Transport Committee on June 5th, 2012

[Mike Sullivan, NDP, York South—Weston, ON]

Yes, there are two separate questions there. One is on supercaps and batteries. The other is why aren't we.... You know, if we have a right of way that we're building for a bus rapid transit system, the simplest solution would seem to be overhead wires. Those technologies exist. The buses exist. The propulsion systems exist. Yet, for some reason we're choosing diesels.

What's the holdup?

[Jean-Pierre Baracat]

Actually, it's the cost of the infrastructure. But you're right. If you compare that, for instance, to rail, putting those wires in would not be that prohibitive.

It could be one solution, for instance, to have electric vehicles on a dedicated lane. We're seeing more and more that even if the trolley solution would be one solution, then you would have to have a bit of autonomy so you don't have the same constraints you have with a rail vehicle that really has to stay on those tracks, otherwise everything is stopped.

It's probably a mix of trolley with some off-grid capacity. That's possibly one solution, from our perspective.

[Chris Stoddart]

I don't think anyone would really consider putting in overhead wires. I guess when you date back to trolleys, whenever they were started—in the 1930s—it was because battery technology was not where it is today.

I think now, with the advancements that have been made, there's really no reason to have that continuous wire there. I don't think I would ever see that being viable.

[The Chair, Conservative, Merv Tweed]

Thank you.

I have to go to—

[Chris Stoddart]

With regard to supercaps, again, the battery technology is advancing on how quickly it can take a charge. The supercaps will take doses faster, so we do build hybrid buses with the ultra-caps.

I think the battery technology will catch up enough that you'll be able to fit in a rapid charge within the window you need to be able to do that—and recover all of your energy from regenerative breaking with batteries—at some point in the very near future.

[The Chair, Conservative, Merv Tweed]

Monsieur Poilievre.

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

Thanks very much.

We are consistently hearing concerns about the lack of standardization with Europe, and the fact that our integration with the United States regulatory regime causes obstacles for transatlantic technology exchange in the area of natural gas and electric vehicles.

I think you've all mentioned that today. Did I characterize that correctly?

[Jean-Pierre Baracat]

Yes, and again, it's not moving away from having common standards with the United States, it's maybe also allowing the use of European standards in some technology. We don't necessarily need to adopt every single standard that Europe has. In certain technologies, such as engine emissions, we believe that it would be an enabler to bring in some new technologies here.

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

Thank you for that. I think that you have definitely identified a problem. I think the ideal situation would be having a transatlantic standard that was compatible among EU, U.S., and Canada. If the Americans don't follow suit in harmonizing even some of these rules with Europe, and we do, could we potentially threaten our cross-border regulatory relationship with the United States?

[Jean-Pierre Baracat]

Personally, I don't see that. If we allow both in Canada, we will facilitate new technologies on Canadian ground. Will we be able to use those technologies in the U.S.? Maybe not, but at least on the Canadian ground we'll be able to do that. That might put some pressure on some of the transit systems in the United States, that will, in their turn, put pressure on the U.S. government by saying that they need to have those same standards, that they need to be able to use those technologies, because they will be able to see them more closely.

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

Right, so I think we need to find a way to do this without jeopardizing the cross-border relationship. The reason we integrate with the Americans is that our economies are so intertwined. Mr. Watson, who has worked in the automotive business, could tell you that some vehicles go back and forth across the border seven or eight times before they reach the dealership, so we need to have some sort of compatibility with the Americans. That must be our principal objective. At the same time, we can't allow that to be an inhibitor to innovation.

Is the price of electricity an important driver in the viability of battery-powered vehicles?

[Chris Stoddart]

Absolutely. Depending on where you are in the United States and Canada, the price of electricity changes fairly significantly. We're pretty blessed in Manitoba that it's very cheap, but even in an expensive area of the United States, it's probably still one-sixth the cost of a gallon of diesel.

