Evidence of meeting #120 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 economic.
A recording is available from Parliament.
Liberal
The Chair Liberal James Maloney
If you can get in a question and an answer in 30 seconds, Ted, you got it.
Conservative
Ted Falk Conservative Provencher, MB
Mr. Langlois, what kind of cost-benefit ratios are you looking at when you're looking at energy efficiency?
President, Canadian Institute for Energy Training
Well, essentially it's not us; it's the consumers.
Conservative
Ted Falk Conservative Provencher, MB
Based on your experience, though, what is a reasonable expectation for cost-benefit?
President, Canadian Institute for Energy Training
We see a range. We work with industries that for a one-year payback wouldn't even invest, for different reasons that I can go into in more detail. We see the five- to 10-year payback being acceptable in the institutional sector. Whatever it is—which is less than 10 or 15 years—at the end of the day it's still more rational to do that, because you will provide energy at zero cents. Whatever the cost of the supply side at the end of the day—
Liberal
The Chair Liberal James Maloney
I'll have to stop you there, Mr. Langlois. Thank you.
Mr. Cannings, go ahead.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Thanks to all of you for coming here. It's been very interesting.
I'll start with you, Mr. Fogwill, and at a sort of high elevation. You talked about this fragmentation of effort among the federal government, the provincial government, the utilities and the municipalities, and then you mentioned the consistency of funding. We have the pan-Canadian framework, and I don't know if it was trying to sort that out.
In terms of energy efficiency, one thing I've been looking at is the retrofit program. You might have something to say on this as well. We had a federal retrofit program for homes. You may disagree that it had a big impact. The big impacts were, as you were saying, on industry, but that program had a great leveraging of funds for the government. People spent a lot of money. As you said, it was money that was spent in the communities. That money stayed in Canada in those local communities. Yet in the pan-Canadian framework, it was sort of put down to the provinces. Some provinces have taken it up. Ontario just got rid of theirs, unfortunately.
I'm just wondering if you could comment on advice for us and the Canadian government. What should the federal government be doing to help with this problem of fragmentation of effort? Should the federal government be trying to do all that it can by itself, just to make that effort more consistent across the country? Should it be investing in the long term and not pulling the plug halfway through a program? Do you have some advice at that kind of high level for the federal government?
President and Chief Executive Officer, Canadian Energy Research Institute
It's a very good question. I think we would all like the different governments within this country to be working together more co-operatively and to be moving forward as opposed to taking steps back. That is an inefficiency in our process. The federal government could, with its broad reach, go in and start conducting the same activities across the country, but then you're not going to foster that collaboration that I think is necessary among all the funding partners in order for them to come together and say, “We're going to do this together.”
I think energy efficiency is just one of many issues that can be dealt with in a collaborative approach. It's just hard work. There is no magic bullet. I can't see any magic bullet. Even if you come with money, people are going to want to put limits on your money being spent in their area.
I saw this on a small scale when the Ontario government was debating whether to centralize its energy efficiency activities through the Ontario Power Authority, which no longer exists, versus all the utilities. All the utilities got up in arms and said, “We want to do this because we're closest to the customer.” Yet, from a systems perspective, the most efficient way would have been to leave it with the Ontario Power Authority, but politics and pressure got to the point where now all the utilities are actually doing it themselves.
It's not going to be easy, but I do think that if you have everyone working together, it's going to be easier.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
I'll move on to Mr. Luymes.
Mr. Fogwill talked about the prices of certain energy commodities coming down. Yes, I think it would be great if we all had ground-based heat pumps, but in a more realistic sense or in the near term, are there better ways to provide incentives or get people to have more efficient natural gas furnaces or have natural...?
One of my constituents—and maybe he's not the only one—has developed a natural gas-based heating system that sits outside, like a heat pump, but is enclosed, and he uses the heat of that to generate electricity, so his electricity bill goes down. It shaves a peak off those electrical needs.
Are those the kinds of hybrid systems that we need to be looking at?
Vice-President, Government and Stakeholder Relations, Heating, Refrigeration and Air Conditioning Institute of Canada
That is a description of one type of hybrid system that I mentioned in my presentation. Yes, I think those should be explored.
I also think—and I just want to build on something Allan said—that a federally coordinated approach might make sense, but we also need to recognize that the energy mix across provinces varies significantly. Where it might make sense to lower carbon emissions by promoting heat pumps in Ontario, British Columbia or Quebec, it would not make sense in Alberta, because you might be shifting people from natural gas, which is quite efficient, to oil- or coal-generated electricity as a fuel type for the heat pumps. We do have to have some variability based on the energy mix.
The other point I would make is about the commodity prices. The solace, of course, is that natural gas is currently at historic lows, but I think natural gas as a carbon-emitting source or fuel, relative to others, also has to be analyzed in terms of the impact of the carbon tax. The pricing will not remain where it is forever. In fact, the government has said that we have to change the pricing of these types of fuels, which will then create incentives for people to switch to other fuel types.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Okay.
I'm trying to get everybody in here.
You mentioned government investment in training. In my hometown, Okanagan College has a sustainable construction management program that is designed to train people in exactly that. We've heard many times in this committee about the need for training of all sorts.
Is that the kind of thing you do? What would you recommend to the government? How would it best incentivize or invest in that sort of training, which would train people in modern construction and building techniques that would bring about energy efficiency?
President, Canadian Institute for Energy Training
I think access to training is fundamental in this kind of market, because the best options are probably not in the mind of the big designer, but in the capacity of workers to identify this opportunity.
This is a very technical job, and you have to know what you're doing at a building and industrial level. If we invest in capacity in every way possible, from college to specialized training or whatever, the Canadian government can increase the access by reducing the cost, providing standardized courses or introducing these courses at a university level.
Access to knowledge is the key to having more energy efficiency in Canada.
Liberal
Liberal
Nick Whalen Liberal St. John's East, NL
Thank you very much, Mr. Chair.
Mr. McCauley, it's great to see you again. I haven't sat across the table from you in almost a year. Thanks for joining us.
The testimony between Mr. Langlois and Mr. Fogwill is really interesting. There's this juxtaposition of what I think is a very important point that we might be able to get some recommendations around in our study. If I understand it correctly, Mr. Langlois, you've made some assumptions regarding access to external markets, in the case of your example about Saudi Arabia. You said that demand will always be there, and you had some other statements that sort of said that the excess power will be used.
I think Mr. Fogwill quite rightly analyzed.... I'm from Newfoundland, and I know the problem is that we have this situation where the price of power is really fixed as a block. The power is purchased as a block. It's transmitted as a block, and there's a rate of return that's paid based on the block. If you don't use the whole block, you could have as much energy efficiency as you want, but you're still paying the same amount for the block. I could use 100 units, but if I decide to reduce it by 10% and only use 90 units, I'm going to have a price increase of 11.11% to get me back to zero. So I don't think this assumption about demand always being there is a good one; however, I do think that, with proper planning, we can create the demand.
I'm just wondering if you guys would agree that the conversion of the transportation sector to clean energy provides, essentially, an unlimited demand source for electricity.
I'll start with you, Mr. Fogwill.
President and Chief Executive Officer, Canadian Energy Research Institute
Yes, but—