Government Operations Committee on April 16th, 2013

[The Chair, NDP, Pat Martin]

Good morning, ladies and gentlemen. We'll convene our meeting. Welcome to the 80th meeting of the Standing Committee on Government Operations and Estimates, as we continue with our very interesting study on energy efficiency, energy retrofit, and the savings potential these initiatives could bring in government buildings, structures, and public works.

We're very pleased to welcome by video conference two witnesses in two separate cities. We're really pushing the technological envelope, I think, but we'll see how that works.

Welcome to Mr. Laverne Dalgleish, principal of the Building Professionals company. He joins us from Indianapolis. Mr. Dalgleish, can you hear me?

[Laverne Dalgleish, Principal, Building Professionals]

Yes, I can. It's very clear.

[The Chair, NDP, Pat Martin]

Very good. Welcome, Mr. Dalgleish. Thank you for making the time to be with us today.

From Edmonton we also welcome Mr. Brian Staszenski, general manager of Global Resource Efficiency Services. Mr. Staszenski was with us in a previous meeting that had to be cancelled due to votes and bells ringing. Thank you very much for taking the trouble to join us again. We don't foresee being interrupted this time. We welcome hearing from you. With us in person is Mr. Doug Cane, from Caneta Research Inc. Mr. Cane, welcome and thank you for being here.

[Doug Cane, Principal, Caneta Research Inc.]

Good morning.

[The Chair, NDP, Pat Martin]

Also, from the Building Owners and Managers Association's local office in Ottawa, we have Mr. Dean Karakasis, executive director. Thank you for coming back again. I know that you were here once before and we had to shoo you away before you could give your testimony.

[Dean Karakasis, Executive Director, Building Owners and Managers Association of Ottawa]

At least I live close by.

[The Chair, NDP, Pat Martin]

You're all very welcome, and we appreciate your being with us today.

I worked with Mr. Dalgleish years ago on this issue in Winnipeg. I'm very interested to hear his international perspective, the activities he has outside of Canada, although he is, in fact, based in Canada. We're going to begin with him, if that's all right with committee members, because he can be with us only for the first hour.

If you're ready, Mr. Dalgleish, we would welcome your presentation.

[Laverne Dalgleish]

Thank you, Mr. Martin, and ladies and gentlemen. I appreciate the opportunity to address you today.

I have a real passion for energy efficiency in buildings. The fact that you're looking at this and taking it seriously is a major step forward. I think that's actually where the federal government should be. We need leadership in how we treat buildings.

As we go through this, I look back and reflect that I got involved in energy efficiency in buildings over 30 years ago. I also represent Canada on the international scene at the International Organization for Standardization. We go to countries all around the world, European countries, Asian countries, and so on. When I first got involved with ISO, when you went to meetings, because you were from Canada you were automatically considered to be an expert. The National Research Council was one of the leading research institutes in the world.

We have an excellent base we're building our buildings from, and we're working on how to make them better. Unfortunately, we're losing that in a lot of cases, and we're no longer the leader in how we build and renovate buildings. Countries like South Korea and Thailand are actually ahead of us in getting some things done. I think we still have the opportunity to show leadership and show not only the citizens of Canada but also the world what we can do.

As a side note, I was on a conference call this morning with some people in Sweden. This is a project in which we're taking some of our energy efficiency projects to Scandinavian countries. One of our partners is an American-based company. He asked how it was going to be viewed in Sweden. The short answer was that it wasn't going to be that well received. They basically had the opinion that Americans don't know how to build buildings. That wasn't necessarily unusual or anything different, but then he went on to say that if you say you come from Canada, well, it's cold in Canada and you absolutely know how to build buildings. I was very heartened by that this morning, because it tells me we haven't quite lost everything.

