Transport Committee on March 13th, 2012

[David Bradley]

No—

[The Chair, Conservative, Merv Tweed]

Briefly, please.

[David Bradley]

—not necessarily, but it can.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Van Kesteren, welcome.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Mr. Chair.

Thank you for the invitation. It's a great committee. On my part too, transportation is of great interest.

Mr. Bradley, it's good to see you.

I want to tell everybody here that they missed probably the best event I've ever attended—

[Olivia Chow, NDP, Trinity—Spadina, ON]

Oh, that's right.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Yes, Olivia was there. When the invitation comes out again, I would urge all of you to take up the invite, because it was a great event. I think it's also important that we're able to touch base with our parliamentarians.

I want to direct my questions to Mr. Robert. I want to talk a little bit more about natural gas.

I think it's probably safe to say that we are tied to the States, whether we like it or not, and I don't think your industry would want to see regulations that would impede your traffic in the United States. Those are things that we must recognize.

The fact is that we're playing in a big sandbox; it's not our sandbox, unfortunately, but there are things we can do. I know that you've been a strong advocate of natural gas. You've put your money where you mouth is. You went out and invested in a number of trucks. You were one of the first.

I appreciate your information on Westport. It is an exciting new innovation and a Canadian company, but I want to just give you a little bit of time to maybe tell the committee.... You seem convinced that natural gas is definitely an avenue and an opportunity for trucking.

We're acting as partners. I appreciate what you do in your industry—you're a leader in that as well—but if government and industry were to act as partners, what would you tell the Canadian government in regard to what the necessary steps would be to move forward with this natural gas initiative? It's something you firmly believe in and it's something we could possibly lead the way in and develop more technology in, which would create more industry for this country.

[Claude Robert]

As you know, quite often we forget to go and visit the United States. Last night at 10 o'clock my son sent me an e-mail, a courriel, that will illustrate how many refuelling stations they are going to have by the end of 2012 in the United States. I could give it to the clerk after the presentation, and that should be your answer.

While we preach against natural gas and try to develop alternatives and other things, we forget that the best technology comes from Canada, but in the United States they don't talk, they act. By the end of this year they are going to have over 250 refuelling stations in the United States.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

How many do we have here in Canada?

[Claude Robert]

Right now there are two in the Robert yard and one in Calgary. We have a CNG operation in B.C., but that's what we've got.

I can't believe that people do not see these things. I will transfer the courriel to you and you could share it with the audience today. You're going to see that President Obama didn't say it in a speech, but he went to Chrysler and told them that natural gas was going to fuel the vehicles of the future. In the meantime they have given grants to companies like Clean Energy, Chesapeake, Shell, and these people are building.

In fact, even if we wanted to get a third refuelling station right now, we would have to put our name on the list; it's a year and a half delivery before we can get a refuelling station from Chart, which is the only real manufacturer of refuelling stations in the United States. There's a second one, but it's a very small player.

There's the potential in Canada of developing and manufacturing natural gas tanks. There are two tanks on a truck, and they're worth $35,000 apiece, so you have $70,000 worth of tanks on a vehicle. If tomorrow you believe that there are 125,000 to 150,000 trucks in Canada and multiple that $70,000 by that number of trucks, imagine the amount of investment that could be made in new manufacturing in Canada.

Right now we import all this from the United States, which imports a lot of it from China and other countries. We keep importing, and then we wonder why our trade balance is going down the drain. We need to start producing. As we are one of the top producers in the world, we have a big opportunity with natural gas, so why don't we do something about it?

When I see the speed at which they are doing it right now in the United States.... They have adopted technology other than Westport's right now, and they are going to burn a lot of fuel—not efficiently, because the Westport technology is the best technology in the world right now. They find other technology that works, and that means they are powering the trucks. Whether they do it the right way is something else, except they are EPA-okay.

This is where we stand, and those are my concerns. Canada cannot carry two carriers, Vedder in the Calgary and Moncton areas and Robert in Quebec and Ontario. Let's not joke. Let's be serious. We cannot be two carriers running 75 or 100 trucks in Canada and say we are going to promote LNG and natural gas. If we want to be serious, we need to make the facilities available and just work accordingly.

Keep in mind one thing: people like the ones at Clean Energy. They used to own a company and sold it to Exxon. They were the largest producers of petroleum in Texas. They sold their company and went into natural gas. They got all the grants; now they have the money to put a network across the United States. Tomorrow they are going to control the distribution of natural gas in the United States.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

How much time would we need to put proper corridors in place? For instance, we've talked before about a Quebec City to Windsor corridor, one from Edmonton to Vancouver, and then possibly a spoke on the east coast. How many filling stations would we need to encourage other trucking companies to start looking at natural gas?

I want to point out something else. I know you're environmentally conscious, but you are a businessman first, so you must be convinced that natural gas has some real value.

[The Chair, Conservative, Merv Tweed]

Please be very brief, as we are very close to the time.

[Claude Robert]

First of all, if we are 10% of the United States and they will have 300 stations by the end of this year and probably 500 by the end of next year, divide that by 10 and you should have your answer.

Second, I believe that the trucking industry is ready to go for it, but right now we do not have the support that goes with it. The investment is absolutely outrageous, and there are regulations that we have to fight all the time. For example, in municipalities when we come to install a refuelling station, everybody associates it with propane. They ask if LNG and propane are similar. The difference is that when LNG evaporates, it is so light that you lose it. Propane is so heavy that it stays on the ground, with the risk of explosion and everything, but all the regulations we have to meet are for propane. The fire people, the cities—everybody is using propane to monitor LNG. It doesn't make sense. It would be like comparing water and Pepsi.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Poilievre is next.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Mr. Robert, you've offered some fascinating testimony today. I want to get right down to what we can do to get out of your way so you can succeed.

Just for full disclosure, I don't support any form of grant to help the industry in this regard. I believe business is meant to produce wealth rather than consume it. However, I'm interested in ways we can make your regulatory life simpler, ways you can import technology with fewer obstacles, and other ways we can allow you to invest your own money to get a return on that investment and help the environment at the same time.

In the most succinct way possible, list the regulatory obstacles we could remove, or work with our provincial and municipal partners to remove, so that you can succeed.

[Claude Robert]

As you know, it's a matter of cashflow. Once you buy a truck and pay twice as much for it, we don't want a grant; we just want accelerated depreciation so that we get deferred income tax. Trust me, we will pay the tax back.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Is that on the full price of the truck, or on the incremental cost associated with the natural gas engine?

[Claude Robert]

In the United States they can amortize a truck over a period of four years to mostly zero. In Canada it takes up to eight years before you get to zero, roughly.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

That's for the whole truck.

[Claude Robert]

Yes.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

You want to accelerate the portion that is associated with the natural gas engine. Is that correct?

[Claude Robert]

Yes.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

What do you propose: 50% a year, 80% a year?

[Claude Robert]

I suggest you look at what has been done in Quebec.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

It is 80%, right?