Natural Resources Committee on Nov. 20th, 2018

[The Chair, Liberal, James Maloney]

Good morning, everybody. We're off to a bit of a late start.

Apologies to our witnesses. We had a vote this morning, which pulled us away to the House of Commons. We're grateful for your hanging in there and displaying the patience to attend today.

Here's what we're going to do. We had two one-hour segments, and we're now going to consolidate them and do all four witnesses consecutively.

Here with us, right now, we have Sheila Hayter and Darryl Boyce from the American Society of Heating, Refrigerating and Air-Conditioning Engineers. We also have Paul Cheliak from the Canadian Gas Association.

We also have two witnesses who will be joining us shortly by video conference.

The process is that each witness group will be given up to 10 minutes to make its presentation, and once all four witnesses have completed....

You know what? I'm going to wait.

Good morning, can you hear us and see us okay? Whom do we have there?

[Jocelyn Bamford, Vice-President of Automatic Coating Limited, Founder, Coalition of Concerned Manufacturers and Businesses of Ontario]

I'm Jocelyn Bamford from the Coalition of Concerned Manufacturers and Businesses of Ontario.

[Gabriella Kalapos, Executive Director, Clean Air Partnership]

I'm Gabriella Kalapos from the Clean Air Partnership.

[The Chair, Liberal, James Maloney]

Okay, thank you very much for joining us. I was just explaining the procedure for the meeting.

We have two groups here, and we have two witnesses by video conference. Each set of witnesses is given up to 10 minutes to make a presentation, and then we'll open the floor to questions from around the table.

Ms. Hayter and Mr. Boyce, why don't you start us off?

[Sheila Hayter, President, American Society of Heating, Refrigerating and Air-Conditioning Engineers]

Thank you.

Mr. Chair, vice-chairs and members of the committee, thank you for the opportunity to provide testimony today.

I am Sheila Hayter, President of ASHRAE, which was founded in 1894 and is a global society advancing human well-being through sustainable technology for the built environment. The society and its more than 56,000 members worldwide focus on building systems, energy efficiency, indoor air quality, refrigeration and sustainability. ASHRAE has about 6,000 members in Canada, and over 10% of our board members are Canadian, including Darryl Boyce, whom you will be hearing from later this morning.

ASHRAE is well known for our hundreds of standards and guidelines that improve the performance of building systems. ASHRAE provides training and professional development through in-person and online courses and validates and recognizes professional expertise through six certification programs.

I am excited that this esteemed committee is interested in studying the economic opportunities for energy efficiency in Canada and its contributions to Canada's climate commitments. With about 28% of Canada's greenhouse gas emissions being attributed to residential and commercial building operations, ASHRAE's technical expertise can be useful in meeting your objectives.

I understand that you have already heard from organizations focusing on the economics of energy efficiency, and from utilities and those focused on energy generation and delivery.

As ASHRAE is a society of professionals with technical expertise, ASHRAE's testimony will focus on the technical tools, standards and guidelines that can help government and the private sector deliver on energy efficiency and building performance.

Importantly, ASHRAE's standards are voluntary, accredited by ANSI and developed through a consensus-based process through the participation of any and all interested and affected stakeholders, including manufacturers, users, and representatives of the government and academia. ASHRAE also serves in the role of international secretariat for several ISO technical committees to help ensure that ASHRAE standards are represented on the international stage.

Many of ASHRAE's standards are adopted into building codes, including those concerning energy efficiency and high-performance green buildings. ASHRAE's flagship standard, standard 90.1, which establishes minimum requirements for energy-efficient design of most buildings, is an indispensable reference for engineers and other professionals involved in the design of buildings and building systems. Standard 90.1 has been a benchmark for commercial energy consumption and energy codes in the United States and a key basis for codes and standards around the world for more than 35 years.

For communities wanting to achieve even better energy efficiency levels, ASHRAE has teamed up with the International Code Council, the Illuminating Engineering Society and the U.S. Green Building Council to publish the 2018 International Green Construction Code, powered by ASHRAE 189.1.

We understand that Canada has set even higher standards for itself in establishing a milestone to create a nationwide net-zero energy building code by 2030. ASHRAE is reviewing its existing portfolio of standards to determine the best way to create a net-zero building standard, and we would be happy to share our expertise in this regard.