When we take a look at energy efficiency in Canada, we have always said that we are a big country so our energy use is high compared with other countries. When we take a look at how we can reduce energy use in Canada, and this applies right around the world, buildings become the number one spot. If we're going to transport materials and goods across Canada, there are so many kilometres they have to go and we can make our trucks more fuel efficient, and those sorts of things, but when we get down to kilowatt hours and gigajoules, or whatever it might be, the biggest opportunity we have is in buildings. If we start to look beyond that into the environment and sustainability, I propose that the greenest building there ever is, is a building we don't build.

As we're looking at new construction, obviously we want to make it the highest quality in energy use and so on, but also we want to retrofit our existing buildings. Whether they're 10, 50, 100 years old, it doesn't really make any difference. We can retrofit these buildings, and we can save energy and solve all the issues we have with destroying buildings and building new ones.

Mr. Martin, as you mentioned, our office is in Winnipeg. We're in the downtown core. The building my office is in is over 100 years old. Most of the buildings around there have now been retrofitted and brought up to date. If we can make them energy efficient, that's great.

There are other things that we don't sometimes attach to energy efficiency in buildings.

About 40% of the garbage that goes into landfill is construction waste, so we're going to have a reduction there.

I am at a conference here in Indianapolis, and one of the presenters last night brought forward the issue that when we create energy.... We have a lot of hydro power in Canada, and we're very fortunate in that, but we still do coal and gas. On the American side, of course, it's much more. They don't have quite the same percentage of hydro power. For the southern Unites States, the amount of water used to produce electricity is equal to all the water that goes over the Niagara Falls on a minute-by-minute, second-by-second basis. One of the points he brought up is that as we expand the population and so on, people like it where it's warm. They're moving to places like Florida and Georgia. Those are the areas where it's the hardest to get water. We have some environmental benefits to do energy efficiency in buildings that go beyond just reducing the energy and reducing our costs.

Back to the potential, obviously any new building we build should be absolutely the lowest energy use that is possible. The terminology typically used today is “near net zero”. What we have to keep in mind is that of the existing buildings, 74% of the buildings we have were built before 1989, and 93% of the buildings we have out there were built before 2003. The potential we have for reducing energy use in buildings, federal government buildings or whatever, is phenomenal on that side.

As you move forward and you're looking at improving the government buildings, first of all, we should be setting an example with use of technology and efficiency and setting standards for energy use to show the industry and to help the industry move in that direction. We're doing that through the codes in some of the other areas, but that's a long, slow process. We need somebody out front to lead the pack there.

My company has started a project called Historic Zero, just because our buildings happen to be 100 years old. We're going to be renovating three buildings in downtown Winnipeg. Our whole purpose for doing this is to show that you can take a historic building, which would be considered the hardest to improve in energy efficiency, and bring it as close as we can to near net zero that's out there. We've been discussing this project. We have Manitoba Hydro involved. We have interest from BC Hydro. We have interest from a lot of architects and engineers in both Canada and the United States because we don't have any program out there that deals with existing buildings.

We've established 100 equivalent kilowatt hours per square metre per annum as the goal that we're trying to hit. That's another thing I would suggest be brought into the foray of dealing with government buildings: we should be setting energy targets. We should not just simply be adding some materials or changing motors or changing light bulbs, or whatever it might be, but we should actually bring it down to energy use intensity. Whether 100 equivalent kilowatt hours per square metre is the right one for government buildings or not, it will all depend on use, but if we don't have a target to go to somewhere, we're never going to get there.

An example of how that can happen is that the Army Corps of Engineers are renovating a lot of buildings in the United States. They have set, for example, for airtightness, when they renovate or build a new building, that building needs to be airtight to the point where the amount of air leakage in and out of the building is going to be about 1.25 litres per second per metre squared, at a 75-pascal pressure difference.

Now a typical building would be somewhere in the neighbourhood of 10, 15, 20 litres per second. To keep it very clear, when you build or renovate that building you do not get paid unless you meet this performance requirement, which is an extremely airtight building. When they first brought this out as a performance requirement it was deemed impossible, that nobody could do it. Now it's being done very routinely, and in fact they've moved from 1.25 litres per second per metre squared down to less than a half a litre per second per metre squared. The point of all that is just to show what happens when you start to set some targets, that not only can you achieve the target, but you can go beyond.

