Natural Resources Committee on May 3rd, 2018

[The Chair, Liberal, James Maloney]

Good morning, everybody.

Before we introduce our witnesses and get started today, I just want to acknowledge the tragic event of yesterday. We lost a colleague and a good friend. It's incredibly difficult to process this. For me, I know that you don't always get an opportunity to get to know everybody on the other side of the aisle, but in this case, I did. Gord Brown was a very decent, kind, and fair person and I know, personally, that I'm going to miss him and that everybody shares that sentiment. I just know he's in all of our thoughts today and will be for a long time. I know all of us feel the same way.

Now, we'll move on to business. We have two sets of witnesses today, who are familiar with the way things work around here. I see some familiar faces. Welcome, gentlemen.

For the first hour, we have the Canadian Gas Association and the Canadian Electricity Association. You know the process, I believe, but each group will be given up to 10 minutes to do their presentation and then we'll open the table to questions. You can do your presentation in French, English, or both and you can rest assured that you'll be asked questions in both.

You gentlemen on my left look like you're ready to go, so why don't we start with Paul or Tim.

[Timothy Egan, President and Chief Executive Officer, Canadian Gas Association]

Thank you, Mr. Chairman.

Let me extend my sympathies and condolences as well in respect to Mr. Brown. I grew up in Leeds-Grenville, so had a chance to meet Mr. Brown, and I know the riding well. The riding loses a great representative.

Thank you for the opportunity to appear before you today. As noted, my name's Timothy Egan and I'm president of the Canadian Gas Association. With me today is Paul Cheliak, my vice-president of government and regulatory affairs. I have some prepared remarks that I'll read and then I'll be happy to take any questions.

The CGA is the voice of Canada's natural gas delivery industry. Our members are distribution and transmission companies, equipment and materials manufacturers and suppliers, and other service providers. Our product and our delivery system together offer an incredibly cost-effective means to deliver on key objectives on infrastructure, innovation, environmental performance, on the north, on transportation, emissions reductions, and more.

Today in Canada natural gas has a central place in our country's energy mix, meeting 36% of our energy needs. This means it's fulfilling more demand than any other energy form in Canada, more than electricity, gasoline, diesel, etc. Today over 20 million Canadians rely on and benefit from affordable, clean, safe, and reliable natural gas.

I want to speak to the benefits of national energy data and to highlight the users, their needs, and whether their needs are being met today. I also want to note some gaps in current energy data availability and to offer CGA's recommendations on the best practices for managing data going forward.

By way of context, CGA is itself a primary source and user of energy data. As a result of the wide use of natural gas, our member companies, the distribution entities across the country, have access to a vast network of important data and information related to energy end use across Canada. Currently, a substantial amount of this crucial data and information is collected by public institutions, including provincial and federal government agencies and energy regulators. In addition, industry associations like ours and our colleagues, the CEA, private companies, think tanks, and other non-governmental organizations are also collection points and providers of energy data and information.

CGA believes Canada, as a significant producer and consumer of energy, needs to have ready access to the highest-quality energy data that is available to all stakeholders. It's also necessary for the data to be accurate, impartial, and transparent. Particularly during this time when Canada is considering its strategic energy future, as well as its greenhouse gas reduction goals, this access to energy data is essential to ensure that Canadians' energy system is reliable, affordable, and resilient.

On the surface, the basic energy data and information needs seem simple enough. We need to measure and report a comprehensive set that can allow us all to understand the full energy value chain of energy resource extraction and/or production, energy product refining, shipping and transmission, and distribution and consumption. At each point along the energy value chain, we need to know some basic information. We need to know how much is produced, moved, or used; at what initial investment or costs; at what delivered price for the final consumer or energy user; and with what environmental impacts, such as emissions or waste, or life-cycle impacts.

The goal must be to eliminate any informational asymmetries and unnecessary confidentialities so as to allow all stakeholders to see, know, and understand Canada's energy circumstance. Once we have a common set of Canadian energy data and information as a reference point, we will be able to have the foundation we need to analyze, forecast, discuss, and properly debate key issues, and to develop a shared understanding of the entire dimension of what energy is and means to Canada.

However, right now Canada lacks that common point. The Canadian Gas Association believes that all Canadians need to have ready access to the highest-quality data and analysis via a single window energy data management capacity. In addition to a lack of some very basic energy data, there's the additional challenge that the disjointed nature of the current collection and reporting in Canada leads, in cases, to issues with data timeliness, quality, and accuracy. One simple example is the lack of any official public sector count of how many customers use natural gas. Statistics Canada doesn't report that number any longer. Natural Resources Canada has an estimated value, but its only via our organization, the CGA, that we collect this information. So, despite its being the most-used energy form in Canada, we have no shared understanding of how many homes, businesses, and industrial facilities are using our product.

