Natural Resources Committee on April 29th, 2010

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Thank you very much, Chair.

I just want to follow up with a question I asked previously and get clarification from the department with respect to the costs they identified for the program. They indicated that $340 million was given to grants that were paid out. Another $300 million was left in the program, but the total cost was $745 million. I just want to understand what that difference is attributed to. Is it attributed to an uptake or not? If we can just get the department to follow up on that, it would be greatly appreciated.

My question is to Mr. Koch. The government MPs, and the government, keep repeating that this program has not been cancelled, that it's just under review, and that it will continue until the end of March 2011. Does anyone in the industry believe this is true? From your remarks, is there anyone that you've come across that believes this to be the case?

[Stephen Koch]

I think what you saw in the press and in communication from people out there is confusion. What has been put forward by the government is that they will stop taking any new audits. Therefore, any new people wanting to come into the program would not be able to benefit from the incentives. But that is not being understood in the market today. If you go onto that website, you will see that there is a perception by Canadians that it has been cancelled. Even the Government of Ontario, which matched funds, went through a process of trying to understand what the federal government was proposing when they made their announcement on the 31st. They just recently agreed to continue the program as it was before.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

So who benefits from the cancellation of this program? You described in your opening remarks all the benefits in terms of the jobs it creates, the investment, the technology, the benefit for the energy efficiency, the outcome. You even talk about issues around poverty. So who benefits from the cancellation of this program? Is there anyone or anything that you can think of that benefits from the fact that this program is being cancelled?

[Stephen Koch]

No, sir, I can't.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Again, to the other panel members, I would just like to get clarification on this. Who benefits from the cancellation of the program? Is there anyone who comes across that benefits from the cancellation of this program?

[Sheldon E. Busey]

The benefit is that we have to do something about it.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

I appreciate that.

The question I had for you, Mr. Koch, now is in terms of specifically the issue around jobs and technology. We've heard from various panel members and witnesses before that it's very important that this program is kept because it creates a market to generate new technology and it allows Canadian companies to actually develop certain technologies. Because this program is being cancelled now, there's no new incentive to generate technology and no one really wants to invest here in Canada. A lot of these companies are going to the U.S. Is that the feedback and the assessment that you're getting, from your perspective?

[Stephen Koch]

The way we look at it is that the energy efficiency in buildings follows what we call a civil strategy. That civil strategy has four major pillars. Those pillars are: codes for new homes; incentives to be able to help bridge the gap between high-cost new technology...; voluntary programs that actually test that new technology in a small group of homes; and then you have labelling, which ultimately gives the rights or the choices back to the consumers as to what they want.

These are all intertwined. It is so important to the ecoENERGY program and the EnerGuide rating itself to be part of that process so that the provinces and the municipalities can create a process to move this strategy along, because only one will not make energy efficient homes across this country; all four are required.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

You also mentioned tracking jobs and the fact that this impacts particularly small and medium-sized businesses that very much rely on this program. Have you any data that tracks any job losses or jobs that will not be created because of the fact that this program is being cancelled?

[Stephen Koch]

Oh, absolutely. I have heard of many of the audit firms laying off auditors because the process won't be growing any more. In 2009, when Ontario brought in the Green Energy Act, they indicated mandatory labelling would be part of that. That is where the investment was to be in new jobs within the auditing community.

I also sit as chairman of a non-profit organization called EnviroCentre, which does home audits for social housing as well as for regular housing. We are considering laying off auditors since the process has slowed down because of a lack of understanding by consumers as to whether this program is cancelled or whether it is proceeding.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Mr. Brouillette--I hope I pronounced that correctly--you mentioned in your remarks that energy efficiency is a major desired outcome for industry, and you had some data that referred to homes that needed a major repair as representing 9%, but you believed the number was close to 33%. You briefly talked about some of the changes you would like to see to this program if it wasn't cancelled. One of them was changes to the incentives for rental buildings.

Are there any other changes you would like to see? If this program did exist, what other changes would you like to see to address the concerns in your industry?

[Hans Brouillette]

In the case of residential rental buildings, given that the families living there benefit more from any renovations, the amounts granted should be greater. In addition, the multiplying factor used to calculate the grant in the case of a small building, such as a duplex or triplex, yields the same grant as for a single-family home, even though the rental building houses two or three families.

