Natural Resources Committee on Dec. 4th, 2018

[The Chair, Liberal, James Maloney]

Good morning, everybody. Thank you for joining us.

We have a new room and new members. It's like a fresh start. I can see how excited everybody is by the looks on their faces.

This is our second-last meeting on this topic.

We are joined in our first hour by Anna Murray, who's the vice-president of sustainability at Bentall Kennedy. I hope you can hear us and see us.

[Anna Murray, Vice-President, Sustainability, Bentall Kennedy]

I can. Thank you.

[The Chair, Liberal, James Maloney]

Excellent.

With us here today from the Canadian Federation of Independent Business are Monique Moreau and Emilie Hayes.

Thank you, all, for joining us.

Each group will be given up to 10 minutes to make a presentation. Following that, we're going to open the floor to questions from around the table. We do try to stick to the timelines as best we can. It's not always easy, but I may stop you if we go a little bit over. I'll apologize in advance for doing that.

All of you have translation devices available to you should you need them. I anticipate that you will be asked questions in French and English.

Ms. Hayes, I understand that you're going to be delivering remarks. Why don't we start off with you.

[Emilie Hayes, Policy Analyst, National and Legislative Affairs, Canadian Federation of Independent Business]

Perfect.

[Monique Moreau, Vice-President, National Affairs, Canadian Federation of Independent Business]

Just to introduce ourselves, I'm Monique Moreau, with the CFIB. Emilie will be giving our remarks, but we'll both be available to answer questions.

[Emilie Hayes]

Thank you for having me here today for the opportunity to speak on this topic.

You should have a slide deck in front of you. I believe an English version will be posted as well.

I'd like to walk you through this deck for the next few minutes.

As you may know, CFIB is a not-for-profit, non-partisan organization representing more than 110,000 businesses across Canada. Members from our small and medium-sized businesses represent more than 1.25 million Canadians.

Small businesses across Canada account for $75 billion, or nearly half our GDP. They represent all sectors of the economy and are found in every region of the country.

As you may be aware, CFIB takes its directions solely from our members through a variety of surveys, which makes us different from other organizations. We know that business owners are often too busy to come to committees such as these, so we go directly to them for feedback through our survey process and through our field force of around 220 district managers. These district managers knock on the doors of around 4,000 businesses every week. This gives us an opportunity to understand the realities of running a business at the grassroots level.

Today, I'm here to share our members' views on economic opportunities for energy efficiency in Canada, but first I'd like to set the stage and have a look at the state of the economy.

As you see on slide 3, one of the surveys we conduct at CFIB is our monthly business barometer. Our latest barometer from the month of November shows that small business confidence has stayed somewhat muted through the month and has stayed relatively stagnant in the past few months. Ideally, we'd like to see this index between 65 and 70, when the economy is growing at its full potential. Right now the index is at around 61.2. It's not great, but not bad.

On slide 4 you'll see that small business owners want governments to take a balanced approach when it comes to implementing environmental policies. Our survey on the environment in 2016 found that the majority of members believe that actions to protect the environment can be done alongside policies that encourage economic growth, so it is important that governments carefully consider both sides of the equation when implementing environmental policies and making decisions about the development of natural resources. These decisions have a profound impact on small businesses' ability to remain competitive and create jobs.

Moving on to the next slide, as small business owners tend to be more directly tied to their communities, their views and opinions on environmental issues may often reflect those of ordinary Canadians. However, small businesses are often overlooked by policy-makers, who tend to focus their efforts primarily on changing the behaviours and attitudes of consumers and big business. When we asked our members what motivates them to go green, the vast majority said it was their personal views. Half also said that cost savings were a motivating factor, which may indicate more education is needed about how certain changes in their business can help them save money. Only 13% of our members said the fear of additional taxes and regulations motivated them to implement environmentally friendly measures.

On slide 6 we included some of the comments we received on the survey from our members about what motivates them to become more environmentally friendly. As you can see, protecting the environment is an important personal issue for many of our members. This is why you'll see on slide 7 the majority of small businesses have already taken steps to implement environmentally friendly measures in their business. Small businesses cannot always afford to make large investments or undertake big environmental projects, but it's important to recognize they are nevertheless doing what they can to protect the environment within their means. Seventy-one per cent of our members say they recycle; 63% have reduced their electricity usage and almost 40% have made the switch to more environmentally friendly products. While fewer businesses are able to afford bigger investments, 33% of our members still were able to undertake energy efficient building upgrades and a quarter said they purchased new equipment.

On slide 8 we included some examples of the sometimes creative things that our members have done in their business to help the environment. As you can see, these efforts are not limited to certain sectors or regions, but they include businesses of all types across Canada, from farming to trucking. The first example we've listed is a hair salon in B.C. that participates in a recycling program that helps divert waste away from landfills, even the hair off people's heads. This hair is then used inside a hair boom that has helped to clean up oil spills because it absorbs up to 12 times its own weight in oil.

We also wanted to know what was preventing businesses from implementing environmentally friendly measures. On slide 9 you see the biggest barrier to going green was the fact that businesses may not be able to make changes to their building. As many of our members lease rather than own, this often ties their hands in regard to how much they're able to do.

The second biggest barrier, no surprise, is cost. With increases to CPP coming in January, minimum wage increases, a new carbon tax in many provinces, the bottom line of many small businesses is just getting tighter and tighter and they are simply not able to afford these investments.

While over the long run some of these investments may save them money, the upfront costs are sometimes prohibitive for many smaller companies. While the new accelerated depreciations announced in the fall economic update will certainly be helpful, businesses still require the upfront financing to make these investments in the first place. However, banks and financial institutions don't typically lend money for things such as green renovations, so getting financing to undertake larger projects can be difficult.

Finally, we also wanted to highlight that a lack of awareness of what businesses can do to go green came in as the third biggest barrier.

Next is slide 10. When we asked our members about what government approach they would be most supportive of, raising awareness of how they could increase their energy efficiency came out on top. This indicates that government can play a big role in helping businesses not only understand what they can do, but also what cost savings may be available to them.

The measure with the second highest support from small businesses was more research on clean technologies. For businesses in sectors such as trucking, for example, they know they are limited as to how much they can reduce their emissions since the technology simply does not exist yet that would enable them to do more.

Our members are also supportive of further financial incentives, which is no surprise as cost was the second biggest barrier to going green.

Businesses are also largely supportive of enforcing current regulations. As they do their best themselves to be in compliance, they want the playing field to remain fair.

However, where there is less support among our members is for more regulations or introducing taxes and fees, such as the carbon tax, as these can actually make it more difficult to make further investments to reduce emissions as these impact their bottom line.

On slide 11, you will see some of our recommendations.

Our first recommendation is around the cost of implementing environmentally friendly measures for smaller firms. While we understand that $1.5 billion of the revenues collected from the federal carbon backstop will be allocated to small businesses, we are concerned with how this amount will be allocated. If it is too narrow in scope, too complex and time consuming, or involves a significant amount of paperwork, many small businesses will be unable to access it or may not think it applies to them.

For example, programs that require energy audits to access financing can be complex and time consuming while providing no guarantee to a small firm that they will even get any funding at the end of the whole process. Moreover, this amount for the carbon backstop only accounts for 6% of the total revenue collected. As such, we believe that the proportion of the carbon tax revenue that will be collected from SMEs will be much more significant than the amount that will be allocated to them through the dedicated fund.

Our second recommendation is to ensure that small businesses can easily access information about what their business can do to reduce their carbon footprint. There are a currently a variety of programs available at various levels of government. However, it can be very difficult for a business to track down what would be most relevant to them. As we've seen, most government websites are little bit of a maze. This could be similar to BizPaL or maybe even the innovation platform available through the ISED website.

Last, one of the biggest barriers to going green is often that the business may not own the building in which they operate. We wanted to put forward the idea of something called a green lease. This lease would enable landlords and tenants to agree upon certain environmental targets for energy, water, air quality and recycling, and would allow landlords to execute green renovations.

I want to conclude by saying that small business owners do care about the environment. The federal government must recognize the work that they're already doing to reduce their environmental footprint. Our members know that growing the economy and protecting the environment do go hand and hand, but are understandably concerned about environmental policies that seem to place an undue burden on their business through additional costs.

Thank you for your time.

Please note that we can also answer questions in French.

[The Chair, Liberal, James Maloney]

Thank you very much.

Ms. Murray, you're next.

[Anna Murray]

Good morning, everyone. Thank you for having me here today.

My name is Anna Murray, and I'm the vice-president of sustainability for Bentall Kennedy. Bentall Kennedy is a Sun Life investment management company, one of the largest global real estate investment advisers, and one of North America's foremost providers of real estate services. We serve the interests of more than 550 institutional clients. Our investment management group has approximately $46 billion of assets under management.

Bentall Kennedy is a member of the United Nations Principles for Responsible Investment, and is a recognized responsible property investment leader. It has been ranked among the top firms globally for the global real estate sustainability benchmarks for over eight years.

Regarding a bit about sustainability at Bentall Kennedy, as we know, buildings account for approximately one-third of global greenhouse gas emissions and consume approximately 40% of global energy. There really is an incredible opportunity here to reduce the real estate industry's overall environmental footprint.

