Natural Resources Committee on Nov. 20th, 2018

[Darryl Boyce]

I find that, particularly in the commercial and higher education institutional environment, the fact that we have buildings that are at a point where we need to renew major parts of that system gives us an opportunity to really stop and ask how we can make this a better environment and not waste the energy.

I do see that there's a lot more interest in that. It's kind of the one extra thing or the one extra opportunity that happens just on the basis of the age of the built environment that we're dealing with.

[The Chair, Liberal, James Maloney]

Thanks. I'm going to have to stop you there.

Mr. Falk, go ahead.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair.

Thank you to all of our witnesses for their testimony and presentations here this afternoon.

I won't have a chance to ask all of you questions, but I'd like to start with you, Mr. Cheliak. You mentioned in your presentation that, by 2030, you believe that natural gas will be the preferred energy supplier in Canada. Where do you see the biggest opportunities?

[Paul Cheliak]

Just to recap, the numbers and the point about its being the largest fuel are taken from the National Energy Board's 2018 forecast from November, so they're not our numbers.

In terms of opportunities, we use almost no natural gas in transportation in Canada today. There's a real opportunity to bring together electricity, natural gas, hydrogen and other fuels in sort of a low-carbon strategy for transportation in Canada.

With regard to heavy duty vehicles, locomotives, marine shipping, that's where the sweet spot for natural gas is; it's with the larger engines. With regard to smaller vehicles—passenger vehicles, etc.—that's really where electricity has a strong role. Both fuels are developing technologies in those alternative spaces, but predominantly the thinking is that the passenger vehicles and the smaller vehicles are electric. The larger-horsepower, higher-end vehicles move to natural gas.

[Ted Falk, Conservative, Provencher, MB]

Okay.

For your industry to develop and to continue to grow, what do you see as some of the major obstacles that you're facing?

[Paul Cheliak]

We're a unique industry. We're a utility industry. We're regulated monopolies. There's only one company that builds the infrastructure down your road, either a wire or a pipeline. Because we're regulated monopolies, we have an important relationship with provincial economic regulators. Those regulators set out the rules by which our companies can make investments. Those rules are, by design, fairly stringent.

The way we've approached our investments, and the way our regulators have approached our investments, in low-emission technologies has been one of caution to ensure that the monopoly is doing things appropriately.

We're working closely with our regulators to kind of redefine what a utility does. What space does the utility play in, and what is the role of the utility in delivering future energy services to Canadians?

[Ted Falk, Conservative, Provencher, MB]

How do you think Bill C-69 would impact that?

[Paul Cheliak]

We're provincial companies. We don't have a tremendous amount of cross-border or cross-province infrastructure. When gas utilities build infrastructure, they don't trigger federal environmental assessment processes, so our companies don't typically find themselves under federal environmental assessment review.

Certainly, the transmission, mining and other industries have a much more pronounced focus on this, and they would have a stronger position on that question.

[Ted Falk, Conservative, Provencher, MB]

I think it's going to impact your industry more than you suspect. You're going to find that you bump up against that bit of regulation, and it's not going to be positive.

I'd like to ask Ms. Bamford a few questions. Your testimony was very compelling and thorough. You touched on so many things that I'm not even sure where to start. I think I'm going to start with some of the comments you made about the tax regime that small and medium-sized businesses find themselves in under the current government.

The current finance minister would call folks like you “tax cheats”. You're probably aware of that.

[Jocelyn Bamford]

Absolutely.

[Ted Falk, Conservative, Provencher, MB]

It makes you feel—

[Jocelyn Bamford]

Nothing could be more untrue and completely offensive, because small and medium-sized businesses are the lifeblood of the economy. We are the ones who keep people employed and get people to pay taxes to give to politicians so they can do the program. If you don't have us, you don't have any money to do anything.

A lot of my members right now are negotiating their locations, and Ohio is phenomenal in what they offer. The biggest thing I see in Canada versus the United States is that they welcome you with open arms. They don't treat you like you're a bourgeois sweatshop owner abusing your employees. They treat you like you're the job creator and contributor to society that you are.

If there are none of us, there are no programs and there's nothing, so yes, I find that quite offensive, especially the attack on passive income, because that's what we do either to save up for a piece of equipment so that we can be more efficient, or to save for a rainy day so that we do not have to lay people off during the downturns.

What people don't understand is that 92% of businesses are 100 people or below. We have great relationships with our employees. We want to take our employees, develop them and move them along. In fact, a lot of the managers at our company started by hanging parts on a line. When the government treats us like criminals, I can see why people decide they are going to get out of Dodge.

When you put your life into a company and look after your employees.... The stories of people who support their employees.... We had an employee whose wife had cancer. He came to work for a few hours and then went to look after her for a few hours. Our stories never get told, and there is never any recognition that we do good for employees and for communities and that we contribute charitably.

The negative talk coming out of the federal government is not helpful and serves to drive business out of here.

[Ted Falk, Conservative, Provencher, MB]

I think that's very well said. We saw those attacks on small and medium-sized enterprises through those tax changes that were proposed in 2017.

Now, with the introduction of the carbon tax, again we're seeing small and medium-sized enterprises as really being the targets and the focus of this government for collecting those taxes. The large emitters, the big corporations and the ones that can afford the high-paid Ottawa lobbyists are getting exemptions of up to 90%.