As an example, again, when we mentioned the 100 equivalent kilowatts hours per square metre per annum to architects in B.C., in Vancouver, where I had some meetings last week, they said that's nothing for them to achieve, they're currently achieving that today. So it shows where we need to go.

Now, obviously we do the standard energy-efficient things that we've done for the last 20 years, the light bulbs, the motors, the controls, and so on, but we need to get into some areas that we haven't got into. On a typical building we haven't worried that much about the air leakage. We're now realizing that air leakage accounts for somewhere around 30% of the energy loss due to air leaking in and out of buildings.

We haven't applied that. We've left the building envelope alone. We're starting to understand continuous insulation. It's extremely important that we get rid of the thermal bridges so the building will perform much better, rather than just throwing some vacs in the attic or vacs in the walls.

We need to also look at new and innovative products. We have a lot of new materials coming up. We have vacuum insulated panels. We have high-performance insulation. We have aerogels. We have high-performance equipment, and the list goes on. We need to start to take a look at how that can better us.

A quick example is a thermostat called Nest. It was designed by people who used to work at Apple. It's very simple, but it learns what you do. We're probably all aware and familiar with the setback thermostats, but this goes way beyond that. People who have installed it in their homes have seen their energy bills drop. We have to take that type of new technology, which is basically a smart thermostat, and apply it to some of the areas that we're dealing with.

[The Chair, NDP, Pat Martin]

Mr. Dalgleish, excuse me. I'm going to have to ask you to wrap it up in one minute or so. We need to leave some time. We try to keep as much time as we can for questions from the committee members as well. I know that you have to leave roughly after one hour of being with us, but I would ask that you stay as long as you can so that committee members get a chance to question you as well after we hear from the other presentations.

[Laverne Dalgleish]

There's actually only one more point I would like to make. One of the places where Canada's lacking and we could move forward with government buildings is building labelling. Actually, it's a regulated practice in Europe that we have to label the building with how much energy it uses, and it is something that if you have the knowledge and you have the idea of what you're doing, then you can improve the building as you go along. Incorporating building labelling into government buildings would be a good way of introducing that technology into Canada.

With that, I thank you for your time.

[The Chair, NDP, Pat Martin]

Thank you, Mr. Dalgleish. It was a very interesting presentation. I know there will be questions for you from committee members if you're able to stay with us as long as you can.

Next we'll go to Mr. Karakasis from the Building Owners and Managers Association of Ottawa, and then we'll go to Edmonton for the video conference, and finally to Mr. Cane here in Ottawa.

Mr. Karakasis, you have the floor.

[Dean Karakasis]

Good morning. My name is Dean Karakasis. I'm the executive director of the Building Owners and Managers Association for Ottawa and the national capital region, proudly at the service of the highest concentration of government buildings in all of Canada. Recently your committee showed a lot of respect for our organization by asking our national offices to address this committee and they told you that nationally our association represents about two billion square feet. To put that in context for you, for what I do, we represent about 100 million square feet in the city of Ottawa and the national capital region alone.

Our mandate is to be the voice of the industry, not the voice of our members, but the voice of the industry. In that regard we develop different programs to educate and document industry standards, but possibly most importantly to provide forums for the sharing of best practices and experiences from everything from building management to energy savings, as we're talking about today.

One such BOMA program that combines both standards and sharing is the BOMA building environmental standards or BOMA BESt program. It's a Canadian designed, Canadian operated, and Canadian maintained program. It's designed to address the impact of commercial office space on the environment by recognizing that you can't change what you don't measure. My national colleagues let you know that BOMA BESt assesses six key areas of environmental performance and management. Just as a reminder, let me tell you that the areas are energy, water, waste reduction, emissions in effluents, indoor environment, and environmental management systems.