ASHRAE has also partnered with AIA, IES, and USGBC and, with support from the U.S. Department of Energy, we published a series of advanced energy design guides that provide a cost-effective approach to achieving advanced levels of energy savings using readily available technology. The newest guide in the series provides recommendations needed for achieving zero-energy buildings. We respectfully request that the committee accept copies of these guides as a brief for the committee record.

While building standards and codes can tackle emissions for new construction, most of the building environment already is in place today. Evaluating, assessing and then retrofitting buildings to improve energy performance is where Canada can make even greater progress toward its energy and climate commitments.

Darryl Boyce, president-elect of ASHRAE, knows buildings very well. He knows how to operate them, how to fix them and how to ensure optimal performance. As head of facilities at Carleton University, Darryl was responsible for over 50 buildings encompassing 450,000 square metres of building space, including labs, residential space and administrative operations.

I'm going to let Darryl talk about some of the tools ASHRAE has developed to improve energy performance in a cost-effective manner.

[Darryl Boyce, President-Elect, American Society of Heating, Refrigerating and Air-Conditioning Engineers]

Thank you, Sheila.

Optimizing the performance of Canada's existing buildings is key to meeting Canada's energy and climate commitments. Investments in these buildings can also generate solid economic benefits for those who own, operate, live and work in these buildings. The Pembina Institute has found that every $1 million invested in energy efficiency results in $3 million to $4 million in economic growth. That's real return on investment.

Here's how ASHRAE can help.

ASHRAE recently revised standard 100, “Energy Efficiency in Existing Buildings", which sets criteria through reducing energy consumption to improve energy efficiency and performance.

ASHRAE has also recently published standard 211, an energy audit standard, which should be helpful to municipalities that have started to include energy audit requirements in conjunction with their benchmarking regulations.

Another tool ASHRAE has developed to improve the energy performance of existing buildings is ASHRAE's building EQ. Building EQ is a building energy rating program that provides both an operational and an asset rating to assess a building's energy performance. Beyond providing a score, building EQ can help you improve your building's energy performance once you have done the benchmarking. We are using building EQ at Carleton University to improve our energy performance, improve the indoor environment and save money. This has resulted in energy savings of about 20%.

We must also focus on building operations. As buildings have become increasingly complex, we need to ensure that designs respond to effective building operations and that the operator is effectively trained to get real value from energy-efficient design, without compromising the indoor environment.

So-called smart buildings are another area where ASHRAE has developed tools to optimize building performance. ASHRAE's standard 135 defines data communication service protocols for information technology used to monitor building systems and to ensure that all building automation systems can talk to one another. Ensuring that these data protocols are in place will help buildings actually realize the energy savings as designed.

I'm now going to hand the microphone back to Sheila, who will speak on how buildings' integration with the electric grid can help deliver even greater energy efficiency benefits and cost savings.

[Sheila Hayter]

As you know, our building and energy infrastructure is rapidly changing. We are moving to smart buildings, smart cars and a smart grid. This integration and communication presents tremendous opportunity for energy cost savings.

As a leader in the buildings industry, ASHRAE wants to ensure that its expertise is employed as policies are developed in defining the relationship between buildings and the smart grid. Building systems will be able to exchange information with electricity providers, other buildings and transportation systems. As well, building systems will receive data to inform system operation and performance. Microgrids, distributed energy resources and energy storage systems will be an important part of this new energy future.

Of course, this interconnected system must be implemented in ways that still ensure the safety, security and privacy of building occupants and their information.

ASHRAE has developed standard 201, “Facility Smart Grid Information Model”, which provides a common basis for electrical energy consumers to describe, manage and communicate about electricity consumption and forecasts.

As Canada moves to a smart grid, ASHRAE welcomes the opportunity to share its technical expertise to ensure that this transition is done effectively and efficiently, and to assist in providing the tools, resources and knowledge to ensure proper operation of buildings in this new paradigm.

Thank you again for giving us the opportunity to testify before this committee. We would be happy to provide more details on any of the issues we have discussed, and we would be happy to take questions.

Thank you.

[The Chair, Liberal, James Maloney]

Thank you very much.

Paul, we'll move over to you.

[Paul Cheliak, Vice-President, Public and Regulatory Affairs, Canadian Gas Association]

Good morning.

Thank you for the opportunity to present on the role of natural gas utilities in delivering energy efficiency in Canada. My name is Paul Cheliak. I'm the Vice-President of Public and Regulatory Affairs with the Canadian Gas Association.

