Government Operations Committee on April 18th, 2013

[Carol Buckley]

May I add something?

[The Chair, NDP, Pat Martin]

Certainly.

[Carol Buckley]

To finish that off from the Office of Energy Efficiency's perspective, we'll provide advice to anybody who has an energy bill in Canada. Under the federal buildings initiative, obviously, we are focusing on federal government departments. For any federal government department or agency, we will provide help and support, but my broader mandate is to improve energy efficiency in every sector of Canada, and so for anyone with an energy bill, we have something to help you with.

[The Chair, NDP, Pat Martin]

I don't think that's common knowledge. That's very useful to know.

May I ask you then, if a building owner in downtown Toronto or Montreal wanted to set up an ESCO situation, would you be able to help them in putting out an RFP?

[Carol Buckley]

We would certainly make available our documents and expertise. We have a number of other instruments to help them, a benchmarking tool, for example, so that they can track and compare their energy use. We work with the provinces on codes, so that we codify better performance year after year.

There's a whole wealth of investments that we make through the building sector.

[The Chair, NDP, Pat Martin]

I certainly wasn't aware that there was a service you offered the general public. That's great.

Denis Blanchette.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Thank you, Mr. Chair.

I want to thank our guests for joining us today. They have given us some very detailed information this morning.

Mr. McBain, I really appreciated the figures you provided on consumption. However, we are lacking some specific information on the subject. You gave us an overall average per square metre. That's fine, but, as you know, the government not only owns, but also leases properties.

What is the proportion of leased properties compared with owned properties? Could you also tell me if consumption varies based on whether properties are leased or owned?

That information will help us understand this issue better. In addition, it will allow us to increase the scope and effectiveness of our recommendations—should we have any.

[John McBain]

It's an excellent question. Thank you for the opportunity to respond.

Again, I am speaking for the portfolio that is Public Works and Government Services Canada. We are responsible for approximately seven million square metres nationally; 52% of that is crown-owned by Public Works, or part of a lease purchase that will eventually become part of our property and is very much treated as crown-owned, and the other 48% is leased. So when we talk about energy consumption, we are speaking specifically about the crown-owned space, because that is within our purview and we have the ability to look at those numbers.

With regard to leased space, the cost of energy is normally included in the cost of the rent. It can be done through a triple-net or a semi-gross lease. The federal crown typically uses semi-gross, where we would establish a base and then pay an index amount each year.

So we have a base year of energy consumption from the landlord, and then we pay an index increase, not actual cost. This gives us greater predictability over the term of the lease.

[Denis Blanchette, NDP, Louis-Hébert, QC]

I am asking you this question because certain witnesses mentioned that leases can be long-term—for instance, spanning decades.

Here is what I would like to know. Let's talk about the properties leased by your department. Given the long-term nature of those leases, do you ask owners to improve the energy efficiency of their buildings using a method that could help you reduce your rental costs while helping them save money? Do you take advantage of those circumstances?

[John McBain]

Yes, we do, and I would say increasingly more now than in the past.

For example, our recent P3 project for the RCMP E Division in Surrey, British Columbia, includes a requirement that the proponent achieve LEED gold certification. That lease required them to achieve a certain efficiency as part of the contract.

In the semi-gross lease that I was talking about earlier, because we pay a fixed amount, if the landlord were to implement something such as the equivalent of an FBI or an ESCO deal, they could save money. There is incentive in them, because they know that my cost, that I am paying them, is fixed.

At the time of renewal, we would look at the energy efficiency of the building to incent the landlord to implement projects to save himself, or herself, and us money as well.

[Denis Blanchette, NDP, Louis-Hébert, QC]

So, if I have understood correctly, when a building is leased over 25 years, and you are in the tenth year of the lease, you do not look into what could be done for your clients in terms of energy savings in that building. Is that correct?

[John McBain]

If we're in the middle of one, they would be towards the latter part of our assessments. We would look at any new lease, and any renewal of any lease will be assessed using BOMA BESt, to ensure that it is effectively an energy audit. We would then start to look at our long-term leases to see if a negotiation with the landlord could be made. In other words, you'd have to open the existing lease contract to see if that could benefit the crown.

[Denis Blanchette, NDP, Louis-Hébert, QC]

You are talking about BOMA BESt, but that involves many standards. I hope that you will not get lost.