At Bentall Kennedy specifically, we aim to help lead the global movement for sustainability, climate action and environmental progress, which also strengthens the long-term value generation and competitiveness of commercial real estate. As physical, regulatory, reputational environmental, social and governance risks are being increasingly felt in this industry, real estate professionals, as the building owners and operators, are in a unique position to address these risks. By doing so, we're not only mitigating risk, but also safeguarding and increasing the value of the assets that we manage over the long term.

Our team's focus is to manage environmental, social and governance risks to generate long-term returns for our clients. As part of this, we look to drive green strategies, which create value by reducing the risk of building obsolescence, saving energy, decreasing costs, and driving revenue by satisfying tenant and resident demand. We focus on smart strategies and designs to keep buildings at the forefront of technology through our culture of continuous innovation and entrepreneurship.

We also have a wellness-focused strategy that contributes to the retention of tenants and residents and sustained investor return over a long period. Specifically, our initiatives include green building certifications; energy efficiency training; energy, water and waste audits; data management benchmarking; target setting; and external reporting amongst others.

I also want to take a minute to talk about a few additional initiatives that Bentall Kennedy is involved in that are contributing directly toward the Canadian Paris climate change commitments.

As part of the United Nations Environment Programme's finance initiative, or UNEP FI, we are on their investment committee as a member. UNEP FI is a partnership between the United Nations Environment Programme and the global financial sector, which includes insurance, investment and banking. We work with UN Environment to understand today's challenges, why they matter to finance, and how we can actively participate to address them.

As a committee member, we have a global mandate to drive adoption of sustainability in real estate investment and property management. We share responsibility for developing and monitoring the UNEP FI sustainability strategy for the investment industry while engaging with leading global investors to address pressing sustainability issues.

Last year, we were elected as co-chair of their property working group. The property working group's objective is to address the most imminent challenges in the field of sustainable real estate investment. I was in Paris last week for a round table with our global counterparts to discuss our current strategy as well as our long-term strategy.

As part of this group, and in our role as co-chair, Bentall Kennedy drives innovation in responsible property investment by facilitating access to relevant information and best practice, and collaboratively developing the necessary tools to enable property investors and professionals to systematically apply and integrate ESG criteria into investment and lending decisions. We also collaborate, as I mentioned, with our global counterparts.

Of note for the committee today is that, as part of my role as co-chair, I've undertaken a global survey representative of over one trillion dollars' worth of assets under management in Asia, Europe and the Americas. The survey is focused on global investor focus on sustainable real estate, and the results will be available in the new year. It will not only dictate our strategy as part of the property working group, but will also help to inform global investors as to market-competitive strategies.

Finally, in terms of the task force on climate-related financial disclosures, Bentall Kennedy is one of the original participants in the real estate pilot group. We're currently undergoing this pilot as one of 13 other global participants, and the results will be available in the new year. For those of you who are unaware of this pilot, approximately 20 asset managers worldwide joined UNEP FI's pilot project to implement the recommendations of the task force on climate-related disclosures. The pilot will specifically develop scenarios, models, metrics and, ultimately, a risk assessment tool that will enable investors to assess climate risk across their portfolios. Upon the conclusion of this pilot, the results will be made publicly available in an open-sourced format. We're looking forward to seeing those results also in the new year.

Thank you very much.

[The Chair, Liberal, James Maloney]

Thank you very much.

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

[Kent Hehr, Calgary Centre, Lib.]

Mr. Chair, I want to thank both presenters for being here today and for bringing forward their compelling testimony.

Yesterday, I was just reading that Microsoft, Mr. Chair, actually has an internal carbon-pricing mechanism that it uses in its company. It allows Microsoft to not only look towards greener solutions, but also save money within the company.

I was very interested in what Bentall Kennedy has done. Is that the basis of a lot of your programming? Are you guys trying to be part of a proactive move to be more energy conscious, while also seeing some practical savings from going green? Can I surmise that from your testimony?

[Anna Murray]

Yes, absolutely.

Of course, our role is as a fiduciary, and as part of that, our responsibility is to generate long-term returns for our clients. Our credo is to invest soundly and sustainably, so we do see the two as inextricably linked.

Bentall Kennedy commissioned a study that has since been published in The Journal of Portfolio Management. It indicated that, for example, green-certified buildings are, on average, valued at 8% to 10% more compared to their non-certified peers. It kind of works in both ways for us, and we're always making sure that there is a business case associated with a greener and thriving real estate portfolio.

[Kent Hehr]

Part of our pan-Canadian framework on clean growth and climate change is the adoption of carbon pricing instead of having mechanisms like regulations and subsidies do the work for climate change reduction. Does Bentall Kennedy recognize carbon pricing as a legitimate means to moving forward on impacting a more green, clean future for businesses and communities?

[Anna Murray]

I typically don't respond in terms of political strategies, but I'm very happy to get back to you in terms of what our company's stance is on those types of issues.

[Kent Hehr]

Okay.

My next question is for the CFIB.

It sounds like you were talking about how businesses preferred to have more incentives up front because there were often some costs associated and the like.

Are there any best practices out there that other jurisdictions are doing that we should be adopting here in Canada? Are there any examples around the world that you could point us to?

[Monique Moreau]

We haven't looked internationally in our research, but we are working closely, for example, with Minister McKenna's office and Minister Mary Ng's office as they go forward with the development of how the backstop money will get transferred to small businesses.

As my colleague pointed out in our presentation, our advice is really that it needs to be simple. We're looking at situations where, as they did in Ontario, you apply, and then you have an energy auditor come in and then you are told that you need a new boiler, for example. Then you need to find, in some cases, the thousands of dollars to purchase that new boiler and install it. Then you have to have the energy auditor come back to certify that you installed it correctly, that it is the right boiler. Then you reduce your overall energy audit by x%, and then the cheque will hopefully be in the mail at some point several months after that.

For many small businesses, that's not a sustainable way of getting that funding to help them move forward in terms of energy improvement. We're suggesting something that is much more simplified than that.

[Kent Hehr]

I was very intrigued by your green lease, and I think it has a way to move forward.

Is this one of those projects that you're working on with our government or with your members and landlords to try to assist in better shaping buildings and the like?

[Monique Moreau]

We certainly have raised it with Minister McKenna's office as one of the, essentially, biggest barriers that many small business owners have.

At this point, it's tricky for a business owner to negotiate that kind of an agreement with their landlord, so we would welcome opportunities to simplify that process. I think that would require more than just the federal government's involvement. It may be as small as a municipal initiative. That is certainly something that we think presents some opportunities, but at this point, policies need to be designed keeping those intricacies of improvements for small businesses in mind, and that is one of the biggest barriers.

[Kent Hehr]

My final question is for Bentall Kennedy.

Can you point to other examples around the world or otherwise that we should be looking at to institute here in Canada?

[Anna Murray]

Yes, definitely. Having just returned from Paris and spoken with my counterparts in Europe and Asia, there are some great examples coming out in terms of guidance on positive impact in the real estate sector to move beyond solely looking at the environment to also understanding additional impacts, positive impacts in particular, that certain strategies can have as they relate to the social element.

There's something called the positive impact framework that the property working group is just launching now that can be used as a great example.

In terms of some of the initiatives that my counterparts in Japan are focused on, they are also things like green leases, green building certifications and trying to look at the implications among the investment industry, the banking industry, as well as insurance in particular as they relate to climate change elements.

[Kent Hehr]

I think the last time we were questioning a group, we heard that there was an Ontario government program that went in and analyzed buildings to assess energy efficiency. Has your organization been working with them, and did you find that program works?

[Anna Murray]

What specific program is that one?

[Kent Hehr]

My memory is—

[Anna Murray]

That's okay.

We have quite a robust energy management system as well as a proprietary data management system. We have the ability at some of our buildings to analyze our consumption patterns down to the 15-minute interval level. We are very focused for our investment community as well as our tenants to make sure that our buildings operate as efficiently as possible. We are very keen on that.

Internally, we do an annual benchmark survey so that we have the ability to benchmark an individual asset against either its own asset class or whatever portfolio it's in, in a specific region or across North America, to get down to very minute points to understand exactly how they are functioning in terms of their environmental, social and governance risks.

[Kent Hehr]

Thank you very much.

[The Chair, Liberal, James Maloney]

Perfect.

Next is Mr. Généreux.

[Bernard Généreux, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, CPC]

Thank you, Mr. Chair.

Thank you very much for being here. My thanks also to the witness appearing by videoconference.

As you know, Quebec is in a somewhat unique position in Canada, in that it produces hydroelectricity. It therefore has a competitive advantage to some degree. Before I go any further, I must point out that, as well as being a federal member of Parliament, I own a company that has been a member of the CFIB for about 15 or 20 years. I don't know anymore; it has been a very long time.

We have 25 employees, in four offices. We own our main building and we are tenants in the other offices.

As tenants, you do not always have the means to change things, but, with our main building, we have electric heating, using hydroelectricity.

