Evidence of meeting #96 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 independent.
A recording is available from Parliament.
Liberal
The Chair Liberal James Maloney
Good morning, everybody.
All right. We're on schedule and we have two sets of witnesses.
From the Canadian Energy Research Institute, we have with us Allan Fogwill.
From Pembina, we have Nichole Dusyk, who is here with us, and Mr. Israël, by video conference.
The process is that each group gets up to 10 minutes to do their presentation, followed by questions from members from around the table.
Mr. Fogwill, sir, why don't we start with you?
Allan Fogwill President and Chief Executive Officer, Canadian Energy Research Institute
Thank you for the opportunity to address the House of Commons Standing Committee on Natural Resources on the concern regarding energy data in Canada.
I'll start my remarks with my recommendation that Canada establish an independent energy data agency using a governance model similar to that used with respect to the U.S. Energy Information Administration.
We have been here before. Numerous organizations in the energy sector have noted for decades the need for an independent energy data centre. More recently, we have seen concerns raised about the lack of such an agency.
In 2012, Michal Moore, from the University of Calgary, published “A Proposal to Create a Pan-Canadian Energy Information Organization”. Also that year, we had this glaring headline from a Financial Post journalist, Jameson Berkow: “Finding information about the Canadian energy industry is easy—if you go to the U.S.” In addition, in that same year, the Senate's standing committee on energy and environment stated, “It's Time for a Canadian Energy Information Agency.”
In 2015, the Canadian energy strategy, agreed to by all the provinces, included goal 3.1: to “[i]mprove” the “quality of energy data across Canada”. That led to a discussion between the deputy minister of Alberta Energy at the time, Grant Sprague, the assistant deputy minister of energy at NRCan, Jay Khosla, and me. We agreed that it was important to reach out to stakeholders from across the country to see what they wanted regarding energy data and the status of data in Canada.
During that time, CERI produced an assessment of the data challenges we face in Canada, which include the following ones.
There is a lack of data. Only 38% of the 189 potential indicators are gathered. In particular, we lack information on emerging technologies and new energy services.
There is incoherent data. For example, we found at least 10 different definitions for GHG emissions.
There's inconsistent data. Out of 26 indicators assessed from various sources, 42% differed in value by more than 10%, so it is difficult to determine which source is correct.
We also found data lacking credibility. A CERI survey found different levels of trust by stakeholders regarding organizations that produced data or analysis. That percentage of trust varied as follows: government agencies, 67%; governments, 17%; economic experts and academia, 50%; and, industry associations, 42%.
There are also data gaps. To generate a complete set of data requires a review of up to 20 sources of major and minor publications, and that's beyond the resources and expertise of most stakeholders.
The data is not timely. Sixty-one per cent of data is available after one year, so the rest is still waiting, which means that trends in the data are difficult to produce, as is seeing where we are at any one time.
The full data gap analysis report is provided to the committee as background document A. You should have it in your package.
CERI, the Ivey Foundation, and the Trottier foundation worked together to gather interested people from across the country to discuss what needed to be done. In 2017, after two years of discussion, we came to some clear determinations of what was needed, but no one at the time was willing to put funding towards achieving an energy information organization.
The stakeholders were unanimous in their support for an independent and neutral agency with some analytical services. I've brought a summary of the overall discussions as background document B. You should have that.
CERI worked to reinforce our understanding of stakeholders by conducting a survey regarding the need for an energy information organization. The results of that study are included as background document C.
To crystalize our thinking on this matter, CERI developed a business case for stakeholders to reference. The full document is attached as background document D. However, the main responsibilities of an energy information organization would be threefold: data management, analysis and reports, and communications.
Data management would include up-to-date use of artificial intelligence tools and machine learning and cover things like data clearing and quality assurance, data reconciliation and harmonization, ensuring relevance and timeliness, and data gap analysis and filling the gaps with research.
The second part was analysis and reports. From looking in the past we would conduct analysis of historical developments and trends. The current would look at market monitoring and assessments, and the future would look at scenario analysis unfettered by existing policy.
From a communications perspective, we would ensure unrestricted access to information and make sure the information was shared across organizations in the country.