I would like to know whether you are participating in a joint project or whether you have yourselves established a method to consistently assess energy efficiency in buildings.

Are you currently working or collaborating on such an initiative, or do you constantly have to go from one standard to another to decide what you want to do and assess future results?

[John McBain]

I can start.

I know you've heard from witnesses who have spoken about Green Globes and BOMA BESt and LEED. We have looked at the various standards that are out there from our perspective, and have chosen ones that we feel best suit our portfolio.

But your question is very apt. Work has been done at the National Research Council to evaluate whether LEED projects realize the objectives they have set at the start. While in most cases they do, there are other cases where they do not.

This is still something we are working towards evaluating. We do collaborate with our colleagues at NRCan to look at what is the best tool, at what is the best way of assessing the objectives and the accomplishments of these projects.

[The Chair, NDP, Pat Martin]

We're well over time for this segment. If there's anything to add, perhaps you could add it in a different period of questioning.

For the Conservatives, we’ll hear from Jay Aspin.

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

Thank you, Chair.

Welcome back, officials. You've certainly given us a good deal of information. Congratulations for the work that's been done over the last two decades. It's clear from this graph that much has been accomplished, but much more needs to be done. Energy costs continue to rise and they don't look like they're going down any time soon.

I'd like to focus on the certification aspect, of LEED versus BOMA BESt. We're told that LEED is the star performer and BOMA BESt is not the best. We're also told that only four federal buildings are currently registered LEED.

Mr. McBain, should the federal government have all its existing buildings under the same type of certification?

[John McBain]

Geoff, did you want to comment about the general approach on that?

I'd be happy to answer your questions specifically for us as well.

[Geoff Munro]

I’ll point out that certainly in the way we assess energy efficiency activities, LEED tends to be more in the construction of a building. Once you're achieved that standard through all aspects of the construction process, at whatever level, that's where it begins and ends. BOMA BESt then takes over as a measuring device for ongoing building maintenance. You can take a LEED building at any level and say, “Okay, we've achieved it; there it is”. But sure as anything, as time goes on, the efficiency of that building will slowly deteriorate. It's made up of a number of small activities that get adjusted or don't get adjusted. So what we've done is to put the two together.

Use LEED when you're trying to build it and get it up to standard, so you've got the infrastructure and the leading capacity in the building, and then use the BOMA BESt yardstick to measure ongoing maintenance, to do the retrofits, to do the smaller adjustments. Somewhere in our literature I'm sure you've seen the acronym DABO. That's a diagnostic agent for building operations, a piece of software that goes in and makes tiny adjustments every 10 minutes and keeps the system at the LEED level rather than allowing it to deteriorate and your having to go back with a major retrofit. They are two different standards for different purposes.

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

Would I be correct in assuming then that there are two measurements for two different phases, and not two measurements of the same thing?

[Geoff Munro]

That's the way we use it, correct.

[John McBain]

Obviously we've been following the work of the committee and the witnesses who have appeared before you. I understand that Mr. Mueller would be promoting LEED, as it's his organization involved. At the same time, Mr. Karakasis from BOMA would be speaking about BOMA BESt. Working with Geoff and his team, we've looked at the two methods of certification and it's our view that BOMA BESt works best for our existing inventory and LEED is best for new construction. That's why we have selected the two.

There's a cost and a benefit to certification. There's no question that LEED has succeeded in its branding in North America and has the brand recognition, but they are also much more stringent and more costly to obtain and maintain certification from; it's more time-consuming. So there are pros and cons for each, and that's why we've adopted the different models.

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

Mr. McBain, would I be right in assuming that the reason only four federal buildings are registered as LEED is that very fact, that it is for the new buildings? There haven't been very many new buildings constructed.

[John McBain]

From the PWGSC portfolio, we have seven buildings certified, four gold and three silver. We have nine under pending certification. It's exactly to your point. Because LEED started in California and had a very heavy southern U.S. orientation to it, we've not brought that much on line until recently. We expect to see the number of certifications increase.

[Geoff Munro]

I have one last quick point, if I may, just to wrap up this conversation. Neither LEED nor BOMA BESt deals exclusively with energy efficiency. There are broader measures that involve a number of other aspects of both building construction and the use and maintenance of the building.

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

Thank you.

Thank you, Chair.