My company has taken a lot of initiatives. We are printers, so we are very familiar with recycled paper. Unfortunately, Quebec is currently experiencing a recycling crisis. I am going all over the place a little, but I will come back to my other questions soon.

We are currently experiencing a recycling crisis, not only with paper, but particularly with plastic, which is extremely harmful. China used to take certain plastics and certain materials. But now Quebec is really struggling with the plastic. Unlike British Columbia, for example, we do not recycle glass. There really is a recycling crisis and it has extremely significant economic repercussions on business.

Here is my first question. Do your organizations have anything to suggest in that area? Would you like the government to do more?

I have a second question as well. As an entrepreneur, and as a member of Parliament, of course, I meet a lot of entrepreneurs. I am often asked whether there is not some way to reduce paperwork. It is crazy how much of it there is. It makes no sense, particularly with the environment, where we are trying to protect anything and everything.

Unfortunately, we then end up in terrible environmental mazes, especially SMEs, which do not have the means to dedicate employees to it as big companies can. It becomes a huge administrative burden.

In Quebec, the government has been handing out money, particularly through the green fund. By the way, it must be said that the government has spent $1 billion, which has changed absolutely nothing in the Quebec's rate of greenhouse gas emissions.

The entrepreneurs I meet tell me that, instead of being penalized or being bad polluters, they would like help to become better citizens. You understand that fundamental difference.

What do you think about it?

[Monique Moreau]

I would first like to answer your question about recycling.

Our members have told us the same thing as you have. They want to recycle their materials, which they know very well. First, the public, who put their bins on the side of the road and take them back empty at the end of the day, do not understand that entrepreneurs have to pay for that service. Second, when the customer service fall short, they are the ones who basically end up with all the recycling.

Our suggestions really go to the municipal administrations, so that they can begin to get to work on those problems.

[Bernard Généreux]

Our municipality was the first on the Lower Saint Lawrence to use a third bin, a brown bin for biomethanization.

When I became a member of Parliament in 2010, our government announced the establishment of a biomethanization plant in Rivière-du-Loup. Eight years later, it has just started, or is just about to start, producing gas. It takes a long time. The processes are extremely lengthy, especially when we are dealing with such an innovation.

[Monique Moreau]

Surveys of our members generally indicate that they want to participate in those programs. They are interested because they want to reduce the basic costs of running their businesses. It is important for them too.

As for your second question, about paperwork, the opinions of our members are divided. They know that they have to fill out forms and apply for grants, for example. Reducing paperwork should therefore be seen as a way to encourage people to participate. If it is complicated and expensive, it will not be done.

Second, the most important problem—at least according to the surveys of our members—is that they are not aware that the programs exist.

We really encourage the government to provide publications, to make them known, and to use organizations like ours to pass on the message, so that our members know how to access those programs.

[Bernard Généreux]

At the outset, it was clear. People were deciding to do concrete things for their companies. But it is extremely frustrating to see that those concrete things basically end up in the garbage. It is really not pleasant to hear comments like that.

I don't remember your name, Madam, but from far away, I will say, can you answer those questions as well? Do you feel that as well? Do you understand those questions? How would you respond to that?

[Anna Murray]

Are you directing the question at me now?

[Bernard Généreux]

Yes. You're the one who is far away.

[The Chair, Liberal, James Maloney]

It's only Toronto.

[Anna Murray]

Waste is a very large issue. Thank you for raising that. I think there are significant issues, particularly with the measurement and the transparency around measurement.

Some of the haulers have an enormous amount of power. I think it has ended up being a result of their institutionalization in that sort of power role, but the hope is that in the future it starts to balance out a little more and that as a result there will be more transparency in terms of waste diversion and what those numbers accurately reflect.

Transparency is one issue. I think too much power on the haulers' side is another issue. Also, in terms of the waste piece, I think different companies have different calculations in terms of diversion rates. Different companies are looking at that in a different way, so I think some level of standardization would be helpful in order to give a more accurate insight into what these numbers actually look like.

There's another element that's specific to the building world. We find that even when we implement an incredible initiative at one building, the issue is that when you go right next door—to give the example of downtown Toronto—that building will have a different policy, different recycling or different waste regulations or policies. There's nothing that's standardized across an area, which leads to a lazy attempt, I guess, at recycling or waste diversion on the user end. It is so different that people lose motivation and interest, because in every new building they go into they have to look at something different—

[The Chair, Liberal, James Maloney]

I'm going to have to interrupt you there. We have to move on.

Mr. Cannings.

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

Thanks to all of you for being with us today.

I'm going to start with Ms. Murray and Bentall Kennedy.

Mr. Hehr mentioned Microsoft. As long-term members of this committee certainly know, I often talk about building with wood. Microsoft is rebuilding their campus with all-wood buildings that are being constructed with materials made in my riding in Penticton, British Columbia.

We have the technology now to build large buildings more or less completely out of wood. As a structural material, these buildings sequester carbon, so it's good for reaching our targets. I have a private member's bill regarding this in terms of government infrastructure.

First of all, does Bentall Kennedy build buildings or do you just manage them? If you do, do you see this trend in the world of constructing buildings out of wood? I think France has a target of 30% of their new buildings being built with wood in the near future. I'm wondering if you see that and if you were looking at that. You're tuned in with the world of big buildings. Could you comment on that trend?

[Anna Murray]

Yes, we are also involved in the development space in addition to building management, and yes, we are very focused on sustainable orientation in the development space. We now have a few buildings that are being constructed with wood. It's very dependent, obviously, on local regulations and what's allowed where, but just as we do in every other element of our business we work very closely with the development team to ensure the buildings are built to sustainability standards.

One area in particular that has very helpful guidance is LEED, the green building certification, or BOMA BEST. When we go for a LEED platinum or whatever level of LEED-certified building, the guidance within it in order to achieve that level of certification guarantees industry standards for sustainable development.

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

When you are in the planning process for building a building, I assume you do consider modern construction methods that would lead to a LEED-certified building and so on and more energy savings. Are there any incentives out there that you can take advantage of to do that, or do you think this government could provide some incentives for the construction of buildings? We hear a lot about retrofits, but in the actual construction is that something you encounter?

[Anna Murray]

Yes, and I appreciate your raising that. I would say yes, absolutely, if there is opportunity or room for providing developers with incentives to develop certified buildings, that would be very well received in the industry.

One of the main issues is that certifications are becoming increasingly more expensive, so some investors and some funders are having a hard time justifying the spend to get the green certified building.

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

I'm going to move to CFIB. You mentioned the green lease. Mr. Hehr mentioned that as well.

I wonder if you could expand on that and say how it works. Is there a trend towards that? How can we help that along if it has a good effect?

[Emilie Hayes]

I don't think it's a trend quite yet. It's something that we suggested in our first environment report back in 2007 and that we brought up again in our most recent one, in 2016. It's something that I don't think has caught on yet, just because I don't think there's a lot of information available out there for it.

One of our recommendations is really to provide education to business owners and landlords, because business owners may have more incentives to request such a lease from their landlord if they even know it exists.

As far as I know, it hasn't really been something that has caught on fully yet.

[Monique Moreau]

If I can supplement what my colleague has mentioned, our suggestion, though we probably would love to take credit for it, came from the Real Property Association of Canada. They suggested that in 2008. It has been a decade. We could have at this point been talking about this more commonly, but there still seems to be a lack of information. I think it requires investment on the part of the landlord.

What can we do then to facilitate that as we do for the business owners through an offset? What can we do to encourage it and design it in a way that's simple and easy to access? Those would be some of the guidelines we would suggest around that.

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

You mentioned that some businesses find the kind of retrofit rebate system too difficult to negotiate or it takes too long to get the rebate back. For the return on investment, the payback period might be a little too long. Is there a way you could suggest? You said you wanted something simpler. Obviously, the simplest thing would be for the government just to give people money if they were renovating their building. Obviously, some limits have to be put on that.

As taxpayers, we have to be assured that money is being spent on real retrofits that will have a benefit. Is there some way that you have in mind that would do that?

[Monique Moreau]

Certainly. It sounds like a free-for-all, but that's what we're doing for consumers with the carbon backstop. We're just giving them the money, even though they may not make any changes in their day-to-day life that we're aware of. That is one option.

Maybe there are a number of streams whereby if you want to make an adjustment that's quick and relatively inexpensive you can get money much more quickly, and if you do want to undertake a larger, more substantial retrofit that requires a more significant investment, then that would require a bit of an application or something. We're trying to be flexible with that.

Things like green renovation tax credits have gone a long way, and our business owners and members have been supportive of those. In fact, in Quebec they had something called the RénoVert residential tax credit for individual homeowners, so maybe we could have something similar to that. There would be no application process and maybe you would send in your receipts at the end of the year, and CRA would say, yes, in fact you did do this list of approved renovations and so you can deduct those from your taxes. Those are the kinds of initiatives that we're in favour of versus those with a multi-step lengthy process.

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

Thank you. That's it.

[The Chair, Liberal, James Maloney]

Next is Mr. Serré.

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you, Mr. Chair.

My thanks to our witnesses.

Ms. Murray, we heard from officials from Energy Efficiency Canada. They told us about energy costs for homes and businesses and they talked about saving $1.4 billion annually.

