Evidence of meeting #48 for Natural Resources in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was technologies.
A recording is available from Parliament.
Conservative
David Yurdiga Conservative Fort McMurray—Cold Lake, AB
Let's say I have a commercial building. What are their first steps before entering a contract? Is there an analysis of the building? What types of things are you looking for?
Vice-President, Energy Services Association of Canada
There will be a preliminary audit at first, and then normally a full-blown audit once the contract is given. It's a competitive process, so every firm has to file its proposal of the measures they favour, what the payback period is, and so on. All the firms present their different strategies based on their assumptions and based on their evaluation of the current building. One might propose a ground-source heat pump and the other might propose some other technologies to achieve cooling and space heating savings.
Conservative
David Yurdiga Conservative Fort McMurray—Cold Lake, AB
What I'm referring to, for example, is looking at the building envelope. Would you do thermal imaging in the envelope to see whether you would be adding insulation, and then look at the energy usage to see whether you have to change fan motors to DC?
President, Energy Services Association of Canada
They typically use modelling. It may involve infrared, but often it can be captured just by a thorough engineer going through the site and looking at the wall structure and the sizes, at the vintage of the technology, the vintage of the building. Once you've modelled it, then you can do all sorts of iterations and what-ifs. What if I put a separate skin on? What if I change the boiler? What if I improve it? They're really doing a fairly detailed modelling exercise.
Conservative
David Yurdiga Conservative Fort McMurray—Cold Lake, AB
When we enter into a contract, what is the average payback?
President, Energy Services Association of Canada
The FBI programs now would be in the 10- to12-year payback period. They're talking about extending those periods because they're looking to get deeper greenhouse gas emission savings.
Conservative
David Yurdiga Conservative Fort McMurray—Cold Lake, AB
Are you paid on the savings for a number of years?
President, Energy Services Association of Canada
Yes, for the life of the contract. The contract is typically for less time than the equipment lasts, so the equipment will last 25 to 30 years and the contract will be for 10 or 15 years.
Conservative
David Yurdiga Conservative Fort McMurray—Cold Lake, AB
Really? I had a good question. I was saving it for last.
Liberal
The Chair Liberal James Maloney
You could ask it in five seconds.
Mr. McLeod, we have about three minutes left, which is all yours.
Liberal
Michael McLeod Liberal Northwest Territories, NT
I'm very interested in some of the comments that Céline Bak was making regarding some of the recommendations.
I'm from the Northwest Territories, where we have a fairly small community that had to replace their power plants. They were all diesel-generating power, so they went to a combination of diesel and solar panels, which is fine, but if we did a full cost accounting of it, I'm not sure if it would pass the test, because the panels are nice, but the batteries have a limited lifespan. The actual cost to install them was amortized over 10 years, but in 10 years all of it has to be replaced, so we'll start again.
The people who put it in had a subsidy. The territorial government subsidized it and said it's really a good project, but what do you measure? When you're talking about the full-cost accounting, what are you measuring? Is it greenhouse gas emissions? What's the formula made up of?
President, Analytica Advisors
That's a great question. There are many people who are thinking about this now because infrastructure is recognized as being vital to meeting our climate goals, and yet we don't actually have a lot of experience in building infrastructure while knowing that we have to have a price on carbon that will increase over time.
Germany, for example, has full life-cycle cost accounting for its infrastructure. I'll give you an example. For water infrastructure, in some cases they now have a shadow price on carbon. It's not a rising price in the way we probably need to do it, but when they look at new water purification infrastructure, they're including a price on carbon that is like a proxy for energy. They're thinking about energy efficiency, then, when they're looking at water purification. The energy that goes into the water purification actually causes carbon emissions, so if you approach it in this way, you get a better understanding of the cost.
The world, not just Canada, is at a stage right now of trying to understand how to make smart investments in infrastructure. By “smart” we mean that the infrastructure really serves the purposes of the community. It achieves the social goal and also address the environmental goals, and they're done it in a way that yields value for money.
Liberal
Michael McLeod Liberal Northwest Territories, NT
That leads me to my next question. The measuring stick to be used is not really out there yet, is it?
Liberal
Michael McLeod Liberal Northwest Territories, NT
Is this the reason the regulatory bodies don't actually measure energy efficiency and other things when looking at projects and approving them?
President, Analytica Advisors
If, whenever we updated regulation, we had a test that specified that we need to have the best available technology and need only to specify performance, not the means to achieve it, then we would probably get closer to a regulatory system that was consistent with our fiscal desires and our obligations under the Paris agreement. We do not have that today.
Liberal
Michael McLeod Liberal Northwest Territories, NT
I think the measuring stick should apply to some of the buildings and facilities that are built. I personally bought a house that I'm told has an Arctic package. I live in the Northwest Territories, so it was important for me to have eight-inch walls with double insulation, and I got a thermal imaging company to come in. They tested everything and realized that everything's nice, except that whoever built the house didn't put in the proper windows, so I'm basically losing everything I was intending to save.
My next question is to Mr. Love.
Liberal
Michael McLeod Liberal Northwest Territories, NT
When you're talking about these new facilities, you're talking about design and build. Are you talking about energy efficiency, not alternative energy, to heat the buildings or power up the lights, or...?
President, Energy Services Association of Canada
There are two things. It can include alternative energy, absolutely, and a number of projects do. We talked about things being really cost-effective, such as the lighting and the controls. Alternative energy in the past has been the other way, but it is coming down.
I know you're from the Northwest Territories. I'll just say that there was a performance contract done in Nunavik. The Government of Nunavut did a fairly large one; I'll send you information on it. There's also an RFP out right now for the military base in Alert.
These projects, then, can be done in the north, but as you fully recognize, it is a very different environment. To address an earlier comment here, Canada is a huge country, and there are huge differences in our electricity system, in our temperature, and in how things work, yet I think the basic models can apply across the country. In our case, a performance contract has been shown to work out in the far north as well.
Liberal
The Chair Liberal James Maloney
Thank you very much, Mr. Love.
Thank you, Mr. McLeod.
We're going to have to stop there, unfortunately. We have time restrictions, which you now appreciate as well as we do restrict our ability to go on for as long as we'd like.
Thank you, the three of you, for taking the time to be here today. It's been very helpful.
We will suspend for two minutes exactly, and then we're going to start again.
Liberal
The Chair Liberal James Maloney
We are going to resume.
Good afternoon.
We have two more witnesses today. One of them is known to us: Mr. Simon Irish, from Terrestrial Energy. He's not here just because it's March and his name is Irish. We're glad, however, to have you back. Thank you.
From the Conference Board of Canada we have Mr. Louis Thériault, vice-president of public policy.
Thank you both, gentlemen, for being here. I think you heard me explain the process earlier. Mr. Irish, you're familiar with it. You'll each get up to 10 minutes to do your presentation, and then we'll get into questions. We are going to try to stick to timelines as much as possible.
Mr. Irish, perhaps we'll start with you.