Evidence of meeting #49 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 renewable.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Miriam Tuerk  Co-Founder and Chief Executive Officer, Clear Blue Technologies Inc.
Michael Carter  Business Development Manager, Canadian Solar Solutions Inc.
Gordon Fraser  President and Chief Executive Officer, Responsible Energy Inc.

4:55 p.m.

Liberal

The Chair Liberal James Maloney

Thank you.

Mr. Cannings.

4:55 p.m.

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

Thank you, and thank you all for being here today.

I'm just going to start with you, Ms. Tuerk. I ran into Clear Blue at the Clean Energy Ministerial meetings in San Francisco, so it's nice to see you represented here again.

You mentioned a situation, an example, in a northern Ontario community where you were stuck with provincial regulations, I believe they was. I'm just wondering if there's a role for the federal government in trying to harmonize those provincial and municipal regulations that might help the adoption of your kinds of technologies?

4:55 p.m.

Co-Founder and Chief Executive Officer, Clear Blue Technologies Inc.

Miriam Tuerk

I think the short answer is no. The reason is that in order to put a regulation and a policy in place, one has to take time to be thoughtful about it first, because regulations can also kill business. We're talking about an innovation plan that is moving quickly.

In the particular case, you have the electrical department of the Ministry of Transportation saying that it really doesn't want to touch this because who knows whether solar is going to work?

Michael from Canadian Solar is flipping. I hope he's doing a little dance over there and saying, “What do you mean by, 'is solar going to work?'”

It's not just a regulatory thing that you can solve, because you can't force everything through. Somehow it has to be something that takes it over the line so that someone isn't going to get fired if he picks a solar project and it doesn't work. That's the issue, right? You were never fired for picking IBM and you never got fired for picking the grid or picking the technology that was proven 20 years ago. That's what we have to try to unlock. How do you de-risk it for that guy?

I have to say that “How do you de-risk it?” is the perfect question, because people want to do it if it's de-risked.

I'll go back to Mark's commentary. Private investors would like the due diligence, the checkup, the questions, the things that government investment brings. If you could just get the CPP to put a quarter of a per cent of its money in Canadian emerging technology—it doesn't do that now—to balance its portfolio.... I don't know how to do that. How do you get ahead of technology that's changing every five minutes, à la Uber?

5 p.m.

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

Okay, thank you.

I will move to Mr. Carter.

I'll start with the situations you mentioned in British Columbia and Quebec, for instance, where you have very clean energy sources now, if you consider hydro to be really clean. I'm from British Columbia. People come to me and ask how the government can help them reduce carbon footprints. Is it getting that solar power into some storage battery on a wall in your house, and then plugging in your electric car and therefore reducing the carbon footprint through your transportation?

I just wonder how far we are from that vision.

5 p.m.

Business Development Manager, Canadian Solar Solutions Inc.

Michael Carter

I would say that there is a reality to that vision now. It's a cost—

5 p.m.

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

I mean in a widespread way.

5 p.m.

Business Development Manager, Canadian Solar Solutions Inc.

Michael Carter

Certainly we are involved with battery-supported technologies, and we see a lot of that. It's a power-density issue and it's a cost-constraint issue. Tying solar to stored hydro, for example, is a good way to understand that you've incurred a footprint; you've had an impact. It's there. It's a legacy asset. Tying intermittent renewables to hydro storage, I believe, is a good way to offset.

Certainly for far remote communities, camps or whatnot, you can definitely tie it to batteries. There are lots of examples in B.C. with small completely cut-the-cord off-the-grid facilities. I think it's going to take an element of people just deciding how they want to use their energy, and whether they want to go that extra step. Maybe we don't use our power at night if we want to be solar-only and we augment that with a small amount through a smaller battery system. You can tie together used up car batteries now, put them on a shelf, and connect them to your solar panel. As solar modules are coming down in price, you can put more out there.

If you have a low-efficiency regime—British Columbia isn't exactly the place where there is low-hanging fruit for the solar industry, which is why we don't have a lot of it there—as the cost of the module continues to drop, you just put more out there. You pick up what little you can and store it in a battery.

We're very keen. We're looking at various remote opportunities in B.C. in particular, but the storage is tough. The power density of a battery as compared to the amount of storage you can get from a reservoir or a pump storage facility is a tough one.

We can lock arms with those other industries and support that as we look to offset the burning sources of electricity.

5:05 p.m.

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

Okay.

Mr. Fraser, I went online and looked at some of your pretty pictures that maybe we were meant to see, but you had energy going in and your high-temperature plasma procedure, and then one of the things was energy out.

I wonder what the ratio of that energy in to energy out is, say in typical industrial waste, or solid municipal waste, for that matter.

5:05 p.m.