They also mentioned that every dollar invested in green energy produces a gross return of $7 in growth.

One of their recommendations for investing in buildings was to work more closely with the Canada Infrastructure Bank and the Canada Mortgage and Housing Corporation, the CMHC.

Are you working with the Canada Infrastructure Bank? Does it have any connection with the investments you are making?

[Anna Murray]

No, we haven't been doing direct work with them.

[Marc Serré, Liberal, Nickel Belt, ON]

Okay.

When you talk about investments in Canada, is there a specific amount?

You talked about the United Nations and about Canada's reputation. Can you be specific as to the amount of foreign money that has been invested in Canada?

You mentioned the green building certification. Do you know how much money from international sources has been invested in Canada?

We are looking for a energy model that is a little more efficient.

[Anna Murray]

To clarify, are you wondering what the dollar amount of our investors is specific to Canada?

[Marc Serré, Liberal, Nickel Belt, ON]

That's correct.

[Anna Murray]

I can find out that exact number for you. I know it's $46 billion for North America, but I'll have to determine specifically which assets of the various funds are located just in Canada.

[Marc Serré, Liberal, Nickel Belt, ON]

Right now you have a number of $46 billion for North America.

[Anna Murray]

That is correct.

[Marc Serré, Liberal, Nickel Belt, ON]

My question goes to the representatives of the Canadian Federation of Independent Business.

Have you done any studies with your members?

Other witnesses have told us that exporting energy efficiency is an expanding market with a lot of potential. Have you conducted a study with your members, specifically on their export potential?

[Monique Moreau]

No we have not done that yet.

[Marc Serré, Liberal, Nickel Belt, ON]

Okay.

How many of your members work in the energy efficiency field?

[Monique Moreau]

Not very many.

As for technology, investment and all that, most of our members represent what you would expect to find in a business community. We go from corner stores to accountants.

[Marc Serré, Liberal, Nickel Belt, ON]

Earlier, you talked about an initiative to try to encourage companies to save money. We had a representative from Loblaws before us, talking about the huge monthly savings Loblaws has made because of their facilities. The company has buildings all over Canada, of course, so it has the resources to do that. As you mentioned, that is rarely the case with small companies.

What recommendations can you give us to support small businesses?

Two weeks ago, a witness from Ontario told us that 110 people were crunching numbers and trying to improve efficiency in energy costs. Do you have any specific recommendations for us?

How can we encourage small businesses to become involved with saving energy?

[Monique Moreau]

First, we have to tell our members and entrepreneurs what is available to them. That can be done in a number of ways. They do not know the possibilities and the programs that exist. They are not aware. I feel that this it is an opportunity for governments of all levels, especially the Government of Canada, not just to put taxes on carbon and other programs, but also to let entrepreneurs know about the ways in which they can save energy in their businesses.

It may take the form of initiatives like recycling, which is relatively easy and does not require major funds. It may also be by establishing programs or plans for two or three years, allowing them to invest. They have to take advantage of the programs available, like the accelerated investment initiative that the government announced in its fall economic statement.

First and foremost, communication is most important. Our organization and our district managers are also available. The CFIB has 220 employees who knock on the doors of about 4,000 businesses per week. It's a great opportunity to try and familiarize them with the possibilities that may help them to reduce their impact on the environment.

[Marc Serré, Liberal, Nickel Belt, ON]

Madam Murray, you talked about the green building certificate program that you have. You indicated that this is a program that's being promoted more and more because it does increase the value of the real estate. It increases the potential for either adding capital for equity or for selling.

Can you provide the committee with some recommendations on what we can do to support you in expanding that program?

[Anna Murray]

I'm assuming you're addressing this question to me. The first part was cut off.

[Marc Serré, Liberal, Nickel Belt, ON]

Yes.

[Anna Murray]

I also want to take the opportunity to respond to your initial question.

We're managing approximately $20 billion in Canada.

In terms of the green building certification piece, some of our investors and building owners find it difficult now to justify spending the costs required to certify their buildings.

Although in downtown core areas it's table stakes to have class A and B buildings certified, it was much more popular and competitive five years ago compared to now.

I think that providing some level of incentives for buildings would be helpful, either through the development phase or the recertification phase.

[The Chair, Liberal, James Maloney]

I don't do this because I like doing it, but I'm going to have to interrupt you again. We're a little bit beyond time.

If you could wrap up quickly, that would be great.

[Anna Murray]

There's also something to be said for older buildings as those tend to be less energy efficient.

[The Chair, Liberal, James Maloney]

Perfect. Thank you.

Mr. Nicholson, you have five minutes.

[Rob Nicholson, Niagara Falls, CPC]

Thank you very much.

I'd like to thank our witnesses. Your testimony here is very helpful.

Ms. Hayes, one of the things that impressed me about your testimony today was the chart which showed that your members are overwhelmingly motivated by their own views of protecting the environment as opposed to any other issues here. I think that means you're certainly moving in the right direction—or your members are—in terms of the awareness of this.

Towards the end of your testimony, you said that there are going to be barriers. One of them was the increased cost. You mentioned CPP, minimum wage and the carbon tax. Are all of these measures adding up to discourage businesses from becoming more energy efficient? Is that the point you want to make?

[Emilie Hayes]

I wouldn't say it discourages them; I just think it makes it a lot harder for our members.

It's not just the costs of federal government. We have to keep in mind that they're dealing with the costs from the municipal governments and regulations from provincial governments as well. All of these costs add up. When it's impacting a business's bottom line, it gives them less cash flow to be able to make these investments in the first place.

A lot of our members say they want to and they're doing what they can.

We're reading through survey comments right now and so many of our members are stating that they've done all that they can at this point; it's difficult for them to be able to do more.

As we mentioned, not owning your building can be very difficult to make any sort of green renovation.

[Rob Nicholson]

This has been very helpful to us, quite frankly, with respect to the carbon tax. As you know, there's been quite a bit of discussion in Parliament concerning that. That was very helpful, as well.

One of the things I noticed on the chart is what drives businesses. One of them was not financial incentives. If I remember correctly, it was about 13%. It was near the bottom.

[Emilie Hayes]

It wasn't financial incentives; it was the imposition of more regulations and taxation.

[Rob Nicholson]

Okay, it was taxation.

[Emilie Hayes]

It really is personal views that drive them to do more. For them it is important. They recognize that climate change is real. They recognize that it does have an impact on their business and their bottom line. They want to do something.

We read in our members' comments that a lot of people just do it because they want to leave a better planet for their children and grandchildren.

[Rob Nicholson]

That's good. That came through.

With respect to landlords.... That was one of the challenges you had. There are landlord associations and groups across Canada.

Does your group ever sit down and meet with them or do you want your members to do this on an individual basis? Is there anything organized in terms of letting them know that's one of the ways in which we can help the environment?

[Monique Moreau]

We're in discussions with groups like the Canadian Home Builders' Association, the realtors, and there are other associations that we discuss this with, occasionally.

I think that what you're suggesting—to do something wholesale to make it easier—is the best approach. Asking an individual business to negotiate with their landlord also constrains the month or period of time in which they can do that. If their lease is not up for renewal for another five to seven years, for example, or even on a shorter term basis of three to five years, you're constraining improvements that could be happening that day, year or month.

I think that a wholesale approach, if you will, would expedite that process.

[Rob Nicholson]

Thank you very much.

Those are my questions, Mr. Chair.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Nicholson.

Mr. Whalen, you have about four minutes.

[Nick Whalen, Liberal, St. John's East, NL]

Okay, great. Thank you very much.

Ms. Murray, one of the important metrics that everyone seems to use to determine whether or not their energy efficiency program is working is cost per kilowatt hour.

Does Bentall Kennedy have a target cost per kilowatt hour? Can you provide us with some examples within your organization of different programs, the relative cost per kilowatt hour and the relative benefit they might have to other businesses if they were to adopt similar measures?

[Anna Murray]

One thing that's important to keep in mind in terms of Bentall Kennedy's structures as compared to some of our competitors is that we manage, on behalf of multiple clients, and we're not actually building owners. We are really at the mercy of whatever our client mandates are, so we don't paint every single management initiative with the same brush.

Specifically, we have our target-setting program, which currently has roughly 70% of all of our eligible portfolio participating in this. Part of that is that we look at the normalized energy use intensity, consumption per square foot, normalized for occupancy, weather and exceptional loads.

We also have a built-in metric to measure GHG emissions intensity. We've found this to be very cost-effective for us, in that the last three-year cycle realized over 9.5 million dollars' worth of energy costs avoided, or in other terms, a 14.2% reduction in normalized energy.

We don't give away the specific details of what the—

[Nick Whalen, Liberal, St. John's East, NL]

On that, what would it have cost to make those savings? What was the total input cost to generate that $9.5 million in savings?

[Anna Murray]

I would have to go back to find the actual numbers, because there are multiple asset classes involved in that target-setting program. I'm happy to get back with those details.

