Natural Resources Committee on Feb. 14th, 2013

[The Chair, Conservative, Leon Benoit]

You are out of time, Mr. Trost.

We go now to Mr. Julian of the official opposition, for up to seven minutes.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you very much, Mr. Chair.

I want to thank all the witnesses. Your statements were very informative.

Mr. Bradley, I'd like to start with you.

Yesterday, in Sydney, Nova Scotia, your president said that it would take $350 billion, if I'm not mistaken, over the next 20 years to renew existing infrastructure. That's a huge amount, but it lines up with other figures we have seen when it comes to other aspects, such as physical infrastructure.

What kind of a renewal are we talking about? When you get into a smart grid and all the high-tech advancements that entails, especially with respect to renewable energy, how much has to be invested over the next 20 or 30 years?

[Francis Bradley]

Thank you for your question.

You are correct. For a while now, ever since the Conference Board of Canada report, the amount needed to cover the next 20 years has been pegged at $350 billion.

While that may sound like a large number, I have just a couple of comments. We're essentially talking about, and I alluded to this in my opening comments, a system that was built a generation ago.

If you think of the Canadian economy as a house and think of the electricity system as the roof, we built that roof 40 years ago. We got a mortgage on it and we built it. We're saying that it's now time to put a new roof on the house, and let's do it before it starts leaking. Also, that roof is going to cost more today than the roof we bought 40 years ago did, just as anything we bought 40 years ago was a lot less expensive than it is today. The $350 billion that we're looking at is in real dollars.

The other thing is, and I want to emphasize this, this was based on a study done by the Conference Board of Canada that was talking about business as usual. As I've said to a couple of your colleagues in the past, one thing we do know about the future is that it will not be business as usual.

Personally, I would expect that the dollar figure will probably be more than that when we look at the new technologies we'll be moving towards in the future with a smarter grid, with the electrification of transportation, and so on. We don't even know what the future's going to look like 10 years from now much less 40 years from now, but we do know that from 40 years ago to today we've built a system that now needs that reinvestment.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

So the $350 billion over the next 20 years is to renovate the existing system and repair the roof, but when we talk about national grid and smart grids, the cost could be higher than that. Am I correct?

[Francis Bradley]

Yes, it's distinctly possible.

As I said, the work done by the Conference Board was for a business as usual case, for sure.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

What would be your expectations from the federal government over the next couple of decades?

[Francis Bradley]

In terms of our expectations from the federal government, it often comes down to ensuring that the conditions for investment are in place.

We've often made suggestions with respect to capital cost allowance and tax treatment of assets. We continue at times to run into issues with respect to getting plants approved and plans approved on a go-forward basis.

There's clearly a role for the federal government to play in terms of assisting and funding on the innovation side through things like Sustainable Development Technology Canada.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Okay, thank you very much.

I would like to go to our friends from Surrey, Mr. Hayne, Mr. Lalonde, and Mr. Costanzo. It's good to have you with us.

I'm on the other side of the Fraser in Burnaby—New Westminster. I'm very interested in the rethink waste collection program you have put into place.

You compared quarter four in 2011 with quarter four in 2012, but actually, on a month-to-month basis, I'm sure you've seen an even larger increase in the waste diversion. Do you have figures you could share with us for November and December, 2012, and for January 2013?

[Robert Costanzo]

Off the top of my head, that is the average for the three months; that's correct. For the month of October we were approximately at 68% diversion. For the month of November we were at 74.5% diversion. Then in December, we dropped back to 68.2% diversion, in and around there. The basis for the drop in December is that generally we produce much less yard waste in the month of December.

For example, let's look at December and January last year. Typically we generate approximately 500 tonnes of yard waste each year in those months, because yard waste of course is very low during that time of the year; on average it's typically around 2,500 tonnes per month during the summer and the spring season. But in December our organic waste, which was mostly food waste, was at 2,300 tonnes, and it was at 2,500 tonnes in January. So that organic cart, which contains both the yard waste and organic waste is generally very high. We think the organic waste rate will be sustained throughout the year, because that was material that was previously discarded with the garbage waste and now it's going exclusively into the organics waste cart.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you very much.

I'd also be interested in the capital costs of setting up the program. It's not in your figures and you may not have them handy, but if you could provide them to the committee, I think that would be extremely interesting.

You have a whole bunch of neighbouring municipalities in the Lower Mainland that are also doing good things, such as the City of Burnaby, the City of New Westminster, and a number of others. I'm wondering what role the federal government can play in bringing together neighbouring municipalities that have these innovative programs, so that innovation stretches across entire regions. Do you see a role for the federal government?

[The Chair, Conservative, Leon Benoit]

I'll ask you to give a short answer, please, quickly.

[Vincent Lalonde]

I think it's a continuation of programs, such as supporting our application for the P3 Canada funding. Our plant will be sized for about double our needs, so we can take in organic waste from adjoining municipalities in the ICI sector. Again, I think those kinds of program allow the city to build an optimally sized plant for the region.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Julian.

Mr. Hsu, you have up to seven minutes. Please go ahead.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Thank you, Mr. Chair.

Actually I'd like to take some of my time, as a courtesy to the committee, to read out a motion I tabled today, that pursuant to Standing Order 108(2)—

[The Chair, Conservative, Leon Benoit]

Mr. Hsu, if you just tabled the motion today, we can't discuss it.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

We're not going to discuss it. I'm just going to read it out as a courtesy. I'm giving up my time to do it.

