Thank you, Mr. Chair and members of the committee, for the opportunity to speak to you today.
FCM's President, Karen Leibovici, has asked me to extend her greetings.
Today, we are pleased to be able to contribute a municipal perspective to your research into innovation in the energy sector—including generation, transmission and energy use.
FCM has been the national voice of municipal governments since 1901, representing nearly 2,000 municipal governments, which in turn represent over 90% of Canada's population.
Local governments are on the front lines of energy use in cities and communities across Canada and are showing leadership in energy innovation.
Like other orders of government, local governments are important consumers of energy—we own thousands of buildings, vehicle fleets, and we also treat and transport trillions of litres of water per year. We are also in a unique position to influence the energy consumption patterns of our citizens.
In our 2009 report, “Act Locally”, we showed that municipal governments have direct or indirect control over 45% of national greenhouse gas emissions in Canada, a majority of which are driven by energy use. We also demonstrated that there was a significant stock of cost-effective but untapped local, community-based emission reduction opportunities. These opportunities have the potential to supply between 15% and 40% of Canada's 2020 greenhouse gas emissions reduction target, saving millions of kilowatt hours, cubic metres of natural gas and litres of fuel.
In terms of direct municipal control, we are talking about energy consumption and energy losses in municipal operations, including buildings, arenas, fleets and management of residential waste. We are also talking about the harnessing of landfill gas or waste materials for productive use as a source of energy, as municipalities like Saint John, New Brunswick, and Calgary, Alberta, have done. These initiatives save communities millions of dollars, demonstrate innovative technologies and make smarter use of resources, including waste.
In terms of indirect municipal control, municipal policies and programs can promote energy efficiency in residential, commercial and institutional buildings and local industry. Municipal planning can also lower energy consumption associated with personal and freight transportation.
The Regional Municipality of Halifax's Solar City initiative pilot project, which will provide low cost financing to home owners to install solar hot water heating, is a great example of local governments innovating in their use of financial tools to implement wide-scale renewable energy generation in their communities.
Since 2001 FCM has been on the front lines of energy innovation in Canada because of our management of the green municipal fund, GMF, a $550-million revolving loan fund that supports innovative, sustainable infrastructure projects at the municipal level.
Since its inception, the program has provided grants, or loans in combination with grants, to over 460 communities across Canada, funding over 934 initiatives, 45% of which have been energy-related. Of these projects, 162 have been capital projects, which when completed are expected to create more than 32,000 jobs in 123 communities, saving those communities $82 million a year. They will also reduce energy use by 4 million gigajoules, or 1.1 billion kilowatt hours.
GMF provides about $50 million to $70 million in capital funding per year, a drop in the bucket in some respects, but imagine where Canada could be if the lessons from these projects could be replicated across the country.
This is where FCM sees a role for itself as a catalyst of innovation, sharing the knowledge from GMF-funded projects and other innovative municipal initiatives so that other communities may adopt and adapt designs, practices, and technologies that generate better value for investment dollars coming from larger programs such as the gas tax fund or the Building Canada fund.
For the municipal sector, the key challenges or barriers to energy innovation relate to resources, supportive policies from other orders of government, knowledge, and expertise. Our 2012 paper, “Building Canada's Green Economy: The Municipal Role”, highlighted principles for enabling innovation at the municipal level, including acting locally and making value for money a top priority. Acting locally requires long-term predictable infrastructure funding, which will enable municipalities to plan for and implement innovative infrastructure solutions that transform the way Canadians generate and use energy. We are pleased to be working with the federal government on a new long-term infrastructure plan that will lay the foundation for this. Acting locally also involves collaboration between orders of government on sustainable transportation infrastructure and promoting renewable energy use and energy efficiency, all of which are linked.
Enabling policies are important, although many of those policies fall within provincial jurisdiction. B.C.'s carbon tax and Ontario's and Nova Scotia's feed-in tariff programs create conditions that enable innovation, as communities themselves identify opportunities to generate clean energy and new revenues.
Finally, capacity building for municipal officials is critical to Canada getting the best value out of new investment dollars and to encouraging innovation that leads to lasting local benefits and exportable expertise and technologies, and attracts investment to Canada. Dollars can hire a consultant, but municipal staff members with the right knowledge are needed to lead change and capture opportunities in a community.
FCM's infrastructure report card released this past fall showed that a large number of communities had no data on the condition of many of their assets. Out of the 346 communities that responded to our survey, only 123 had data of sufficient quality for analysis. Even among these, there were many gaps—33% of those respondents had no information, for example, on the condition of their waste water treatment plants. It's hard to imagine implementing a waste heat recovery system on your treatment plant for possible sale of the heat into a district energy system if you don't even know what condition your plant is in.
This brings me to the federal role. The federal government has an important role to play in strengthening the foundations of energy innovation in Canada, starting at the municipal level. Current federal infrastructure programs have included a capacity-building component, which has historically been between 1% and 2% of the value of the program, if you look at national medians. As I mentioned, money is not enough. Enhancing the capacity of municipal decision-makers to make innovative investment decisions needs to be a priority.
FCM has the experience and a proven track record in delivering this type of capacity building and working in partnership with the federal government to do so, both in the context of the green municipal fund and the recent InfraGuide program. To capture the energy opportunities at the local level, we recommend the federal government take a partnership approach, building on the GMF model, to strengthen the capacity of the municipal sector to support energy innovation in Canada.
Thank you.