[Nick Whalen, Liberal, St. John's East, NL]

You mentioned that green leasing was one of the activities that you're engaged in. Can you provide some examples of how your green lease program works, and how it's done energy savings in the Canadian market, if you've used it in the Canadian market, or elsewhere in the world, if you've used it elsewhere in the world only?

[Anna Murray]

Yes, sure thing.

In our green lease program, the recommendations put out by corporate are for all of our assets and property managers to look at things like energy, water and waste consumption, as well as even things down to green cleaning products.

It's up to the individual landlord-tenant agreement, but we certainly put forward a lot of our recommendations as opposed to mandating it, for the reasons I specified before.

Through BOMA Canada, we will be providing our green lease recommendation document to the Chinese market in the coming weeks, in terms of our global engagement. Also, through UNEP FI, we provide those types of examples to our global competitors, if you will.

[Nick Whalen, Liberal, St. John's East, NL]

Are you able to provide a copy of that document for the Canadian market to this committee?

[Anna Murray]

Yes, I don't see why not.

[Nick Whalen, Liberal, St. John's East, NL]

Wonderful. Thank you.

[The Chair, Liberal, James Maloney]

That's perfect timing. We're going to have to stop there.

Thank you very much, everybody, for joining us today, and for providing us with very interesting and valuable evidence for our study.

We're going to suspend for a couple of minutes while we get the next witnesses online and in the room.

[The Chair, Liberal, James Maloney]

Welcome back. We're ready to start with our next set of witnesses.

With us in the room from Empower Me, we have Yasmin and Karim Abraham. I'm going to assume you're related in some way.

[Yasmin Abraham, Director, Kambo Energy Group, Empower Me]

You assume correctly.

[The Chair, Liberal, James Maloney]

I'm very intuitive. That's why I'm the chair.

To those on video conference, I hope you can hear us and see us.

[Len Horvath, Past President, British Columbia Advanced Conservation and Efficiency Association]

Yes, we can.

[The Chair, Liberal, James Maloney]

That's good.

From British Columbia Advanced Conservation Efficiency Association, we have David Craig and Len Horvath.

Thank you, everybody, for joining us.

Each group will be given up to 10 minutes to deliver remarks, then we will open the floor to questions.

We have a PowerPoint from our video conference group, which is in English only. It will be translated subsequently. We didn't have sufficient time in advance to do that for today. We'll proceed on that basis, unless there's any objection from anybody around the table.

Seeing none, why don't we start with Empower Me.

[Karim Abraham, Chief Executive Officer, Kambo Energy Group, Empower Me]

Good afternoon, Mr. Chair and committee members. Thank you for inviting us to speak before you today on a topic that we share a great passion for.

My name is Karim Abraham and I'm the CEO of the Kambo Energy Group. With me is Yasmin Abraham, my sister and our senior vice-president of business development.

Before we begin our testimony today, we'd like to acknowledge the Algonquin nation whose traditional and unceded territory we are gathered upon today.

Today we'll discuss our experiences and what we've learned from designing and implementing energy efficiency programs in indigenous communities and underserved populations. We'll provide two recommendations to maximize the efficacy and equity of programs across Canadian demographics.

The Kambo Energy Group is a family-owned social enterprise that delivers turnkey energy efficiency solutions to businesses and underserved communities. Our customer groups include commercial and industrial businesses, indigenous populations, newcomers to Canada, seniors and those who live in energy poverty. We are part of the front line for reducing energy consumption in Canada. We are not policy specialists; we're not lobbyists and we're not economists. We are building scientists, marketers, engineers, software developers, construction specialists and project managers who are innovating the implementation of energy efficiency projects every single day. We have grown from four employees in 2012 to over 60 people across B.C. and Alberta today.

In the 30-plus years our family has been working in energy efficiency, we've experienced the ups and downs of the industry. Today, approximately half of our business comes from the private sector and utilities and the other half comes from funding at all levels of government, including some first nation governments. Having worked with both public and private sector stakeholders, we're in a unique position to bridge the learnings between the innovations required to stay relevant in the commercial market and the patience required for public funding that can seem to come and go without warning or communication of rationale. This is a reality that has been detrimental to Canadian energy efficiency businesses and their ability to invest and plan for the future.

We'd like to share with you our experience with public funding of energy efficiency, and highlight Empower Me, a landmark equity-based program that combats energy poverty in western Canada. Over the years we have honed our programs and services to focus on two core principles, which also serve as our recommendations to the committee. Number one, programs should be focused on implementation and performance. Number two, programs should be inclusive of all Canadians.

With respect to the focus on implementation and performance, if the goal of energy efficiency programs is to reduce energy consumption, the reduced energy consumption should be the verified deliverable. Far too often we see funding that has stringent eligibility criteria limited to activities with no requirement to report actual savings. In addition, funding programs rarely fund both assessments and implementation of measures required to achieve those savings. Assessments on their own do not reduce energy use. This fragmented approach, which separates the processes between energy assessors, engineers and contractors, leads to poor results with little accountability for the savings. We need a cohesive approach focused on accountability.

The success of our clients and the savings they achieve are a direct result of the innovation that has been created precisely between the existing siloed funding steps. Our technology spans the traditionally fragmented value chain to move seamlessly from diagnosing energy-saving opportunities to scoping solutions, providing installation quotes and business cases, managing the implementation and verifying resulting energy savings. By focusing on the goal of delivering meaningful savings for the client from the onset, innovation and accountability maximizes efficacy and drives down costs.

In B.C. first nations communities, we have seen this approach achieve energy savings of between 30% and 40% on upgraded homes. We have also seen 10% community-wide reductions year over year, with simple paybacks of four to seven years. Sadly, we have no specific funding stream from any federal organization to be able to repeat this proven approach with other communities.

[Yasmin Abraham]

Our second principle is to ensure programs are inclusive to all Canadians. In the next 18 years, Stats Canada is projecting 25% to 31% of Canada's total population will be immigrants. In 2016, 1.7 million Canadians identified themselves as indigenous. Canadian seniors now outnumber children for the first time, and by 2031, about 23% of our population will be seniors.

Today, 1.8 million Canadian families struggle with energy poverty, which I will address in detail later.

These are not small numbers. Members of each group have specific needs in how and where they access energy efficiency information and programs. Empower Me is Canada's only energy conservation and behaviour change program designed specifically for and delivered by members of underserved communities in over nine languages.

The program focuses on four often-overlooked groups: newcomers to Canada, indigenous people, seniors and families struggling in energy poverty.

Our experience shows us that members of these communities fail to access the readily available energy efficiency education and programs available to all Canadians. To ensure these Canadians are not left behind, energy efficiency programs need to be designed to address the language, trust and accessibility barriers that these communities face.

Our teams have worked with newcomer families living in uncomfortably warm homes, with astonishingly high bills, who believed they were not allowed to touch that dial on the wall. Many families we work with do not trust authority figures like utilities or governments to help in lowering their bill. Others in this group are often the target of scams and are wary of offers promising savings and other free services.

Empower Me breaks through these barriers by finding and hiring key connectors in the community, known as mentors, to deliver information back to their own networks in a trusted and accessible way. Because mentors are well known in their communities, they're invited into sacred community spaces where traditional government and utility messaging just doesn't reach.

Six years since our inception, this approach has led to hiring and training 55 individual mentors across B.C. and Alberta from under-represented and underemployed groups, many of whom have gone on to other meaningful work in our industry. Mentors have worked with over 320,000 community members and reduced greenhouse gas emissions by over 13,000 tonnes.

To ensure continuity for the communities, Empower Me has made the strategic decision to launch as a stand-alone program and seek support from a coalition of funders: local and provincial governments, utilities and private businesses. At present, Empower Me does not receive any federal funding.

I'd now like to spend a bit of time talking about energy poverty, its link to Empower Me, and the impact to Canadians.

Households are considered to be energy poor when a disproportionate amount of their income is spent on energy bills. Today, 21%, or more than 1.8 million Canadian families, struggle to pay their bills. This means falling behind on bill payments, utility cut-offs, and tough decisions about whether to keep their families warm or purchase other basic needs.

Energy poverty is distinct from poverty. More than two-thirds of families struggling to pay their utility bills would not be considered low income by Stats Canada's LICO measure. One of the easiest ways to reduce energy poverty is to improve the energy efficiency of homes. Higher consumption in energy-poor households is driven by inefficient buildings, older appliances and individual energy use behaviour. Residential rebate programs are typically not an option for struggling families, as they require a significant portion of the upgrade costs to be funded up front. Without providing effective and fully subsidized home upgrades for these families, the cycle of energy poverty and its effects will continue.

In the early 1990s, when governments began funding solutions to energy poverty, the Empower Me leadership team helped develop one of the first programs in the U.K. Since that time, in Canada, all provinces and territories, except for Saskatchewan, have implemented energy poverty programs. However, there is currently no federal approach to addressing this issue.

In 2018, Energy Efficiency Alberta supported Empower Me to design, deliver and build the province's first program to support the 300,000 Albertan families struggling to pay their utility bills. The goal was to maximize energy savings in energy-poor households and build one of the most economical, inclusive and effective solutions to addressing energy poverty, a great example of innovation required across the value chain to maximize impact.

[The Chair, Liberal, James Maloney]

You're going to have to wrap up very quickly.

