Natural Resources Committee on March 10th, 2009

[Thomas Mueller]

The project is not fully developed, but the community systems--for example, the biomass system and these types of systems--have been put in place. To really fully understand the benefits, the project really has to be fully built out. That will be another—there will be 5,000 people living there at the end of the day, depending on the economy, of course—five, six, maybe eight years, to fully understand the benefits.

I can tell you, from having grown up in Europe, that in Germany district systems are very widely used. They're integrated into the urban fabric of the cities. For example, waste energy plants—where waste is being burned—are in the middle of the city in Munich, and they're used to heat housing in district systems.

In Canada we hardly have scratched the surface of making better use of energy sources like waste. We're starting to see those now, as Andrew has pointed out, where we harvest, for example, landfill gas, and then we'll use that as an energy source, using biomass, but there are many, many more opportunities that are available to us. The district system is just the delivery system, but once you have the right system in place, you can use all different kinds of fuel sources over the years, as fuel sources change, to provide energy and heat to a project.

With the district system you build flexibility in. If you don't have a district system your flexibility is limited.

[The Chair, Conservative, Leon Benoit]

You still have one minute.

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

I will continue with you, Mr. Mueller.

When one thinks about new energy sources, is the cost-benefit equation the major issue? It may be well and good to have a new system but one has to find the builder who will accept to carry out research for using waste products or landfill gases, for example.

Is it a matter of cost-benefit?

[Thomas Mueller]

I think currently these systems do cost more to build into a project, but it's a different approach on how to do it.

For example, in Dockside they took what the typical development would cost and they shifted the costs around, because they didn't have to pay the city development cost charges. They didn't have to pay the city for waste disposal and so on. So they shifted these costs around to develop their own systems on site. When you are smart about it and you think about it, then the cost increases are relatively small, and they are being accomplished by doing it differently. If you're trying to do this just the same way you have always done building development, you will not succeed. It's a different way of financing projects, developing projects, integrating systems between buildings and infrastructure, and you have to do that to be successful.

It's the same if you use renewable energy. It's a different type of energy. In just producing it and providing enough of it, you cannot have buildings that use enormous amounts of energy. You need to design in first an energy efficiency that allows you to size the other systems smaller. It's all connected; it all has to be integrated, and then the costs are actually quite manageable. Over the life cycle—and infrastructure systems last hundreds if not thousands of years—the benefits are significant.

[The Chair, Conservative, Leon Benoit]

Merci, Madame Brunelle.

Now to Mr. Cullen for up to seven minutes.

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

Thank you, Chair.

I'm reminded in this conversation that for so long I think a lot of Canadians have thought that the problems with what we're dealing with are technical in nature, that there is just not enough technology available, where we don't have the solutions to our challenges with greenhouse gases or energy efficiency. Your presentations today remind me yet again that technical is not the problem.

I'm also reminded of a town in my region near Terrace—which is Hockeyville—a small place called Fort St. James that for years was building a town hall and wanted to do geothermal. And this went through both Liberal and then Conservative administrations. It's a northern British Columbia municipality. It's not big, just a few thousand people. They were really hooked on this, because they had run the numbers on just cost. They weren't interested in greenhouse gases as such. They fought for years with government to try to find money out there available to allow them to go geothermal. In the end they just said “Skip it” and built it themselves and paid for the extra costs upfront themselves. If any of the committee members will visit, they will proudly take you down to their geothermal unit and celebrate that their energy bills are about $300 a month for a fairly sizeable municipal hall—for everything: for their heating, electricity, and the rest.

Mr. Horan-Lunney, are you aware of any national goals Canada now has in terms of its green infrastructure? I know Germany, for example, has a 5% renovation cycle going on right now, where they hope to renovate 5% of their total national stock every year. Do we have some sort of equivalent in Canada?

[Andrew Cowan]

I'm not aware of that.

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

I'm wondering about that, because as we see, government sometimes does one thing with one hand and undoes it with the other, so many times. It doesn't have to be just this policy; it can be taxation or military spending. In this case, without a national strategy, without a national target or goal just around this topic we're talking about today, it doesn't necessarily allow all the various departments' focus.

I want to get to the role of where the federal government kicks this off. My colleagues from the Liberals mentioned this at the beginning. Is there a role for the federal government to understand, in terms of a national building code, other than just the one-off programs that exist sometimes and then get pulled back the next year or change criteria, etc.? What is the most critical role the feds can play in making this transition happen?

[The Chair, Conservative, Leon Benoit]

Go ahead, Mr. Cowan.

[Andrew Cowan]

The most critical role, again, would be from a support standpoint, to look at policy that does facilitate the development, the uptake of integrated energy systems. So that can come through policy instruments. It can come through regulatory instruments. It can come through setting goals and targets that can follow through.

[The Chair, Conservative, Leon Benoit]

Mr. Horan-Lunney would like to reply too.

[Eamonn Horan-Lunney]

Going back to your earlier comment about why your local community chose to go geothermal, it's because it came down to cost. That's why a lot of municipalities are embracing this and have been for quite a while. Unlike more traditional development in which one person builds a building and then sells it off, municipalities and the federal government build a building and own it for generations, as in the case of the building we are in.

