Evidence of meeting #27 for Transport, Infrastructure and Communities in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was trucks.
A recording is available from Parliament.
Conservative
President and Chief Executive Officer, Groupe Robert
Exactly. Canada refuses.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
I have a final question. You mentioned a company in Phoenix that is running on hydrogen from methane. First of all, are they doing that in a commercially viable fashion, or are they subsidized to do it?
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
It's in a lab, so it's technologically but not commercially feasible right now.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
Would you be able to provide for us, Mr. Robert, a list of the municipal, provincial, federal, and international regulations that are standing in your way? Can you give that to us as soon as you possibly can so that we can ask our officials in front of this committee why those regulations exist and then potentially recommend to the government their removal?
Conservative
The Chair Conservative Merv Tweed
I think it is going to be a problem. I come from western Canada. Our trucking industry basically goes through the U.S. now. If we go to a natural gas product, I suspect that we're going to see more and more migration into the U.S., travelling east to west. I think it's a pretty high number as it is right now. I know that we had a couple of trucks on the road in our business, and we basically tried to avoid provinces because of the rules and regulations from one province to another. There was licensing and registration. They were just obstacles.
Even now, in trucking through the U.S., we avoid certain states simply because their rules are different. I don't know if it's similar for your companies. If you are underweight in one state, you could be overweight in the next and subject to all the fees and penalties.
President and Chief Executive Officer, Groupe Robert
You are right, and your remark is so exact.
In the meantime, I will tell you what I'm afraid of.
Right now they are going to put a refuelling station in Detroit and one in Syracuse. I know that they are putting one in PA, New Jersey, Connecticut, and Boston. I have the list. I will give it to the clerk after the meeting.
That's only one company. That's only Clean Energy Fuels. Chesapeake Energy is doing the same, and Shell is doing the same with Flying J. Imagine the number with the multiplication. These guys are going to run LNG and come and compete with our industry, while here in Canada we will still be running on fuel before we develop an infrastructure. At the speed we are going today, it will be 2015 before we get something that makes sense.
In the meantime, they would be running 400 to 500 gas stations stateside. With the autonomy they have, they can refuel in Syracuse, come to Montreal, and go back to Syracuse and say, “Bye-bye, love, I took your freight away.” They benefit from the cheaper price.
And the Canadian trucking industry is going to do what? Right now, my trucks can go to the United States. They are EPA-approved, but there is no station as of yet. In a month's time, there is going to be one in Detroit.
Yes, we are going to start to run them. We have started to run one truck in Boston. We are running that truck back and forth to Boston, because I have found a friend there who has trucks on natural gas. He said, “Claude, you can come and fuel whenever you want.” I'm fuelling right in his yard. That is the beauty of it.
Keep something else in mind: all of the natural gas on the eastern seaboard is coming from Russia through méthaniers on LNG. The price of this compared to the price in Canada at the pump is not even 25%. Tomorrow we are going to stop bringing petroleum on boats; we will start to use méthaniers to bring natural gas from somewhere else.
I think we need some time to get together and do something. Electricity is too expensive. The price is too high. This is this, this is that. What are we going to do? Even our water we are going to probably import from Maroc or somewhere. That's just to illustrate how sometimes it can be nonsense.
NDP
Isabelle Morin NDP Notre-Dame-de-Grâce—Lachine, QC
Thank you very much, Mr. Chair.
I want to thank our witnesses for their presentations.
Mr. Bradley, you want the government to provide financial assistance to stimulate truck investment. I did a quick calculation. If we want to put an electronic on-board recorder, an electronic stability control system and a GHG compliant trailer on every truck, it would cost $10,000 a piece.
You said you wanted a grant, but how much? What exactly do you mean? What sort of government grant would enable you to properly equip a truck, incorporating the three technologies I just mentioned?
President and Chief Executive Officer, Canadian Trucking Alliance
You're not necessarily going to put all of those things on all trucks, so the cost could be $10,000 or it could be something less.
What we're talking about is repayable grants. We don't have a specific number, and I don't expect billions to fall from the sky tomorrow. We had programs up until very recently—ecoFREIGHT and whatnot—through Transport Canada that were on the order of a few hundred million dollars, but they were for all sectors, not just trucking. It also applied for rail, air, etc. I think those numbers were sufficient to stimulate investment.
The APU program was a 17% investment on the part of the government, with 83% on the part of the industry. It really did help to stimulate investment. That said, if it is a grant program, repayable or not, we have a timeframe during the next few years when I think we can really make some headway. We're emerging from the recession and people are seized of the need to improve fuel economy, so we would favour a time-limited program that would apply to specific products.
The problem with ecoFREIGHT was that these were all called demonstration projects. Companies had to provide so much paperwork that some of them, particularly small ones, had to hire consultants to write their reports. The result was that after a while they didn't bother going after the funds, so it was the big companies that got the money. If we said these are proven, currently available technologies and limited the time, we could make it happen.