My remarks today will focus on three areas: the role of Canada's natural gas utilities in delivering energy efficiency programs, the need for enhanced public-private collaboration, and recommendations for the committee to realize Canada's natural gas energy efficiency potential.

By way of background, the Canadian Gas Association is the voice of Canada's natural gas delivery industry. Our members are gas distribution and transmission companies, manufacturers and energy service entities. Today, more than 20 million Canadians rely on and benefit from affordable and clean natural gas for their energy needs. In 2017, natural gas met 34% of Canada's energy needs. This compares to 20% met by electricity, 40% met by oil, and 6% met by other fuels.

The National Energy Board, in its November 2018 supply and demand report, forecasts that by 2030 natural gas will surpass oil as the single largest fuel for the country's energy needs. With this future, while a bright one, the natural gas industry is committed to promoting and advancing the efficient use of our product.

As historical context, for over 20 years natural gas utilities have been delivering energy efficiency programs to Canadians, and the reason for this is simple: A customer who has a lower utility bill is, frankly, a happier customer. Utility programs consist of incentives to support consumer investments in more efficient equipment, home energy audits, building retrofits, and education and awareness.

The results are significant. As of 2017, natural gas utilities invested over $1 billion in their energy efficiency programs, saving consumers $1.5 billion in natural gas costs. At the same time, these same programs have reduced Canada's cumulative greenhouse gas emissions by 60 megatonnes since 1995.

In looking to 2030 and beyond, we know that more can be done on energy efficiency. We trust that the report you're looking at will examine these measures. In fact, over the last 12 months we've been working closely with Natural Resources Canada on developing road maps for long-term space and water heating regulations in Canada. This important work must be done in order to transform energy use markets to higher efficiency.

Further, in 2016 CGA commissioned ICF International to quantify the emissions reduction potential from natural gas efficiency programs across Canada. That study, available on our website, points to an untapped 12 megatonnes of GHG emission reduction potential. We know that in order to realize that 12 megatonnes, we must innovate. We must innovate in the way we heat our homes and our businesses, and in the ways our industries use energy.

In response to this need, CGA and its gas utilities created the natural gas innovation fund in October 2016. NGIF was created to respond to a need by industry to collaborate, co-fund and commit over the long term to support clean tech innovation in natural gas. To date, NGIF has supported 14 projects, approved $8 million in utility funding and leveraged $70 million in outside capital. In many cases, we are collaborating with government in making these investments in Canadian clean tech companies.

Through our experience to date, we can already see that the future of technology development and energy efficiency in Canada will require partnership between public and private entities. Let me share with the committee a brief example of a partnership we're working on right now with Natural Resources Canada. Through our utilities, we've been working on a program called LEEP, local energy efficiency partnerships. What's innovative about LEEP is that it brings together in a room manufacturers, homebuilders, gas utilities and equipment providers to focus on what technologies are needed to meet the homes of the future in Canada. Learnings are shared among the partners and the results are real. From our perspective, it is this collaborative nature that LEEP brings to the table that will increasingly be needed in the future.

If I may, I'll conclude my remarks with some recommendations for the committee.

First, leverage natural gas utility funding and expertise. Currently, Canadian utilities are investing $250 million per year in their energy efficiency programs. These are funds that are on the table and can be leveraged by government. You may recall that one of the most successful energy efficiency programs in Canada was the home energy retrofit program, which brought together government and utility funding to help homeowners improve the way they use energy. Programs like this deserve revisiting. Further, the federal government should expand funding for programs like LEEP to extend it beyond just the residential sector and into the commercial building space.

Second, chart a cost-effective long-term path for energy efficiency in Canada. As we look to implement the pan-Canadian framework, things like long-term road maps for space heating are important measures, just as new equipment regulations and net-zero homes are important things for Canada. However, they must be recognized under their impacts of cost to consumers. Further, to be effective, any road map or strategy must be followed by policy support, including program funding, education and awareness, and codes and standards development.

Third, over the years federal energy funding has been disproportionally weighted toward energy supply and the associated technologies that produce energy: renewable electricity, biofuels, etc. More can and should be done on the demand side, especially with natural gas. We recommend a federal fund to support gas technologies that meet the criteria of our natural gas innovation fund and the federal government alike. Finally, we recommend greater funding support for federal laboratories like CanmetENERGY and the National Research Council to further their important work on natural gas technology.

