Thank you very much, Mr. Tonks.
Good morning, ladies and gentlemen. I'm very sorry that I'm not able to be there with you this morning, but I've got a few other meetings this afternoon that I couldn't change.
I'll give you just a brief overview of who I represent. The Canadian Energy Efficiency Alliance is a broad-based, not-for-profit organization. We were established in 1995 to respond to the lack of a coordinated effort to promote energy efficiency in Canada.
We are heavily involved in the development of the energy efficiency codes and standards--from building codes for your home, to your appliances, and even to the electric vehicle that will one day be parked in your driveway.
The CEEA, Canadian Energy Efficiency Alliance, participates internationally on strategic working groups dealing in energy efficiency, both with the International Electrotechnical Commission, more commonly known as the IEC, as well as the ISO, the International Standards Organization. Through these organizations, we make recommendations to the IEA, the International Energy Agency. They in turn make recommendations to the G8, of which Canada is a signatory.
In the most recent report published by the IEA in 2009, they noted that Canada's primary energy and electricity consumption per unit of GDP is the highest among IEA countries. However, they're quite optimistic in their tone when they go on to say that Canada is committed to working to increase energy efficiency. In August 2008, individual Canadian provinces and territories committed to achieving a 20% increase in energy efficiency by 2020, largely through the improvement of building codes, broader regulations of energy-using appliances, and green policies for new government-funded facilities. And most importantly, noted in the IEA report was the reference to home energy audits and retrofit assistance.
In addition to this, the federal and provincial governments are collaborating in ways to achieve combined energy efficiency objectives. Provincial and territorial governments are using the federal energy efficiency tools to complement their own energy efficiency programs and policies. It must therefore be realized that the cancellation of the federal ecoENERGY program is a serious blow to the provincial and territorial goals to achieve this 20% increase in energy efficiency by 2020. It's also a failure to maintain the recommendations of the IEA to increase investments in energy efficiency and to create more favourable grounds for private energy efficiency investment.
The ecoENERGY program did this by encouraging Canadians to invest in their own homes. The ecoENERGY program was successful in its own right. While the program has expended $300,543,296 to February 1, 2010, it will likely grow to over $750 million by its conclusion in March 2011. We estimate that this figure will represent only 15% of the total expenditures made by Canadians. Canadians themselves will have invested over $4 billion as a result of this program. Those figures are based solely on the federal numbers. With most provinces having a matching program, the total spend will likely exceed this significantly.
While the average rebate for an ecoENERGY home is only $1,274, we've also concluded that most Canadians have not taken full advantage of the energy savings identified through their audits. So we see the future work being done as consumers recognize the potential as energy costs continue to escalate.
However, the energy savings achieved to February 1 of this year are very impressive. While we believe NRCan's estimates may be a little on the high side, they show 11.22 petajoules of energy having been saved.
Maybe everybody is not familiar with a petajoule, so let me convert that. I do understand there is an issue between natural gas and electricity, but to understand the scope of the opportunity, let's just deal with electricity. One petajoule, in electricity terms, equals 277,780,000 kilowatt hours of energy. That means 11.22 petajoules equals 3,116,000,000 kilowatt hours of energy. You get the picture.
The total weighted average cost of electricity in Canada—and we've done this study extensively—is 10.9¢ per kilowatt hour. This includes all costs, everything from delivery charges, transportation fees, debt retirement charges, and taxes.
Therefore, before the annual total savings to Canadians, based on the NRCan's results to date, show that Canadians will save $339,719,384 per year, every year going forward. All of this is likely to be reinvested in our economy, or lowering household debt. The GHG savings are also significant. While there are some regional variances, NRCan has shown a total cumulative GHG savings of 743,416 tonnes per year. This is really a very impressive target, and it's in line with their goal of 743,750 tonnes for the 2009-10 year.
While these achievements of the program are impressive, they may be a little conservative, the reason being that of the 800,142 audits completed, only 236,000 represent second audits, which would in fact qualify the homeowner for the rebate. There are some 564,137 audits that are likely to move to second audit. While conversion rates now average only 41.8%--that is the homeowner requesting a second audit following the work in order to qualify for the rebate--our discussions with auditors indicate that this will rapidly escalate as the deadline approaches. Many of the auditors we've talked to suggest that the conversion rate will exceed 80%. While this will have serious cost implications to the program, it also means that energy savings will be greater than forecast.
From an economic perspective, if we're to look at the business case for ecoENERGY, it's one that's easy to justify. First, from the federal government's perspective, if our assumptions are correct and the program generates close to $5 billion in total spending, that spend represents $250 million in GST revenue alone.
While the $5 billion cannot be directly translated into jobs, annex 1 of the 2009 budget suggests that there is a relationship between GDP and jobs. Assuming only 5,000 jobs are created or maintained as a result of the program, with an average salary of $40,000 and a 15% federal tax rate, the contribution credit to the program is about $30 million. Thus, the current spend of forecasted $750 million is offset by revenue of almost $3 million.