Key to the success of such an organization is an open platform for sharing data. Many organizations and governments in Canada gather data. We should leverage these activities and the value they create by forming a collaboration among the parties. This can build trust, which is vital for the data being gathered, and promote the use of this information as a source for evidence-based decisions by government, industry, indigenous groups, and environmental organizations.
This country is in the midst of a transition to lower-carbon energy systems. Important decisions are being made that will affect the lives and businesses of us all. Without a comprehensive and credible set of data that we all recognize, those decisions and that transition will be more challenging.
Thank you.
Dr. Nichole Dusyk Postdoctoral Fellow, Federal Policy, Pembina Institute
Hello, and thank you for the allowing us the opportunity to comment on the state of energy data in Canada and to offer our recommendations.
My name is Nichole Dusyk. I'm a postdoctoral fellow with the Pembina Institute, and my colleague Benjamin Israël joins us from Calgary. He's a technical and policy analyst with the responsible fossil fuels program.
The Pembina Institute is a national, non-partisan, non-profit think tank that has over 30 years' experience providing research and recommendations to inform energy policies in Canada. Today we will be discussing three issues: why good energy data is crucial to advance effective climate policy and support the development of the low-carbon economy; the state of energy and climate data in Canada; and our recommendations for improving energy data.
Ben will talk about the first two points, and then I'll follow-up with recommendations.
Benjamin Israël Analyst, Pembina Institute
Bonjour.
The Pembina Institute is an intensive user of energy and climate data. On a daily basis, technical and policy experts in our organization are accessing and analyzing energy and energy-related data from various federal and provincial agencies. This includes analysis to support the development of methane regulations, to re-envision freight transportation in the GTA, or to provide recommendations on how to decarbonize electricity generation in Alberta. As a result, we have a practical understanding of the issues and limitations of energy data in Canada.
In addition, our organization has a long-standing support for evidence-based energy and climate policy. We believe that high-quality data and analysis are a critical component of informed public policy, and we know that in Canada we have work before us to ensure that decision-makers from government, but also from businesses as well as civil society, have access to timely, complete, and independent energy data and analysis.
First, I would like to explain why good energy data is crucial in a context of energy transition. Our energy systems—that is, the way we produce and use energy—are under huge pressure to change, and they are already changing at a pretty fast pace.
A first cause of this change is the imperative to develop low-carbon alternatives to address climate change. A second cause is purely economic: some zero-carbon options have become more cost effective than hydrocarbons. Wind power, for example, is now a cheaper option than natural gas to produce electricity in many jurisdictions. A third reason is the emergence of new technologies. Think of smart grids, for example, or the rapid change in behaviours that affect energy demand. Think of millennials, for example, who drive significantly less than previous generations.
For all these reasons and many other reasons that I won't have time to expose here, Canada's energy systems are changing very fast. As a society, we need to better understand and document this change if we want to accelerate the energy transition and seize the opportunity offered by the new economy.
Energy data in Canada suffer from many flaws, and these flaws impede our ability to develop efficient and effective policy, to suggest alternative policy pathways, and to fully support the rise of a clean economy.
First, there is a quality issue. Some data made available are inconsistent. For example, StatsCan reports that Quebec is using significantly more natural gas than it is supplied with. Second, there are missing data. Some public reports do not include major energy sources. For example, the report on energy supply and demand, which is the go-to place to understand how we generate and use our energy in Canada, does not report wind energy, solar, and biomass as energy sources.
Quality and missing data are only two of the most frequent flaws. I won't have time to develop here all the issues at stake, but we could easily also add consistency across datasets, confidentiality issues, transparency issues, granularity, and availability in a timely manner, etc.
We have entered a data-driven world. We need credible and reliable energy datasets to develop informed, transparent, and accountable policies in order to accelerate the energy transition as well as the rise of the new clean economy in Canada.
Thank you.
Postdoctoral Fellow, Federal Policy, Pembina Institute
I'll now briefly go through some of our recommendations.
In our role as advocates for evidence-based policy, we have recently undertaken a series of expert interviews and developed recommendations for modernizing the National Energy Board. The state of energy data was raised repeatedly in those interviews.