Similar data and information gaps prevent a reliable and meaningful common understanding of how to better manage our energy policies, our energy development, and our energy use. Further, in many ways they prevent Canadian energy literacy and the opportunity for self-learning on energy.

The coordination of Canadian energy data collection and management is critical for Canadian energy decision-making and for public understanding. The U.S. has its Energy Information Agency, a source used by governments and industry around the world, and globally there exists the International Energy Agency. Both are highly regarded and in fact essential sources, but there is nothing comparable in Canada at present.

A single coordinated capacity focused on the complete and comprehensive provision of energy data and information would add numerous benefits, including ensuring the complete and efficient collection of all the necessary data and information; ensuring the highest level of quality assurance, accuracy, and data confidence; ensuring the quick identification and elimination of data and information gaps; ensuring a comprehensive, fully integrated, and internally consistent data resource; providing single, easy, open access to all Canadians of available energy data; providing tools for energy data analysis and a forum for related studies; and providing an independent source of data and analysis, free from any special interests.

In short, a Canadian energy data management capacity would allow Canadians to stop debating what the data is, and instead focus on what the data and information are telling us about how best to address some of the critical issues facing Canadians, our economy, and society as a whole.

In closing we offer three specific recommendations. One, that the Government of Canada work with the provinces to create an independent, one-stop capacity, to be the authoritative repository and conveyer of all energy data and information in the country. I note the aspect of working with the provinces here, given their significant constitutional authority over energy. This needs to be respected, and any energy data management needs to be done in a coordinated fashion with them.

Two, that the information and data this source collects needs to be available on an open data platform to all who choose to use and consult it.

Three, we need to strive for continual improvements in data timeliness, accuracy, and completeness.

Thank you, Mr. Chairman, for your time.

[The Chair, Liberal, James Maloney]

Thank you very much.

Mr. Brown or Mr. Bradley.

[Francis Bradley, Chief Operating Officer, Canadian Electricity Association]

Thank you, Mr. Chair.

I thank the committee for having invited the Canadian Electricity Association to appear before you to discuss this important study on the current and future situation of national energy data in Canada.

I am pleased to be joined by Patrick Brown from Hydro Ottawa. Patrick is the manager of regulatory policy and research.

CEA is the national forum and voice of the electricity business in Canada. CEA membership is comprised of generation, transmission and distribution companies from across the country.

At over 80% GHG emissions-free and growing, the Canadian electricity sector stands ready to help fuel the transition towards a clean growth economy with the electrification of other sectors. Access to reliable and accurate energy information—information that is available in user friendly formats to the public, policy makers and industry—will be important in this transition.

Today I'll highlight some of the gaps in Canada's current national energy data collection system and propose a path forward: the creation of a Canadian energy information agency.

First, in terms of gaps, our current energy data collection system is complex, fragmented, and inefficient. Provincial, territorial, and federal levels of government all collect energy data.

On the federal side, complexity is exacerbated by the numerous departments and agencies responsible for producing energy information. Statistics Canada, the National Energy Board, Environment and Climate Change Canada, Natural Resources Canada, the Canada Border Services Agency, just to name a few, are all involved in the collection, analysis, and dissemination of energy data.

This has led to overlapping information requests and analysis with varying standards, definitions, concepts and timeframes, which can result in inconsistent data. It creates challenges for stakeholders utilizing national energy data. We thus recommend a coherent harmonization of energy data that would reduce confusion for the end user while at the same time improving the efficiency of collection.

In short, we need a one-stop shop.

Second, why is a streamlined, efficient, and effective data collection system in the national interest? I see two primary benefits. First, it could help improve both public and private decision-making; second, it will help promote public energy literacy.

Regarding the former, electric utilities use national energy data to inform everything from system planning to public information campaigns. Similarly, NGOs use energy data to keep track of our progress and to inform their recommendations to both government and the public. All levels of decision-makers, including international agencies and our North American counterparts, also use national energy information to guide policy-making.

Third, on the importance of energy literacy, an informed and educated public that grasps energy concepts and trends will be indispensable in our path towards a “clean growth” future. While efficient and effective data collection in itself will not guarantee energy literacy among citizens, it will provide the solid foundation from which to build. In being provided with access to coherent, credible, and independent information that represents both sides of policy issues in an easily accessible format, the Canadian public will be better placed to participate in our national energy conversation.