[The Chair, Conservative, Leon Benoit]

Go ahead; it's your time.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Thanks. Perhaps I could have my time back for that.

I think it will be of interest to the committee, and I think you'll actually support it:

That, pursuant to Standing Order 108(2), given the concerns raised in the 2012 Fall Report of the Commissioner of the Environment and Sustainable Development, the Committee further study the issues raised in Chapter 1; that the respective Chairs and officials of the two Atlantic offshore petroleum boards (Canada-Nova Scotia Offshore Petroleum Board and Canada-Newfoundland and Labrador Offshore Petroleum Board) be invited to appear before the Committee; and that the Committee report its findings to the House by June 2013.

I know we're not going to discuss that today, but I just wanted to let the committee know as a courtesy.

My first question is for Mr. Bradley.

The reason the price of electricity varies throughout the day is to encourage customers to respond accordingly. What technological innovations influence customers' behaviour, so they use the tool to improve their consumption?

[Francis Bradley]

Thank you for your question.

Yes, we're just starting to get a sense of what the impact is of time-of-use pricing. This is really very new in terms of how customers are going to respond to begin with, in terms of what kind of price differential is required to actually effect change.

There are two sides to it. One is the behavioural, just based upon pricing, and that's something people are trying to get a sense of. The other side of it is the technology side, what kind of tools can be put into the hands of customers and what kind of tools can be put in the hands of companies to be able to affect the load within the households.

We are seeing some interesting things taking place. I mentioned the Atlantic shift project that had nothing to do with time-of-use pricing and everything to do with wind. What in fact it deals with, though, is the ability to control demand and to shape demand. You can shape demand centrally with respect to wind, but you can also shape it, using the same sorts of tools, to match time-of-use pricing.

At the same time, we see a lot of people outside of our industry, in the IT community, in the IP space, who are looking at developing what they call the “Internet of things”, the web 3.0, so that your fridge and your other appliances will be addressable by IP. Well, when those sorts of innovations actually come into play, the end customer will have even more tools to be able to shape their use of electricity.

The innovation in some cases will come from within the industry. In some cases it will come from the Googles of the world. It will be interesting, though, to see how that plays out.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Okay.

My other question is also kind of open-ended. It's about what kind of skills training needs to occur when the electricity distribution system changes. If you have a smart grid, if you have distributed generation, presumably some retraining needs to be done for people who work with the local distribution companies, for example.

I also understand that there will be a big gap in the electrical power industry as people retire over the next 10 years, that there will be a lack—or a potential lack, because of course we could do something about it now—of workers.

Would you like to make some comments about that?

[Francis Bradley]

Absolutely.

It's been a principal preoccupation of the Electricity Association for seven or eight years; that's when we began doing some significant studies on this. With the assistance of the federal government, we established the human resources sector council for electricity a number of years ago.

The changes are not insignificant, and they're coming from two sides.

On one side there's the issue that you referenced, which is an aging workforce where a significant number of our key people are going to be retiring. Already that's taking place. We're seeing a generational change. So there is a gap, which generally companies are dealing with at this stage.

The other side of it is that the skill sets are absolutely going to change. We're already seeing that today. In jurisdictions where you have smart meters, you don't have meter readers anymore, but you will always have, for example, power-line technicians. Certain traditional areas of utility operations will remain, and remain unchanged.

But yes, with the increase of technology and the smart grid—I think I've mentioned this previously to the committee—we're concerned that 10 years from now, when we'll want the best and the brightest on the IT side.....

Today we compete with other people who are trying to build infrastructure. As we move into smart grid, we'll be competing with the Ciscos and the Googles of the world for the best and the brightest, because so much of our operations will be in the smart electron business and not the old world of the dumb electron business.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Thank you.

I have a question for you, Mr. Simpson, but let me preface it by thanking Union Gas for helping the City of Kingston, in my riding, a number of years ago with collecting data on natural gas use for the city's greenhouse gas inventory project. I want to thank Union Gas for being a great corporate citizen in helping out with that.

You talked about your demand side management work and how residential improvements, because of building codes and standards, have resulted in a decrease in use of natural gas. I'm wondering about retrofitting older buildings and whether you would say there's a lot more work to be done, or a lot of progress that you can make, in your demand side management for getting your customers to retrofit their older buildings.

[The Chair, Conservative, Leon Benoit]

Unfortunately, Mr. Hsu, you're out of time.

If you want, Mr. Simpson, you can give a very short answer.

[David Simpson]

I certainly can, and I will keep it brief.

With regard to our program that we have approved with the Ontario Energy Board, we are now in year two of a three-year program. We've been doing this since 1997. Elements of our program touch every component of the makeup of our distribution system in Ontario. We have programs for low-income households, for commercial applications, and programs for industrial applications. I do think that whatever comes our way would fit within the umbrella of those applications, but it perhaps does lead to the point you're making. I do think many opportunities lie ahead in specialized niche areas, in terms of improvements of building structures like you've mentioned.

I think they're all covered, but it is a continuation of the program and working together that will yield the results.

[The Chair, Conservative, Leon Benoit]

Thank you.

We'll go to the five-minute round now.

We'll start with Mr. Allen, for up to five minutes.

Go ahead, please.