Natural Resources Committee on June 5th, 2018

[The Chair, Liberal, James Maloney]

Good morning, everybody, and welcome. Thank you for joining us today.

In our first hour, we have with us, appearing as an individual, Monica Gattinger, a professor from the University of Ottawa. By video conference, we have Judith Dwarkin and Ian Nieboer from RS Energy Group.

Thank you very much for joining us.

The process is that each group will be given up to 10 minutes to make a presentation, which you can do in either official language or both. You have equipment there for translation should you need it. You'll probably get questions in French and in English.

Ms. Gattinger, since you're here, why don't we start with you?

[Professor Monica Gattinger, Professor, Chair of Positive Energy, Director of Institute for Science, Society and Policy, University of Ottawa, As an Individual]

Thank you very much, Mr. Chair. It's an honour to appear before the committee this morning.

I'm going to give my presentation in English, but please feel free to ask me questions in French.

I am chair of an initiative at the University of Ottawa that is called “Positive Energy”, which some of you might be familiar with. It's a research and engagement initiative that uses the convening power of the university and solution-focused applied research to identify how to strengthen public confidence in energy decision-making.

My testimony this morning represents over three years of research and engagement, including research and engagement on the role of information in strengthening public confidence in energy decision-making. In particular, I want to note the contributions to my presentation today of a number of members of the Positive Energy research team: Rafael Aguirre, Dr. Marisa Beck, Professor Stephen Bird, Mike Cleland, Professor Bryson Robertson, and Professor Louis Simard.

I have four overarching messages for the committee today.

The first is that the status quo when it comes to energy information is woefully inadequate. The lack of robust and credible energy information creates a vacuum that is often utilized to spread misinformation or biased information.

My second message is that the focus of an energy information system needs to be on information, not solely on data. Data is essential, but transforming data into information that's both relevant and accessible is key.

My third message today is that information needs will grow exponentially in the coming years, notably as a result of Canada's transition to a lower-carbon energy system. Any information system needs to be designed with those long-term needs in mind.

Last but not least, when it comes to energy information, the credibility of the energy information system needs to be job one. Credibility of information is paramount. Independence is crucial.

The remainder of my testimony will respond to the committee's questions about benefits, users and needs, gaps, best practices, and recommendations when it comes to energy information. The four messages I've just shared with you will emerge from those comments.

First, when it comes to benefits, what is the overarching benefit of an energy information system?

An energy information system is essential to anchor evidence-based decision-making and public confidence in Canada's energy decision-making. How will Canadians trust energy decision-making if leaders don't know what they're talking about or don't know the limitations of the data and the information that they're talking about?

How can Canadians have rational discussions about energy projects if they don't trust the information upon which project approvals have been based? How will Canadians know how to contribute to energy transition if they don't have the appropriate information upon which to make personal choices? Also, how can Canada position itself in global energy markets if it doesn't have adequate performance metrics to tell its energy story?

All these questions are key.

In other words, information is pivotal to the ongoing development of Canada's energy system, energy resources, and energy projects, and the needs are only going to grow in the years ahead. Think energy transition. Think artificial intelligence and things like automated vehicles and smart homes. Think distributed energy systems, where people aren't just consumers but also producers of energy. All of these processes need to be informed by information.

The committee also asked about users and their needs when it comes to energy information. We can think about both traditional users and new users when it comes to energy information.

Traditional users are fourfold: policy-makers, who need information to inform decisions now and into the future; regulators, who also need information in order to make decisions; industry, which needs information to inform decisions with respect to investment, divestment, new market opportunities, and the like; and academia. Academics can be an independent voice in energy decision-making, but they need access to data and information to drive knowledge generation.

There are also new users when it comes to energy information, and we've been spending a lot of our time at Positive Energy focused on these new users. The first are individuals, both as consumers and as citizens. People are becoming far more engaged in their energy lives and they want energy information. We've undertaken public opinion research and our most recent survey results find that more than eight out of 10 Canadians support, or somewhat support, the creation of an agency to provide independent, diverse, and accessible information, related to energy, to those making decisions about energy in Canada.

The second group of new users are municipalities, indigenous communities, and non-governmental organizations, all of whom are increasingly engaged in energy decision-making, as we've been seeing over the last number of years.