Over 150 buildings currently hold one of our four levels of BOMA BESt designation in the BOMA Ottawa area. Many other buildings have run the program simply to assess where they stand and what they need to do to improve and reach one of our four levels. We at BOMA Ottawa are proud to say that since 2008 we have worked with Public Works and Government Services Canada as well as SNC Lavalin, who manage many of the government facilities, to put large segments of their building inventory through our program.

Our four level program helps property managers to understand where they stand in absolute numbers and where they stand against comparable metrics allowing them to consider initiatives that may reduce their buildings' impact on the environment.

A BOMA BESt level two certified building performs 6% better than the national average. Level three buildings perform 18% better and a level four building, our highest standard, perform 46% better than the national average. We are partners with government to ensure that the Public Works portfolio goes through BOMA BESt assessment. In March alone we with independent auditors reviewed 49 buildings, buildings that house government employees, a new record.

The reality is that many of the options available to larger, well-managed buildings are already being implemented. But there are three areas that we can address if our collective goal is to reduce the environmental impact of commercial office space in both government and the private sector, in particular in energy usage.

First is the need to invest in professional property managers and facility managers who manage the government portfolio or who interface with their alternate delivery providers. They need access to continuing education to allow them to learn about and implement best practices as they continue to evolve. It will make them contributors to the overall discussion. It will make them better managers and more valuable assets as federal employees.

Often I find myself managing a BOMA BESt file where the data is collected and entered into the system by a project officer or an environmental specialist while the property managers or the building operators are left to answer questions and conduct on-site verification tours unique to our program. These property managers or building operators are the front line for ideas for progress and for maintenance and they need to be participants in the measurement initiatives.

Second is the expansion of the federal mandate to those buildings that are not part of the Public Works and Government Services portfolio. I don't want to suggest that this isn't happening. There are many enlightened property management groups in Transport, DND, and other government departments that have sought us out and because of the affordability of our program are able to access it and implement it and receive the value of the evaluation. The ability to further realize savings by further reaching into building inventories is clear. You simply can't reduce what you don't measure.

Finally, let me suggest something that I'm not sure has been considered a lot. It might seem strange coming from someone who is supposed to represent buildings and building owners, but too often we concentrate on the building envelope and equipment that keeps the building running because it's easy and it's within our sphere of influence to change a system, to change a light bulb, to change a window. The fact is in today's world the replacement of windows or HVAC systems will always trend towards environmentally friendly options that are available in our industry.

A very well-respected property manager with a very large portfolio in this city said to me that you would have to try hard not to build a retrofitted building that is more harmful to the environment than what is currently being used.

In fact, the investments some of our industry are making in being environmentally responsible are not usually reflected in a positive way on the balance sheet, but environmental responsibility in the operation of the building is part of our culture now, and we're not going back.

What we struggle with is the constant evolution and improvement of those that reside in our buildings, our tenants. We place signs directing behaviour: glass here, plastics here, organics there. We put in place an infrastructure for them to participate in paper recycling, computer recycling, and battery recycling. These are all things we do constantly. But we don't have an obvious means of education, or recognition, or the capture of the input from the tenants in things that will make them a bigger part of the process. I don't mean suggestion boxes, whether they be virtual or real, but rather the idea that tenants can provide meaningful approaches to the problems.

The best sealed window in the world is of no use if it's left open all day. The most energy-efficient piece of equipment in an office is ineffective if it's left on when it's not needed. Users of office space are more environmentally conscious in their homes than they are in their office space, and the reason is simple: it's not their space. That culture is something we all need to work on in order to get tenants to understand.

We need to get them to feel they are a partner in this and we require more than just a memo for tenant contact. It means using traditional media, social media, and more to get the message out, and maybe branding the culture of environmental education, something all of us can do, both government and private sector, to all of our tenants.

Sometimes we feel we're trying to make buildings efficient in spite of our tenants. It's time to design programs to make them efficient with our tenants. Tenant engagement is the next horizon to energy and waste reduction.

