Evidence of meeting #101 for Natural Resources in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was agency.
A recording is available from Parliament.
Conservative
Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON
Okay. Can I have that answer to that question, and then I'll go back to the previous question, just because we're on a roll here?
Chief Economist, RS Energy Group
The National Energy Board has set up a portal where you can get linked to various websites, including CANSIM, industry organizations, and some provincial agencies, and go and dig around for data. It is still pretty cumbersome, and the data, as I say, are quite disparate. Different data providers use different definitions for the same thing. Some of the data are very granular. A lot of the data available from the Canadian data system, CANSIM, especially on the consumption side of things, are very lagged. They're very dated, and therefore, of less use when it comes to analysis, unless you're doing long-time series sorts of things.
Granted, Stats Canada has a mandate to provide data, and they do provide data, but from our perspective the data have inadequate coverage. There are lags and inconsistencies for some provinces. The consumption data for natural gas, for example, just make no sense at all when you look at it over a long period of time. You see weird swings in sectoral demands that are just not explainable by weather or anything else.
Your provocative notion of user pay for national statistics is an interesting idea. I would simply point out that, from an economist's perspective, if information isn't distributed equally on all sides of the debate, that's one of the ingredients for market failure. Where there's a disproportionate power because the distribution of information isn't equal, not everybody has access to it, which goes to Professor Gattinger's point that not everybody can afford the information.
As well, basic, good, accurate, reliable, and timely information about the energy ecology of Canada is a public good. Governments ought to be doing it because third party providers aren't. They will provide snippets and bits and pieces, and they do that now, but in our experience data purchasing from a third party tends to be very expensive because some of the data are pretty hard to collect.
Conservative
Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON
How many of the small players, if you will, are accessing these data? Many of the companies we're dealing with are larger and can afford to be into this. Could you give an example of a smaller company that might not be able to pitch in some money to keep this going?
I'll get back to the other question after.
Liberal
The Chair Liberal James Maloney
No, you're going to have to answer this question very quickly, and then we're out of time.
Conservative
Chief Economist, RS Energy Group
For example our company is pretty small. There are certain data points we'd like to be able to access, but we decided the price tag from the third party provider is too high.
Director, RS Energy Group
More importantly, you can't access it at perhaps some of these numbers, and at that point you restrict the innovation potential that young people, institutions, maybe not-for-profit institutions, could build an industry on. If it's just about information and collecting what we have, I think your notion may have some merit. If it's about trying to create a national resource that we can build on for our economy going forward, where the focus is on skilled, highly technical, intellectual capital, you need a resource to build on. You're restricting that or putting it in the hands of the private sector if you take this kind of move.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Thank you all for being here this morning, especially those in Alberta. I'm from British Columbia, so I know what it's like to have morning teleconferences with people in Ontario.
I want to start with Ms. Dwarkin.
If I caught you right, you said that one of your main recommendations was to provide the NEB with sufficient resources to be this portal, or this gatherer of energy data, that we're talking about. However, we hear from many witnesses, including Professor Gattinger, that trustworthiness is really at the core of this credible data. I've heard from a lot of people who wouldn't trust the NEB as far as they could throw it. By some groups, it's seen as a real cheerleader for industry. I wonder if that would be a real impediment to creating this thing.
If we're all about creating trust and credibility, is this a non-starter? Perhaps you could comment on that.
Chief Economist, RS Energy Group
Thank you for that question.
I'll put my personal view up front. I'm not in the camp that can't throw the NEB far.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
I imagine there are many that are in that camp.
Chief Economist, RS Energy Group
I do think that it's a very respectable entity that's done a lot of good work over the years. Perhaps the way to address that concern about perception of biases is that the way the NEB could go about building on the data that it already has amassed or is provided access to and perhaps set up a working group that includes some of the credulous parties, who don't think the NEB is unbiased, so that it's more of a joint effort from the different corners of the debate to identify the data that is useful and to continue that process.
As I've heard already this morning, setting up a whole new entity may not be in the cards because of expense reasons. The NEB already has mounds of data. They have already taken the first step towards something that could look like a national energy database. Maybe the next step involves conscripting folks to the cause that might not be in support of the cause unless they're inside the tent helping to forward the effort, as opposed to outside and shooting arrows into the tent.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
I'll turn to Ms. Gattinger.
Maybe you could follow up on that. Also, in regard to trust and credibility, you talked about the importance of having an agency that would do analysis, and modelling, and provide information to Canadians, as well as just raw data. I think that's where some of the concerns for people come in because, as anyone knows, you can massage statistics into a lot of different forms. I wondered if you could comment on that.
How important is it to have an agency that is independent, in terms of funding and in terms of direction, especially if it's an agency that is going to be doing analysis and modelling, and showing Canadians what the future may hold or what the past was all about? It's a big broad question, but maybe...with regard to whether we can use an agency we already have like the NEB or Statistics Canada, or whether a new agency would be worth that price tag.
Prof. Monica Gattinger
I think I would really draw on the work we've done over the last three years at Positive Energy. We've undertaken extensive research and engagement around how to strengthen public confidence in energy decision-making. This is an issue in this country that has been extremely challenging over the last number of years.
I would really point to something that's emerged time and again in our work, which is that public confidence in the substance of decisions—or in this case of information—is very fundamentally linked to the process by which it is developed. When it comes to thinking about organizational arrangements, I can well appreciate the desire to work with what we already have, but I think we need to look very closely at what some of the negatives or disadvantages would be of working with some of the organizations that we have.
For example, take a regulatory agency, whether it's the NEB or another regulatory agency at the federal or provincial level. These are organizations that, from the public's perspective, are predominantly about either approving or rejecting projects. If those organizations are also then responsible for creating energy information, does that then at some level put them into some sort of a conflict of interest?
