Thank you very much.
Again, my apologies on getting here a bit late. Our flight was cancelled and we got on the next possible one. It worked out well.
My name is Corey Diamond. I'm the executive director of Efficiency Canada. This is my colleague Brendan Haley, our policy director.
Efficiency Canada is the national voice for an energy-efficient economy. We advocate to make our country a global leader in energy efficiency. We convene people from across Canada's economy to work together to advance policies to take full advantage of energy efficiency. We also communicate research to build a more productive economy, sustainable environment and socially just Canada.
We are an operating unit of the Carleton Sustainable Energy Research Centre, which is a cross-disciplinary initiative between the School of Public Policy and Administration and the Faculty of Engineering and Design.
We were established in May of this year under the recognition that strong energy efficiency policies could have significant benefit to Canadians. Treating energy efficiency as the “first fuel” can show that this resource is one of Canada's most plentiful energy resources, helping to drive significant employment and GDP growth and making us more competitive on a global scale. It can also help us reduce our carbon emissions.
When we launched our organization, we came out with a report called “Economic Impacts of Improved Energy Efficiency in Canada”. I'll focus on a summary of that as part of my remarks.
I'll discuss the model. Our team worked with economists to model the net economic impacts of energy efficiency as it relates to the pan-Canadian framework. The scope of the work considered five key measures: making new buildings more efficient, retrofitting existing buildings, improving energy efficiency of appliances and equipment, supporting building codes and energy-efficient housing in indigenous communities, and improving industrial energy efficiency.
We looked at the net economic impact of these five measures over the 14-year period that's laid out in the PCF, the pan-Canadian framework. It's important to note the term “net economic impact”. In modelling the combined net effects of efficiency, the study addressed three ways that efficiency generates employment and economic impact, both positive and negative.
First, we look at increased demand for efficiency of related goods and services. When we fund energy efficiency programs, it's a cost to the economy. However, it also stimulates new demand. We hire renovation contractors, weatherize homes and support employment.
Second, we redistribute those savings that households and businesses gain. As a result of the energy efficiency improvements, we all save on our energy bills. This, in turn, increases our household disposable income and lowers our cost of doing business.
Third, we look at reduced energy sales, which limit utility revenue. We had to take into account that negative impact.
In addition to modelling the PCF, we also looked at a different scenario called “PCF+”. If we did a stretch scenario beyond what the current policy says, what would the impacts be?
Let's get to the results of both of these.
The first step to understanding this is that the economic model looks at energy savings yielded from adopting all these measures. As I mentioned, the bill savings are net savings, so they account for the positive impact and the negative. Here's what we found.
If we adopt the PCF policy scenario, the average annual household savings is $114 a year. An average annual across all Canadian households would be $1.4 billion in savings. When we look at the commercial/industrial side, we see an average annual savings of $3.2 billion.
Now the PCF+ scenario is a stretch scenario. We go beyond this policy and we see that average household savings rise to $151 per year and overall annual savings of $1.8 billion. In the commercial/industrial space, we see a rise as well, with average annual savings of $4.9 billion.
The work to get these savings creates jobs. Additionally, the savings that are circulated into the Canadian economy create jobs and GDP growth as well. We looked at that next.
The PCF scenario showed us that, as a result of these energy savings, we would see an increase in GDP of $355 billion, which is a 1% increase over the baseline forecast. Every dollar we invest in energy efficiency generates $7 of GDP growth. Implementing these actions will add 118, 000 jobs annually to the Canadian economy.
What's more, as the map that we circulated shows, this growth happens in every single province in every part of Canada.
Of course, the PCF+ would help us go even further, with a net increase of GDP of $595 billion, a net job increase of 175,000 and the same distribution across the country.
As part of our international efforts to combat climate change, the Canadian government committed to reducing our GHG emissions by 205 megatonnes. Our PCF scenario modelling predicts that the energy efficiency measures can cut 52 million tonnes of that target. That's 25% of our international commitments. If we go further, in the PCF+ scenario, we're seeing a 40% reduction in our Paris climate commitments.
In addition to the jobs and GDP growth that we modelled in the study, I want to outline three additional reasons that energy efficiency is key to building a more competitive and resilient economy.
First, helping our industries and buildings cut their energy waste increases energy productivity. If you spend less on energy, that cushions businesses against unexpected costs and it frees up dollars to invest in more productive capital improvements and human resources. Today, this potential is only partially realized. In fact, in Canada we still use more energy to produce a unit of GDP than the U.S., the U.K., France, Mexico or South Korea.
Second, efficiency improvements also produce what are known as co-benefits, which are non-energy benefits that can boost labour productivity and even sales. Better ventilated and designed buildings increase employee satisfaction and reduce sick days. Better lighting can increase worker safety and even make products look better. These economic benefits can be much greater than the energy saved.
Last, there's an opportunity to grow Canadian clean-tech companies, with specializations in areas such as integrated building design, data analytics and smart devices to sell to the global energy efficiency market, which is estimated to be a $236-billion market. It's growing, while most other energy sectors may be experiencing a downturn.
We wanted to leave you with a few more recommendations to further advance understanding of the contributions of energy efficiency to the economy. More research is required to understand specific elements to exploit this economic potential. I've identified three of them.
The first is mobilizing private sector finance to improve building infrastructure. We suggest that the committee further study the structural barriers that prevent engaging private finance in support of the upgrade of Canada's building stock, and potentially using institutions like the Infrastructure Bank and the Canada Mortgage and Housing Corporation to attract private sector capital into energy efficiency.
Second, we recommend studying strategies to transform markets so they automatically adopt energy efficiency. These include things outlined in the Generation Energy Council report, such as net-zero-energy building standards, a model code for renovations, energy performance labels and industrial energy management systems.
Last, none of this will happen unless we develop a workforce to make it happen, so we think we need to study more about the opportunities for increasing labour force representation of under-represented groups and leverage energy-efficient building infrastructure projects to promote more training and skills development.
We've just released a budget 2019 priorities document that provides more detail on how Natural Resources Canada can support the energy-efficient economy, and we'd be happy to meet with you about that as well.
Thank you for the opportunity to present our findings to you. Brendan and I are available to answer any questions you may have.