I want to thank the committee for inviting me here today and listening to my message. As an industry we stand ready to partner in the development of even more innovative approaches to our collective future.

[The Chair, NDP, Pat Martin]

Thank you very much, Mr. Karakasis. That's very useful and very helpful.

Next, we are going to go to Edmonton. Mr. Staszenski has been waiting very patiently to present to us; spanning a few weeks now, his patience has been tested. You finally have an opportunity, sir. You're very welcome and the floor is yours.

[Brian Staszenski, General Manager, North American Office, Global Resource Efficiency Services]

Thank you for the opportunity. I've been here for three weeks now, waiting for this. I'm only joking.

Thank you very much.

I run Global Resource Efficiency Services. We're a strategic energy management group. We operate across Canada. We're integrators and planners and we help clients implement energy efficiency measures.

We're now in Alberta where we have the highest electricity rates in Canada, thanks to deregulation. Lots of people don't like 22¢ a kilowatt hour. We like it because it's creating a lot of opportunities. We work on welding shops, high-rises, schools, Indian reserves, and on and on, because there's a lot of angst in the system right now about the high cost of electricity. Gas is still really cheap. Water is at times very expensive; it depends where you go. Waste is an issue as well.

For you, in getting right to the point of dealing with this topic, I see the federal government and the way it operates with its buildings operating in two different worlds, one where you lease a lot of space and the other where you own your space. I think more and more you are starting to lease more and more floor space. So how do you deal with owners who really don't care what your operating costs are and are passing on those operational costs to you? You pay them. You pay the electricity, the gas, the water and so forth. Really, I have only two thoughts on how you deal with that.

We deal with a lot of owners and tenants and leasing issues and so forth. The key to what the federal government should do on a policy level is to set standards of performance that you expect the owners of the buildings you are leasing space from to deliver to you. Do you want to move into a space that's got really high gas and electricity costs, or do you want standards of performance that set basic requirements for what you want to be able to pay for?

Do you want energy-efficient lighting in the buildings you lease? Do you want water efficiency and so forth? I think you have a lot of power there to demand that you deal with owners of buildings who will give you really reasonable operating costs.

The other thing you can do with leased buildings in general is make big improvements in terms of the building code. Provincial and federal governments continually run away from improving building code standards when they should be dealing with that, because you can solve a lot of problems.

When you phased out the T12 fluorescent tube in Canada everyone moved to the T8 and the T5 lamp, so a legislative tool like that has created a lot of changes in our system.

When you own buildings we really believe in utilizing something called AIM, audit, implement and monitor, where we deal with your buildings in a strategic way versus a tactical way. Tactical solutions to attacking buildings would be “I want to fix my lights.” That's a tactical decision and away you go and make the changes to the lighting, but you're really not thinking about what other impacts that change would have in your building.

When you remove old lighting you are really removing a lot of heating that's being generated from that lighting, so how are you going to deal with the heating and cooling issues because of that change in lighting? We therefore really believe in doing strategic planning in terms of how you're going to attack your building.

In the AIM process the first thing you do is get a strategic plan done. When you do a strategic plan you're looking at the capital renewal costs over a 25-year horizon, such as when you need to replace your roofs, windows, doors, the lighting and so forth. You have an analysis done on that and you see you have a lot of money to spend on building renewal. Well, energy efficiency measures can attack some of that problem. So if you have a plan that lays out and provides you with an analysis, you can then start to implement sound, really efficient decisions on how to move forward on retrofits for your facilities.

You tie capital asset planning together with energy efficiency measures. That is something that I think the bureaucracy within the federal government should be doing. That's a policy decision.

When you deal with the AIM process, you do the audits and all the planning, and then you move into implementation, that's where you attack the hard measures that confront you, i.e., the need to improve lighting, the need to do all of these different measures, and renewables and so forth. How do you that? As the previous speakers have talked about, if you don't have very good building managers and facility people in your system, you're going to have a hard time doing that. Training those people and resourcing them with tools and the money to do those changes is critical.