In conclusion, the natural gas industry is positioned to support Canada's energy efficiency future. We bring to the table knowledge and consumer relationships that can be leveraged to benefit governments, industry and, most importantly, Canadian natural gas consumers.

Thank you.

[The Chair, Liberal, James Maloney]

Thanks very much.

Ms. Bamford, why don't we move on to you?

[Jocelyn Bamford]

My name is Jocelyn Bamford. I represent the Coalition of Concerned Manufacturers and Businesses of Canada. We represent primarily small and medium-sized businesses in manufacturing and other areas.

We want to thank you for having us here today, because very often the voices of small and medium-sized business get lost in a lot of legislation that comes to pass. We are not competitive in Canada. We're not competitive for business. Our energy cost is not competitive. I pay between 18¢ and 21¢ per kilowatt-hour for my electricity. I could move my business to the United States and pay between four and six cents per kilowatt-hour.

This is just a cascade of effects. It's death by a thousand cuts. We are not competitive because there is going to be a price on carbon; we do not have tax reform; and we don't have accelerated capital depreciation. There are many other components that make us not competitive.

If we want businesses to grow and the economy to thrive, the only way to do that is to have more jobs and more people paying taxes. That's our way through economic prosperity.

Right now the biggest problem in our electricity, especially in Ontario, is the variability of cost. With a global adjustment, you can have a swing of $10,000 in one month. As people come off the grid with some of the technologies they're utilizing, that cost for global adjustment just goes up.

The cap-and-trade pricing that was on in Ontario wasn't borne by large emitters; it was borne by the small and medium-sized companies such as ours. Large emitters got credits. Small emitters couldn't participate in cap and trade. We just got to pay through increased natural gas pricing and diesel costs. This makes it uncompetitive for us to compete in areas where there isn't carbon pricing in place.

The fact of the matter is that Canada contributes 1.6% of greenhouse gases globally. If we burden the small and medium-sized companies with carrying this cost, we see four phenomena. We definitely have seen, in the last couple of years, these four phenomena come to pass. One, companies are going bankrupt. Two, companies are moving outright to the United States or other jurisdictions. Three, companies are staying here as a head office, but moving their growth to the United States, where they don't have the burdens of unaffordable energy. This is just as damaging. Plus, they have a lot of incentives to move there. The fourth phenomenon we're seeing is that companies have had enough and they are selling to large multinational companies. Then we are going to have an economy that's completely controlled by outside forces.

None of these four phenomena are good for Canada and the economy.

It behooves small and medium-sized businesses and manufacturing to reduce their energy cost. For us, it's our third-largest cost. Anything we can do to reduce that, we have done. If you look at our plant, you see that we invest over $1 million every year, most of which goes to trying to address energy efficiencies and run more efficiently to get our costs down.

We went to Queen's University to do a study on what we should do, keep our plant here or move it to the United States. They did a very in-depth study on a number of factors, and they recommended, in fact, that we move our growth to the United States. That's a very telling and concerning study, and one that we should heed.

What should we do about this? We have many solutions. The biggest problem is the Wild West of energy savings. We have people coming to our plant all the time, telling us that they can save $1 million on electricity. What you find is that the consultants also sell things. The gentleman who tells you how to reduce your electricity cost on the one hand, pulls out a card that he's selling solar panels on the other, or that he's selling combined heat and power. There's no support for small and medium-sized businesses on what solutions are actually legitimate.

I've heard a lot of stories about members in our coalition that have invested millions of dollars in the hope of getting out of energy policy, only to have their energy pricing go up. There is no support with regard to this new technology. There are a lot of unscrupulous spenders in this space, and there is no support or help for us to find what is an efficient, cost-effective, long-term solution.

In many cases, if people come off the grid and put in a combined heat and power unit, they will actually increase greenhouse gases. Similarly, if they move their business to the United States, to places that do not have energy as clean as we have in Ontario, they end up raising greenhouse gases. So, by putting in some of these burdens—carbon pricing, cap and trade—you actually drive companies out, and you drive greenhouses gases up.

What do we need to do? We also need better SR and ED credits. The SR and ED credit program is extremely difficult and has wound down in the last five years. We need accelerated depreciation for new capital, as they have in the States, or hyper-depreciation as they have in Germany. These things would allow companies to reinvest in new technology and help us reduce our energy costs.