It is important to note that the lack of renovation incentives for rental property owners is due to provincial laws and restrictions on rent control. Therefore, larger grants are needed to remedy that shortcoming. As everyone knows, the rental housing stock in Quebec is very old. Major renovations are needed.

[The Vice-Chair, Liberal, Alan Tonks]

Mr. Bains, we're out of time.

We will go to Mr. Guimond.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chair.

Good morning, gentlemen.

My first few questions are for Mr. Brouillette.

Ms. Brunelle and I had a question about the Department of Natural Resources' report on the ecoENERGY program for homes. There were 134 advisors in Quebec, while Ontario had 1,182.

Can you explain that disparity between Quebec and Ontario?

[Hans Brouillette]

I will ask my colleague to answer that, if I may.

[Pascal Dubois, President, Legault-Dubois, Corporation des propriétaires immobiliers du Québec]

I, myself, am the president of a company that provides services to the majority of evaluators and advisors in Quebec. I cannot comment on the situation in Ontario, but in Quebec, it is not easy to find people to work in this field. There are consequences when programs of this nature are cut. In the wake of these announcements, we had to lay off 30 people. We spent thousands of dollars on training advisors and developing their skills, and we had to let them go to work in other fields.

I cannot say for sure that there are fewer advisors in Quebec, but I can say many businesses like mine have been directly affected. The way we see it, we have an opportunity to have a business that provides other services. The fact remains, however, that as a result of these announcements, we are going to lose that expertise in energy efficiency in terms of rental property owners.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Brouillette mentioned earlier that the program should be renewed for the long term. What needs to be done to properly address the concern you just raised and keep the program going in the long term, so as to level the playing field where Quebec is concerned? I am talking about the situation regarding advisors.

[Pascal Dubois]

First, there is the issue of energy efficiency training and education in Quebec. Quebec has a huge housing stock. I think everyone would come out a winner if building owners were given incentives to undertake energy retrofits. Mr. Brouillette may be able to elaborate on that. Regardless, building owners whose tenants pay the energy bill have no reason to undertake energy-saving renovations. That is why it is important to give these owners financial incentives. Then we could do our job as advisors. When an owner wanted to spend $1 on renovations, we could tell them where to invest it to get the biggest bang for their energy-saving buck. That kind of skill is not taught as part of a technical program in architecture or construction. The industry is the one that trains these people.

If the program were renewed, I would have certain questions as a business owner. I would have to ask myself whether I was willing to invest in and train thirty or so evaluators all over again. I was around when EnerGuide was cancelled and now ecoENERGY. I am not so sure I want to go through that a third time. We are talking thousands of dollars. We developed expertise. After the sudden cancellation of EnerGuide, we started to build a name for ourselves with ecoENERGY. Right now, I am not sure whether the industry in Quebec would be interested in doing it all again.

I often joke that it is the bookkeeper brother-in-law who tells the building owner which renovations they should do. Usually, those are myths that we help to dispel as experts in the field. That is something the industry is losing now as a result of these programs being cancelled so suddenly.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Your testimony will no doubt be taken into consideration going forward, if the program is renewed.

Mr. Brouillette, how many owners have used the program to date, as it now stands?

[Hans Brouillette]

Do we have specific figures on that?

[Pascal Dubois]

It is difficult to say.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

But you seemed to be saying—

[Hans Brouillette]

We also have the provincial programs. Certain owners are eligible for both subsidy programs, others for just one, either the federal or the provincial program. That needs to be calculated. Regardless, it is not a lot. We cannot really say that we have changed the opinions of owners. It is important to remember that given the large amounts invested, owners have to spread out renovations over a number of years. They cannot fix the walls, the roof and the heating system all at once.

So when owners plan out renovations that cost tens or hundreds of thousands of dollars over a period of five years, by cancelling the program, the government is putting an end to the relationship between the availability of liquidity, the need for renovations and the ability to access grants.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Based on your experience, was it very difficult to coordinate Quebec's programs with the federal government's ecoENERGY program for homes?

[Hans Brouillette]

Essentially, it is the combination of both that gives owners a real advantage. If you take away federal grants, for example, you have to ask whether things will continue based solely on provincial grants. It will certainly not be the same because the incentive becomes too small. At the provincial level, there are grants for evaluations. So there is a benefit to owners doing them. It is very useful. This first step, which costs money, often scares owners, but if they are getting a grant to take that first step, they can get used to it. The facts remains, there is still a lot of work to be done. We are just scraping the surface in terms of awareness.