Good morning.
Mr. Chair, Vice-Chairs and members of the standing committee, thank you for the opportunity to provide testimony here today.
My name is Martin Luymes. I am the vice-president of government and stakeholder relations for HRAI Canada, the Heating, Refrigeration and Air Conditioning Institute of Canada. HRAI is a trade association for the heating and cooling industry in Canada and claims 1,300 member companies, including product manufacturers, wholesalers, distributors and contracting firms in all parts of the country.
Our members provide products and services that are essential to life in Canada. We keep homes and buildings warm in the winter and cool in the summer, and we provide essential refrigeration, ventilation, indoor air quality and energy management services to all manner of commercial and institutional entities, from grocery stores to hospitals, ice rinks and high-tech manufacturing facilities.
The HVACR industry generates over $7 billion in the Canadian economy annually and employs close to 50,000 people. Our contractor membership alone employs a diverse range of skilled tradespersons, including refrigeration mechanics, gas technicians, plumbers, sheet metal mechanics and electricians.
I understand that the mandate of this committee is to explore the economic opportunities for energy efficiency in Canada and the contribution of energy efficiency to meeting Canada's Paris climate change commitments.
As a first point on this theme, I will say that as a supporting member of Efficiency Canada, HRAI endorses the position forwarded by that organization at a previous meeting here, which asserts that the concerted investment in energy efficiency will not only help achieve a significant share of Canada's carbon emission reduction targets, but it will also stimulate economic growth and create meaningful jobs across Canada.
According to Efficiency Canada's analysis, an average of 118,000 jobs would be created every year between now and 2030 due to economic activity associated with energy efficiency investment. Many of these jobs will be in the HVACR sector as a result of retrofits on mechanical systems in homes and buildings. In saying that, I would also add that these are for the most part highly skilled and well-paid jobs in all parts of the country where Canadians live, work and play.
As an organization, HRAI and its members have had a vested interest in the promotion of energy efficiency for many years. For our members, of course, the primary focus of their work is to ensure comfortable indoor climates for Canadians, but the promotion of energy efficient products and solutions is increasingly seen as an important ancillary offering that delivers monetary savings for building owners as well as reduced carbon emissions and, as it happens, increased profits for our members.
Unlike many other types of building retrofit contractors who are called in by building owners and homeowners to make planned upgrades for efficiency reasons or otherwise, HVAC contractors have the unique opportunity to identify and act on energy efficiency upgrade opportunities of which their customers may not even be aware. Contractors are almost always called into fix something that's wrong or that's not working, but in identifying the best solutions to fix or replace what's not working, properly trained and motivated HVACR contractors can become in effect ambassadors of energy efficiency improvement, and the opportunities for improvement in Canada are significant.
According to Natural Resources Canada, space heating is the single largest source of energy consumption in Canada's building sector. It accounts for 64% of energy consumed in homes and 56% of energy consumed in commercial buildings. According to their analysis, if today's best technologies were deployed more broadly, total home energy use could be reduced by 30% and greenhouse gas emissions could be lowered by 18 megatonnes per year. Meanwhile, water heating represents between 8% and 19% of energy use in homes and buildings. Again, if today's best technology were deployed, total home energy use would be reduced by 5% and greenhouse gas emissions lowered by more than three megatonnes.
What needs to happen in our sector to fully realize the potential benefits that can be delivered through investment in energy efficiency? One obvious area of focus is product efficiency improvements.
This is something to which our manufacturer members have committed a great deal of time and effort. In the area of product testing and certification standards, HRAI has engaged with Natural Resources Canada for decades, most recently in the development of amendment 14 to the Energy Efficiency Act, which affects numerous products of our industry, as well as current discussions for the next round, amendment 15.
I will note here that a priority focus in our discussions around minimum energy performance standards is the importance of harmonization of these regulations and test standards between Canada and the United States. On that score, we are pleased with the progress that's been made since 2011 under the Regulatory Cooperation Council in the alignment of regulations between NRCan and the U.S. Department of Energy.
Equally important for our manufacturer members is the need for greater harmonization of regulations and standards among provinces and territories within Canada. There's much work to be done here, but we are very encouraged by commitments recently made under the Canadian Free Trade Agreement.
A second area of focus should be on building code development and refinement. There are many ways in which the building code can be reworked to improve the overall energy performance of homes and buildings. More of these refinements concern the building envelope than they do the mechanical systems, but here I would highlight some of the innovative work being done by our industry in co-operation with CanmetENERGY, for example, in exploring the benefits of zoned HVAC systems.
It's worth noting, however, that most of the technologies that are capable of delivering significant energy savings and carbon emission reductions in the heating and cooling of homes and buildings already exist in the marketplace, but they tend not to be commonplace, due to various forms of market resistance. Therefore, a third area where we believe a great deal of effort should be committed is in the facilitation of key measures to overcome those market barriers, measures that have been identified in “Market Transformation Road Map for Energy Efficient Equipment in the Building Sector”. This document was approved by the Energy and Mines Ministers’ Conference last August and is the product of extensive consultations among NRCan, the provinces and territories, and key industry stakeholders from our sector.
The plan identifies where work is needed in terms of R and D and training investment to facilitate a smooth transition to a low-carbon economy, specifically in relation to space and water heating technologies. Initiatives identified in the road map include codes development, support for labour adjustment, training, product market readiness demonstration processes and more, with the aim of paving the road to market acceptance for low-carbon energy-efficient products and services.
The market transformation road map zeroes in on specific technologies from our sector that hold great promise for reducing energy consumption in buildings and for significantly reducing carbon emissions at least in regions of the country where the emissions intensity of the electricity grid is low. Chief among these technologies are electric heat pumps, including ground-source heat pumps and cold climate air-source heat pumps. Neither of these technologies has been deployed on a widespread basis in Canada, for a number of important reasons.
Among the reasons are the relatively high initial capital costs for these systems, especially ground-source heat pumps, especially when compared with heating systems in areas served by natural gas. Second are the concerns about the performance of air-source heat pumps in extreme cold conditions. Third is a lack of standardized test procedures for air-source heat pumps. There is also a general lack of consumer awareness about the technologies in question, as well as a lack of training and awareness among contractors, design engineers, inspectors, and building owners about these products.
Overcoming market barriers will require investment in R and D and market development measures to refine products and develop the workforce needed to install and service these products. Some of the R and D needs include research on how to develop lower-cost cold climate air-source heat pumps, develop hybrid or dual-fuel heat pump solutions, reduce ground loop installation costs for ground-source heat pumps, and develop lab and field testing for gas heat pumps in Canadian climates.
There are also a whole host of measures needed in the area of market deployment or development. These include demonstration projects, developing Canadian-based performance standards or ratings in qualified product listings for heat pumps, experimental financing schemes to overcome initial cost concerns, and development of heat pump training and certification programs for contractors and technicians.
In this short submission, I focused on these few technologies because they have the greatest potential to become mainstream and therefore will deliver higher savings in energy use and reduction in carbon emissions. Other technological solutions—such as VRF, variable refrigerant flow, or building automation systems—hold great potential for energy saving in commercial applications. Research is also under way to develop the marketplace for micro combined heat and power, and natural gas heat pumps.
In summary, the HVACR industry stands at the ready to partner with governments and utilities to help make the marketplace more energy-efficient and to lessen the carbon impacts of space and water heating. We, in fact, have a vested interest in doing so.
Thank you for listening.
I'd be happy to answer questions, if you have any, when the time comes.