[Yasmin Abraham]

I have one more sentence.

[The Chair, Liberal, James Maloney]

That's good.

[Yasmin Abraham]

Our family is proud to have built a business developing innovative solutions to make a real difference to our most vulnerable populations.

I hope that our testimony today has illustrated the need for energy efficiency funding to be inclusive for all Canadians and to focus on implementation and performance while providing businesses the space to innovate solutions that align with overarching goals.

[The Chair, Liberal, James Maloney]

Thank you.

You would have been right on time if I hadn't interrupted you. That's my fault.

[Yasmin Abraham]

It's not a problem.

[The Chair, Liberal, James Maloney]

Mr. Craig, I understand you're going to deliver remarks.

[Len Horvath]

It's Len Horvath here. David is going to go second.

I'm the past president of the association, and I operate my own consulting and service business. I've spent the last 40 years in the construction industry and the corporate world, looking after buildings and real estate for a major telecommunications company and, in the last 24 years, running my own business focusing on energy efficiency.

I want to pass on what I think are the critical issues the committee should consider, really addressed to the commercial building industry. The challenge I see is that much of the work that's been done focuses on things like building codes and energy codes, such as the national energy code for buildings.

The problem is that none of these codes apply to anything but new building construction or renovation work that might take place in existing buildings. The challenge will be how you take our existing commercial building stock and improve the energy efficiency in that sector. I've identified that the building codes and energy codes are an obstacle, and that there's nothing that really addresses that issue.

Also, in the rental market for the commercial sector, it's pretty standard in Canada to have what's called a triple net lease, whereby the energy costs are simply passed on by owners to tenants as an operating cost charge. Owners don't pay the energy costs directly; they are paid for by the tenants, so the owners don't have a direct motivation to do anything to improve the energy efficiency of their buildings. Tenants, on the other hand, don't own the buildings, so they also don't have any particular motivation to do anything, especially as they near the end of their lease, which in Canada is typically a five-year term, which may be renewable, but it's around that time frame.

What we've found in the work we've done in the last 40 years is that incentives really appeal to the natural human desire to find a good deal. They work—it's been proven by energy utilities across Canada—and there's been significant uptake amongst building owners.

The other issue is, if building owners make an investment—and they can be major investments—how do they get a return on that? The industry has come up with a concept called a green lease. There's language within a green lease that allows the owner to amortize the cost of these changes as an operating cost charge to the tenant over the term of the lease. They're able to pass on that amortized cost, and we've found that that works. Unfortunately, it's not mandatory that leases have green clauses in them, but if it were, it would go a long way to addressing the issue in the industry.

Those are my comments relating to the existing commercial building industry. I'll turn it over to David, who will talk about some of the new innovations that might be considered.

[David Craig, Vice-President Secretary-Treasurer, British Columbia Advanced Conservation and Efficiency Association]

I'll start with the opening slide of the PowerPoint. I want to introduce you to a new technology for buildings for a sustainable future. We'll be looking here at an innovative Canadian technology that's been developed in Moose Jaw, Saskatchewan. It's disruptive to the building industry. It has substantially lower CO2 emissions—in the order of 80%—and significantly lower construction costs, resulting in those lower costs being reinvested in the building technology to produce higher quality, disaster-resilient buildings for approximately the same cost as conventional alternatives.

I know that your committee is interested in the economic development opportunities involved. We have assessed those as being approximately, as we commercialize the technology, 0.3% to 3% of Canada's total GDP growth. That would be between 1% and 10% of the U.S. market. The worldwide market would be 10 times that.

We're looking at Canadian benefits being 0.3% to 3% reduction in buildings emissions against the total building emissions of the sector, and a 1% to 15% impact on productivity improvement relative to GDP growth. We think there are substantial economic benefits to the introduction and commercialization of the technology.

The markets that we've looked at, the global construction industry will grow to a $10-trillion industry. The U.S. market is over $1 trillion, and the Canadian market is over $100 billion, perhaps $170 billion.

The residential sector is progressing at about $5 billion a month. You will see in chart 1 that the multi-family dwellings are coming up from, in millions of dollars, around 3,000 to 4,000. We're looking at the commercial industry being about $2.5 billion per month. That's the Canadian sector.

The GHG emissions in Canada that we're looking at in the building sector are about 12% of total emissions. There are approximately 98 megatons of CO2. In the U.S. it's closer to 39% because of the coal-based energy supply in the U.S.

I want to introduce you to the technology. It's a whole building solution. The whole building solution is based upon a patented material called Buildcrete. It's a proprietary, ultra-lightweight concrete mix with superior insulation of expanded polystyrene foam as the core between the two panels of concrete. It can be used for foundations, floors, walls and roofs. The entire structure is made of the one simple design. The panels come with exterior and interior finishing done in the factory and with windows, doors and selected services pre-installed.

The whole building solution is more thermally efficient. It's airtight for thermal efficiency and reduction of outside odours. There's proven superior sound-dampening, and it's disaster resilient, impervious to fire, water ingression, insect infestation, moisture, mould and mildew—which is particularly important—and is resistant to earthquakes and hurricanes. It makes a much stronger building.

The benefits to builders and developers are quite significant. We've found that the builders and developers we're approaching are eagerly signing up. We expect the technology to be driven by the market, and the builders and developers seem anxious to get there.

[The Chair, Liberal, James Maloney]

Mr. Craig, you're going to have to wrap up in about a minute, please.

[David Craig]

Yes.

We have a list of benefits that the architects find in working with us. The home owners have significant benefits listed there as well. There are benefits to the planet in terms of the reductions of footprint.

In the end, we're looking for government to help us deliver these gains to Canada through introductions that you can help us with to government programs supporting the commercialization and the capital investment in the first new commercial plant anticipated to be here in B.C. We're currently applying to SDTC and looking for any additional help that the committee might be able to provide us.

Thank you for the opportunity to make the presentation.

[The Chair, Liberal, James Maloney]

Thank you very much.

Mr. Whalen, I think you're going to start us off.

[Nick Whalen, Liberal, St. John's East, NL]

Thank you very much. I thought I was going second, but that's great.

It is a very interesting business you have, Mr. and Mrs. Abraham.

In terms of the mentors, I'm just wondering how they get paid.

[Yasmin Abraham]

We hire them with a living wage. In B.C. I think that's $21 an hour. In Alberta it's a little lower, but we continue with the $21 an hour. It's an hourly wage.

[Nick Whalen, Liberal, St. John's East, NL]

They're not paid by commissions out of sales.

[Yasmin Abraham]

No, not at all.

[Nick Whalen, Liberal, St. John's East, NL]

You talked about a four to seven year payback on some of your community projects. What does that translate to in cost per kilowatt hour of savings? Do you use that metric? If not, why not?

[Karim Abraham]

We do. It varies, realistically, because some of the communities we're heading into are very remote. If we were to compare the cost per kilowatt hour of a lighting upgrade in a city to putting insulation into a remote community where you have to take a barge and fly materials in, they're not equitable to compare.

I can provide some of that information later, but it's not a metric that we use to compare our internal programs that are so different in scope. We really focus on, within each community, what the major issues are and what needs to happen and the best business case for that community itself.

[Nick Whalen, Liberal, St. John's East, NL]

If these are impoverished communities and impoverished purchases, what's the financial model that's used currently to help them get that return? Do you agree that they will pay you their bills for the course of the four to seven years, and then after that they would pay their normal bills?

[Karim Abraham]

We act as a broker for funding. We go after municipal, provincial and federal funding. We look for funding from private and public utilities, foundations—there are a lot of different ways that we go out and look for money.

We help the first nation communities apply for that funding on their own. Then those nations hire us to do this work. As we build in long-term community energy management planning into these communities, we start to see results long term. Because they've chosen to hire us, we just act as a broker to go and get different types of funding.

[Nick Whalen, Liberal, St. John's East, NL]

So in addition to whatever government money is available to them, they also get the net asset benefit of having cheaper energy in the future.

[Karim Abraham]

Yes, in a way. Currently, most of these communities are on diesel generators, and the diesel is covered by the federal government or utilities. The savings are actually on both sides. The communities get better housing. That's the big driver—to have more comfortable housing, more healthy housing, and lower their bills so they can move out of energy poverty. It also helps from the supply side where there is less diesel that needs to be brought into these communities.

[Nick Whalen, Liberal, St. John's East, NL]

Okay. I see, from one side, government programs help fund these retrofits, and the government actually saves because they are greatly subsidizing the cost of the fuel at the tail end anyway.

[Karim Abraham]

That's right.

[Nick Whalen, Liberal, St. John's East, NL]

In terms of this material, Mr. Craig, what's the Canadian patent number on that?

[David Craig]

I'm sorry, I don't have that, but I can—

[Nick Whalen, Liberal, St. John's East, NL]

What about the U.S. patent number?

[David Craig]

I don't have the numbers with me, so—

[Nick Whalen, Liberal, St. John's East, NL]

You didn't really describe the material all that well, but if I could take a look at the patent, I could understand what it is.

[The Chair, Liberal, James Maloney]

Would you want to get into that business?