By the way, the money to make those changes is in the system. We really believe there's over 50% waste in our system, in our buildings. Give me a building and I'll find 50% savings. That's our philosophy and approach. One of the things I've been hearing about in terms of this committee is how you make these changes with internal staff if you don't have them.

Some people have been talking about energy performance contracts and utilizing ESCOs, energy service companies. That's an option, but when you choose that option, you have to know that you're going to be paying 20% to 40% more for those retrofit costs if you go that way. Those companies are going to be insuring the risk they're putting into the project. They're guaranteeing savings, and guess what? You're going to pay a premium for that kind of work.

Our belief is that you get the people in your system, have them available, and let them do the work. You bring in resources, consultants or whatever, to help them make those changes, but the best way is to have your own people make those changes, because they run them long term.

On the soft side of measures, and I like what I've heard already from the BOMA folks, is training of your building operators and providing them with the tools and resources on how to operate your facilities effectively. It can easily generate 10% savings.

ASHRAE has done peer review work on this type of work, and for sure, easily 10% savings can be generated in terms of how you manage your facilities. Involving the occupants, creating awareness programs for your occupants, and creating incentives and shared savings programs with them will also help.

I'm going to stop there. I prefer dialogue and discussion.

On a high level, do strategic planning; try not to do it tactically; do it yourself and you'll save a fortune; change the building code. Deregulate so that we have really high electricity rates all over Canada—I'm joking.

[Voices]

Oh, oh!

[Brian Staszenski]

Thank you.

[The Chair, NDP, Pat Martin]

That's very helpful, Mr. Staszenski . Thank you very much. These are very useful, concrete points you've made. It was worth the wait to hear from you.

We're going to go now to Mr. Cane.

Thank you as well for your patience, Mr. Cane. You tried to present to us a number of weeks ago, and snow in Toronto kept you from being with us. We're glad to have you here today representing Caneta Research Inc.

Please take eight to ten minutes and give us your opening remarks.

[Doug Cane]

Caneta Research Inc. is a small energy consulting company in the greater Toronto area. We have 10 engineers on staff. Our core business is done under a company called Caneta Energy, which does energy modelling and energy consulting in connection with a number of building owners who are trying to improve their buildings and trying to qualify for LEED.

We do not do full LEED facilitation per se, but we often become involved with facilitators who don't have an energy modelling capability to help them meet the energy prerequisites in LEED and gather additional credits, perhaps under that same program.

We also become involved in doing modelling of 3P projects, public-private partnerships, that might be of interest especially in Ontario, B.C., and Quebec, in which there is a requirement for an energy target or energy guarantee on a new project. That's where the rubber meets the road, when it comes to providing accurate energy modelling.

In addition to that, in Ontario there is now a requirement to model to show code compliance. There are only a couple of provinces in which this is currently a requirement. I'll get into that a little later.

Our background, prior to 10 years ago when this Caneta Energy activity started under the old banner of Caneta Research Inc....

We have been in business for 24 years. We have advised and consulted with the provinces, the federal government, and agencies such as the National Research Council when they do their code development. We've advised these departments on new building energy requirements and also have worked with some government programs that a number of you may remember: the commercial building incentive program, which was offered by Natural Resources Canada for large buildings, and recently the ecoENERGY efficiency initiative, which is very similar. We provide support to those programs and also help clients get incentives or take advantage of what is being offered. We have worked for the Ontario Ministry of Municipal Affairs and Housing. It is the group responsible for the Ontario code. We've done this on two occasions, once in 2006 and again in 2011.

I'm only providing this background as I think it will be useful for the kind of questions you may want to put to me.

We have just completed a major study with the same agency, the Ministry of Municipal Affairs and Housing, for large buildings, developing code proposals for encouraging energy efficiency upgrades during renovation. At this time, there is no requirement to upgrade. For example, if you do a repair on a wall, there is no requirement to replace or upgrade the insulation in the wall. If you replace a piece of equipment, you do not necessarily have to meet the current energy requirements.