If we want to have an agency that can do things proactively, for example, put out information around pipeline safety or put out information around tanker safety, if you're also the organization that is responsible for evaluating a proposed project that deals with those issues, will that be perceived as credible and independent by the public? Those are the sorts of things, I think, that I would hope the committee would look at very carefully.
I think the same thing would go, for example, with having an energy department as the node or focus for these efforts to the extent that an energy department has, as part of its mandate, the development of a particular industry sector. Again, from the perspective of the public, this could be also looked at as in some way tainting the capacity for that organization to be providing neutral, non-partisan, independent, balanced energy information.
What I would just end on here is, again, I recognize from a resource perspective the challenge of additional expenditures, but I would also invite the committee to think very seriously about what the costs are of not putting in place a system that is viewed as credible and independent by all parties when it comes to energy.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
With regard to that and Mr. Schmale's suggestion about a user-pay system, beyond excluding some groups that may not be able to afford that information, would you say that a user-pay system might favour those who can pay and, therefore, kind of direct the agency's analyses and modelling if they're being paid by the groups that can afford it, some of the bigger industry companies, for instance? Would that not taint the credibility and trust that the Canadian public would have in it?
Prof. Monica Gattinger
That would be difficult to say ex ante, and I think it would really come down to how it's structured from an organizational perspective. That said, as we well know—and we've seen this increasingly over the last years when it comes to the energy sector—reality and perception can be two very different things, and at the end of the day, perception can become reality.
So even if, in the organizational arrangements, those sorts of concerns are dealt with, if the perception is that it's not the case, that can become really the overriding concern.
Liberal
Nick Whalen Liberal St. John's East, NL
For those who have been with me on the committee on this topic, everyone knows that I like the idea of this piece of infrastructure. It is important industrial infrastructure and I think it pays for itself, so I buy into that line of reasoning. When we had the folks here from Nalcor Energy in Newfoundland, they demonstrated how making their data publicly available has really driven growth and foreign investment in the industry. We'd like to see that across spheres.
I want to drill down a little more on the level and type of independence that we are looking for. When I come to this committee, I wear my politics on my sleeve. When Mr. Genuis comes, he wears his. When academics or bureaucrats who are involved in running the organization come, they're not necessarily up front about their politics, but that's not to say they don't have them.
Ms. Gattinger, when you talked about NEB either approving or rejecting projects, in my mind that was already predetermining an issue and stating a political bias. NEB either rejects projects, or they say how, and they put hundreds of conditions on some projects. In Newfoundland and Labrador's case, it's the C-NLOPB. It's not a question of yes or no; it's a question of no or how. We want to make sure there is a path to “how”, because if there is no path to “how”, there is no industrial benefit ultimately from this.
I want quick perspectives from each of the three of you on the level of independence you are looking for, and the model of independence. Does it have to be independent of customers? Does it have to be independent of government entirely? Is it an agency of government that reports to Parliament? What level of independence are you looking for?
Maybe we'll start with the people from Calgary this time.
Chief Economist, RS Energy Group
Thank you.
From my perspective, data are ideologically neutral. Basic data on production, consumption, prices, imports, and exports don't have a particular ideological slant. Therefore, an entity that is simply collecting those primary data, which we do need, notwithstanding what's in the CANSIM database, is already independent. It's just collecting basic, primary data.
That's kind of where I sit on that topic.
Director, RS Energy Group
I would extend it. I think the notion is that it's independent, but I can understand why some might view the sources and compiler of that data as perhaps influencing in some way.
As a consumer, it's helpful to understand and have consistency of source. At the very least, if you believe in or if you imply some bias, even if it's not there, you're in a position to at least account for that, rather than a distributed network of sources with all their own idiosyncrasies and biases, which are real or perceived, being incumbent in that.
Prof. Monica Gattinger
Very briefly, I would add to that. Fundamentally, it's about credibility, and credibility then can be based upon ensuring that you have the engagement of all of the key “stakeholders” or rights holders, or those with an interest in the sector. It's not necessarily independent, in the sense of not bringing to the table particular perspectives and points of view, but credible in the sense of being viewed as balanced.
Liberal
Nick Whalen Liberal St. John's East, NL
My next question is whether we can build half a car. In the U.S., it's all paid for by Congress. They're throwing about $125 million a year into the EIA. It's a world-class institution. Do we have to go that far?
This is certainly a question for RS Energy Group, because you provide these types of data services. We had a previous witness say that maybe, in order of magnitude, somewhere between one-tenth and 10 times the amount.... It's not a great ballpark for policy-makers to determine, but how much do we need to be spending extra on data to get this project rolling and to sustain it long term?
Chief Economist, RS Energy Group
I think the answer to that requires some research with what's available and what is needed to get it into minimal shape, along the lineaments of what EIA provides in the basic data categories: production by energy type, consumption by energy type, storage—that's a big one that national data are very severely lacking.
To get from where we are.... As I say, I keep harking back to the NEB's portal, but it's one step toward this one-stop shop. What resources would be required to get that into...? What data are out there already? You don't have to make up new data or collect new data, but take the data that are there and put them in a consistent format. Get it on a publication schedule that's regular and known and timely. Scope out the cost of that kind of a project, and then it will be a case of having to increment along until we have the Canadian version of it.
There are things that the EIA does that we won't want to do in the end, perhaps. It does a lot of forecasting and has huge clanking models that do that. We probably don't need to go into that, but on the basic data service itself, we're only one step towards that. I'd say do some scoping on the business case to do the next step.