What do users need? Users need clear, accessible, timely, relevant, and credible information.

The committee also asked about gaps in energy information. The gaps are numerous. In my opinion, it's an embarrassment that researchers like me go to the United States Energy Information Administration for energy information about Canada. There are multiple gaps in the system. I'll mention a few of them here today.

There are gaps in transforming data into information. There are mountains of data in various organizations that aren't being transformed into information. There are gaps in coordination and harmonization of data. Different definitions are being deployed in different organizations. There are gaps in flexibility in the ability for organizations to be more proactive when it comes to holding public meetings or taking initiative to conduct particular studies on energy information.

There are gaps in accessibility. Presenting information in accessible ways on user-friendly platforms is extremely important. There are gaps in understanding, when it comes to new and emerging energy business models and decision-making approaches in Canada. Finally, there are gaps in credibility. Where does information come from that's viewed as credible, by various parties?

The committee also asked about best practices. I would draw the committee's attention, if it's not already aware, to the United Nations Statistical Commission's international recommendations on energy statistics, which put forward a number of best practices and principles when it comes to energy information: relevance and completeness, timeliness and punctuality, accuracy and reliability, coherence and comparability, accessibility and clarity, and political independence.

Finally, the committee asked for recommendations to the Government of Canada. I would like to come back to the four main messages that I began this presentation with.

As I noted, the first is that the status quo is woefully inadequate. Building an energy information system in Canada is not a greenfield operation, but it does require substantial additional attention. The current system, such as it is, does have a lot of expertise, but it's distributed across multiple agencies. Any reform should aim to maintain and leverage existing expertise and tailor Canada's system to the country's local circumstances.

The second is that information needs will grow exponentially in the coming years. Any reforms to Canada's energy information system need to be designed with long-term needs in mind.

Third, the focus needs to be on information, not just on data. Data is essential, but transforming data into information that's both relevant and accessible is crucial.

Finally, the credibility of the energy information system needs to be job one. In Canada, as elsewhere, there are lower levels of public trust in government, industry, expertise, and the like. People look closely at organizational mandates, leadership, and decision-making processes and form their judgments about the credibility of information from there. Funding to energy information systems needs to be consistent and the long term, and beyond short-term political imperatives.

My final note would be to say that energy information might not be the sexiest of energy policy issues, but it is absolutely essential as we move forward in Canada on energy.

Thank you.

[The Chair, Liberal, James Maloney]

Thanks very much.

It's your turn.

[Judith Dwarkin, Chief Economist, RS Energy Group]

Good morning. Thank you for inviting us to address you.

My comments today are organized in response to the five questions posed by the committee. As will quickly become apparent, I will be speaking to you from the perspective of someone who is daily battling in the trenches with the data, attempting to squeeze out analytical insights and usable information.

My colleague, Ian Nieboer, will follow with some advice to you on some more aspirational goals with respect to establishing a national energy data bank for Canada.

What are the benefits of national energy data? Obviously, good decisions are built on good data, be this in the public or the private realm. Good data are accurate, timely, consistent, and comprehensive, and they come in a user-friendly format. A lack of data, or unreliable data, undermines good analysis and understanding and, therefore, good decision-making. It also impedes informed debate.

Who uses national energy data, and are their needs being met? Analysts in the public and private sectors use energy data to research energy supply, demand, logistics, price, market behaviour, and environmental issues. Decision-makers rely on this research, or at least they ought to, to make good policy and commercial choices. Canadian citizens use these data to try to gain understanding about issues in and about the energy sector.

In our view, Canada at present lacks a comprehensive, consistent, timely, and easily accessible source of national energy data. The default entails seeking out multiple, often conflicting, incompatible, incomplete data from other entities, including provincial agencies, industry organizations, and commercial data providers.

You asked if there are gaps in the national energy data that are currently available. From our perspective, there are gaps in what's currently available, and the vision has been already put to you for a Canadian energy information agency. These gaps relate to the data coverage, it's timeliness and frequency of reporting, the degree of granularity in the data, serious continuity, consistency in definitions across databases, and ease of access and use.

