Government Operations Committee on March 19th, 2013

[Dave Seymour]

I think their discussion with the client who has retained them is becoming a lot more specific about the objectives of the design. And I wrote down the integrated designs as well; that's got to be critical. So we need to take action with the clients up front and give them that sales job—if I can use that term—that they need to be looking at a broader picture, not just our fees.

Start looking at the bigger picture in terms of sustainable design, how this building is going to work, the legacy of the building. Those are important things, and then bring in the right players, not necessarily the cheapest players, to get that design done, and done well.

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

Okay. That's very good.

Earlier we talked a lot about targets and measures. I've heard your views on that, Mr. Seymour and Mr. Carpenter, but I'd be interested in your particular views, Mr. Mueller.

Given the considerable portfolio of buildings the federal government occupies, how should the federal government commit to achieving targets for energy efficiency?

[Thomas Mueller]

In building on what Mr. Seymour said about the vast building portfolio the government owns in various departments, I think you need to start to look at and understand the energy and water use, and also toilet waste generation, of these facilities. Then you need to benchmark them on an ongoing basis to understand what's happening and then strategically target your investments where you can achieve the biggest reductions.

The evidence would suggest that operational savings of up to 20%, maybe a little more, are possible from recommissioning. These types of approaches can be readily achieved, meaning the buildings would be operational without any retrofit—it's just about operating the buildings better, maybe replacing some old technology. The precursor is really good benchmarking and understanding your building portfolio well, and then I think being more ambitious in setting targets for all the indicators of water, energy, materials for your new builds, and for your larger existing buildings as well. I think there are opportunities for improvement to achieve higher performance and move toward more of that kind of low carbon, low water use, low or zero waste generation. The terminology seems to be taking hold in the industry now.

[The Chair, NDP, Pat Martin]

That concludes your time.

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

Thank you, Chair.

[The Chair, NDP, Pat Martin]

Thank you very much. Thank you, Mr. Mueller.

That concludes our first round of questioning. We will have time for each party to have one more round of questioning, but I'd ask you to expand on two items just before we move on.

First of all, do you know of any studies, or is there any documentation, on the secondary or beneficial byproducts of energy retrofitting in terms of better indoor ambient air quality, productivity, or fewer person days lost due to illness, etc.? Do any of you know of any evidence that might make the case for a healthy building resulting in a more productive or healthier workforce?

Secondly, I think, Mr. Mueller, you made reference to financing, and so did you, Mr. Seymour. Are some of the energy services contractors self-financing, and if they aren't, are they seeking external venture capital to get these ventures under way? Pension funds seem to me a really good source of capital as a safe investment. Can you tell me roughly the cost of borrowing for this type of venture or the rate of return expected from, for instance, the teachers' pension plan when they put forward the money to undertake this kind of thing?

Is there a brief response on either of those two things before we go to the next round of questioning?

[Thomas Mueller]

I'll quickly answer the first question. A number of studies have been done in schools and hospitals, at the workplace, but they're individual studies and they're not necessarily done under the green building auspices; they're just certain design elements like day lighting, natural ventilation, which is better for students or for patients, and so on.

A study by the National Research Council on evaluating the occupancy of green buildings was just released in the new year. It was a three-year, million dollar study that does point to the indoor environmental benefits of green buildings, and the reference to many LEED-certified buildings shows that they have a positive effect on the workforce.

That's available on our website, and I'll be happy to forward you a copy. It's a very important, very good study.

[The Chair, NDP, Pat Martin]

That's exactly what I was looking for. I'm sure the analysts have made a note of that, and they can get it through the Library of Parliament as well.

[Thomas Mueller]

I don't know about the returns because I'm not involved, but I do know that large commercial landlords do use pension funds to invest in buildings and that the internal rates of returns are in excess of 10%.

[The Chair, NDP, Pat Martin]

Whew, that's not a bad return.

[Thomas Mueller]

Doing a new, gold-certified LEED tower in Toronto in the downtown financial district costs about 2% more to build and the returns are over 10%. So the math is pretty straightforward, I think.

[The Chair, NDP, Pat Martin]

That's very interesting. Okay. I won't take any more time then.

Next we have Mathieu Ravignat from the NDP.

[Mathieu Ravignat, NDP, Pontiac, QC]

I will share my time with Ms. Duncan.

I have a quick question. I want to make sure that I understood correctly. Since the LEED project was adopted by the federal government in 2006—or according to my colleague Mr. McCallum, in 2005—only four buildings that have already been built were LEED certified by the government. Is that correct? Yes or no?

[Thomas Mueller]

No. No, it's not correct. I can give you the numbers. What I was trying to say is that there only four buildings out of your 150.... The Government of Canada has 150 buildings on LEED. There are only four buildings.... They're all new builds, all new construction. There are only four buildings that target existing buildings' retrofit and maintenance out of the over 150. There are only four.

[Mathieu Ravignat, NDP, Pontiac, QC]

Why is that so?

[Thomas Mueller]

I think it's just that right now we don't see the LEED for existing buildings being adopted at other levels of government either. I think it's just an evolution of the market.

As I said before, the private sector is very strong in this area, but they have different objectives in terms of return on investment and tenant demand. They want to keep the existing buildings competitive in the marketplace. The federal government doesn't have that—

[Mathieu Ravignat, NDP, Pontiac, QC]

In my view, the federal government has no other choice out of respect for taxpayers—it is their money, after all. Do you agree with me?

[Thomas Mueller]

I believe that targeting high performance in existing buildings is a good use of taxpayers' money.

[Mathieu Ravignat, NDP, Pontiac, QC]

I think so too.

Mr. Seymour, you had to deal with the federal government in 2004 for a specific building. Did you think the communication process with the federal government was effective? Was it difficult or complicated? Would you do it again? Is there room for improvement?

[Dave Seymour]

We can all improve.

Certainly, working with the federal government has been a worthwhile exercise. As I said in my remarks, I think the projects were successful, they were meaningful, and the results are significant. I think that says a lot about the projects. It's a great opportunity. You put the right people in the right places and they're going to make things happen. But there's a lot of confusion today in government, and in industry as well, about conflicting agendas and conflicting priorities, so those confusing signals that are picked up cause problems.

I enjoy working with the federal government and I think we should be doing a lot more of it. I think there's a tremendous opportunity.

The other thing is that I think with regard to deficit reduction action plans, for example, that's a short-term focus on cost savings. Well, that's not what the projects I was talking about are focused on. They're in the longer term. It's a little longer-term savings benefit, right? And it takes a bit of hard work. So as people—

[The Chair, NDP, Pat Martin]

I'm sorry to interrupt you, Mr. Seymour.

If you wanted to share any of your time, Mathieu, there's very little time left.

[Mathieu Ravignat, NDP, Pontiac, QC]

Now's the time. I will, yes.

[The Chair, NDP, Pat Martin]

Okay. I'll pass it over to Ms. Duncan.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Chair, I wish to use the remaining time to provide notice of two motions.

The first is that the Standing Committee on Government Operations and Estimates invite the Senate Ethics Officer to appear before the committee for the review of the Senate Ethics Officer's 2013-14 estimates, no later than May 28, 2013.

The second motion is that the Standing Committee on Government Operations and Estimates invite the Speaker of the Senate and the government leader of the Senate to appear before the committee for the review of the Senate 2013-14 estimates, no later than May 28, 2013.

If I have any time—

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[Inaudible—Editor]