[David Craig]

I'm happy to have that delivered to you.

[Nick Whalen, Liberal, St. John's East, NL]

Yes, if you could, just so we know what it is. Probably more important, when do the patents expire?

[David Craig]

They're just recently established.

[Nick Whalen, Liberal, St. John's East, NL]

Okay.

In terms of Empower Me's goals of making sure that you both test the energy usage at the beginning and test the uses at the end, do you tend to employ independent assessors, or is it all in-house managed?

[Yasmin Abraham]

Over our six years we've had a combination. We do a combination of energy modelling to determine what we believe is going to be the energy savings, and then we actually look at users' consumption data from utilities. Those are the savings that we report. Some of the funders, some of the cities, and some of the utilities have done their own independent studies. I believe Energy Efficiency Alberta is also planning to do that.

[Nick Whalen, Liberal, St. John's East, NL]

In terms of the performance, how good is the modelling as compared to the measured?

[Karim Abraham]

In the modelling we use HOT2000 as our baseline for modelling in these homes, which is a standard used across Canada.

[Nick Whalen, Liberal, St. John's East, NL]

How's the performance? How close is the modelled expected savings to the experienced savings?

[Yasmin Abraham]

It's pretty good. We don't have the data with us today, but I think one of the big things we focus on is what the homeowners say.

The homeowners are saying their bills are going down. They're more comfortable. They understand what energy efficiency is. They know that putting in a light bulb saves them energy. Then maybe six months down the road they're going to install insulation, and then maybe in another year they're going to go for a furnace. It's really a journey that we lead our participants on.

[Karim Abraham]

To add to that, as we have the whole value chain under our belt, it allows us to create feedback loops. When we are looking at the performance of modelling versus actual data, we see we can incorporate that feedback right through our entire process to allow us to continually iterate and improve the processes, as opposed to having fragmented, different service providers who lose that feedback loop.

[Nick Whalen, Liberal, St. John's East, NL]

In terms of how this is financed, I can see an argument where government is ultimately paying the energy costs for the clients in order to have some sort of an incentive. But generally in the marketplace isn't there enough money just in the recaptured value of the savings to pay for the work that your organization does?

[Yasmin Abraham]

Can you explain a bit more what you mean?

[Nick Whalen, Liberal, St. John's East, NL]

If you're able to do a project that has a four to seven year payback just in these cost savings alone, why is that not enough to try to recapture that cost as a way to pay for energy retrofit programs? Why does government also need to subsidize?

[Yasmin Abraham]

I think Karim has a comment, but I just wanted to say I think that's good for a community with multiple buildings and multiple homes and a band council. But when you're an individual, and you're working three jobs, and you're taking your kids to school, you don't have the time and you don't have the finances for those bigger upfront costs.

[Nick Whalen, Liberal, St. John's East, NL]

You said that about a half of your work is for low-income folks. Did you say that the other half of the work is for bands?

[Karim Abraham]

A half of our work is from the private sector, so commercial and institutional buildings, and the other half is from public funds at various levels of government. The work we do services distinct markets that are—

[Nick Whalen, Liberal, St. John's East, NL]

so let's focus on the half of your—

[The Chair, Liberal, James Maloney]

I'm going to have to stop you there. We're right on time.

Mr. Viersen, you're next.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

To carry on with that line of questioning, basically, how does your funding come in and how do you allocate your resources back out again?

[Karim Abraham]

In indigenous communities, they don't have the capital required to pay for long-term community energy planning, the assessment component, and to pay for the capital requirements for these upgrades. If we look at the supply in diesel costs that are being subsidized to these communities, and we look at that funding as a way to help push energy efficiency, we see that becomes a more impactful model that helps both the supply side of energy and the demand side of energy. But these remote communities with 90 homes don't have the capital required to take on these initiatives on their own.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

It sounds to me, though, like where you're getting the resources from doesn't necessarily mean that you're allocating the resources back to that same jurisdiction even. It's a business model that collects money from around and diverts it more broadly.

[Karim Abraham]

We would work with the specific community on a specific project, and take that project to different funding bodies or look at various funding opportunities that fit that project at all levels of government.

The problem we face is these projects are often relatively innovative in their service delivery model. When we see funding that's only for a specific part of it as opposed to the whole thing, we find ourselves outside the check box that we need to be in that we think is innovative. However, it provides a barrier for us to get these projects off the ground that have incredible payback and are helping improve the lives of people in these communities.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

I think you said something about you've been operating for six years so far. Do you have a total emission reduction number that lets you say that since you've been in operation, you've reduced consumption by a certain amount?

[Karim Abraham]

That's a great question. We do an annual report at the end of the year for our emission reductions as well as some of our other stats—how much coffee we drink and things like that. We will have those numbers in the next few weeks, and we'd be happy to share them with you.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

That's very good.

My cousin works in the data industry, and most of his stuff is remote. He's cell powering it himself. Ten years ago, it took an eight foot by twelve foot solar panel to run his technology. Now he can do it with an eight inch by twelve inch solar panel and he's doing exactly the same stuff. He said even using the same technology on the backside was just power management. Turning things off when you aren't using them was the biggest thing. That was just programming.

You talked about somebody who didn't want to touch the thermostat. I recently was in a place where you didn't have to touch the thermostat. As you walked by it, it figured out your routine and things like that.

Are you seeing that kind of trend as well?

[Karim Abraham]

I think talking about the supply side, solar, and the demand side from energy efficiency, it's really important to look at those two technologies holistically. If we look at a community and they have energy consumption, you're going to have to build a solar facility to match that.

If we can reduce consumption beforehand, the feasibility and the economics of your renewable project go down tremendously. We need to look at these programs in harmony. Again, it's a really good example of a lot of funding being diverted to things like solar in places where energy efficiency would have a much greater return on investment and help the community much more in the long term to get to renewables down the road.

[Yasmin Abraham]

One of the things we try to do with technology from a homeowner basis to maximize the savings potential is to educate. If you're going to put in a new device, whether it's a heat pump or a smart thermostat, if that person doesn't know how to use it, you're not going to maximize the savings. We spend a lot of time educating homeowners in our communities about what we're installing. I think that's led to our savings success.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

That's all I have.

[The Chair, Liberal, James Maloney]

Mr. Cannings.

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

Thank you, all, for being here today.

I'm going to start with Empower Me.

In the previous hour, the Canadian Federation of Independent Business talked about barriers that businesses faced. There was testimony that many businesses couldn't afford to get into these rebate programs because the upfront cost of the audit and the installation was too much, yet you're talking about how it's important to have that accountability in the program. You said half your work was with the private sector.

Do you see that problem, and if you do, how do you get around it?

[Karim Abraham]

Absolutely, we see that problem all the time and Len's point about having tenants and landlords at odds for who pays the energy bill and who should front the cost of capital to do these upgrades.

A common thing that we see...I think a really good example of a program that gets past all of this is PACE. It's a financing program that puts the burden on the property itself. It's tied to property taxes where the owner can invest long term into deep retrofits for a building and if that building is sold, that debt continues with that building.

It's a really nice mechanism for buildings that may not invest hundreds of thousands of dollars in capital to do energy efficiency because of that landlord/tenant, “What if I sell the building....” All these different barriers break through that completely, and there's financing available to do that.

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

You talked a lot about energy poverty, which I found very interesting. We had a program for homeowners in Canada, the eco-energy retrofit homes program, that was just that. You had the audit. You invested your money. You got your rebate. It was very successful. We've heard testimony earlier in this study from other people who said it would be better to have a tax incentive.

I'm just trying to get an idea and wonder if you have any opinions on whether a tax incentive or a rebate would be better. I'm thinking for people in energy poverty, tax incentives aren't of much value because they're probably not paying much tax. I wonder if you could comment on that choice.

[Yasmin Abraham]

Yes. Can I choose neither?

I agree with you. I don't think the tax incentive is the right tool.

The issue I see with rebates is that, again, the upfront cost is needed from the homeowner. It's that same story we've been talking about. They simply don't have the ability to put in that upfront cost and the issue, and what we need to solve for them, is their housing. By reducing their bills, we are increasing their disposable income and, in lower-income and medium-income households, that income can go directly back into the economy.

By investing in the infrastructure of these homes, you're solving that issue in a more equitable and more effective way.

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

Okay. Thank you very much.

I'm going to turn to Mr. Craig now.

This BuildUp technology sounds very interesting. I've been hearing a lot about these new modular building techniques, whether it's with your new Buildcrete material or with wood. In one of the towns in my riding, we just had a hotel built that went up, in what seemed like days, because it was built somewhere else and moved there.

With your Buildcrete, are there any size restrictions on those buildings or could they be skyscrapers?

[David Craig]

We can't do skyscrapers, but we can go up to 12 storeys, so for multi-family, which is more typically three or four storeys to six storeys, we can double the density.

In a competition in the U.S., for technologies that are advanced and being looked at for the future, we had this technology and it came second, only because it's not yet commercialized. Otherwise, it would have been at the top out of 50 competitors. There is a very significant opportunity for this technology and we're finding the market is responding very favourably to it.