They don't just look at the cost of building it. They look at the overall maintenance of it for the lifetime of that building, whether it be a hockey arena built in the 1960s or a city hall built in the 1920s. When they're looking at infrastructure investments right now, they're not just looking at how much it costs to put up a new window. It's how much it costs to put that new window in and what choice they have for windows in terms of energy costs for the next 30 years. Energy costs are unknown, but they know how much it costs to put in window type A or window type B.

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

I want to get to this point. Among, say, western developed countries or the OECD, where does Canada place on the list on this particular topic? Are we near the top of the list? Are we a highly efficient country when it comes to our building codes, designs, and implementation, or are we near the bottom of the list?

[Thomas Mueller]

From the information that I have seen, compared with.... I think we compare ourselves mostly to Europe. Compared with most European countries, we are probably more towards the bottom of the list, unfortunately.

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

Here is a question for Mr. Horan-Lunney about these programs and projects that you announced. I have a great concern, in the times we're in right now. Most of the government programs that I've seen announced require the traditional matching funds: the one-third, one-third, one-third. A lot of the municipalities I represent simply don't have the one-third, and they can't run deficits; they are restricted.

We've seen this pattern in building projects at the national level before. Eight billion dollars is announced, but when the dust settles, we see that 20% to 30% of it was actually spent. I don't accuse the government of any cynical measure, of withholding the money. I just don't think folks are able to apply, because they don't have the matching dollars. With no matching dollars, it doesn't happen.

How critical is it for the government to reconsider this formula when it comes to this particular topic?

[Eamonn Horan-Lunney]

There are a number of federal programs right now. I think there are upwards of 15 different federal infrastructure programs that municipalities have some access to. Some of them require matching funds; others are straight transfers. If you're talking about the economic stimulus, we're not sure of its details yet, so it's hard to comment. We're waiting to see the details.

[Andrew Cowan]

In addition to that, the Green Municipal Fund, which was an endowment given to FCM, can be treated as the municipal share of a project. They are stackable. That's an instance in which there has been some consideration of the challenges municipalities face.

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

This is a question to Mr. Mueller. I'm always interested in barriers—what keeps a homeowner in particular from taking the step and making the investment. There's been some concern about the cost of the audit no longer being covered. A homeowner pays for the audit up front, spends the money on the retrofit, has another audit at the tail end, and then at that point, if everything works out, maybe they get the money for their improvement.

I'm anecdotally presenting this as a concern that will remove some people from even bothering to do it, because there's so much risk incurred by the homeowner.

[Thomas Mueller]

I think if we want homeowners to take action to reduce energy use in their buildings, we have to look at.... We have 13 million homes in Canada. We have a goal at the council to target a million homes and 100,000 buildings and cut energy use in half in those buildings. Twenty-five percent of the buildings and fewer than 10% of homes would result in 50 megatons of reduced carbon emissions.

Clearly, homeowners would need to be incentivized to take those steps. Even if they know that the technology is readily available and understand how to reduce energy use in their buildings—just putting double-glazed windows in helps—I think an audit is important to figure out where the improvements can be made. But the challenge is for people to get to that stage and do the audit. I think the municipalities can play a role there, working with homeowners in their jurisdictions to achieve this. But the federal government also plays a role. To achieve our carbon goals, we would like to see more investment in a fund like the ecoENERGY program, engaging more Canadians to make improvements to their homes and enabling them to make those changes.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Cullen.

Next is Mr. Trost for up to seven minutes.

Go ahead, please.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Thank you, Mr. Chair.

In one of the presentations, and it might have actually been both, there was mention of regulatory conditions that can cause problems or get in the way of projects going forward. This question can be to any or all witnesses. I was wondering whether you have any specific examples of areas in which regulatory reform could be helpful to achieve this, not so much in a coercive way but in a cooperative way, whereby municipalities and again private corporations could work together in a better, more efficient way to get these projects going faster and ultimately more efficiently.

[Thomas Mueller]

One comment I would have is that most cities.... I only know two, actually, that are allowed to adopt their own energy codes, codes that are not provincial. It's the City of Vancouver, because of the Vancouver charter, and I think the City of Toronto. All other municipalities have to abide by the provincial code to increase energy efficiencies within the buildings in their jurisdiction. I know that many cities would like to have better energy codes, but simply because of how the provincial and the federal codes work, they're not allowed to.

That's why the City of Vancouver has the best energy code in the country: they have the Vancouver charter, which allows them to have ASHRAE 90.1-2007, I believe, which is a high-level energy code for buildings that are being built within the city. That's an opportunity, I think, because we need to raise codes. If you have a level playing field, it's an opportunity to bring all buildings up to a high level of performance. It's not the only solution, but it's certainly one of them.

[Andrew Cowan]

Improving the energy code for buildings is one of the key solutions, and setting standards for technology as well, so that it can be implemented faster. We run into a lot of barriers around new technology that is coming on line, in applying it and getting it passed.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Do you have any examples of the new technology or how these standards work?

[Andrew Cowan]

There's solar hot water on roof tops and what has to happen to make those...and renewable energy production, and the transfer of renewable energy, and the ability to produce it at the municipal level. Ontario just came out with their new energy plan, which incents and allows for municipalities to get into the renewable energy production field and distribute that energy.

From a standards perspective, one that has been a challenge on a number of occasions in Winnipeg is the use of waterless urinals, something that's used very much in Europe but because of our codes and standards is not necessarily something that is fully embraced. There are many examples we could point to that would benefit from some assistance from the national government.