Fourth, Canada should look to its counterparts and learn from international best practices in national data collection.

Currently, the United States has an Energy Information Administration, the EIA, which collects, analyzes and disseminates independent and impartial energy information to promote sound policy-making and greater public understanding of energy and its interaction with the economy and the environment.

The EIA is independent of government and does not have to seek approval from any government office to collect, analyze, report or publish its findings. This model has done well and contributed to an increased understanding of energy issues in the U.S. The EIA pools together coherent and consistent energy data, standardizes definitions and collection methodologies, and has made it easier to report data.

Lastly, Canada should therefore create an energy information agency of its own.

CEA has long been advocating for the creation of an independent, non-partisan Canadian energy information agency. Recently, we reiterated this in our 2018 pre-budget submission to the House Standing Committee on Finance.

Indeed, CEA is not alone in this. Recommendation 1.3.1 of the report of the Expert Panel on the Modernization of the National Energy Board also pushed for it. At the Generation Energy Forum last year, Canadians also expressed the need for improved institutional structures and recommended establishing a data and modelling centre.

A CEIA would have as its sole purpose the collection, analysis, and distribution of energy information, ideally via regular public reports. The agency should consist of partnerships and information-sharing agreements between the federal and provincial and territorial governments, utilizing Statistics Canada for primary-source energy data or perhaps adopting this function itself.

The development of the CEIA should be guided by the following principles, namely, that we should facilitate the establishment of common definitions; ensure that appropriate safeguards and measures are in place to protect the sensitivity and confidentiality of data submitted by energy companies and other organizations; ease administrative burden by eliminating obligations to report the same data to different agencies; seek to ensure synergies with achievement of public policy objectives related to GHG reduction, climate change, and environmental protection; and finally, acknowledge the benefits associated with improved collection and dissemination of energy-related data from an economic-growth and investment-protection standpoint.

I would now like to invite my colleague from Hydro Ottawa to share a few thoughts on this topic from the perspective of a utility company.

[Patrick Brown, Manager, Regulatory Policy and Research, Hydro Ottawa, Canadian Electricity Association]

Thank you, Francis.

Hydro Ottawa appreciates the opportunity to participate today.

As you may know, Hydro Ottawa is the local distribution company here in our nation's capital. In addition to that core business activity, Hydro Ottawa also has a growing portfolio of renewable energy assets, including the Chaudière Falls hydroelectric station, located not too far from this building, as well as a growing portfolio of energy services.

To support our diverse business interests, we need high-quality information and take seriously the imperative to ensure that our customers and the general public as well have access to such information.

Regarding the proposal for establishing a Canadian energy information agency, Hydro Ottawa believes that the idea has merit and wishes to echo the principal recommendations that were just outlined by Francis.

With respect to how a diverse energy company like us would see this type of agency adding value and improving upon the status quo, we would offer the following thoughts.

We have experienced, and continue to experience, challenges with existing reporting requirements and processes that are in place with certain federal agencies.

We believe the public interest would be well served, especially in relation to energy literacy goals, by the establishment of an agency that is independent from government and has an exclusive mandate to collect, analyze, and disseminate energy information.

Finally, we do see a need for a broader range of federal government data products and services on a wide range of energy-related topics, especially in relation to renewable energy and electricity in general. Particular examples include developments and trends around electrification, electric vehicles, distributed energy resources, and electricity pricing.

With that, I will hand it back over to Francis.

[Francis Bradley]

In closing, as it currently exists, Canada's energy information collection system is inefficient.

A Canadian energy information agency could streamline data collection, facilitate greater evidence-based decision making by government and industry alike, and increase public energy literacy. Critically, a CEIA could also assist in our transition to a clean growth economy by enabling more accessible and reliable energy information sharing, and ultimately better energy policies and decisions.

While CEA strongly supports the creation of a CEIA, the concept is not without risk. If the CEIA does not streamline the federal data collection, but instead becomes just one more federal agency to which data must be submitted, then we will have missed the opportunity and will have exacerbated the problem instead.

I thank all committee members for your time, and we're happy to answer any questions you may have.

[The Chair, Liberal, James Maloney]

Thank you very much.

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

[Marc Serré, Liberal, Nickel Belt, ON]

Thank you, Mr. Chair.