We need pipelines. We need to get pipelines through this country, and we need to get them now. When a lot of companies were moving offshore, a lot of fabricators in Ontario retrenched into the oil and gas industry, and now that pipelines aren't going through, we have people out of work. We need to get our pipelines through.

You can have your natural resources in an environmentally friendly way. Our company is proof of that. We've developed and patented three pieces of technology that allow you to rehabilitate pipelines in an environmentally friendly way. This is technology that has come from Canada and can be exported globally.

We need to relook at Bill C-69 because we're concerned that there are going to be no major projects going through. That is going to negatively impact manufacturing across this country, but specifically in Ontario. A lot of people don't recognize that in Ontario, since the downturn in the economy, there is almost an equal number of companies in the resource sector as there is in the auto sector. We need to recognize the damage that Bill C-69 could do to some of the manufacturers in this province.

Exports need to be exempt from tariffs if they have carbon pricing on them. We need to make sure that we're playing on an even playing field because right now we can't compete.

[The Chair, Liberal, James Maloney]

Thank you.

Now we have our last witness, Ms. Kalapos.

The floor is yours.

[Gabriella Kalapos]

Thank you.

Good afternoon, committee members, and thank you for the opportunity to address you today.

My name is Gabriella Kalapos, and I'm the Executive Director of the Clean Air Partnership. We're a charitable environmental organization that works with municipalities and their partners to help them become sustainable, resilient, vibrant communities where resources are used efficiently, the air is clean to breathe and greenhouse gas emissions are minimized. We achieve this mission through research and knowledge transfer, and by fostering collaboration among all orders of government, academia, NGOs and others as well.

The Clean Air Partnership is well positioned to speak to the economic opportunities for energy efficiency in Canada and its contributions to Canada's climate change commitments. While we've been delivering a broad range of programs and research related to greenhouse gas emissions, today I'd like to speak to the importance of a comprehensive home energy efficiency retrofit program to deliver on these commitments.

More specifically, I'd like to speak to the importance of local improvement charges, or LICs, as a possible financing mechanism and what the Government of Canada can do to increase the use of this financing mechanism.

LIC financing is enabled by provincial legislation that is used in Canadian municipalities. It has been used for decades, and mostly it has been used historically for block-level improvements like sidewalks, sewers and other types of infrastructure. More recently, we witnessed provinces enacting enabling legislation allowing for LICs at the single home level for energy efficiency improvements.

The LIC charge is associated with the property and not the owner, so if a home with a LIC is sold before the energy efficiency loan is fully recovered, the next owner continues paying the charge on a property tax bill until the full loan is recovered. This allows the costs and benefits of the energy efficiency improvement to stay and to be shared between current and future owners. Because some families cannot access financing at attractive rates, the LIC program removes up-front capital cost barriers that often impede energy efficiency retrofits. LIC financing also has the advantage of offering longer repayment time frames at fixed rates, making payments more affordable and allowing for greater equity in the home energy efficiency retrofit market.

Possible measures covered by LICs can include thermal envelope upgrades, HVAC systems, water efficiency and water quality upgrades, and renewable energy systems, as well as other measures such as climate change resilience and flood protection measures.

Supporting energy efficiency in all sectors is the cheapest and fastest way to ease energy demand and help offset the need for costly energy infrastructure development. As this committee understands, energy use in homes and buildings accounts for a significant portion of our greenhouse gas emissions. People who invest in home energy upgrades reduce their energy bills and protect against energy price increases. In fact, participating home owners in the federal eco-energy retrofit homes program saw an average energy savings of 20% after upgrades. These savings strengthen the local economy by creating local employment and spending.

Energy efficiency upgrades, especially in older housing, can significantly improve the quality of the local building stock, and LIC financing can fill a gap in public support for energy efficiency upgrades. Over time, the aim is to have program costs supported by the participants, not the general taxpayer, so the program moves towards paying for itself. Regulatory amendments permit the municipality to recover administrative, marketing and other program costs directly from participants on a pro rata basis. However, it does need to be kept in mind that allocating all the administrative costs to initial program set-up and delivery would undermine the business case for early adopters of such a program.

However, efficiencies of scale over time present a financially sustainable model for delivering such a program. Energy efficiency upgrades are labour-intensive and provide a significant economic stimulus when carried out on a large scale. The American Council for an Energy-Efficient Economy notes that in the construction industry there are about 20 jobs created per $1 million spent on energy upgrades, compared to half as many in power generation and distribution.

