Natural Resources Committee on Feb. 26th, 2009

[Geoff Regan, Liberal, Halifax West, NS]

Thank you, Mr. Chairman.

I think if you review the minutes from the last meeting, you'll find that in fact we agreed to a considerably broader study to be done. Although this is certainly an important part of the study--Mr. Tonks suggested this part of it, involving QUEST in these community initiatives--we in fact talked about a broader study of renewables.

I urge you to look over those minutes, because for some reason this seems to have been dramatically narrowed. Suddenly you don't want to have questions about the government's programs.

[The Chair, Conservative, Leon Benoit]

Mr. Regan, I'm sure you understand that it's important that when the committee agrees to deal with a particular issue, we deal with it. I don't want to waste any more time. I have stopped the clock. I probably shouldn't have. If you would just continue to ask your questions, we'll get on to other questioners who hopefully have questions related to what we had agreed to talk about.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much.

Mr. Harcourt, in your view, what should the Government of Canada be doing to support the kinds of initiatives you are working towards, and what's missing?

[Michael Harcourt]

From the perspective of being the chair of the QUEST initiative, I outlined two significant areas where I hope the report you'll be coming out with approves of the approach we're taking, and agrees, hopefully in as broad a way as possible, that the technology, program, and infrastructure funding allows this tremendous initiative to blossom. Thousands of communities across this country—small communities, medium-sized cities, larger cities—can then start to integrate energy, through integrated energy systems, into a whole new way of moving from non-sustainable to sustainable cities.

There are a number of initiatives under way. I personally think that the previous Liberal government and the present Conservative government have increased the resources going to cities. The infrastructure program, the elimination of the GST on municipal purchases, the $2 billion that's equivalent to 5¢ of gas tax--those were very good initiatives. The committee I chaired for the Prime Minister on what the national role should be in Canada's cities and communities outlined a number of approaches, which by and large are now incorporated in the agreements that have been signed by the national government, provinces, and municipalities across this country.

I think the framework is there. People have agreed, whether they be provincial, municipal, or federal, that they're going to move in this sustainability direction. We think energy should be incorporated into the picture you're trying to grapple with here. Integrated energy systems should be part of green infrastructure and sustainable cities and community strategies. Then, hopefully the funding that is now going out into communities as shovel-in-the-ground in the next 120 days, to kick-start the economy and put people back to work, will follow that approach to green infrastructure within sustainable city strategies and integrate energy into that.

That's the push we would like to see the committee consider. Hopefully you'll put it into the recommendations in your report. We'd be quite prepared to look at any draft report you come out with to add further to the recommendations that we hope you will be making to the government to implement in the budget deliberations coming up next fall.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Regan.

Madame Brunelle, for up to seven minutes.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Thank you, Mr. chair.

Welcome, lady and gentlemen. Thank you for being here.

I learned about this program, QUEST, with great interest. Your objectives are very commendable. However, I have a slight concern. We are being told that QUEST is aimed at integrating services in order to face our energy challenges but there are important differences between the provinces from the point of view of costs as well as the types of energy used. The provinces have different green policies. For example, Quebec has been betting on hydropower for at least 30 years and has developed programs to help people to convert their systems to electricity. I wonder what your role is in this context. What is the participation of the federal government?

One should remember that, often, these matters come under provincial jurisdiction. Furthermore, municipalities are under provincial jurisdiction. In Quebec, the provincial government forbids any role for the federal government in various fields. It is forbidden by legislation. Therefore, I find it difficult to see how, even though your idea may be excellent, you would be able to take account of all these differences and not be involved in strategies or matters that are not under federal jurisdiction.

[Michael Harcourt]

I don't think it's a question of overcoming provincial jurisdiction. I think there's been an understanding since 1867 that municipalities are under the jurisdiction of the provinces. So, of course, the provinces are going to have to be very actively engaged, and the dialogue will be with the national government and the provinces. So that's taken as a given, and it's one of the key provisions in the report that I prepared for the Prime Minister two and a half years ago. So it is understood that the direction would be through the provinces. Each province has a way of conducting its relations with the municipalities, which has to be respected, of course.

[The Chair, Conservative, Leon Benoit]

Ms. Buckley, do you have something to add?

[Carol Buckley]

We have every intent of respecting the jurisdictional responsibilities of municipalities and provinces and territories, but we still think there's a role for the federal government, with our research capacity, our experience in delivering national programs in energy efficiency and renewable energy, and our ability to bring organizations together. We've been providing some support to QUEST, because we see QUEST as being very effective at bringing together different actors in the economy, including some provincial and municipal folks, and we can bring them together of our own accord. We would do that rather than work on this unilaterally.

I'd just like to point out that one of the key things we're doing to support community integrated energy solutions is bringing together all of the provinces, territories, and the federal government to do a year and a half's work of very detailed thinking about the policies and programs that would be helpful to further this kind of work. The end result will be a road map for those jurisdictions. While it's aimed at those two jurisdictions, it will have some benefits also for the municipalities, and we would certainly be sharing our learning with the municipalities, as we have already invited them to join us to think about this.