Combining what we heard from the 23 experts we talked to and what we know from our own work, we recommend harmonizing and aggregating data across federal, provincial, and territorial agencies; producing energy data with aligned timing, units, and assumptions; expanding the scope of collected data to include, for example, demand-side energy data, information on international and interprovincial energy trade; data that is as granular as possible and in formats that can be easily disaggregated and manipulated; improved quality assurance and, where applicable, information on assumptions and inconsistencies between datasets; and reduced time lags between the collection and publication of data.
To implement these recommendations, we further recommend the creation of an independent Canadian energy information agency.
A second finding from our research was the issue of independence and the need to separate data collection and analysis functions from policy-making and regulatory agencies.
In the case of the National Energy Board, we have the same body that is evaluating and regulating a project also producing the energy and supply and demand forecasts that may be used to evaluate that project. This creates a situation where the forecast used to determine project feasibility may not be viewed as sufficiently independent. The NEB expert panel also recognized this issue and recommended creating an independent energy information agency. We agree and would like to highlight that there are two separate functions that need to be considered: data collection, and data analysis.
We recommend separating these two functions, expanding energy data collection at Statistics Canada, and creating a new Canadian energy information agency charged with disseminating energy and climate data.
We envision the new Canadian energy information agency relying on Statistics Canada for the collection and harmonization of energy data. This is consistent with the mandate of Statistics Canada, and it makes use of existing data collection capacity, expertise, and relationships with provincial governments.
The new energy information agency should be housed within Natural Resources Canada and report to the Minister of Natural Resources. However, the independence of that agency should be established by specifying, in legislation, that the agency does not require review or approval of its statistics or forecasting by any government entity.
The mandate of the agency should include reporting quarterly on energy supply, demand, sources, and downstream consumption, including international and interprovincial energy import and export; producing annual scenarios for energy supply and demand, including a reference case that considers domestic and international action on climate change; producing an annual report on Canada's progress towards fulfilling its commitments to addressing climate change; managing a coordinated interface, a one-stop-shop platform to disseminate all energy data and analysis; making all data available to the public at no cost in easy-to-use formats; conducting proactive energy education to increase energy literacy; participating in project hearings as expert witnesses with respect to energy and GHG emissions modelling; and finally, advising government ministries and agencies on energy matters upon request.
In conclusion, we would like to thank the committee for initiating this study. Ensuring that we have high-quality energy data and analysis is essential to good decision-making, and is especially critical in the current context of rapidly changing energy systems.
We look forward to the recommendations that come out of this study and thank you for the opportunity to participate in the discussion.
Liberal
Liberal
TJ Harvey Liberal Tobique—Mactaquac, NB
Thank you to all of the witnesses for being here.
Ms. Dusyk, I want to start by touching on a comment you made about the creation of this overarching body, and it having its independence but falling under Natural Resources Canada, which would be counter to the U.S. model, which I think is completely independent.
Why would you suggest that it fall under NRCan? Why would we want to take the independence of an organization and continue to place that underneath the oversight of the department?
Postdoctoral Fellow, Federal Policy, Pembina Institute
Well, our recommendations were largely designed around the idea of trying to minimize additional resources that are needed: rather than creating an entirely new institution, use the capacities that already exist.
I will say, though, that we know there are other models out there, and more important than the actual structure of the model is that issue of independence. We felt that ensuring independence by including a legislated mandate, that it does not need to report to the Minister of Natural Resources for its statistics and forecasting, would be sufficient.
We'd be open to any model that can ensure that both data collection and analysis are independent. That is our primary focus.
Liberal
TJ Harvey Liberal Tobique—Mactaquac, NB
Mr. Fogwill, would you like to comment on that as well?
The reason I ask the question is because I see this idea of an independent agency as being something that's truly independent. It's so that not only over a two-year or four-year period, but over a long period of time, Canadians can see it as being a source for consistent data that's relevant to what's actually coming from both existing industry and new industry. Whether it's renewables or traditional sources of production from the energy sector, it's relevant data that's completely removed from government altogether.
President and Chief Executive Officer, Canadian Energy Research Institute
The kinds of debates we're going to have in this country are often going to be between the federal government and provinces. If one of those governments has control over this data agency, it will always be suspect by the other.
When we talk about our proposal for an independent agency, it's where both the federal government and the provincial governments are involved in the governance and no one has complete control. Trust is a very important part of the organization. If there's no trust, don't even start. What will happen is that you'll put resources into something, and other people will say they're not going to use your information because they don't trust you. Therefore, they'll set up their own and you've lost right from the beginning.