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

I'm about to read a book called Freakonomics about unintended consequences to policy decisions. In Ontario, under the guise of protecting our air, the government has paid enormous price markups for wind and solar power, which has dramatically driven up the electricity bills of Ontarians. I'm wondering if, indirectly, they're going to make it uneconomical to move towards battery-powered and electrical vehicles because the electricity costs are so high, and indirectly, you're actually driving out of business a technology that would be more “environmentally friendly” because of environmentally friendly policies.

[Chris Stoddart]

Putting aside the environmental benefits of having zero emissions or very close to it, as I said, the price today of the battery-electric is so significant, six to one. We're going to be making changes in the management of energy and the storage of electricity, as I was saying, by reusing batteries, doing stuff off peak hours, and storing it and using it.

I just think there will be so much more technology that's coming on energy optimization and management on electricity that I can't see the price going up to break even with the fuel prices.

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

What do you think of Israel's initiative to become the world's first oil-free country, with a system of battery-charging stations where you pull up your car, pull out your tablet, insert a charged one, and you are on your way? Is that a realistic plan for electric vehicles?

[Chris Stoddart]

I don't know the specifics enough to comment. I just believe that you are going to see places and countries really doing neat stuff, stuff exactly like that on how to best manage and store your energy. I think you'll see that propagate.

[The Chair, Conservative, Merv Tweed]

We'll go to Mr. Watson.

[Jeff Watson, Conservative, Essex, ON]

Thank you, Mr. Chair. Thank you to our witnesses.

I come from the auto industry. I'm trying to understand the differences, and I think they're essentially these.

With the auto industry, the product is less customized, and it's high volume, so harmonization with the United States really becomes important. The U.S. drives technological change in the industry, and you have to be able to abate the cost over an entire market, not a balkanized market. For example, having harmonized fuel economy standards is critical. You can't have several different jurisdictions, because you're going to have different technologies, and that's a loser for the company.

The bus industry is largely custom and low volume, so harmonization with the United States on standards is not as imperative as it is in the auto industry. This is why you're arguing that some European standards can actually work in the Canadian market. Am I oversimplifying the difference? Am I on the right track with that?

[Chris Stoddart]

When I spoke earlier about the customization, it wasn't so much relative to standards, which are vastly different from automotive. I was in automotive before this, as well.

We have our end customers who say that they want ceiling panels that are dove white, and they want bone grey for this and this colour of floor and these seats, whether or not you've ever put them on, and this stanchion. They want a different seating layout and the handbrake to be like this and the driver's dash to be like that. And they want to use this component from this supplier, even if you've never integrated it before, because that sales guy came in and sold them a bill of goods, and they think it will perform for their fleet. Everything is custom, which drives a tremendous amount.... That has nothing to do with specific regulations, necessarily.

I just want to clarify that our heavy pain from customization is not necessarily from the regulatory side.

Maybe you guys want to touch on the regulation side.

[Jean-Pierre Baracat]

Sure.

Basically what I'm saying is that since we are customizing so much for each customer, we could easily, for instance, have a different engine for a customer in Canada and a different engine for a customer in the U.S. That would not be such a big change for us. The fleets are typically made for a specific city. I heard earlier about vehicles going back and forth through the borders. That doesn't happen for transit buses.

[Jeff Watson, Conservative, Essex, ON]

That's because it's an integrated supply chain.

By the way, what is the size of the European Union market for buses? You said that in America, it was about 5,000 to 6,000 buses a year.

[Jean-Pierre Baracat]

It's significantly more. I think it's 10 times that, at least. I think just Germany has a market of 6,000 buses.

[Jeff Watson, Conservative, Essex, ON]

How many companies are competing to sell buses into the U.S. market?

[Chris Stoddart]

Oddly, it is a very small number for transit buses. There's New Flyer and Nova in Canada. Unfortunately, Orion just announced in the last month that they're closing their doors. They were headquartered, by Daimler, in Mississauga, Ontario. So three of the five were located in Canada.

In the United States, you have NABI, in Anniston, Alabama, and GILLIG, in California. So really, there are now, I'd say, four big players in North America.

[Jeff Watson, Conservative, Essex, ON]

I want to talk about R and D for a second. I'm probably going to run out of time on this, too.