Many municipalities are considering creating their own energy efficiency programs to fill the gap left by the withdrawal of the provincial and federal governments from incentive-based programs. Building on this desire, since 2012 the Clean Air Partnership has been working with the CHEERIO program—collaboration on home energy efficiency retrofits in Ontario. Through our experience with the CHEERIO program, we have a keen understanding that the greenhouse gas reductions associated with LICs are only achieved when carried out at scale.

However, a number of barriers exist in Canada preventing the scale-up of LIC programs. There are three key areas where the Government of Canada could intervene to facilitate the rapid uptake of residential GHG reduction measures: The first is access to capital; the second is credit enhancements; and the third is addressing mortgage lender and insurer concerns.

With regard to access to capital, a key barrier associated with LIC program scale-up relates to the upfront capital required to finance the actions that will lead to significant energy and greenhouse gas savings over time. Until now, municipalities have largely considered programs that would rely on public funds to provide initial capital, which are limited and compete with other municipal needs. Municipalities must respect provincial requirements concerning debt load, where they can maintain specific maximum debt-to-revenue ratios.

There is a timely opportunity for the Government of Canada to provide capital to initial LIC programs, reducing the need for municipalities to find it in their own budgets or to qualify for third party lender programs. This would address the upfront capital cost barrier and achieve more significant greenhouse gas reduction in a manner that would, over the longer term, enable those public funds to leverage increased private capital.

On the issue of assisting in addressing mortgage lender concerns, not all LIC/PACE programs require mortgage lender consent. However, LIC programs where there is that requirement have found this to be a major stumbling block resulting in massive potential participant dropout. There are two areas of concern, those of the mortgage lenders—the banks themselves—and those of the mortgage insurers, such as CMHC.

Banks have concerns around threats to the liquidity of mortgages in secondary markets, potential for increased losses associated with mortgage defaults, and concerns around consumer protections.

The second area of concern is from mortgage insurers. The vast majority of Canadian mortgages are insured by the CMHC, and the CMHC has yet to issue a formal position on LIC programs, so homeowners with CMHC-insured mortgages are ineligible to participate in LICs where program design requires lender consent. Natural Resources Canada and the Government of Canada can mitigate some of the aspects of this barrier by leveraging their position to engage in discussions with CMHC and financial institutions.

Credit enhancement is another area where the government could play a key role in accelerating energy efficiency retrofit financing programs. For municipalities that are able to access capital for LIC program development, a second issue relates to the credit enhancement to de-risk the LIC. There is a very small but still possible financial risk to municipalities and/or financial entities providing mortgages for the property associated with the LIC mechanism. The financial risk relates to the loan repayments between the time when a property goes into default and the time when that property and the LIC are taken on by the new owner.

To address this unlikely but possible financial risk, loan loss reserves are currently provided to PACE programs in California, Vermont and other jurisdictions. For example, in California, in June 2014, the California Alternative Energy and Advanced Transportation Financing Authority enrolled eight PACE programs for a total of over 56,000 residential PACE financings valued at over $1.2 billion under the PACE loss reserve program. As of December 2017, they have not received any claims on the loss reserve.

The Government of Canada could create a loan loss reserve to backstop municipal LICs in the unlikely case of default. This provision of a loan loss reserve fund would go a long way toward de-risking the LIC for the municipality and would be instrumental in increasing LIC offerings from municipalities. It would also address financial concerns on the part of the financial institutions providing mortgages, as well as the insurers. It would also make securitized/bundled LIC loans appealing and secure investments from private financial institutions, thereby enabling public investments to be shared and transferred to the private sector, and it would provide a mechanism that would be able to recapitalize those public funds to be reinvested in energy efficiency. In addition, it would send the message to municipalities that Canada wants to help and support municipalities to provide LICs for a variety of energy efficiency programs.

While there are many areas where provinces and municipalities must work together to develop comprehensive home energy efficiency retrofit programs, these three key areas represent opportunities for the federal government to facilitate the development and rollout of these programs nationally.

Given how integral this work is to our mandate and to our greenhouse gas reduction goals, we would be happy to work with Canada, the provinces and Canadian municipalities to advance this mechanism and ensure a more sustainable future for all Canadians.

I am happy to answer any questions that you may have at this time.

[The Chair, Liberal, James Maloney]

Thank you very much.

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

[Kent Hehr, Calgary Centre, Lib.]

