the standard because of the very high cost of including long payback items and so on. I know I may be preaching lighting, but in lighting retrofits 25% of the energy consumption can be reduced by at least 50%. So a 10% or 20% reduction in the building can come from lighting alone.

The technology is proven. We simply have to have a very simple monitoring system that says, “Okay, here's the audit. We counted the lights”. At the end of the day, someone needs to go in and say “This is the number of lights that were changed and”—boom—“there are the savings. It's done”.

[The Chair, NDP, Pat Martin]

That's very compelling, Mr. Rogers. Thank you.

We're going to go to the Conservatives. The first spokesperson for the government side is Mr. Dan Albas.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Mr. Chair, I'd like to thank all of our witnesses for being here today. I find it a very interesting panel, where you have a lot of people involved from the industry side. I certainly think it's important to have that kind of knowledge from on the ground, derived from the thousands of different buildings across this country being built with some successes and some failures. Hopefully, all of that knowledge trickles up so that you guys can present to us here today, rather than some of the big policies that sometimes are a one-size-fits-all.

What Mr. Rogers said about having to fill out paperwork for a common sense change in lighting is something I'd like to focus on later.

But, Mr. Chair, I served as a municipal councillor in British Columbia in a beautiful little town called Penticton. As we talked about some of the fads and some of the science behind some of the green techniques, they always came down to two things: zoning and the building codes.

We've already heard from Mr. Eickmeier who said that energy retrofits can be very expensive and that oftentimes you can't take the old technology out without severe disruptions and costs.

The challenge I think is to find about how we move forward.

Here again, Mr. Chair, if our witnesses, Mr. Shinewald or Mr. Smiciklas from the building owners or REALpac, Mr. Eickmeier, can't answer the following questions, I'd maybe like to ask our analyst to see if they could maybe find out.

When you build a new federal building, is it regulated under the Canadian building code? And if one of your clients were to build a building with the intention of leasing it to the federal government, does it go under the provincial building code of the day or the national building code?

I think I'll start there, Mr. Chair.

[The Chair, NDP, Pat Martin]

Good question. Who would like to answer first?

Mr. Eickmeier.

[Ryan Eickmeier]

It would be under the national model building code, and they would generally build to the specifications of a tenant if the agreement were for the builder to have a fully tenanted federal building.

One of the things we've seen with a lot of our members, particularly in the new building or new construction field, has been their building to a high level certification, but based on the tenants' asks. Those types of construction, as I said, are quite palatable and quite cost-efficient because you can do them from scratch. As you mentioned, the cost of retrofits are the really costly part of our business.

Our members are quite happy to be challenged in terms of building codes and to find innovative ways of meeting new levels of energy efficiency because, at the end of the day, the cost savings are what drives it. So, yes, I believe it's the national model building code.