Natural Resources Committee on Dec. 6th, 2012

[Kirsty Duncan, Liberal, Etobicoke North, ON]

What policies and mechanisms would you recommend to this committee?

[Christopher Gora]

The very first step that needs to be taken is to delineate the resources across this country and to identify, in terms of tidal energy and also river hot spots, areas that have good flow regimes and decent access to the grid for the example. If there's no decent access to the grid and you have a remote community situation in which you have expensive diesel being purchased, the first step is to get data and information and really focused analysis. After that you have to put into place a regulatory structure that is predictable and understandable and fair so that it will attract various companies—and not only from Canada, I would add.

This is a global industry, and we rely on the expertise of complementary companies from Europe and other parts of the world so that they can come to Canada, look at the landscape, and be able to say with some confidence, “Here are some good resources. Here is how the leasing or the licensing of sites will work. We can wrap our heads around that. Now let's see if we can put together a business plan based on our own financial resources and on the kind of investment that we might be able to get through banks and funds and potentially even the government.”

[Kirsty Duncan, Liberal, Etobicoke North, ON]

If you have any recommendations you'd like to make to the committee, you have 15 seconds.

[Christopher Gora]

I think I've covered the gamut. I think it requires funding support but also policy support and a really positive and concrete structure around how this resource will be exploited in the future.

[Kirsty Duncan, Liberal, Etobicoke North, ON]

If there is policy support or policy recommendations you'd like to share with the committee at a later date, please send them in.

[Christopher Gora]

Absolutely.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Duncan.

We will go to the five-minute round.

We'll start with Mr. Leef and then Mr. Calkins.

Go ahead please, Mr. Leef.

[Ryan Leef, Conservative, Yukon, YT]

Thank you, Mr. Chair.

Thank you to our witnesses for attending today.

It's always great to be able to follow the preamble that Mr. Julian tends to make when he introduces his comments. It got me thinking that he makes Canada seem so horrible that if we could only find a way to remove the dark cloud they cast upon the country when we talk about these things and then somehow harness the sunshine that appears to be emanating from their backsides, I think we'd be a world leader in solar technology. I know you're here to provide advice to us, but maybe consider that as an option to explore as an innovation.

Mr. Gora, you mentioned that the provinces of Quebec, Manitoba, and British Columbia have expressed interest in development and are participating in project trials. What level was that driving up from? Was it from a municipal or provincial level, from industry, or from multiple levels of interest?

[Christopher Gora]

I was specifically referring to involvement by both provincial governments and utilities. There are obviously some large utilities involved that are exploring other alternatives in energy generation. I would say it is less the case in our business on the municipal level, although I'm certainly aware of municipalities, Vancouver included, that are quite involved in other kinds of technology development.

[Ryan Leef, Conservative, Yukon, YT]

Thank you.

You listed some of the challenges. I noticed you didn't list as a challenge or barrier any sort of social or environmental concerns. Maybe I could just get you to comment. We've seen projects like wind energy come up, and some communities just don't want them. They're in favour of cleaner, greener energy, but they don't want them in their communities.

How is the public receiving these technologies in terms of that social aspect, and are there any environmental challenges that you see facing this innovation?

[Christopher Gora]

In terms of our industry, we're certainly not saying that there aren't concerns meriting further study. Our point on the environmental front was that we need to coordinate various levels of environmental review and make it a streamlined process.

I can tell you that in terms of our own industry, yes, we have to respect and consult various stakeholders. In tidal energy, those stakeholders include water vessels, the fishing industry, and that sort of thing. Without very robust stakeholder consultation and communication, I think we will see opposition to these projects simply because people don't know.

I know that the various levels of government and other technology developers, including ourselves, do undertake environmental reviews. So far, in terms of our own projects, we did an installation off the coast of Vancouver Island, specifically at the Race Rocks environmental reserve. We had to do an environmental.... We did a baseline assessment, and then we did an assessment of the effect of our turbine in the water. We came up with positive results, but that doesn't mean that.... I think this process has to be repeated in future projects, but it's the coordination that we're really pushing for.

[Ryan Leef, Conservative, Yukon, YT]

Thank you, sir.

Do I have a bit more time, Mr. Chair?

[The Chair, Conservative, Leon Benoit]

You have a little over a minute.

[Ryan Leef, Conservative, Yukon, YT]

That's great.

Mr. Gilmour, you listed in your deck some of the communities you've operated in. Do you have an idea of just how many communities across the country you're working in? Do you have any specific northern locations? Maybe you could just touch on any of the challenges or differences between northern locations and other parts of Canada that would be of interest to the committee.

[Brent Gilmour]

Sure. Thank you very much.

In terms of the total number of communities engaged in the application of integrated community solutions, our hope is to have all of them, and there are 5,400 across Canada. The intent, though, is that you could assume that every major city over 50,000, say, is trying something in some regard.

We are documenting at this time, with support from Natural Resources Canada, how many communities are actually doing integrated community solutions on some scale. Right now, we have 65 to 75 that we've just pulled together, but it all depends on how you define them.

When you start looking at northern and remote communities, you see that their challenges in terms of energy are the same. They need electricity and they need heat. In terms of what they rely on primarily for electricity, of course, it's diesel; there are 300 off-grid communities. At the same time, they might also require other types of fuel—oil for heating, maybe—and what they're looking at is that the prices and costs are of course escalating, particularly as they have to fly it in. What we're looking at in the hope of encouraging it is what could be done locally. Could they be looking at alternative sources of energy that might be there already, whether that's biomass or others?