The grants would be only for retrofit; if you're buying new equipment, you can get that stuff added on and you can get financing for it yourself.
Ron Lennox Vice-President, Trade and Security, Canadian Trucking Alliance
There is a precedent here in Quebec. I have a document about a program they put in place for the trucking industry. Claude, and I think David, talked about the accelerated CCA for the newer trucks, along with the LNG, but in addition to that, they put in place a program in 2009 directed at the introduction of new technologies to reduce fuel consumption, and by extension greenhouse gases.
You were asking about numbers. In the Quebec program, they will rebate 30%, up to $3,000, for an auxiliary power unit. Side skirts make up another category—it's 30%, up to $1,500. The program is sunsetted. It doesn't last forever; it expires in 2013. The total cost of the program is $27 million for the trucking industry. That's an example of the sorts of things that could be done.
President and Chief Executive Officer, Canadian Trucking Alliance
There are so many ways you can skin the cat. I appreciate Monsieur Poilievre's comments on grants. I only wish it were true for things like biodiesel and whatnot; billions were provided in grants for something that we're not sold on as a fuel. We could also be looking at LNG and stuff like that.
Governments find ways to do different things. The Prime Minister, back in 2008, promised he would eliminate 50% of the excise tax on diesel fuel. That hasn't happened. What we said at the time was that there were good arguments for getting rid of that archaic tax, particularly in a GST/HST environment, but rather than getting rid of it and having the money go off wherever, why not take that money the government would otherwise lose and put it into a program like this, where at least the companies that are doing the right thing would get some benefit from it, as opposed to just reducing the tax?
We have to decide as a country whether we're really in the game of reducing greenhouse gas emissions or not. The industry is moving in the direction we want; it's a question of whether we want to get there in the next few years or in the next 30 years. That's really the issue.
Conservative
Conservative
Ed Holder Conservative London West, ON
Thank you very much, Mr. Chair.
I'd like to thank our guests for attending today. I find the information that you've provided thus far to be very helpful.
You know, my New Brunswick dad was a truck driver almost all his life.
President and Chief Executive Officer, Canadian Trucking Alliance
There are a few more of those these days too.
Conservative
Ed Holder Conservative London West, ON
Well, she never drove.
My father always said that if you want to know how the economy is going, follow the trucking industry, because the trucking industry will be farther ahead in the economy. If you see a lot of activity, it means that going forward you'll see a stronger boost to the economy, because they really precede the activity. Conversely, if you see fewer trucks on the road, then you know that some real challenges are going to happen.
I think that's as good a barometer as I have seen, and that's why I appreciate your comments today.
I have a few questions for you, Mr. Robert. One thing you talked about was the lack of what I will call “natural gas centres” for your vehicles. It's good that you have a friend in the United States who lets you use his resources.
Why has that not taken off in our country? What's your sense of it? It would seem to me that with the cost of natural gas versus, say, diesel fuel....
What's been the impediment, from your standpoint, for this not expanding exponentially?
President and Chief Executive Officer, Groupe Robert
As with any new technology, I believe, people are scared.
The big difference is that in the United States.... I don't want to take too long, but I'll tell you the first thing the federal government did. In California, as you know, they gave the drivers one shot to eliminate old trucks that were polluting, which was something like 500 trucks. Then they started to give grants in California, right or wrong, to all the trucks going to the ports to eliminate smog in the cities of L.A. and San Francisco and others. They gave all the supports so that everybody could switch to natural gas. Right away there was a big impact.
As well, some large corporations, UPS and others, have gone with compressed natural gas, CNG, instead of liquefied natural gas, LNG. These people started with this, but at the same time, since they had the fuel station, they decided to have some LNG trucks as well.
The states of Texas, California, Arizona, Nevada, and Utah have all started to develop the natural gas side very strongly. Naturally this development has created a market of replacement parts, maintenance, facilities, and all the things necessary to support a fleet of maybe 150,000 trucks altogether.
Here in Canada we started from scratch with one truck, five trucks, ten trucks. You cannot live with one truck, five trucks, ten trucks, and I'll tell you why: it's because methane is a gas that has to be kept at minus 260 degrees. If you don't keep it at that temperature, it evaporates into the air. In order to keep your truck fuel-efficient and to keep the truck going, you have to refill your refuelling tanks every three days, at the latest.
Now, if you have one truck, five trucks, ten trucks, you cannot start a business. We quickly discovered that. The first six months we operated, we were throwing our gas away, because we were losing it. Very quickly we made the decision to expand from ten or 15 trucks. We now have 43; we will be at 70 trucks on May 1.
At 70 trucks, we will have just enough to be able to maintain our two refuelling stations, one in Toronto and one in Montreal; with fewer than that, we can't. Imagine if we are by ourselves, pulling the gas from the gas station; we just cannot do it.
Conservative
Ed Holder Conservative London West, ON
But you've made a commitment, it's clear to me, from what you've just now said, to use natural gas as your way forward.