Natural Resources Committee on April 29th, 2010

[Victor Fiume]

No, it was a surprise to us.

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

Normally, and typically, this government likes to announce things with a lot of fanfare and money. We see their $90 million ad campaign that was running, and is still running. Ironically enough, that ad campaign about putting Canadians back to work was running while they cancelled this program, and part of the ad campaign mentioned the program they had just cancelled. I guess the advertising company hadn't caught up to the decision that had been made here, because it was announced, if you want to call it an announcement, on a Friday afternoon on the third page of a website of Natural Resources Canada. Some of the folks who actually work in the industry were maybe notified, but Canadians were not. There was no minister standing in front of a ribbon; there was no formal announcement from the government sitting on a website.

Mr. Brunet, to those who work in the industry, and to homeowners more specifically, is that a respectful way for the government to notify them that they should stop bothering to apply for this program?

[Martin Brunet]

I'm not entirely sure how the government goes about making decisions. I don't necessarily believe it's the fairest kind of way, but again, I don't really know what decisions would have led them to make such a....

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

Mr. Fiume, you seem remarkably optimistic. Usually, when a program is cancelled, folks don't talk about hope and opportunity: it's been cancelled.

Is there not a danger of a gap existing? This is a very serious question about the lead-up and the build-up of a program establishing itself within the minds of builders and homeowners. It takes some time—isn't that correct?—for folks to become familiar enough to trust it that they go out and spend the money, bring in the retrofit analysis, and get the thing done.

Now that it's been cancelled, word has gone out not to bother with the federal government in terms of this project; it won't take applications. And the government hasn't announced anything to replace it or said whether it will replace it. Do you have some knowledge, as your source of optimism? Has the government whispered in your ear and said, don't worry, Victor, we're going to come in with something even better next time around?

[Victor Fiume]

We are home builders and we are always an optimistic bunch.

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

You are optimistic by nature, sure.

[Victor Fiume]

Having said that, we are concerned. We don't want to lose this momentum. It's critical from a public perception point of view. It's also critical from an employment point of view in that we have now a whole bunch of new green jobs. We have people who specialize in this area, but we do understand that in the meantime many of the people actually doing the work will still be employed doing the work until the program finally finishes its conclusion in March.

In the meantime, no, we haven't had whisperings in the ear. We will take this to Natural Resources Canada and sit down with them and say this is what we see moving forward. The stimulus cannot go on to the same extent it did. Here is what we think the program should be about, and we will work with them to come up with a program that is less expensive and keep the momentum going, keep the jobs going, and keep Canadians improving their homes.

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

This is what frustrates people about dealing with government, in the sense that it's on again, off again. Mr. Elsey talked about folks going into training programs, college programs, getting themselves ready for this. The uncertainty that the government has created puts a doubt into the minds of both those in the industry and on the home-building side. People hear about this through their neighbours. They hear about it through different campaigns, from yourselves, from Mr. Brunet's group. Then they hear it's all off. It's on the evening news that it has been cancelled. This is the frustration.

I want to go to Mr. Elsey for a moment. On the international comparison side, Mr. Elsey, you pointed to an IAEA report that showed we had the highest energy use per unit of economy. Does the cancellation of this program help Canada's competitiveness on that particular question?

[Ken Elsey]

It definitely takes us away from what I'll call achieving some of our objectives in terms of energy efficiency and greenhouse gas reduction, so I would say it really is a bit of a blow to our international commitments for climate change. I am concerned.

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

We've heard from government officials. You quoted another ratio, but there was something on the order of a 10:1 investment ratio. For every dollar that government was putting into this, the private sector, Canadian homeowners, were putting in $10. Government officials could cite no other program that had this kind of leverage into the economy in terms of stimulus.

The British government, the Americans, the Japanese--essentially every European government--are ramping up their home energy and business energy efficiency programs. Do you know of any other country that has decided to cancel their national energy efficiency programs?

[Ken Elsey]

No, and the point that should be made is that Canada still has an extremely low cost of energy. When we hear of things being done in the European market and elsewhere, they're looking at a kilowatt charge of anywhere from 30¢ to 35¢, equivalent, whereas we're still sitting at 11¢ for a kilowatt. Until we see the cost of energy start to move to a point where it becomes a motivator in and of itself, we'll be behind the rest of the world in terms of doing that.

We are a very energy-intensive country. If you go to some of our international meetings and you see the graph and you see that red dot for Canada up in that top right-hand quadrant, above and beyond everybody else's, you would sit there and say, “We have to do something.” Unfortunately, this is not a good signal.

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

I'm wondering, just in terms of signals, then, Mr. Brunet.... We've heard from the solar, the wind, and the geothermal, the different green energy sectors, that if it were not for the provinces right now, there would be virtually no green energy business in Canada because we are in a competitive environment with the United States and international players. Has the federal government essentially defaulted to the provinces at this point in saying that anything that's going to be done on this part of the green economy is going to be done by you and the municipalities or not at all?

[Martin Brunet]

It would appear so.

[The Vice-Chair, Liberal, Alan Tonks]

Mr. Cullen, we're out of time now, sorry.