What are our recommendations with regard to best practices for managing, acquiring, and sharing energy data? We would reiterate the recommendation made to you by the expert panel a year ago: that a new Canadian energy information agency be created. The U.S. Energy Information Administration is the obvious model to follow in this particular effort. This agency is regarded as an authoritative, non-partisan, and trustworthy source of data, in part because it's been doing it for a long time, but also because it's relatively transparent about how it collects and compiles the data it publishes. It also is fairly quick to supplement the information it provides in response to emerging issues in the sector.

The NEB's initiative, Canadian energy data links, is a step in the right direction toward a one-stop shop for basic national energy data, but much more needs to be done in terms of collecting, curating, and collating Canadian energy data and disseminating them in a consistent and accessible format.

Our fundamental recommendation to you is to provide the National Energy Board with the resources it needs to develop the Canadian energy data links portal into the Canadian version of the U.S. EIA data service. This effort should include canvassing data users in the public and private domains for their specific data requirements in terms of coverage, frequency, and formatting.

Some consultation with the EIA itself would be essential in planning Canada's energy data system, which would benefit from this agency's experience, and it would start the Canadian version off on a solid footing.

Lastly, since using both Canadian and U.S. data sources together is often beneficial, making Canada's system as compatible as possible with the U.S. version would be a worthwhile goal.

[Ian Nieboer, Director, RS Energy Group]

I will continue. I think this discussion is rightly focused on the benefits and value that an information agency in Canada could provide and how we might get there. Judith and the other presenters have talked, I think, a great deal about the immediate shortcomings of Canadian data, and I would like to focus on imagining the future and the possibilities that such an agency could deliver on.

The first tenet, and I think grounding for this presentation, is that an aspiration of the Canadian energy information agency should be to lay the foundation for an energy-focused big data industry. That means building on the five dimensions of big data.

First is volume. How can we collect more types of data with longer histories?

Second is velocity. How can we collect it more frequently? How current is it? Is it from this month, this week, or today? Once it's collected, how can we make it easier and faster to access?

Third is variety. How do we find additional sources and types of data, and how do we make them available?

Fourth is veracity. Is it accurate and complete? Is it presented consistently?

By answering these questions, we get to the heart of the matter: the value that this data can provide and what is really the impact on the broader industry and our economy.

With respect to value, allow me to speak from the narrow perspective of our firm, RS Energy Group. We are a Calgary-based intelligence firm, and we serve many of the largest asset owners, financial institutions, and investors in the energy industry. Our business is built on providing insight and analysis to our clients that is based on a quantitative assessment of the industry. This means exploiting big datasets with the tools of data science and under the guidance of subject matter experts from geology, engineering, finance, and economics.

This type of work supports asset owners such as exploration and production companies and pipeline operators to make better business decisions about where to invest and how to position their companies. As a result, our domestic asset owners become more competitive amongst their global peers. This promotes employment and supports the sustainability of these businesses, many of whom are national champions on the global stage.

For our global investor clients, this work gives them greater transparency into the risks and opportunities associated with the investments they are making. This transparency reduces the cost of capital associated with Canadian opportunities and enhances the competitiveness of our assets.

To achieve these goals, we and our competitors rely on public and proprietary data sources. Those jurisdictions with greater endowments of data offer additional opportunities, while those with more poorly developed data resources are comparatively disadvantaged.

Over the last few years, we have seen a move to greater availability and quality of data in many jurisdictions including the U.K., Mexico, and Brazil. These countries compete directly with Canada for capital and in the energy landscape. Data is a national resource that is no different from our natural resources like energy, water, minerals, metals, or timber. If developed appropriately, it has the potential to yield enormous value for all Canadians. Our natural resource endowment provides leverage to the value of this data. Allow me to explain.

A small increase in understanding may result in a small change in the value of a barrel of oil or a thousand cubic feet of gas. However, this benefit is amplified by our country's vast natural resource base. Even a few cents of value per unit multiplied by the billions of barrels or billions of cubic feet of gas resource we possess could result in hundreds of millions of dollars of incremental value for all Canadians. This provides an incentive for businesses like ours to pursue new opportunities. It enables us to hire and retain skilled labour like computer and data scientists. It allows us to advance the tools of the new age—big data, artificial intelligence, and predictive analytics—which we in turn export to the world.