President and Chief Executive Officer, Responsible Energy Inc.

Gordon Fraser

The energy balance, basically, is that we produce about one and a half times more power out than we require. Depending on the jurisdiction, that one and a half could go to a grid if we're producing electricity. In Ontario, because of the pricing, it makes more sense that we offset our cost, because there is zero incentive to convert waste into electricity. We're basically left with about a half left over to sell to the grid. Unfortunately, that's also been cancelled in Ontario. Now we're moving more towards renewable natural gas. But the energy out versus energy in is that we produce about one and a half more.

Could I respond to Mr. Strahl's question?

5:05 p.m.

Liberal

The Chair Liberal James Maloney

Very quickly.

5:05 p.m.

President and Chief Executive Officer, Responsible Energy Inc.

Gordon Fraser

Very briefly, that alludes to one of my slides, which is that the clean-tech sector has many needs. There's small money, but there's very large money that's required. I find that narrows our sector very tightly. That's what I was alluding to, that each sector should be responsible for its own clean-tech portfolio.

There are quick things. VCs can just throw money in and get all of their money back in six months. But then there's solar and waste, which take 20- or 30-year investments. For them to step in, they need a little push. All I'd like to see is just a little push.

5:05 p.m.

Liberal

The Chair Liberal James Maloney

Thank you.

Mr. Serré.

March 21st, 2017 / 5:05 p.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

Thank you, Mr. Chair.

Thank you to the three witnesses for your presentations and the time you took to prepare yourselves for today.

Also, Mr. Fraser, thank you for your service in the navy. Thank you so much for that.

I want to ask Ms. Tuerk and Mr. Carter the first question.

Ms. Tuerk, you mentioned in your presentation that Canada was falling behind Germany and China. You also indicated that there was no question that a lot of the jobs in the industry are more on the clean-tech side.

Can you elaborate a bit on some recommendations on things that you feel the federal government could do, looking at China and Germany, to try get a competitive advantage here in Canada? Also, to a certain extent, we've heard from past witnesses that the U.S. is also emerging with a large clean-tech industry.

5:05 p.m.

Co-Founder and Chief Executive Officer, Clear Blue Technologies Inc.

Miriam Tuerk

Well, action in regard to the EDC, the banks, and financial supports and guarantees, I think would be key things. I have had a number of projects in which I've had to take a deal that I'm winning or that I have in hand and push it to a Chinese company or a German company—I only take the subcontractor portion of it—because they bring in government relationships, finance, and performance guarantees.

I have to tell you that when I heard the phrase “trade with aid” and I read about the U.S. government helping—oh, God, why can't I remember the name of that country that had the big earthquake in the Caribbean...? When they gave a lot of aid and then they gave a lot of trade, I thought that was terrible. But social...is starting to integrate with our businesses, and a lot of the other countries are helping to build infrastructure. They are making sure their dollars are helping the countries in a good way by helping to fund clean tech. If we could take the money that we promised in Paris and put it towards infrastructure projects and other projects that by coincidence happen to benefit the destination country greatly but also bring our own technology and jobs, that would be great.

On the ability to get performance bonds and all of those things for clean tech for smaller early-stage companies, the Canadian banks won't do a deal even if EDC guarantees it. That's one thing that has to get fixed. It's ridiculous, and it doesn't happen in other countries.

I can tell you there are hundreds of thousands of solar street light systems being installed in Africa and the Middle East. I'm going to sell my controller because I'm the first technology in the world to have what I have, but I cannot bring Michael any solar panel business because I have to give it to China because they're providing the financing. We'll get 10¢ on the dollar in this country; the drag-along revenue won't be here.

5:10 p.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

Do you have any comments on that, Mr. Carter?

5:10 p.m.

Business Development Manager, Canadian Solar Solutions Inc.

Michael Carter

On my part, I'm with the project development division of our company and certainly understand the Chinese. Many of our projects are built with modules that are built overseas. We have a facility in Guelph, which is still manufacturing modules, but it's a very difficult market to compete in. Our cost of electricity in the provinces is higher, and we don't have the same supports that we are seeing overseas from China in particular.

From a development perspective and that of getting more projects, I do look at the loan guarantees, the partial risk-assuring mechanisms that we could deploy from the federal perspective, whether they be.... These are EDC-type programs, but are for developing markets. What we were talking about here was developing the natural resource sector. I look at that as greening it and getting more renewable adoption. I see that as a development sector. Let's use Business Development Canada or another mechanism to do those loan guarantees, using risk assuming programs, development risk credit products, innovative risk assurances, and other lending arrangements that I couldn't come up with. I'm sure there are many different mechanisms that can provide help.

