Evidence of meeting #65 for Natural Resources in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was technology.
A recording is available from Parliament.
February 7th, 2013 / 4:50 p.m.
Conservative
The Chair Conservative Leon Benoit
Ms. Liu, this has nothing to do with the business of this committee. You're talking about some political work I have done—work of which I'm proud, by the way; I in no way tried to distance myself from that.
Please stick to the agenda of the meeting today.
NDP
Laurin Liu NDP Rivière-des-Mille-Îles, QC
Thank you. The point is noted. I will think about how I want to follow up on your actions.
I will move on to questions for the witnesses.
My question is for Mr. Bettencourt.
In your presentation, you mentioned several recommendations that you made to the federal government about regulation and taxation. You said that you wanted to transfer a portion of the costs from the ratepayers to the taxpayers. Do you have any other recommendations you would like to elaborate on?
Managing Director, SmartGrid Canada
Sure.
The point we were trying to make was with regard to a lot of the things our utilities are being asked for in Canada, and it's true around the world: we're trying to accomplish environmental goals—not so much in Canada—but national security goals, economic goals, job growth goals. These are things that utilities didn't do before. Utilities really just tried to make power as cheaply as possible and deliver it reliably.
Because of the technology that's available, utilities now do have the opportunity to be the best agents to deliver on environmental goals, economic job growth goals, reliability goals. However, when they go to their regulators—all utilities need to go to regulators to ask before they spend the money—they need to do it using a business case.
For us to enhance the grid in order to get more renewable energy, or to enhance the grid to improve the reliability so that fewer people experience the costs associated with outages, it increases the cost of the grid and it increases the amount of money that ratepayers need to pay for it.
The point we're really trying to make is this: are there opportunities where we can transfer the responsibility, the costs, away from the ratepayers and onto the taxpayers? One of our ideas, an idea that's been used in other countries, is that when utilities—which are crown corporations themselves, so all this money stays in the system—make investments in the smart grid that improve reliability and help the integration of renewables, they be allowed to depreciate those assets over a shorter period of time, which helps them make their business cases to their regulators.
NDP
Laurin Liu NDP Rivière-des-Mille-Îles, QC
Thank you.
We have heard a lot of comments from witnesses about the tax credit for scientific research and experimental development. What do you think about these criteria and the impact they may have on your sector?
Managing Director, SmartGrid Canada
One of our members, Hydro One, finished up the first release of their smart grid project. They did apply for the SR and ED tax credit, and they received funding from the SR and ED tax credit—which we didn't expect, so thank you to the federal government for providing that funding, because it was an unexpected help to our business case. I imagine that utilities across the country....
Now, a very small proportion of the project qualified for the SR and ED tax credit, but the credit is something that some utilities in Canada have successfully applied for.
Conservative
The Chair Conservative Leon Benoit
Thank you.
We now go to Mr. Trost, then Mr. Gravelle, then Mr. Armstrong.
Mr. Trost, go ahead for up to five minutes, please.
Conservative
Bradley Trost Conservative Saskatoon—Humboldt, SK
A few years ago I was on a bit of a field trip—I think it was in the Sarnia area—and there was a really intelligent inventor who had worked out a system to create a turbine taking off the heat from the heat towers and the heat distribution. It was a great idea. You could see where he was going. It would massively increase efficiency, etc. But like a fair number of my engineering physics classmates over the years, he wasn't exactly—how should we put this?—the best communicator or the most knowledgeable about how to get to business. So I'm throwing out this question to some of the people here representing industry groups. You often represent technologies that have made it this far, which is good, and people who have good business plans and so forth, but what have you done, and what can the government do to help people who have these really good ideas and bring them up in areas like geothermal, smart grid, and others?
I'm sure even though you work with good technologies, you're always seeing new and innovative ideas. What do we need to do to bring those innovative ideas along for those people who have talent but maybe don't have the necessary skills to get them all the way?
Managing Director, SmartGrid Canada
What I've seen work, especially for the new technologies, is that—and it's largely been provincial governments that I've seen do the work, one good example of which is the MaRS facility in Toronto. MaRS is an institute funded by the Ontario government that takes new medical technologies, clean technologies, and other sciences, when it's really just a mentor and his idea, and they professionalize him. They give him lawyers, they give him accountants, they coach him on how to make presentations, and they get him to a stage where the idea is bolstered by all the other support services.
I've seen those models work in Ontario and British Columbia, and my best suggestion would be to try to have more of these institutes across the country.
Conservative
Vice-President, Policy and Sustainability, TransAlta Corporation
Yes, I do. I want to use as an example something that's happening in Alberta, which I think gets at exactly your question. The Alberta government in 2007 established what they call the Alberta technology fund, which is a fund created by contributions from Alberta industry to offset carbon emissions in the province.
That fund accumulates somewhere in the order of $80 million a year. The objective of the fund is to support emerging clean technologies of all forms that are low carbon in nature. We believe that would be a great model to look at on a broader basis, should there be some value or price put on carbon in other jurisdictions. That technology fund concept is actually highly functional and operational, and to date it has funded over $200 million of investments in new technologies, which are leveraged by industry contributions as well.
Representative, Chief Executive Officer, Borealis GeoPower Inc., Canadian Geothermal Energy Association
As I think I probably agree with everything Ms. Kenny's going to say, I'll defer my time to her.
President and Chief Executive Officer, Canadian Energy Pipeline Association
Well, thank you. I really just wanted to build on what Mr. Wharton was saying. I happen to be on the board of Climate Change Emissions Management Corporation, and Don's absolutely right that the level of investment from essentially the carbon-pricing mechanism and that tech fund has been well distributed through a very thorough practice. But I just want to boost his number by saying that the over $200 million invested is actually being leveraged up with in-kind contributions to over a billion dollars of technology projects being in play today.
That goes to the heart of Mr. Trost's question about what more can be done. I also think that tech fund example that Don pointed to was very specific—
Conservative
Bradley Trost Conservative Saskatoon—Humboldt, SK
My question was how we connect the nerd with the project to applying it, not necessarily how we spend. I'll take my final question—
President and Chief Executive Officer, Canadian Energy Pipeline Association
I was just going to get there actually—
Conservative
Bradley Trost Conservative Saskatoon—Humboldt, SK
I have only 30 seconds here.
My final question is about the role that human resources play as far as what we're doing goes. Mr. Bettencourt got to it: how do we develop the human resources, the engineers, the scientists who can tie in with the business to move forward new ideas?
Conservative
Bradley Trost Conservative Saskatoon—Humboldt, SK
Ms. Kenny or Mr. Thompson, since they didn't answer.
President and Chief Executive Officer, Canadian Energy Pipeline Association
I'll make one point.
President and Chief Executive Officer, Canadian Energy Pipeline Association
I will just give a very quick finishing to the other point, because it goes right to the heart of this. Through those kinds of mechanisms you can seek tailored, big-splash adventures that invite people to come forward with cool ideas and ways to vet, support and grow those ideas.
Representative, Chief Executive Officer, Borealis GeoPower Inc., Canadian Geothermal Energy Association
Parallel to that point by Ms. Kenny, I've been through the CCEMC and SDTC processes myself. I think what you'll find, and I find particularly valuable, is the partnering processes that are part of the admissions intake. They require you to marry up good ideas with good people across a set of disciplines so that you come as a stronger whole, if you will. I think those elements of managing the human capital that are a part of the intake process are extremely valuable.