The province wants to change that. They want to be able to take advantage of anything that comes under a permit to call for more stringent requirements. They are currently looking at drafts for this requirement. It may take a few years to put in place, but at least it's encouraging to see that it's not all focused on new buildings.

I briefly mentioned the work with the National Research Council in development of the National Energy Code of Canada for Buildings 2011. I'm sure many of you are aware of it. It's one of the most stringent codes, I would think, in North America if not the world. We haven't had a chance to benchmark it against the European standards, but I'm sure it's up there.

My attendance today was prompted in part, from what I understood from Marc-Olivier, by a report we did for Public Works in 2001, a study in which we were challenged to identify how we could improve office-type buildings, from meeting a model national energy code for 1997, which was a benchmark at that time.... A couple of the provinces adopted this as an energy requirement. Public Works wanted to go 60% to 70% beyond that, which is very stringent.

It was relatively easy to get to 25%, and we demonstrated that. Programs have evolved since. The commercial building incentive program, for example, required that buildings show 25% energy savings compared with that MNECB, the model national energy code for buildings.

The current national energy code for buildings, which I just mentioned, which NRC came out with in 2011, shows savings in buildings typically 25% greater than it does with the old MNECB 1997. Considerable progress has been made so I didn't want to spend a lot of time talking about a 12-year-old report, but rather where we've come since then.

That work did show it was relatively easy to show you could get a 25% saving compared to the old code, MNECB, without any incremental capital cost, and that was promising. Anything beyond that is a different matter. It can get more expensive.

As I said, that whole approach of achieving 25% greater savings was later used in incentive programs across the country.

Today that same premise is the basis for the Ontario building code energy requirements. One of the paths to compliance is showing that your building is 25% better than the MNECB. I wanted to point that out. I think it is probably one of the more stringent jurisdictional codes that I'm aware of. We've benchmarked it against ASHRAE 2010 in the United States, 189 ASHRAE, which is a high performance standard, and as I say, the only thing left is how it compares to Europe.

I probably have spent enough time talking about that sort of thing.

I mentioned in my background, which I understand everyone has, that I did a presentation to the Toronto chapter of the CaGBC on all this, how we've come over the years, where we're going with buildings, including net zero. There's a little about net zero in that presentation, and how we could achieve that in buildings.

By the way, ASHRAE in the United States, the American Society of Heating, Refrigerating and Air-Conditioning Engineers, is targeting 2030 to be at net zero. I don't know whether they'll achieve that or not. That's a long way off.

One of the biggest challenges today in many areas—and I'll be concluding more or less with this point—is energy prices have changed dramatically since that 2001 study. The price of natural gas is 50% lower today than it was at that time. The price of electricity is double what it was at that time. I'm talking primarily certainly of the markets we looked at in that document. This has the effect of significantly increasing the payback periods associated with gas measures, if you want to save gas, while lowering payback periods for electricity measures.

Often when you do something in a building you're going to impact both electricity and gas use and you're depending on both to give you the savings you need to justify your capital investment.

I think you've already heard from the CaGBC, probably back in March when I couldn't make it, but it's making it very difficult to show a 25% cost reduction and beyond to get energy credits beyond the prerequisite in LEED because you can't depend the same on the gas savings because you're coming up with a percentage dollar saving.

I wanted to place that. That is something everyone is up against today, and any time we've looked at.... Recently, for example, the renovation study I mentioned we're doing for the code ministry in Ontario was one of the big issues we had. We had difficulty showing savings at a reasonable payback with the gas prices we had. Electricity is a different matter.

I think a lot of what we did in that old report that dated from 2001 would apply, for example, to existing Public Works buildings. A lot of the energy measures we've looked at there could of course be applied. There is an opportunity, especially if the buildings are undergoing equipment replacements, major renewals, or renovation.