Where you have the partners in this confederation involved in a lot of resource and environmental issues, they also have to be involved in the data organization. I don't think it should be part of NRCan. I don't think it should be part of an internal federal government department. I think it should be separate, and in a way that's transparent and has the provinces involved.
President and Chief Executive Officer, Canadian Energy Research Institute
It goes to the role that you want to have the different governments play. If you want them to have a direct governance role where they're on a board of directors, for example, that's one model. Another model is just providing funding; that's a second one. There are myriad approaches you can take to get towards something that's a collaborative approach between the provinces and the federal government.
I think what it really means is that you have to a find a solution where the provinces will agree. If they don't agree, then the idea about a credible independent organization will only be seen as credible and independent from the federal government. The provinces will continue to put their resources into data collection and analysis into their own departments.
Liberal
TJ Harvey Liberal Tobique—Mactaquac, NB
The reason I asked that question is because in testimony last week from the representative from the U.S. administration, we heard something similar, but contradictory also. It was that only when they separated themselves from the states and used this separate overarching body that was removed even from federal governance to gather and analyze this information, but stepping away from utilizing current information coming from each of the individual states, did they get true relevant data.
They indicated that the data they had been getting from the states was sometimes skewed towards what the individual states were pushing for at any one given time. By completely going away from a model that tied itself it to either state governments or the federal government, they were able to achieve better outcomes with more reliable data. There were fewer people who had an interest to play in how that data looked.
Liberal
TJ Harvey Liberal Tobique—Mactaquac, NB
The testimony we heard from the U.S. government the other day indicated that each of the states were still individually doing this, but the governing body that is deemed to be the most credible relevant source for this information in the U.S. has no connection with any of the individual states.
President and Chief Executive Officer, Canadian Energy Research Institute
We don't work in the same way the United States does. There's a lot of collaboration among the different provinces. The Council of the Federation is a really good example of that.
I don't know if we have to go to the U.S. model. I think if there's a way to take into consideration the approach that provinces are working with the federal government right now, maybe we should start there. If it doesn't work, we can always change it.
But that is just the governance side of things. It's not the analysis. It's not the data itself. It's how you get that trusting relationship starting to be built on what's coming out of the organization. If that is in a form that completely separates the provinces and the federal government, that's fine, but I don't think you want to start there. I think you want to start with them all together and see if you can work it that way, because in the long run, that helps to generate trust. If they are directly involved with how the organization runs, then they'll go back to their counterparts in the different provinces and say, “Yes, this is a legit piece, and they have credibility, and you should accept it.”
Conservative
Shannon Stubbs Conservative Lakeland, AB
I think I'd invite both of you to expand on this issue. We do seem to be getting similar testimony but then also some contradictions. It will be no surprise that as Conservatives we are reticent to support a model that would involve the creation of a whole new branch of government and expenditures. However, obviously on this issue of collecting, analyzing, and providing data, it clearly must be independent and objective and expert-based to provide evidence for policy-makers and decision-makers.
Previous testimony from Stats Canada reinforced what you're saying and what we all know about the variety of bodies from which energy data comes—provincial and territorial regulatory bodies, industry associations, and Stats Canada. Stats Canada also contended that they already have a model for a single information hub, and they believe they have models that could be adapted for these specific purposes, although there was then follow-up testimony from others saying that at one point their model was world-leading and now maybe is ineffective and out of date and requires some improvements.
I'm trying to figure out if really what's required here is a mandate or direction from the federal government to require the sharing of information among these regulatory bodies, like automatic reporting—I'm not sure why that doesn't happen—but hopefully not requiring a whole new branch.
Given that maybe that's part of it, that the feds have to say that this has to happen, do either of you think it is possible that the organization that manages it could be completely supported or be in the private sector and have a relationship like that with government, rather than being embedded right in a department and reporting?
President and Chief Executive Officer, Canadian Energy Research Institute
Let me speak to the last part about being supported in the private sector. We had a very disappointing meeting about this time last year. We got on the phone with all these stakeholders, and they said, “This is a great thing. We should do this. It would be wonderful.” Then the next question was who has money for it?