So I think there is a role for the federal government to provide certain thinking, certain support, certain collaboration, and we would certainly not forget our colleagues in the other jurisdictions.

I'm just going to wave around this document, published by the Council of Energy Ministers in 2008. The document is on energy efficiency writ large, covering all of the sectors of the community and how we can forward and further energy efficiency. And we wrote it together. Federal-provincial-territorial energy ministries all got together and agreed to a document of about 40 pages, which is no mean feat for us, coming from our very different perspectives. So we would like to do the same thing on the narrower focus of community energy systems.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Ms. Buckley, you referred to a small municipality with 1,600 residential units near Edmonton where you have been able to implement the QUEST program.

What was the participation of the federal government, concretely? In the two cases you have mentioned, are you able to tell what the outcomes are in terms of energy savings?

[Carol Buckley]

I'm just going to ask my colleague to speak to that because he was the manager involved in the project, so he would be best placed to give you some specifics.

[The Chair, Conservative, Leon Benoit]

Mr. Lee, go ahead.

[Kevin Lee, Director, Housing Division, Office of Energy Efficiency, Department of Natural Resources]

Thank you.

The savings vary according to the different projects and according to the different locations. But, as we were saying earlier, with respect to the project with Drake Landing, we are seeing savings pushing up to 100% on the space heating side of things. We're seeing similar potential savings in other environments, and it really depends on the approach that's taken and the target that is set by the individual community.

One of the things we're looking at in integrated community energy systems is allowing each community to set its own targets and to decide the important pieces, whether they want to focus on renewable energy, whether they want to focus on lowering carbon targets, whether electricity is the base case in a particular jurisdiction, or gas. All of these things have different implications.

As we talk about a road map for how we implement these things, the road map is not for individual communities, but more a means for them to decide how best to approach integrated community solutions for their specific circumstances.

Overall, though, as we heard earlier, communities are responsible for 50%-plus of the energy consumption in Canada. And we certainly see savings of 50% within the realm of reach in very short order, and significantly more become possible when you start thinking about renewable energy technologies and getting the synergies across the different systems, where you start using waste heat from different industrial facilities and that kind of thing—or we can get some real synergies and economic benefits at the local level. So there's lots of opportunity.

I think one of the big keys is understanding that each community will have different solutions, depending on their energy mix, building type, industry type, etc.

[The Chair, Conservative, Leon Benoit]

Merci, Madame Brunelle. Your time is up.

We now go to Mr. Cullen, for up to seven minutes.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

Thank you to our witnesses today.

I guess I'm struck again by the number of times that we in the House of Commons have been presented with the solutions side of things. I imagine future generations will look back at this generation and wonder what we were thinking, why it took us so long to get to talking about community-wide heating solutions, as opposed to what we've been doing, which has been operating one of the most inefficient economies on the planet. The amount of greenhouse gases and pollution per unit of economy that Canada produces is amongst the worst, and has been for quite a while.

I have a specific question, and if it's possible, I wouldn't mind getting a commitment from Ms. Buckley on this. As we go through and study these integrated energy systems, I think it would be insightful for committee members to know what the federal government actually has an effect over. Many of these questions lie in the realm of utilities and in the realm of urban planning, things that we around this table, and the federal government within its powers, just don't touch—or we might do so around the edges. So if your department could give us some insight into what we should actually be talking about, and what we have influence over, that would be helpful.

I'm noticing, Chair, just for the record, that Ms. Buckley is nodding somewhat enthusiastically—I think.

[Carol Buckley]

Yes.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Great. That's good.

There are no cameras today.

I have a question for Mr. Harcourt. Is it easier to make these changes once a site has been established? What I'm talking about is the energy and the energy efficiency of a place, the retrofit model, where you build it and then retrofit it, versus building it correctly the first time. When government is looking at spending money, when the homeowner or the business is looking at spending money, where is the money spent most efficiently?

[Michael Harcourt]

I would think, Mr. Chair, through you to the member, that my colleagues here, who have been dealing with this for quite a long time, would be able to answer that. I think we're still working through whether you need to start from scratch or whether you can retrofit. Frankly, we're going to have to retrofit because only 3% of the building stock changes every year, so we still have 97% to deal with.

And there are lots of good examples of communities where that retrofitting is taking place, and others that we have documented across the country, where new lands, old brownfield sites, are being redeveloped. There's one in Montreal, the Technopôle Angus Montréal, which is a very large--one million square feet--space that's being built. It's going to LEED buildings. It's close to the transit system, and it is using a lot of what we're talking about. So I think it's a combination of doing both.

I'll give you another example. In British Columbia, I'm working with four high-growth communities, four high-growth municipalities—Surrey, Langley, Abbotsford, and Coquitlam—which are going to receive two-thirds of the next million people moving to Vancouver. They have dramatically changed their land use to much more compact, higher-density, green buildings, and they want transit to be built into these old city centres of Whalley and other places to shape that development. We are now starting the dialogue with them about integrating energy into that.