With those programs we create jobs. As projects are getting built, we're not the only ones bidding. We're in some programs right now in Canada. There are 35 different applicants going for similar small projects. They are chasing everything they can possibly get because not a lot of projects are getting support and funding right now.

We're seeing that hurting our industry. People are putting their hands up and saying we're not going to.... This is a starvation situation right now where not a lot of big programs are being supported. We want to build.

5:10 p.m.

Liberal

Marc Serré Liberal Nickel Belt, ON

My next question is for Mr. Fraser, and perhaps for the other witnesses afterwards.

You mentioned SR and ED, IRAP, FedDev, angel investment, and then the commercialization, the valley of death. We heard this in all sectors: mining, oil and gas. Oil and gas has COSIA. COSIA is a cluster of ecosystems, and the mining sector is also.

When you talk about the issues and challenges you have had with commercialization, can you make some recommendations? I ask because it's not just about your company. This is an issue across the board that we in Canada possibly don't commercialize our R and D and our research as well as we could, and we don't export it as well.

5:10 p.m.

President and Chief Executive Officer, Responsible Energy Inc.

Gordon Fraser

Thank you very much for the question.

As a company once we got to that big drop, we're now looking for that first entity, whether it's VC or government, to be the first to commit to our moving forward, even with conditions. Nobody wants to be the first person in, and that's the chicken and egg syndrome I mentioned earlier.

Even if the government were to provide and say they will invest or will provide this or that incentive, we still have to do this, this, and this. That's a lot easier than having to go to the market and say, “I have all of this; now are you interested? I think I'll have a better chance of getting the funds I need to move forward.

That's not just within Canada. We are actively searching for funds in the U.S. and overseas. That's what they are looking for also. For us there are a couple of major items left; our permitting process has taken two years. That's Ontario-based, not federal. Usually working with supply agreements is dependent....

Unfortunately, there are a lot of things you would like to be able to do together, but certain things are linear, and financing, getting that first one in is the first step, and then you can branch out, but until you get that one person, you're still in the linear form.

5:15 p.m.

Liberal

The Chair Liberal James Maloney

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

Mr. Barlow.

5:15 p.m.

Conservative

John Barlow Conservative Foothills, AB

Thank you very much, Mr. Chair.

I appreciate both of you being here with us today to offer some concrete recommendations for some things we can do.

Mr. Carter, I found it ironic when you said that you're trying to keep your Canadian operation going but it's difficult to keep a renewable energy company going in Ontario because of the high hydro costs. It was an interesting comment to make. I appreciate what you're having to face in Ontario.

You touched on the fact that some of your components are made in Canada but some you are having to do overseas. As a Canadian company, how much is done here in Canada and how much are you having to do overseas?

5:15 p.m.

Business Development Manager, Canadian Solar Solutions Inc.

Michael Carter

I can't really comment entirely on the actual module manufacturing business, but in general for the solar cells, a typical module panel is made up of 72 cells now for an industrial project. Those are manufactured overseas and will be brought to our facility and assembled on our line. Unfortunately, I'm not a manufacturing—

5:15 p.m.

Conservative

John Barlow Conservative Foothills, AB

That's okay.

5:15 p.m.

Business Development Manager, Canadian Solar Solutions Inc.

Michael Carter

That component is put together and sealed together. We have four lines running in Guelph right now, but not full out. All of those cells are soldered together, put together, and shipped to projects.

Most of the Canadian-manufactured modules, to my understanding, have been supporting North American business, for the most part. Our founder, our Canadian company, and our name.... We obviously want to continue to support the Canadian brand and our Canadian customers. My understanding is that we find ways to make our modules work here in Canada as best we can and we try to continue to keep that operation and essentially keep the lights on.

I did mention the hydro rates. The irony is not lost on me. However, I don't necessarily agree with the general understanding that the costs are directly attributed to solar. Environmental Defence had a report out a short while ago, and I believe they estimated that $5 or $6 on an average $100 contract could be attributed to the solar industry. Those numbers decline over time as the contract lives go further out, but I do appreciate the sense of irony in that too.

5:15 p.m.

Conservative

John Barlow Conservative Foothills, AB

I'm not trying to put this on the solar industry at all. I'm just saying that we have a provincial government that has a Green Energy Act that has been investing billions of dollars in subsidies for green energy projects, and maybe unknowingly is driving some of these green energy businesses out of Ontario, because they cannot or may have....

I'm not saying that's your fault, but that template is going to be used on the federal government scale as well, and I think this is something that we have to be very cognizant of. If we are driving up energy prices, are we going to be driving Canadian innovators and Canadian businesses to other jurisdictions because they simply can't afford it here? I think that's something we have to be thinking about.

5:15 p.m.

Business Development Manager, Canadian Solar Solutions Inc.

Michael Carter

Absolutely. Do you want me to...?