President and Chief Executive Officer, Canadian Energy Research Institute
There was silence, right? They said, “Let's get the federal government to do this.” That was basically it. They all love the idea, but there's very little money floating up to put towards it.
Would it last in the private sector? I don't think so, unless there were some assured funding streams on which it could depend. If there were an allocated funding stream from all 14 levels of government, I think that would work. Having certain caveats or what have you associated with the funding such that it would have to meet certain performance standards, for instance, that are out in the open and clear, I think would be important.
I go back to the way the government is working right now, and there are three issues that come to mind. Two deal with StatsCan and one deals with the National Energy Board.
On the two with StatsCan, we're all aware of the long-form census debate, and that was resolved by the chief statistician resigning in protest because the government had a requirement to make some changes that didn't seem, in his opinion, to be appropriate. That's an example of where government gets directly involved in that activity. A second one was the impasse between StatsCan and Shared Services over the computer systems. One thing that I think would be vital in having something be successful is a top-of-the-line new type of artificial intelligence that anyone can use with very little training. I don't see that happening any time soon within the federal family, given other issues such as being paid on time, for example—figure that out first and then look into the future.
In terms of the National Energy Board, some of their analysis done several years ago was limited to current policies at the time. Their scenario analyses, which may have looked at different options, weren't allowed to include alternative policy scenarios.
Those are examples of where it would be difficult to work in the private sector and is difficult to work in the public sector. Either one will work if you resolve some of those issues: funding in the private sector and legislative independence in the public sector.
Postdoctoral Fellow, Federal Policy, Pembina Institute
I do. I feel that whatever organization gets created needs to have a really strong public interest mandate. If it were private, particularly if there were a for-profit model, I would worry that the public interest mandate would be compromised.
The committee might look at the example of the Canadian Council on Social Development, which I believe in the late eighties or early nineties, as a non-profit, actually did a function of data analysis on socio-economic issues. From what I understand, it was considered quite credible. It was given a federal contract to do that. It no longer performs that function, but it is a model of a completely independent agency that did analysis and was trusted in that analysis in terms of doing it transparently and being seen as credible by a broad range of stakeholders.
I think it is possible, but again, I would emphasize that for the sake of public trust I think we really need independence, and that includes independence from policy and regulatory functions, but also independence from industry. We don't want particular sectors of industry to seem to have more influence on the data. Especially in our current context, where our energy systems are changing really quickly, we want to make sure that it's independent of any particular industry or any particular side of industry.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
I'd just like to thank you for being here for us. I'd like to follow up on all this and talk about different models of what an independent agency might look like.
There is one agency that I'm personally familiar with through my past life as a biologist. I used to sit on the Committee on the Status of Endangered Wildlife in Canada, which is a body made up of representatives from federal, provincial, and territorial governments along with and indigenous and academic representatives. It provides advice to the federal government under legislation such as the Species at Risk Act, so it's independent in that sense. There's a secretariat that supports it in the Ministry of Environment and Climate Change, so the support function is funded by the federal government.
I'm wondering if that sort of model will work. The only non-independence there is that the money supporting it is provided by the federal government, and if they don't provide enough money there are certain constraints that happen.
I wonder if all of you might want to comment on that kind of model. You mentioned the provinces and federal government coming together, and it's also very important that indigenous governments be represented. It's something we've heard time and time again in this day and age.
President and Chief Executive Officer, Canadian Energy Research Institute
A model like that might work, but the issue there is twofold. One is that because of the funding structure, they are always beholden to a third party. It doesn't really matter what organization you work for; you always know where your money is coming from and you make sure you don't piss those people off. If their money was solid and secure, then they'd have independence in that sense.
An example is the U.S. Energy Information Administration. They were created in the 1970s, and various parties have taken a run at them, both in terms of the legislation but also their budgets, and have been unsuccessful in attacking them. You can get at an organization through its funding, so that is one aspect.
The other aspect is the secretariat function, because the secretariat function can be staffed by someone else, and they'll staff it with the kind of people they want to have to make sure that whatever they're looking for from that organization is going to come out of that organization. I'm not saying that happens, but there's the opportunity for that to happen.
If there's an opportunity for that to happen, then other people would look at that and say they have a credibility issue. They have a credibility issue in terms of the budget as well as the staffing.