Thank you, Mr. Brunet.

I think we'll go now to Mr. Allen.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you, Mr. Chair.

Just as a comment before I ask some questions, I wish Mr. Regan and Mr. Cullen could get past “c” in the dictionary, to actually what “review” means, because the program is being reviewed. As we know, as the officials said, there's $80 million in additional money this year to make sure we can go until the end of 2010-11. So as Mr. Fiume put a minute ago, there will be impacts felt from this program continuing on into next March, as the work is being done.

Mr. Fiume, you mentioned that 22% of homes in Ontario were Energy Star last year. Based on this work that's done, are homebuyers seeing an increased price in their homes for this?

Secondly, has there been any discussion about the idea of, let's say, our multiple listing system in Canada, as part of real estate sales, putting Energy Star ratings on all homes as a matter of informing a purchaser before they go in? Say it's an Energy Star rating of 2; you'll have an idea of what your energy consumption would be in that house.

[Victor Fiume]

In regard to your first question, certainly there is additional cost for the energy efficiency program Energy Star and some of the others that are out there. One of the things that leads to the success of this program is that we can clearly demonstrate a healthier home, a more comfortable home, and that the carrying costs on the added capital investment are minimal compared to the savings in utility costs.

That's what makes the program so successful: one, it's a voluntary program; and two, builders are using all their might and their marketing abilities to educate the public. An important part of that program is that builders are behind it.

It's interesting. Builders are very much creating the marketplace as opposed to reacting to the marketplace. I think it's very, very important that we understand that we are actually pushing the marketplace in this situation.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Would you suggest that that has been the impact right across Canada?

[Victor Fiume]

Absolutely. I travel across the country, and it's absolutely the case from coast to coast that these are builder-led voluntary initiatives. The public has caught on, indeed, in Ontario and others. Saskatchewan has about a 25% uptake. So it has been very, very successful across the country.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

I'd like to ask each of our panellists to comment on the next two questions, because I think this is important.

As part of the review process, which we understood from officials is going to take place over the next few months, specifically what incentives do you think would be important as part of a new program or a recast program?

What specific items do you believe could be improved upon, based on what you've seen, working through this program?

Obviously it makes sense, from the point of view of fiscal responsibility, to take a look at this, and I'm sure last year the home renovation tax credit had some impacts on this as well, because of the layering process that you could have. I'd specifically like to know your thoughts on what could improve the program if it were recast.

[Victor Fiume]

Off the top, without getting into huge discussions, certainly it would be to look at all areas of products, from shower heads all the way up. I think part of the program is big dollars and big investments by the homeowners. I think we need to cast our net much wider.

We also need to be more demanding of our manufacturers and suppliers that they are creating new products, being more innovative with ways that we can retrofit homes. Many of the products that are available are only available because of the new home construction area.

Also I think it's important that homeowners see the value in retrofitting their homes. I'm not sure that an 18-month window is long enough for people to see the benefits of what they've invested in. We had a mild winter this past year, so everybody's gas costs went down. Great. Is that because they bought a new furnace or because of Mother Nature? So I think the program needs to have a longer period of time.

Clearly we need to be looking at the entire house as a system. You can't tighten up building envelopes significantly without putting in HRV, heat recovery ventilators, or some mechanical ventilation system. Over the years, that's one of the lessons we've learned in new homes, and I think that's key.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Brunet and Mr. Elsey, do you have any comments about what you think would be positive in a different program?

[Martin Brunet]

Go ahead, Mr. Elsey.

[Ken Elsey]

In terms of it being a new program, I think the essence of the ecoENERGY program really hit the nail on the head. It may have been too aggressive in terms of its overall cost to the government—I can appreciate that—but I do think the cost of energy will ultimately prove to be the motivator.

You hit on a topic just a moment ago when you talked about the whole idea of whether or not to rate existing homes. I really do believe that to be a key aspect. If a homebuyer understands the cost of heating or managing their home before they purchase the home, it just makes sense to have that home labelled. We've actually done a bit of research on this, and it's not as onerous as one would think. It really keeps in line with the strategy NRCan has with everything else, from appliances to automotive purchases and homes. I think it's the next step. So home labelling is a really key issue.

The second is codes and standards. We need to invest more in codes and standards and to bring those codes up to snuff much more quickly. We are currently working with NRCan through the National Research Council and the Canadian Commission on Buildings and Fire Codes, the CCBFC, to update the model national energy code for buildings and houses. I think that's really where most of the effort should lie, because the rest of it will carry itself as energy costs continue to rise.

[The Vice-Chair, Liberal, Alan Tonks]

We're out of time, Mr. Allen.

But, Mr. Fiume, did you want to add something to that? I saw your....

Oh, Mr. Brunet, okay.

[Martin Brunet]

One thing I'd like to see with the program is better management of how much is handed out, and maybe looking at giving the program more permanence so that you can instill confidence in Canadians.

Also, we should use the program as a venue for endorsing new energy efficient Canadian products, for example, maybe aiding and assisting Canadian companies in getting their products from renewable energy sources, or even just making any systems in houses more efficient, like solar domestic hot water, for example.