[Jocelyn Bamford]

Absolutely, and we saw—

[Ted Falk, Conservative, Provencher, MB]

I don't think your business will qualify.

[Jocelyn Bamford]

No, absolutely.

When cap and trade first came in, at first there was an information session. I wasn't going to go, because I thought, “I'm a low emitter, and that's none of my business.” I went, and I was horrified to find that it's the exact opposite. The large emitters, the large polluters, have the lobbyists and they get exemptions and tax credits. It's the small and medium-sized businesses that are not well organized or well funded and can't afford lobbyists, and all of the cost went on us.

We were the ones who paid for cap and trade, and we're the ones who are going to pay for carbon tax. That is going to lead to more companies moving across to where they don't have to deal with that kind of cost and where they do get incentives. Mississippi will give you a building for free to put your business in.

When you have one country trying to drive you out and one country opening its arms to you, what do we think will happen? Where do we think our kids will work?

[The Chair, Liberal, James Maloney]

I'm going to have to stop you there.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Ms. Bamford. Your testimony was very good. The chairman is cutting me off.

[The Chair, Liberal, James Maloney]

It was the clock, not me, Ted.

[Ted Falk, Conservative, Provencher, MB]

Oh, sorry.

[The Chair, Liberal, James Maloney]

Mr. Cannings, it's your turn.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thanks to all of you for coming before us today. It's been very interesting.

I'm going to start with you, Ms. Hayter and Mr. Boyce. We had a witness here last week from Loblaws, and unfortunately I ran out of time when questioning him. He was talking about the big building/big box environment and how that could play into this energy efficiency world.

You mentioned smart grids and things like that, which could work. I know an electrical engineer, and he has told me that he's done work between American utilities and Walmart, for instance, to help integrate renewable energy into the system. When the sun goes behind a cloud in Tucson, a signal can be sent to Walmart to cut back on their air conditioning. I think he said that Walmart actually got a cheque from the utility for helping them to deal with that sort of situation.

Is that the kind of thing we can look forward to in the future with the large building environment especially?

[Sheila Hayter]

Yes. The example you provided is certainly a solution, and it's a solution that's made possible by bidirectional flow of information between the consumers of energy—the buildings—and the providers of energy, such as a natural gas utility, an electricity utility or whatever it is that the energy is coming from.

The opportunities that moving toward a smart grid economy provides are just endless. “Smart grid” is a term, but what it is implying, what it means is greater communication between energy-consuming devices within a system. Within a building, that could be the Internet of things, where you have appliances that already have built into them the ability to talk to one another. We aren't doing that a whole lot yet, but we have products that can.

It's about taking the building systems and all of the different pieces of building systems that are needed in order to provide the right temperature and the right level of humidity—the right kinds of conditions to ensure good thermal comfort and good indoor environmental quality in a space—and having them not only communicate with one another within the building system but across to other systems with the appliances outside of the building, such as the utilities, which may have different needs when they're starting to balance the loads across their entire portfolio and their entire system.

These things are on the horizon, and the horizon isn't that far away. In fact, the changes are happening now. You've given an example. That's a real-life example right now. The models that we will see about how buildings are interacting with these other energy systems are being developed, so I'm not surprised if the utility serving that particular building that you described may be providing an incentive for that building operator or building owner to share their load information in order to control those loads at a larger level and ensure stability across the entire system.

We might be seeing more of that. We might see other ways of encouraging and incentivizing to motivate that interaction between energy systems. Changes are happening, and they're happening right now. That's the exciting thing about it. The important thing is that we recognize that these changes are occurring; that we prepare ourselves to be able to take advantage of the opportunities and to be ready; and that when policy needs to be put in place and regulation needs to be formed and we need to be involved, we do it in a productive way that's helping the small businesses, helping the homeowner and benefiting all the parts that are involved with these changes.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

Mr. Cheliak, you touched on a favourite topic of mine—the eco-energy retrofit program and whether the federal government should consider bringing it back. I know there are versions of it in different ways in some provinces. In the pan-Canadian framework, that sort of work was punted over to the provinces. I've been trying to promote the idea of bringing this back in some form so that we can get a standard version of it across Canada.

When I talk to the Canadian Home Builders' Association, they say to bring it back. They say that they really noticed it when it was there and noticed when it was cancelled. It's a program that leverages a lot of money for the government and produces real results.

I wonder if you could expand on that.

[Paul Cheliak]

It's important to understand that there's a lot to that program. There's a lot of architecture to bring in—no pun intended—and there are a lot of people you need to train. Once you set up a program like that, it's a heavy lift and it needs a commitment. If the government were to consider bringing back that program, I think we would want to look carefully at how to do it in a way that is cost-effective and is perhaps a bit more targeted. I think that bringing back the same program might not be the best approach. I think the learning from the last one and the million homes that were upgraded would be an important first step.

Another thought, perhaps, is for something in the commercial building space. My colleagues here would probably know more about this, but the commercial building space is really a tough nut to crack on energy efficiency. You have complex ownership structures. Targeted programs that look at the commercial building space—and maybe a commercial retrofit program that mirrors the residential one—would be something worth exploring as well.