In addition, we have an existing endowment of data in this country. Provinces like Alberta have been collecting and making data available publicly for decades. However, differences between provinces' agencies suggest that a national agency is required to harness the potential value of this data resource. Such a move would begin to address the immediate shortcomings that Judith has described, uninformed debate, inferior decision-making, inefficient and costly data aggregation, data gaps and lags, etc. Think of this as basic infrastructure that smooths the flow of everything from commerce to social discourse.

Longer term, a national agency committed to delivering Canadian energy-focused big data and volume with velocity, and variety, and with veracity, offers additional value. Our national champions become more competitive. Our energy assets gain access to additional capital. We foster intellectual capacity in disciplines like computer and data science, and we allow new businesses and champions like ours to emerge.

Thank you.

[The Chair, Liberal, James Maloney]

Thank you.

I neglected to say thank you at the beginning too. I realize you're in Calgary so we appreciate your getting up so early to join us.

[Ian Nieboer]

No worries.

[The Chair, Liberal, James Maloney]

Mr. Serré, you're going to start us off.

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you, Mr. Chair.

I'd like to thank the witnesses for their preparation for this meeting and their time today.

Of course, we are proud of Canada's energy system. Internationally, Canada is a leader; we are among the top energy producers and consumers in the world.

As two of today's witnesses also mentioned, Canada needs more data. I don't think we've had a witness who hasn't said that. We are talking about data that go back 50 years, not two and a half years. We've heard a lot about the need to establish an independent system, as the U.S. has. Politically, however, that's hard to put in place because it's so expensive. Setting up a national energy centre would be hard on a political level, given that certain parties don't want to invest in something like that.

If we stay in the realm of a more independent system, is there another model we could adopt?

On both sides, people seem to be rather inflexible in their ideology. There is no moving. Be that as it may, we don't have enough data.

If we don't create a national research centre, what can we do in the short term to create a better system and enrich our capacity, possibly in conjunction with Statistics Canada, the National Energy Board, Natural Resources Canada, and other organizations?

[Prof. Monica Gattinger]

Thank you for the question.

You raise a fundamentally important point. Something you didn't mention, but was implied in the question, was federalism. Under the Canadian Constitution, most energy-related issues are in the provincial domain. A number of organizations, even at the provincial level, have data. The Bureau d'audiences publiques sur l'environnement and the Alberta Energy Regulator come to mind, for instance. Building a strictly national system would therefore be challenging in a country like Canada.

That said, it would be possible to set up some sort of pan-Canadian initiative. Although a somewhat different approach, it is one that I think could leverage all existing data in the country. There could be a one-stop shop, or single window, if you will, where Canadians and the full spectrum of stakeholders could turn to access the data. Currently, that information is really difficult to find, and even when the data exist, they are so spread out federally and provincially that experts, themselves, have a hard time finding them.

In Canada, improvements could be made as far as coordination and co-operation are concerned. A pan-Canadian model is another possible approach.

[Marc Serré, Liberal, Nickel Belt, ON]

RS Energy Group also indicated a national energy centre. As I indicated earlier, politically it might be difficult because there are millions of dollars to be spent to have the buy-in of all the local parties to do this. If we're not going to do a national energy centre what can we do to enhance NRCan, Statistics Canada, and provincial relationships to get better data today because obviously right now Canadians are evenly split on both sides of the debate. There's an issue; both sides say there's no credible data.

What can we do to enhance the institutions that we currently have without spending millions to establish an EIA-type U.S. system here in Canada?

[Judith Dwarkin]

I will follow on what Professor Gattinger was saying. There are reams of data available now, but they're a completely mixed bag across the provinces and at the federal level. In the first instance, the National Energy Board has already taken steps towards establishing a portal, an online portal, where people can go to access primary data on a variety of energy-related things. However, it's incomplete, and it is not particularly user-friendly because the user gets directed to third party websites and then has to grapple with the various issues pertaining to that particular entity's data, such as the use of different definitions.

I think that in the first instance the committee should accept that additional resources are needed to take it from the step that has been established already at the National Energy Board—which is a pan-Canadian entity, in my view—to supplement their resources so that they can carry on the good work that they've already started.