That concludes my opening remarks. I hope I can address some questions you might have.

[The Chair, NDP, Pat Martin]

Yes. That's excellent, Mr. Cane. Thank you very much.

We will go to committee members for questions now. I should say that it's now a quarter to twelve Ottawa time. We'll be finishing this at a quarter to one as we need 15 minutes to do some committee business.

Mr. Dalgleish cannot be with us for the whole time. If committee members have questions for Mr. Dalgleish, they should ask them at the front end, rather than waiting too long.

The first questioner for the NDP will be the critic for Public Works, Linda Duncan.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you very much, Mr. Chair. I do have a question for Mr. Dalgleish.

Thank you to all four of you for your excellent testimony. We really appreciate it.

Mr. Dalgleish, you raised the concern that Canada's losing its reputation for leadership on energy efficiency. Yesterday, I happened to come across a report specifically on this topic by the North American Commission for Environmental Cooperation.They apparently formed a task group of Mexicans, Americans, and Canadians, to look specifically at improving energy efficiency in buildings, including government buildings.

Among their recommendations, which I'm hoping we will take a look at since they're in both official languages, is that the government lead by example to spur investment by private industry.

Would you concur? I think you and some of the other witnesses mentioned that. Could that be a factor in spurring investment by private enterprise, including those who lease buildings to the federal government?

[Laverne Dalgleish]

Absolutely, I would agree with that. I think that's the opportunity the federal government has. If we look back in history, we can see that any time somebody has taken that leadership, we've moved forward, whether it be deleting the T12s, or whether it be a demonstration project.

The building industry is prepared to do things, improve things, provide better products, and provide better services, but they need to know that they're going somewhere. If the federal government showed leadership, that would give the message to the industry that we are moving to a more efficient building industry and they would respond.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

If you have any more information or contacts on Historic Zero, the federal government has a lot of historic sites and it could benefit from that knowledge and experience to make our heritage buildings more energy efficient.

Mr. Staszenski, we haven't really heard this testimony before. We've heard it somewhat, but it's very interesting that you're talking about the difference between tactical decisions and strategic decisions. This may be particularly important for the federal government and their buildings because of the challenge of needing to invest now to have energy savings but they would have to spend the money now and there are tight budgets.

You say you don't think these performance contracts are necessarily a good idea because they could cost too much. Do you have other suggestions on how the federal government could approach this? Is it worthwhile to be making an investment now because of savings into the future? What's the challenge for governments?

[Brian Staszenski]

First, the money required to make changes is already in the system. It's going out the window. If you have inefficiency in the operations of your buildings, the money's there. What you do is capture those funds and capitalize them. You don't need new money; you already have it in the system.

The federal government might even borrow money at 2%, 3% or 4% to do the changes but the savings created would pay for that financing. You don't have to go and look for new money; it's in the system.

The other thing related to ESCOs and the energy performance contract world is you go there when you're desperate, when you don't have people and when you don't have the resources to do that work but you're going to pay for it. Our approach or our belief is design-build: do it with the people you have in the system; bring in a few resources to help you do that, but do it yourself. Have your people do it themselves, because they make the changes and they have to run the buildings so why not just do it that way. You'll save a lot of money.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you.

Mr. Karakasis, you raised a really important point. You said that the challenge is the tenants. I think the vast majority of federal office space is leased as opposed to owned. Our focus is on federal buildings and savings for the federal government as opposed to the private sector.

Can you share—and we could hear from others if they'd like to add to this. Do you have experience with the federal government’s taking this seriously as a tenant? Also, what innovative measures could the federal government take? Have people previously opened up leases? Is that a possibility to open up a long-term lease and seek investment in energy efficiency?

[Dean Karakasis]

When I talk about engaging the tenants, whether it's a situation where the government owns the building or they lease space from the private sector, you still have physical human beings occupying the floor space. When you talk about engaging the tenants, it's about helping them understand how they are part of energy reduction or waste reduction.