Thank you very much, Mr. Chair.

I'd like to thank all the presenters for the information. It was very well delivered and well received.

I am very interested in hearing a little more about the LIC program and how it could be expanded by the federal government. You indicated three areas where we could play a role. Have you guys done some mapping and tracking to see how much this investment would cost the federal government, as well as how much more we could reduce GHGs? Is that information available?

[Gabriella Kalapos]

Yes. There are a number of programs from across the United States, and there's the Toronto home energy loan program. The Halifax Regional Municipality has a LIC out for solar as well. There are a number of examples where we can learn from other jurisdictions.

The financing component of the program isn't a very expensive thing for the government, because these are loans that are provided. The energy savings are what pays back the loans. There is no doubt that any incentives always increase uptake of the home energy retrofit programs. As you can imagine, no one really looks forward to home energy retrofits, or home renovations in the first place, so it often needs to be tacked onto existing renovations that homeowners are going to be doing anyway. At that point, increasing the energy efficiency opportunities through incentives and rebates always increases the uptake of these programs.

The financing component is one area, and it can be delivered in a relatively cost-effective manner because of the fact that it's a loan. Any incentives or rebates that are provided to homeowners will only increase the uptake.

[Kent Hehr]

Thank you very much.

I have a question for the American Society of Heating, Refrigerating and Air-Conditioning Engineers. You guys have been in business for a long time—over a hundred years. I thought that was very interesting.

We have looked at a pan-Canadian framework on clean growth and climate change, and acting on climate change will create economic opportunities and good jobs for Canadians.

Are your members on board with the movement towards putting a price on pollution? Do you guys see energy efficiency being promoted through this goal and the like?

[Sheila Hayter]

Everything ASHRAE does is focused on how to use energy more wisely in order to create built environments that are healthy, productive, safe and well for the occupants. Most of the time those occupants are people. Energy efficiency is a priority within that context.

Putting a price on emissions and comparing that to the benefits of efficiency is not an area ASHRAE has explored up to this point. ASHRAE is focused on finding solutions on the energy side. That's not to say ASHRAE won't take that up, but at this point it's not an area that ASHRAE has investigated yet.

[Kent Hehr]

Mr. Cheliak, you were going through the natural gas cycle. Are there roles the federal government could play to assist in enabling more people to use natural gas?

[Paul Cheliak]

Yes. In fact, we're actively working on proposals of that nature, such as the idea of bringing natural gas infrastructure to regions of Canada that don't currently have it, where those end-users might currently be using higher-emitting fuel. That could be heating oil, or it could be propane, or it could be diesel in remote communities. We're actively exploring that.

The federal government played a leadership role through Natural Resources Canada, both in the 1980s and in the 1990s, with various “off-oil” programs for home heating. We recommend the revisiting and resurrection of those types of programs, if appropriate.

[Kent Hehr]

We had them in the 1980s. When did they...?

[Paul Cheliak]

Most fiscal programs have a cycle of around four years. I believe most of those programs had a four-year duration. There have been subsequent funds through federal regional economic development agencies, principally in Quebec, to bring gas pipelines to regions such as Thetford Mines, Asbestos and other communities. That's been done through regional economic development funding agencies, which are an option. Typically the funding envelopes in those agencies are a little smaller than some of the previous programs the government had, but they are a fiscal lever and an option.

[Kent Hehr]

Okay.

My next question is for Darryl. Are there measures that should be considered by the federal, provincial and territorial governments to maximize the impact of energy efficiency for Canadian households and businesses?

[Darryl Boyce]

Yes, and it's very similar to what was presented earlier about the home incentives and low-interest or no-interest loans that could drive some activity in this area. I think the same thing applies to the commercial environment. If you want to generate greater activity in energy efficiency, incentives are really good. Actually, no-interest or very low-interest loans would also help in this area to generate interest.

We're at a point in the built environment where the bulk of the buildings that exist today need to be dealt with in some form of renewal. That renewal could actually be a real opportunity to improve the efficiency of the operations of those buildings, particularly in the commercial area.

I think there are some real opportunities to bridge that renewal investment with energy efficiency investments to come up with buildings that will operate more effectively for what's going on in the interior—for the people or the processes inside—while reducing the waste of energy.

[Kent Hehr]

Are you finding that consumers are looking more and more for this type of information in looking to create their living spaces, as well as their work environments? Are they really understanding the importance of this?