Transport Committee on May 10th, 2012

[Brian Bower]

Up to 21,000 feet, in the case of the military surveillance vehicles, but only 10,000 feet for the commercial vehicles.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Poilievre.

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

Thank you very much.

I see in your list of recommendations we have here a lot of regulatory changes and updates. If we were to make those cost-free changes, would they allow you to pursue your enterprise? I'm talking to DAI.

[Garry Venman]

It would be a step in the right direction. We are still faced with the challenge of funding this demonstrator.

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

Can you provide us with a list of government activities that DAI would be able to bid on were it up and running?

[Garry Venman]

We could provide that—not today, obviously.

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

Right, but across the board, whether it's surveillance, movement of cargo to remote northern communities, or military applications, areas where the government is already paying someone else to do the same type of work and you believe your hybrid airships could do better....

[Garry Venman]

I think we could easily provide that analysis, including our market analysis, if that is what the committee wishes to see. We can provide that.

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

You mentioned the military and the enormous advances in aeronautics during the wars. The difference I see between that and the kind of investment you seek today is that the government was actually purchasing a service. It was purchasing a product. Through that demand pull, there was massive industrial development.

That is distinct from an R and D investment or an industrial subsidy. There is a big distinction between government purchasing a service or product it needs on the one hand and creating an industry on the other.

Governments during the wars did not seek to create aeronautics industries. That wasn't their goal; their goal was to fight a war. To do that, they needed flying machines that could help them fight that war. The government was basically making a commercial transaction, which had the added benefit of creating an industry, but that was not the principle purpose of the government's activity.

The reason I asked my earlier question is that if there are things that government has to buy anyway, if there are transportation services the government has to buy anyway, and you can do those less expensively or better, then we can recommend to Public Works and other departments that procure those services to ensure that their RFPs are open to bids from enterprises like yours. Does that sound helpful at all?

[Garry Venman]

That would definitely be helpful. I agree with your point about the government generating a war effort. The comment was meant to be illustrative of the outcomes. I would say that if there were a list of government services that could be met via a commercial application of airships, that would be extremely useful to us.

I think what I'd like to do is to provide the committee with a little more detail. In some cases much of it is about cost avoidance. For example, how much is spent taking people out of the remote communities of Canada and transporting them, typically by air, to major centres so they can receive health care? If we could change how that's done and look at the economics of that, there might be a compelling reason to pursue this.

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

Governments have spent a tremendous amount of money on new transportation technologies, particularly fuels, in the last couple of decades. To be honest, the results have not been great. We see examples in the United States—which I don't need to list—of governments spending a lot of money and producing very bad results.

Here in Ontario we were told that wind and solar could become commercially viable if government just got them through that early stage and helped them invest in their early-stage R and D. Now, after $7 billion and countless job losses in the manufacturing sector resulting from higher electricity prices and with elderly people having to pay significantly more on their electrical bills, we have 1.5% of Ontario's electricity coming from wind and solar. I can see no prospect of our exporting in a large way the manufactured windmills or solar panels—and we now have a less competitive, more costly business environment.

I think we all have a good reason to be suspicious whenever we're told that there's a commercially viable technology for which someone else's money is required, for which taxpayers have to pay. I think overcoming that natural and justifiable skepticism is a challenge for anyone who comes before this committee seeking government assistance.

Do any of you have a response to that?

[Garry Venman]

I'll respond to that.

I think that's a healthy skepticism, which is why we're not advocating a wholesale investment in infrastructure for a network of airships prior to providing additional proof. We want to see that, because although the technology holds much promise, and I'm sure everyone on this committee can see the potential benefits, sometimes there's a long distance between the potential benefits and actual benefits. So we're looking to do incremental investment on a relatively small scale to prove that we're not going down a path and making additional investments that are going nowhere.

But ultimately, if the demonstration phase does work and the performance of the air vehicle and the operational cost performance particularly—and obviously from a business point of view that is very important to us—are proven to be accurate, then all of the other stuff will flow. The customers will flow. The market will get developed. There will be justification for government to invest in infrastructure to support the industry. Jobs will be created, and tax revenues will flow into the treasury. All those things will occur.

But let's be realistic and consider if it might not work. So let's not make oversized investments until we actually prove this thing is real.

[The Chair, Conservative, Merv Tweed]

Thank you.

[Garry Venman]

We do think that the program of the U.S. Army is going a long way to proving the technology and certain components of it, but we still want to see the proof and a demonstrator.

[The Chair, Conservative, Merv Tweed]

Thank you.

Before I recognize Mr. Adler for his last questions, Mr. Tauvette, what's the one thing we could do as a committee today as far as a recommendation is concerned that you or your company would make regarding our moving jet biofuel forward?

[Geoffrey Tauvette]

We would really like to see a federal department named as the lead to help us establish what needs to be done with respect to a policy framework. A coordinated effort would be very helpful to avoid, potentially, some of the pitfalls we have seen with some of the ethanol protocols or policies, or wind or energy subsidies.

The airlines are committed to reducing their carbon in gross terms. We have an international goal of going carbon neutral come 2020. Biofuels will be part of that solution. We need to make it more affordable. To get investment and to get things rolling, there needs to be a coordinated effort. We need help. There are many departments involved in this, but a lead department would be helpful. I think that's what we would recommend, at the end of the day, to move forward on this. Someone needs to be our internal champion to help move this forward.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Adler, I took up some of your time, but go ahead, please.

[Mark Adler, Conservative, York Centre, ON]

That's okay.

I think the airship concept is a wonderful idea. I would like to see that in practice.

How much have you invested so far in the development of the airship as a working model? Has there been a significant investment on your part?

[Garry Venman]

We've probably invested close to $5 million thus far.

[Mark Adler, Conservative, York Centre, ON]

And that's been on....

[Garry Venman]

That's been approaching two years now.

[Mark Adler, Conservative, York Centre, ON]

And the money's been spent on, generally...?

[Garry Venman]

A lot of elements.... There's been a lot interaction in trying to assess the market conditions for this. The funding has gone into the hiring of engineers to finalize the design elements.

[Mark Adler, Conservative, York Centre, ON]

You have a business plan for it, right?

[Garry Venman]

Yes.