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

I keep hearing more and more about hybrid building technologies, where we build partly with wood and partly with concrete. Would this technology lend itself to that, where you would have part of the structure being glulam beams and the floors made out of Buildcrete? Is that something you could envision or is it just an all or nothing technology?

[David Craig]

The importance of the technology is its simplicity. The simplicity comes from the panel itself being a complete solution to floors, walls, panels, roofs, and even foundations. It's not something to be mixed. Many of the existing technologies will have 10 to 18 steps involved in the production of the building and we're down to four steps. The simplicity is what's attracting the developers, the architects and the market.

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

Have you had interest from American—I know there are some big American companies that are just building up now to change the world of construction. Are you in touch with them with this Canadian technology?

[David Craig]

Obviously, we've been in touch with them to get into this competition in the U.S., but we're in the very earliest stages of commercialization. We've started introducing ourselves to developers and architects and we're finding a tremendous response. We have a long way to go to acquire the market and to complete the commercialization process.

[The Chair, Liberal, James Maloney]

Thanks. I will have to stop you there.

Mr. Tan.

[Geng Tan, Liberal, Don Valley North, ON]

Thank you, Chair.

Thank you to the witnesses for being with us today.

Improved energy efficiency helps households and businesses and institutions save money, be more competitive and have a better quality of life. It is also the cleanest way to meet the increased demand for energy. The concept of energy efficiency is very clear and straightforward. The benefit is also very obvious. However, the committee has learned from many witnesses that there's still a big job to do to promote, among the general public and stakeholders, the awareness, understanding and participation. Of course, there's a share of that job for the government to undertake.

I want to ask you both a very general question. Do you have any suggestions on how the federal government can accelerate these energy efficiency programs in all sectors of the economy, not just the construction industry? How might the government work closely with partners and associations and businesses like yours to pursue a more coordinated strategy on energy efficiency?

My question is quite general and pretty wide. I'm hoping that both of you can give us some advice.

[Len Horvath]

Perhaps I can start off on the points I brought up—the federal government taking a leadership position and insisting that for any lease it brings in, for spaces acquired through a leasing program, it adopts green leasing language in all of it. I think it would be ideal if they could unilaterally mandate that green lease clauses be part of any commercial lease to strengthen the mandate that owners might have to improve efficiency in buildings. That would apply to their rental buildings. However, I think if you're developing programs that are targeting existing buildings, you also have to work with provinces and utilities to bring in sustainable incentive programs that will encourage energy efficiency in the existing building stock.

[Geng Tan, Liberal, Don Valley North, ON]

Thank you.

[Karim Abraham]

To add to that, we would like to see a much more holistic, long-term approach to energy efficiency. In my testimony, I said that funding that's coming and going in the market, that's in and out, has been detrimental to the industry. Having a long-term, holistic approach to funding would help spur additional innovation within the private sector. We'd like to see the government really focus on the goals and the implementation of energy efficiency, not the six or seven steps to get to that point. The private sector can and will innovate for the most efficient way to achieve those goals. It will be through innovation.

[Geng Tan, Liberal, Don Valley North, ON]

In your opinion, are the stakeholders, the general public, really open to the idea of adopting high energy efficiency practices or technology in the provinces, or even in Canada?

[Yasmin Abraham]

I definitely think so. In our experience, we have gained success because we have led people on a journey. It's not an event. I think once people start seeing the increase in comfort, the increase in safety, and the decrease in their bills, that's when you start to really get momentum.

[Karim Abraham]

Just anecdotally, people don't really care about energy efficiency. People care about the benefits, the things that come out of energy efficiency. Energy efficiency is not very tangible. A warmer home is more tangible. A lower bill is more tangible. Less mould in their house is tangible. A lot of benefits come out of energy efficiency. I think focusing on those rather than energy efficiency as a single thing has been a big part of why we've had success.

[Geng Tan, Liberal, Don Valley North, ON]

I think I will go back to the question of incentives or tax rebates. I suppose the witnesses from B.C. agree with these comments. Do you?

[Len Horvath]

We do by and large.

[Geng Tan, Liberal, Don Valley North, ON]

I was hoping so.

[Len Horvath]

There's a wide range of folks out there with different motivations and different abilities to fund activities. That's where the challenge comes from. You need to stimulate people to do something.

My particular business is lighting. The LED technology has been truly transformational in our industry. You have energy efficiency gains in the range of 50% to 90% just from introducing the technology.

There are, however, other benefits. We did a school a number of years back into which we introduced dimmable lighting, which comes free with LED technology and fixtures, and the teachers just loved it. As a result, schools in that district followed that standard, just because there was something new that benefited their ability to present material on screens in a classroom.

That's just one example. There are so many innovations possible.

[Geng Tan, Liberal, Don Valley North, ON]

Thank you.

What is the role of the provincial government and the municipal government in fostering the growth of this kind of program of energy conservation and efficiency? What is the difference between the local government role and the role of the federal government?

[Len Horvath]

It varies. If there are provincially owned power utilities, as there are in Manitoba and British Columbia, they have a very direct role. They can work with the federal government on codes and standards for new buildings. There is, however, a gap for existing buildings that I think needs to be addressed.

[Geng Tan, Liberal, Don Valley North, ON]

Thank you.

[The Chair, Liberal, James Maloney]

Thanks, Mr. Tan.

Mr. Nicholson.

[Rob Nicholson]

Thank you, witnesses, for your testimony.

This question is for Empower Me.

One thing you talked about, which my colleague from the NDP raised as well, is the whole question of energy poverty. You said there are programs involved with, I think, nine out of the 10 provinces. Are they working? Are they inadequate? Tell me what the results are.

[Yasmin Abraham]

That's a really good question.

We have been working in this industry for 30 years, but we have been doing the work on the ground.

I know our friends over at Efficiency Canada and Corey Diamond, who was here a couple of weeks ago, are looking into this. We have been talking to them about getting a sense of which programs are working well and which could use some help. It's definitely part of our mandate and mission to help homes all over Canada learn from our successes and from things we have done wrong and learn from what they're doing right. There is no place right now for all these programs to come together. They're so fragmented.

[Rob Nicholson]

It would be interesting to hear whatever analysis you have.

To complicate this, as recently as this morning it was predicted that Canadians will be paying between $300 and $400 more for their groceries next year. Again, anything that can be saved with respect to energy costs obviously will allow for more disposable income, much of which, I'm sure, goes to food.

That being said, you said there was no federal funding. Did you or others make applications to the federal government and just not get it, or is there just an absence of some particular program?

[Yasmin Abraham]

There is no current funding that I am aware of specifically for energy poverty.

[Rob Nicholson]

It would seem to me that you'd probably be aware of it, because you're in that business.

[Yasmin Abraham]

I hope so, but I don't want to....

[Rob Nicholson]

That's fair enough.

[Yasmin Abraham]

Maybe there are some, but none that we're aware of.

For us, a federal strategy targeting energy poverty would help.

[Rob Nicholson]

We'll make sure we take note of that here.

Thank you very much for your comments.

[Yasmin Abraham]

Thank you.

[The Chair, Liberal, James Maloney]

Mr. Serré, you have about two or three minutes.

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you, Mr. Chair.

I thank both witnesses. Congratulations on the patent. I want to commend the work you're doing.

You talk about a living wage. You talk about seniors and poverty. From a parliamentary perspective, for our first nations communities, both indigenous and Inuit, we have to do more. The poverty levels are outrageous.

You said you were in B.C. and Alberta. What can we do to expand? Can you go into northern Ontario? In my neck of the woods, there are 110 first nations communities. Some are doing fairly well and some are not doing well.

[Karim Abraham]

Absolutely, we'd love to come.

[Marc Serré, Liberal, Nickel Belt, ON]

What can we do to expand what you're doing?

[Karim Abraham]

We'd love to come visit you and help with that. The thing that has not allowed us to move into these additional markets is the lack of transparency on when funding is coming in and out of the market. If there were a long-term plan, a long-term strategy for capital to do these types of programs that were holistic in nature, and focused on results and accountability, we would like to put our hat in the mix to show the efficacy of the work that we're doing against other people in the industry that have different ideas as well.

What would help us is having that long-term holistic strategy matched with funding directly for the implementation of these projects.

[Marc Serré, Liberal, Nickel Belt, ON]

Holistic, long-term.... Are you talking more capital or are you talking more on the innovation side...?

[Karim Abraham]

The private sector will innovate. If you fund the goal, if you have dollars available to implement energy efficiency opportunities to reach specific GHG reduction targets for specific kilowatt hour reductions, the private sector will innovate to hit those. It's a competitive market, so we will do that relatively efficiently.

Focusing capital on that goal across the country, and having organizations like ours apply for funding like that, would be the best strategy.

[The Chair, Liberal, James Maloney]

Thank you ladies and gentlemen very much for coming today and contributing to our study. We very much appreciate it.

Thank you to our new members of the committee for stopping in. I will be sure to pass on to our regular members what a great job you did.

[Bernard Généreux]

Thank you very much.

[The Chair, Liberal, James Maloney]

You're welcome to come back any time.

We'll see everybody on Thursday.

The meeting is adjourned.