I thank the witnesses very much for their very specific presentations and their good recommendations.

Both of you believe that we absolutely need a central focal point, and that was very clear in your presentation. In our study we are examining that need, I think that you were very clear on that point. I also appreciate the fact that you presented the European point of view and that of the EIA in the United States.

My question is about the steps that need to be taken. Mr. Egan, your first recommendation concerns the provincial jurisdiction, which is important. Given today's climate, do you have specific recommendations to make to the federal government on behalf of your organization and all of its members on the need to engage the provinces and municipalities, and on the specific measures that need to be taken to encourage collaboration?

[Timothy Egan]

Thank you, sir.

If I may, I will respond in English.

I highlighted the provinces, given how much energy data collection they do on their own. As for what the federal government can do independently of that, as Mr. Bradley highlighted, a series of federal agencies currently collect data, and I think there is an opportunity to assess what data is coming from each of those agencies and the best way to coordinate that data collection from each of them.

I share the concern that what could happen here is that we create a new federal body that just duplicates the existing data collection capacities. That's another reason to make sure that we have the provinces in the conversation, because I think this entity needs to be independent of any one government. I think that's critically important.

We rely on several different federal departments and agencies for data in a variety of ways right now, but we also call on the provinces very regularly with respect to data collection. The economic regulators that I noted are those that oversee the activities of each of our members. The régie in Quebec oversees the activities of Énergir and Gazifère and their counterparts across the country. There's data in each of these points, and it needs to be brought together in a coordinated fashion.

My recommendation would be that the energy and mines ministers who meet every year, including this year in Iqaluit, make this a priority item for their agenda. In spite of experiencing political challenges at times, they've had great success in identifying specific initiatives to co-operate on, and they have a mechanism in place for such co-operation. I think they could lead on our response to this, and the independent entity that comes out of this could come from them.

The other thing I'll note is that I highlight capacity instead of agency, because we have to think about how we're using technology. The reality is that this data is online. It can be made accessible on the cloud, and there are ways to coordinate this that are cost-effective and respect the jurisdictional differences.

[Marc Serré, Liberal, Nickel Belt, ON]

That brings me to my second question, and I'll ask it first of Mr. Bradley, and then Mr. Egan.

We obviously talk about the data being transparent, accurate, and public, and your second recommendation, Mr. Egan, refers to open-source data. What would you say to your members in the private sector who are concerned about their competitive advantage if they shared this data? What are the recommendations around that framework so we protect the competitiveness of individual companies with respect to data?

[Francis Bradley]

That's one of the critical things we would be looking for—this agency or this capacity—to weigh in and balance it to ensure the risk protection of information. Again, it is a balance. There is a limit to what information, and how much information, should be provided. At the same time there is a requirement for information at an aggregate level for purposes of decision-making and public policy. Frankly, we're in the middle of these sorts of discussions right now with Statistics Canada with respect to some additional information they're seeking to elicit from our members. Honestly, regardless of whether there is an agency, that is an ongoing discussion. I think it's a discussion that will always take place; it's probably just becoming more so in the age we live in now when so much information is available online. It will be a never-ending source of discussion, although perhaps in this way it could be addressed in a more centralized and consolidated manner, at least with respect to energy.

[Timothy Egan]

I would underscore those points and point out that there's perhaps no better time to be looking at how to manage energy data, given that there's so much conversation about how to manage data in general in the public discourse. The principal concern would be privacy—privacy of individuals' data and privacy of corporate data for competitive purposes—and so rules of the game would have to be established from the start about how privacy is respected. I think we can gain a lot from the various other conversations about privacy that are going on right now to establish that.

[Marc Serré, Liberal, Nickel Belt, ON]

I have a quick question about Statistics Canada.

Should it be the agency that we look at expanding to play a national role in this? Would that be a part of your recommendations?

[Francis Bradley]

With respect to CEA's recommendations, we haven't offered an opinion one way or the other. We've suggested that an agency could lean on Statistics Canada as a source for some of the information, or that it could gather information itself. That frankly isn't a concern of ours, so long as the function itself is done in a coordinated and consolidated manner.

Based upon discussions we've had with others, we think this one's a bit of a no-brainer. There's a fair amount of consensus that we need to do better in terms of having national data, so I applaud the committee for taking the time to shine a light on this.

[The Chair, Liberal, James Maloney]

Thanks, Mr. Serré.

Mr. Falk.

[Ted Falk, Conservative, Provencher, MB]

Thank you to our witnesses for coming. I enjoyed your testimony, and I think this study is important.