Calgary has, in its east downtown lands, the old rail yards. It had to go through some very difficult bureaucratic and regulatory regimes to get in sync with the new mixed-use, very high-density development--it's an attractive development--of this old rail yard site, that finally has a district energy system integrated into it.

So I think this is still an emerging approach. As to whether you need to have a new development or retrofit existing land use and buildings, I think this is something we need to act on, as we do on these demonstration projects throughout the country.

[The Chair, Conservative, Leon Benoit]

Mr. Cleland, you indicated you would like to answer that as well.

[Michael Cleland, Representative, Industrial Organizations, Quality Urban Energy Systems of Tomorrow]

I would maybe just expand a little bit on Mr. Harcourt's answer.

I think it's correct. Getting a precise answer to this is hard. On the other hand, if you're asking where the biggest bang for the buck is likely to come from, it's going to be new mixed-used development, because of the fact that you're integrating your basic infrastructure into the buildings. If the buildings are already there and the infrastructure is already there, it's harder to get at.

I guess one of the reasons we've been pushing on this and saying we think it's urgent is that every day we're building new communities, and every day we're building them the way you just described. So there's lots to get at with new buildings. There are retrofit opportunities, especially with building complexes like universities and hospitals, where you have single owners and scale. The hardest thing to get at is the individual residential market.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

It's interesting, because the mix of politics and policy always comes into this for us with any government. The individual single-family dwelling retrofit model is attractive because it goes to the voter, yet when we do a cost-estimate analysis of where the best bang for the buck on greenhouse gas reduction or on savings to the energy sector is, the mix isn't there.

It's a question of balance between the new and the old. I've had towns, very small communities--Houston, Fort. St. James, little tiny towns--struggle to build a new municipal infrastructure. They've tried to get money from the government to build a better building, to do it with geothermal or to do it this way, and it's very difficult to do. The signal we've been sending—and maybe this has changed over time—is that it's better to build the bad building, the less efficient one, and then apply for retrofit money to get it up to the geothermal and better standard and R-2000 and all the rest. It has frustrated many of the people we represent, at the municipal level in particular.

My question is about balance. Maybe Mr. Ogilvie can step in for this. When we step away and look at the federal budgets of this year and years past, there's something about the priority of efforts. We see $1.4 billion going as a subsidy to the tar sands. We see $1 billion from this government and $2 billion more from Alberta going to carbon capture and sequestration. Many of the solutions that you folks are talking about here today, to integrate energy systems for reduction.... Are we just going to have over and over again the repetition of the bus transit subsidy that was given out or the corn ethanol subsidy of $2 billion that went out with no greenhouse gas analysis at all, with no study of the effects on the green economy at all?

This government talks a lot about these efforts that you folks are making, but when you get down to the brass tacks and the numbers, and how much money is going out the door, it's totally skewed the other way.

[Kenneth Ogilvie, Representative, Environmental Organizations, Quality Urban Energy Systems of Tomorrow]

One of our messages is to try to bring balance into energy policy. Some of the macro policies around carbon capture and storage and generation and so on are on one side of the equation. On the other side are community-based energy systems, where half the energy is used. We're trying to bring a balance in the policy framework, to bring more attention, more systematic attention across the country, to this agenda.

It really is very organic. It's coming from some communities up, and from some provinces up; it's not a top-down agenda at all. We're looking for the federal government to use and deploy its policy programs and technologies in a way that encourages this new thinking. It requires a great deal more attention, in our view. It has been underrepresented in policy.

So it is a question of balance, yes.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Cullen.

Now to the government side, to Mr. Anderson, for up to seven minutes.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Thank you, Mr. Chair.

To the QUEST folks, how many demonstration projects are you involved in right now? Or are you involved in any?

[Kenneth Ogilvie]

QUEST is a fairly new initiative. It really just got off the ground in 2006. We've had two major workshops, and a third one is coming up in Quebec City this year. The two were at Niagara-on-the-Lake in Ontario, and in Victoria, B.C. In both cases, we found at the provincial level that there was a desire to form what we'll call a provincial QUEST, from the stakeholders at the provincial level. As was pointed out, each jurisdiction has its own authorities and its own unique characteristics.

A report that I prepared for QUEST through the Canadian Gas Association identified a number of communities; you've heard about some of them. We identified different initiatives. Very few of them would approach what we're looking for in QUEST. They deploy really innovative technologies and innovative ideas, but we're looking to integrate at a much bigger scale.

Our message really isn't about taking an individual program and bumping it up, but rather having a vision of what we're trying to do and getting the pieces working together, and then looking down at deploying the resources. We think many of the resources will come from those communities and those projects, some of which we've mentioned. Others, like Guelph in Ontario, with their community energy plan, really have transformative thinking in place and are really trying to take a multi-decade look at how they transform their cities into sustainable cities.