At the end of the day, we might not have a bright and shiny thing that's quite as glamorous as the EIA's framework, which, as I say, they've been doing for a long time and with vastly more resources. I think that if additional resources could be provided to an entity like the National Energy Board, which can also.... Some of their links currently go to the CANSIM database, but from my perspective, that database entails a really terrible hunting and pecking operation, which I think is not at all a good use of anybody's time.

It's not that there aren't data there. It's that they need to be curated, collected, and then disseminated in a very consistent way so that anybody who wants to use the data can use the data.

[Marc Serré, Liberal, Nickel Belt, ON]

You can go ahead, Mr. Nieboer. I have 30 seconds left.

[Ian Nieboer]

Very quickly, I have two things.

I think that agencies within our own government organizations are grappling with the same issues that we as practitioners are facing. There is a drag on resources that exists today because of the inefficiencies in that system.

Secondly, like any other natural resource, if we aren't collecting this, if we aren't aggregating it, we are missing out on an opportunity that any other resource-rich country is trying to capture.

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you.

Ms. Gattinger, you said it was important to engage indigenous groups in the process. I'm out of time, but if you have any information or recommendations on that specifically, could you kindly share it with the committee?

[Prof. Monica Gattinger]

Now?

[Marc Serré, Liberal, Nickel Belt, ON]

No, afterwards.

[The Chair, Liberal, James Maloney]

We're going to have to do that in writing because we're going to have to move on.

Mr. Schmale.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Thank you very much, Mr. Chair.

Thank you, witnesses, for being here today. It's been a great conversation. I think we do agree that there is a lot of data out there. How we collect and then translate that information is something that we are trying to figure out.

We just spoke about different options and different recommendations, picking up on what Marc was talking about, on how we can utilize current assets and current agencies rather than creating an entire new agency to do this. We know that taxpayers are being asked to evermore contribute more to government, and we don't need to continue to grow this government, so that's where I am looking at this on how to go. Stats Canada has a mandate to collect this information and publish it on all sorts of sectors.

How about a different idea, and I open the floor to this. What if we created a user-pay system where those users who want the information can pay into it? We can have that central system that you mentioned, but it is paid for not by taxpayers, but by the people who actually want and need the information.

[Prof. Monica Gattinger]

That's a very interesting perspective.

Certainly, that would be something worth exploring, but I would raise a few cautions with respect to that. To the extent that we're looking at increasingly new users who would be then required to pay, if those users are indigenous communities, local municipalities, or individual Canadians, that raises some very fundamental considerations, I think, around equity and accessibility. The research that we've been undertaking at Positive Energy really underscores that information is necessary. It is a necessary but insufficient condition when it comes to strengthening public confidence in energy decision-making. It really is a fundamental need in our decision-making systems.

I can well appreciate that there are some concerns around further expenditures of government resources. That said, I would invite the committee to consider the costs of not investing in additional resources when it comes to energy information. In this country, we have, as we well know, increasing levels of polarization around energy issues. In many instances, they are driven by misinformation, biased information, or lack of credible information. I would invite the committee to think about what the lack of a credible information system is actually costing the country, to perhaps think about the amount of resources that would be required to strengthen that system with whatever model is being utilized to advance with, and to look at that as an investment as opposed to an expenditure.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Stats Canada makes information right now, as you pointed out. It's general. It's free. It's out there. If businesses are using this information to make decisions, I would also argue should they not be required to pay something into it, other than through their normal taxes?

[Prof. Monica Gattinger]

I suppose, again, that could be worth exploring. I think it probably merits mentioning as well that for some StatsCan data there already are user-pay arrangements. Certainly industry is already paying indirectly by the provision of much of the information that Stats Canada is utilizing, so again, any additional requirements that businesses need to put into play in an additional reinforcing of that system, should be taken into consideration when it comes to what the costs are for businesses as well. I think it should be done with consideration for equity and access and the costs of doing business.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

I think it was mentioned already just a little while ago. I can't remember who said it, so I apologize. They said a database within the NEB has that information. If I misheard please correct me.

[Judith Dwarkin]

I made that claim.

[The Chair, Liberal, James Maloney]

Mr. Schmale, I don't want to interrupt you, but I think that witness would have had an answer to the previous question.