I want to follow up a bit more on Mr. Serré's questioning.

As you were both presenting here, I had similar questions going through my mind about the competitiveness of the energy industry in Canada. The word “transparency” keeps coming up in your and previous previous presentations to this committee. Everybody wants to be transparent with everything.

I don't get the sense that anybody's trying to eat anybody else's lunch here. I don't sense a competitive environment for any particular industry in the energy business in Canada, or that the gas industry is trying to muscle away some of the electricity industry's business. I think it's as though everybody is content here.

You talked about transparency, and I'm wondering where the competitive advantages are. Where's the proprietary information that you want to guard? It sounds as though there is none. It sounds like, “Our books are wide open. We want to share everything, and everybody is going to live in peace and harmony together.”

Can you expand, Mr. Egan?

[Timothy Egan]

Absolutely.

Mr. Chairman, I'm very interested in eating the electricity industry's lunch, if I can.

[Voices]

Oh, oh!

[Ted Falk, Conservative, Provencher, MB]

I appreciate hearing that.

[Timothy Egan]

Don't assume that my remarks suggest otherwise.

[Francis Bradley]

We have common members.

[Timothy Egan]

We have common members.

Both of us represent industries that are regulated monopolies, so competition between my members and, if I might be so bold as to say, competition between Mr. Bradley's members doesn't occur, because they are regulated monopolies. However, we do in fact compete with each other, and we do compete with other energy sources for the provision of energy services.

We care a lot about competition. We're very concerned about competition. The issue here is not about, does creating an energy data management capacity mean you're going to be obliged to share your strategic plans about how to grow your customer base. No, I don't think so. Does it mean you're going to share details on who your customers are, what their rates of growth and energy consumption are, and where they're going? I don't think so.

I think what it really means is, as I noted, what's our resource base? Is there a single, comprehensive, transparent assessment of what our resource base is in the country? Is that widely available? What are our current rates of production from that resource base? What are our current rates of consumption from that resource base? I think there's a line, and I don't mean to suggest that it's not a line that our members care a lot about in terms of competition. I think you can talk about whether there is a level playing field of information that can be available to all so that we can then all pursue our competitive interests.

I would also argue that having that level playing field of information is important for you as decision-makers, in order to create the most effective policy framework. When we don't have an effective policy framework, it's that much more difficult for us to compete as well.

[Ted Falk, Conservative, Provencher, MB]

I appreciate that answer, and I'll ask Mr. Bradley to follow up on that as well.

Certainly I think there needs to be that competitiveness. When, as you indicated, we have lots of monopolies in various sectors here, I think there is a tendency for folks not to necessarily seek out the efficiencies that could be driven out of any particular industry or energy provider.

I appreciate hearing that you would like to steal some electricity companies' business. I don't get that sense a lot. In fact, I'm always perplexed when I get my bill in the mail, and my hydro company is telling me ways I could use less of their product. I'm a businessman. I don't tell any of my customers, “By the way, if you do this and this, you don't have to use as much of my product as I'm currently selling you.” Something doesn't feel right about that scenario.

Mr. Bradley, maybe you want to speak to that.

[Francis Bradley]

Sure.

It is an interesting dynamic. What it speaks to is the transformations that are already starting to take place in the electricity business. I would liken it to where telecommunications was 20 years ago. Wireline telephone service was a monopoly and it still is today, but guess what? They have a lot of competition and it came from people outside.

There are a number of reasons that companies will engage in energy efficiency programs and promoting these to customers. Often, it has to do with public policy objectives that have been set by provincial governments and regulators. The other side of it is that, for some companies, it is also a customer retention strategy, as they're looking to the future and anticipating that there will be some new players in the marketplace. Yes, it's a regulated monopoly, but the competition is going to be coming from interesting places. It's going to be coming from Tesla, which is going to want to put in power walls. It's going to come from people who will bring in new distributed energy resource options. It is in the interest of the incumbent companies to continue to build that relationship with the customer. In some instances, that means helping the customer to be more efficient. It may sound a little bit counterintuitive that we'll help you to use less of our product, but the subtext of that is that you're using our product.

[Ted Falk, Conservative, Provencher, MB]

I understand that.

I want to follow up on a comment you made.

You talked about the U.S. system and the Energy Information Administration in the United States. I got the impression that you were quite fond of the model of information gathering they have on the U.S. side.

Do they not have to provide information to any other jurisdictions, as an energy industry outside of the Energy Information Administration?