We have a couple of communities to highlight. Beaverlodge is one. High Level is one. These examples are communities in Alberta; they wouldn't be so much remote or northern. They are communities that are still on the grid, but they're looking at combined heat and power, as examples, and at drawing on local biomass sources for what they could be doing to offset their activities. When we start looking even further, up into the Northwest Territories, Yukon, and Nunavut, they get into creatively different challenges.

Mike, would you like to add anything?

[The Chair, Conservative, Leon Benoit]

Actually, Mr. Leef's time is up, so maybe someone will give you an opportunity to go that way later.

We have Mr. Calkins for five minutes, followed by Ms. Liu.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you, Chair.

I just wanted to remind committee members of one particular change in SR and ED. If we go back to the budget document in 2012, the expert panel that made recommendations on the budget implementation talked about some of the problems that our country is facing. From a perspective of per capita investment in R and D in the higher education sector, Canada is faring better than Germany, the U.K., France, and all of the other G-7 countries. However, in business investment in research and development, as a share of our economy, Canada is lagging behind, so when Mr. Cleland and Mr. Gilmour talked about the 10:1 leveraging ratio, I think that's exactly what our budget changes were proposing to effect.

In fact, the budget document says, “Canada lags behind peer countries in leveraging government procurement to promote private sector innovation”. The key recommendation was to “shift resources from indirect support through the Scientific Research and Experimental Development Tax Incentive Program to direct forms of support, including the Industrial Research Assistance Program”.

This is a large amount of money. We're basically talking about $1 billion, I think, going directly into that particular set of programming, and another $500 million into venture capital, which was going to help companies like yours, Mr. Gora, and everybody else's here at the table.

With the record corrected, I would like to ask a few questions of the witnesses who are here today.

Mr. Dutton, I grew up on a farm and I've seen pipelines go through. We have them across our property. I'm a little curious about line location and if there's been any innovation on this matter. That's a big issue when you have as many kilometres of pipeline as we do in Alberta.

Second, my observation has been that any time we have a disturbance from a pipeline that goes through our land, the most productive land in the subsequent years is usually that patch of land. You can see the dark, more green, more lush vegetation growing over where a pipeline has just gone through—and you can see that for several years, notwithstanding the depression. I'd like to know a little bit more about how your compaction technology works, if you can explain that in the time that's provided.

Mr. Gilmour and Mr. Cleland, I'm very curious about this. Places like Drayton Valley in Alberta, close to my riding, have things like the Bio-Mile. There's a lot of support at the municipal level to get involved in these kinds or projects. I'm curious: what are some of the barriers?

When I used to be on municipal council, the idea of creating a community with a common power source that would be off the grid but connected was an attractive one. Such a power source might use wavestreams from a lumber mill, or whatever the case might be, to provide heat for a number of buildings, municipal and residential. Byproducts of electrical generation from a biodigester, for example, might be used to power the homes in a different type of grid system.

One of the key barriers to success in such projects is that some of this technology is so new that many of the contractors and developers aren't aware of it, and neither are some of the people who work on the ground. Are there some barriers there that you could identify? I'm wondering if the Government of Canada could provide some assistance in making sure we have the boots on the ground to provide the training to get people with the knowledge to come and install something. For example, if you're putting a solar panel on a roof, you might have an electrical engineering certificate, but you might not have studied that in school or in your area of expertise. If you're a journeyman electrician, you might not have the capability or knowledge to do a project like this, so the will might be there, but the ability to deliver might not be. I'm wondering if there are any gaps that can be addressed.

Mr. Gora, please answer me quickly. I don't know how much time I'm going to have after my rant.

[The Chair, Conservative, Leon Benoit]

You have 50 seconds, Mr. Calkins. They're going to be brief answers.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

I'm sure the magnanimous chair will allow some complete answers. What are we looking at for a price-point entry on, say, a generation system that would sit in a river or a stream, and is it capable of powering a home?

[The Chair, Conservative, Leon Benoit]

We'll go to Mr. Dutton, and we'll see if we get beyond your answer.

Go ahead, please.

[Robert Dutton]

With respect to line location, ground disturbance is a major concern for us, and line strikes are something that we take very seriously. Over the course of time, we have in a more complete way taken ground disturbance to a new level with respect to how we implement it. I'll leave it at that for the moment.

Our compaction techniques employ things like sheep-foot compactors. We use narrow compacting equipment, rollers and tampers. Some of the lines require some fairly exquisite geometry, but they've been made for this purpose.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Will it improve the ability to drive large equipment over the line in the future? If it's compacted well, it protects the line, right?

[Robert Dutton]

Absolutely. In fact, the line is in a better condition when it's left after this is implemented. What happens over time is these lines become constrained through natural compaction, and that provides a more integral pipeline. Compacting it after it has been installed makes for a more complete installation.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Calkins. Your time is up.

The witnesses may get a chance to answer those questions, if others ask the same questions.

Ms. Liu, you have up to five minutes. Please go ahead.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thanks.

I'd invite my colleague to familiarize himself with the changes to SR and ED. As we know, only a portion of the funds invested from SR and ED were reinvested into IRAP and other programs to support research. If the witnesses have any further comments on SR and ED to table with committee, I'd invite them to do so.

My question is for Mr. Cleland. You mentioned pricing carbon and policy stability in your presentation. If the Canadian government decided to respect its international engagements concerning reduction of greenhouse gases, what impacts would this have on your sector in particular?