Natural Resources Committee on April 15th, 2010

[Carol Buckley]

Thank you, Mr. Chair. That's a very interesting question.

The leverage for each program is quite unique to that program. It depends on how much investment the Government of Canada is making vis-à-vis how much investment the energy consumer needs to make. In the case of the small and medium organizations incentive, a small building or a small factory would get access to up to $50,000 in incentives for an investment they make, and the leverage is as you have indicated. Other programs, such as the ecoENERGY retrofit home program, have a higher level of leverage so that for every federal dollar we spend, the homeowner is spending about ten dollars.

The leverage is far greater for non-incentive programs. Where we're making investments in training curricula for novice drivers, for example, which all of the provinces have adopted so new drivers learn eco-driving techniques, the federal investment is just minuscule, and yet we train thousands of new drivers across Canada every year. Similarly for training truck drivers and home builders, the federal investment is very small vis-à-vis the investments that the private sector makes.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

I have one more question. I want to just clarify something.

We've been developing new technology to cut down on our greenhouse emissions. I'm assuming that our cost per tonne, because we're developing new technology, is going to be higher than it will be after we have the program levelled out, the technology has been proven, and we're just applying that. The development of technology is going to be higher, so I don't think we can achieve the lowest possible cost per tonne at this point on most of the programs, but that will come.

Am I right in that? I'm referring to Mr. Cullen's assertion that our cost per tonne is far too high, but that's because of the technology we're developing, I'm assuming.

[Mary Preville]

Thank you very much for the question.

You're correct. The development of new technologies is obviously very expensive. There are many unknowns, going from the person who has the bright idea, to the scientist who can then develop it, and then to likely the engineer who can put it into practice. Not all succeed, and there are many risk factors along the way. So of course, the development of technologies in the infant stage, or even in the demonstration phase, is much more costly than when you start to get economies of scale.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Thank you very much.

I think I must be about done.

Is my time done, Mr. Chair?

[The Chair, Conservative, Leon Benoit]

Oh, you were done, like....

[An hon. member]

Like the rest of us are.

[Voices]

Oh, oh!

[The Chair, Conservative, Leon Benoit]

Frankly, I forget.

Thank you, Mr. Harris.

We now go to the second round, which is for five minutes, starting with the official opposition.

Mr. Bains, go ahead, please.

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

Thank you very much, Chair.

I'd like to follow up on the comments made by Mr. Harris and Mr. Cullen with regard to the effectiveness of the program and how we measure success. I think we've spent, according to your numbers, $960 million over four years for these programs, and the overall objective is how much we reduce gases by.

You mentioned, Mr. Corey, that you would love to spend a lot more money if it were available. Obviously we have limited resources, so it does boil down to value for money. In your opinion, are we getting the optimal value for money for the investments we're making to reduce the greenhouse gases?

[An hon. member]

Absolutely.

[An hon. member]

He asked them.

[Mark Corey]

Mr. Chair, again, that's really the purpose of going through...the fact that we have fixed-term funding, that we have to then go through an evaluation. Part of the evaluation is to see exactly how effective the programs have been, what the cost has been, what the results have been. That's part of the evaluation we're going through right now.

Carol, do you want to talk a little bit more about it? We can get into some more specific detail, actually, with the programs.

[Carol Buckley]

We do assess the impacts of each program. Obviously, you're looking at a roll-up across all of the programs, which we will have more definitively when we have our evaluations.

So we have our own internal progress accounting on each of the programs and I'm reluctant to share that until we have the third-party independent evaluations that give us that—

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

Can you elaborate on the criteria that you have for effectiveness? One criteria is obviously the reduction. We would measure that on a per-tonne basis.

Are there any other criteria that you have to measure success or progress?

[Carol Buckley]

Certainly the criteria for measuring the effectiveness of any one program are very much linked to that particular program. We're sitting before you today representing a real range of different program types. In an incentive program, we would look at the effectiveness not just of the dollars per tonne; it's also how many resources in the Government of Canada are required to process the applications but provide due diligence for the Canadian taxpayer that the investment has actually taken place.

So we look at the effectiveness of how long it takes us to respond to an application and to process it through the federal government, and how long it takes us to respond to questions from the public and to deal with their application.

That's very different from the effectiveness requirements of preparing a regulation or a standard where we don't have the same response to the individual consumers but where we do have to take into account the impact on the economy of imposing a regulation, how long industry has to respond to that regulation, and whether we are consulting adequately.

There are different effectiveness criteria we would apply to a regulatory program than we would to an incentive program. Each individual evaluation looks at each individual program and develops the specific criteria for evaluation. I've just given you a couple of examples for two different programs.

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

You said you're tracking this internally and you're going to wait to make it public, once it has been validated by a third party. What is the timeline associated with that?

[Carol Buckley]

The evaluations on the energy efficiency programs are expected in a couple of months.

In the meantime, there are public records of our emission reductions in the annual report to Parliament. The energy efficiency programs report on their progress every year in that public fashion. There is also a reporting in the Kyoto Protocol Implementation Act, reporting which comes out annually.

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

Based on your internal tracking for the criteria that you just described, and obviously each program is very different, have you made any changes to the program based on this tracking, realizing that maybe you're not necessarily getting the success in terms of reducing the greenhouse gas emission targets that were originally set out?

Have you made changes to any particular programs, and can you cite those examples?

[Carol Buckley]

Certainly. Thank you for the question and the observation.

Because we review our progress on the energy efficiency programs at mid-year and at the end of the year, every cycle, and we are three years into this four-year set of programs, we have made many observations about improving the effectiveness of our programs.

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

Excuse me, effectiveness or ineffectiveness?

[Carol Buckley]

Effectiveness.

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

Okay.

[Carol Buckley]

Yes, certainly, let me repeat, we have made many improvements to the effectiveness of our programs.

For example, on the small and medium-sized organizations incentive program, in response to an audit, we are reviewing how we audit the recipients to ensure that the program funds were spent appropriately. The auditor made an observation that we in fact had a more cumbersome process in place for evaluating the effectiveness of the incentive than we could have had.

So we have taken action already to try to streamline our process of selecting a recipient auditor to go into a company and determine how the money was spent. The audit actually observed that we were maybe putting in too much oversight for fairly small investments.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Bains.

We'll now go to the government side, to Mr. Shory, for up to five minutes. Go ahead.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Thank you, Mr. Chair.

Thank you to the witnesses, as well, for coming out this morning.

It's very interesting, and I'm happy to see that our government has been investing in the clean air agenda, and also on reducing GHG emissions. As a matter of fact, our government has undertaken a lot of very specific and targeted initiatives to reduce greenhouse gas emissions and will continue to do that. The latest numbers also show that greenhouse gas emissions are dropping because of our government's policies. In fact the emissions were reduced by about 2% between 2007 and 2008. I just read that this morning.

But my question will be coming back to ecoENERGY for renewable heat systems. I haven't heard much about geothermal programs. Are there any initiatives or programs on geothermal heating systems?