Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 13 - Evidence - November 4, 2010
OTTAWA, Thursday, November 4, 2010
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 8:07 a.m. to study the current state and future of Canada's energy sector (including alternative energy).
Senator W. David Angus (Chair) in the chair.
The Chair: Good morning, colleagues, witnesses, guests, staff and our viewers on the CPAC network, the World Wide Web and on our own website dedicated to our study on Canada's energy future, www.canadianenergyfuture.ca, or www.avenirenergiecanadienne.ca. Our new dedicated website has been up and running for a week and has been doing well. I have been given the numbers of followers, page hits and various demonstrations of interest that people that are now following on a regular basis. Welcome to you all. We hope to continue our dialogue with you on the important subject we are addressing.
Today, honourable senators, we continue phase two of our study on Canada's energy future. I do not think I need to go into a lot of detail. I want to particularly welcome this morning two folks from what they call Quality Urban Energy Systems of Tomorrow, QUEST. We have Shahrzad Rahbar, Vice-Chair. Welcome, doctor. With him is Kenneth Ogilvie, Spokesperson, here to speak on behalf of QUEST.
I want to thank you both very much for the help you have been giving this committee on its deliberations. Everyone knows that during August this summer, under the initiative and excellent guidance of Senator McCoy, we had a focus group that deliberated for a day to try to identify what questions Canadians should be asking themselves and what direction we should be looking in terms of financiers who might guide us and provide sign posts for the future.
Mr. Ogilvie was our scribe on that particular day, which I think was August 4 or August 5. I have read your materials since then and I want to thank you on the record. I wish to thank all those people who participated in the focus group, which was a great contribution to public policy-making, which is what we are engaged in, after all. Those of us who are members of the Senate believe this is the kind of thing the Senate should be doing.
Before hearing from you folks from QUEST, I want to introduce the people in attendance today. I am David Angus, a senator from Montreal, Quebec, and I am the Chair of the committee. To my right is Senator Grant Mitchell from Edmonton, Alberta. He is the Deputy Chair. To his right we have our people from the Library of Parliament, our analysts, Marc LeBlanc and Sam Banks. To Sam's right is a happy man with a smiling face, apparently personally responsible for a great decision made yesterday with respects to some event in Saskatchewan, Senator Robert Peterson from Saskatchewan. I am glad you are happy today. We also have Senator Tommy Banks from Alberta.
Senator Elaine McCoy is a great guiding spirit in our study. She keeps us on the right track when we slip off the rails now and again. Senator McCoy, thank you. I know you have a new twist for our deliberations, and I hope we will be talking about that later.
To my left is our able clerk, Ms. Lynn Gordon. To her left, maybe a sad man this morning, Senator Richard Neufeld, a former minister of various resource sectors in British Columbia and a great friend of the premier, who announced last night he was stepping down. We are glad you are here, bright-eyed and bushy-tailed this morning.
To his left is Senator Judith Seidman from Montreal. To her left from the Yukon Territory is Senator Daniel Lang. To his left from Montreal, Quebec via Winnipeg is Senator Paul Massicotte. To his left, the only elected senator so far, Senator Bert Brown from Alberta.
I know you will be getting into a subject that we have not broached yet, which are the elements of the whole energy system within a metropolitan type of environment. I think it will be interesting.
Honourable senators, documents have been circulated, including a colour chart that purports to be an integrated community energy system. We are looking forward to what you have to say.
I want to provide a bit of a background. In addition to her duties with QUEST, Dr. Rahbar is the Senior Vice President at the Canadian Gas Association. As you know, we are also looking into the gas sector, whether it be traditional natural gas or shale gas, and all of the elements thereof with this important resource.
Dr. Rahbar leads the CGA's activities in sustainable development and delivery operations. She is also responsible for supporting the association's manufacturer section and downstream market partners.
Ken Ogilvie, in addition to his duties with QUEST, is a consultant and a senior adviser to the Corporate Responsibility and Sustainability practice at Deloitte & Touche LLP. He also carries the title of Executive Director Emeritus of Pollution Probe, an organization we have heard from often at this committee, where he was Executive Director from October 1995 to March 2008. Prior to Pollution Probe, he served for two years as the Executive Coordinator of the Ontario Round Table on Environment and Economy.
Dr. Rahbar, please proceed with your presentation.
Shahrzad Rahbar, Vice-Chair, Quality Urban Energy Systems of Tomorrow (QUEST): Thank you for having us here this morning and giving us the opportunity to talk about an initiative that is probably not what you are normally used to seeing, which is slicing and dicing. The fact that the gas association body and Mr. Ogilvie are sitting here singing songs of praise might be a bit of a slight. To build on that theme, we will not be talking about the normal silos that you have been seeing energy discussed under for the past little while.
You have a copy of our presentation. We will not walk you through slide by slide at all, just by way of context setting. I will get to how QUEST came about and who it is today.
QUEST was rooted in a shared sense of both frustration and optimism. Mr. Ogilvie and I have been blessed with having been part of climate change deliberations for far longer than either of us would care to admit. Coming out of one of the sessions, we could not help but realize that we had been having these discussions seemingly forever; our greenhouse gases at the rate of 1 per cent and a shared sense of frustration gave way to a shared sense of optimism. We are missing value on the table by not looking at the energy system from the user's perspective. What are the energy services that the people of Canada need to meet their requirements for working, playing and living? How are we currently hanging them together?
The two of us thought this was worth our while to explore further and see what kind of an answer we got. We each knew a group of people with whom we normally interacted, so we tested the idea by a larger group, and much to our delight, we found an increasing number of individual bodies, seemed to think this subject was worth having a conversation around.
Our coalition includes our chair, an ex-mayor of Vancouver and an ex-premier of British Columbia. We have builders, developers, traditional energy players, renewable energy players and representatives from three levels of government.
We thought it would be worthwhile testing the grounds. We had a conversation organized by land use planners out of the University of Michigan and transport planners out of Laval. They brought our little group together and asked, "Are we leaving value on the table?"
Coming out of that meeting a few years ago was a report produced by QUEST. The overwhelming consensus of the group was that, yes, there is value on the table. The key value to be reaped here is if you look at the energy system from an integrative perspective, what does that actually mean, apart from difficult words to pronounce? We figured that if you looked at land use, transportation, energy systems and water and waste and set the unit of measure not to the appliance or the light bulb or the house, something bigger than those and something smaller than the whole universe, something like a community, you would get interesting opportunities for optimizing. A waste from one system could go into the running of another system. That sounded great, so we did more work.
Being who we are, we thought it would be helpful to connect the other dots. We have been working with our key academics and key experts in this field. We brought our group together again, got them to roll up their sleeves and figure out what this thing might actually look like.
The space is busy. You have private sector and public sector engagement and you have the urban agenda and the municipal agenda intersecting with the energy and transportation agenda. Each of them by themselves are quite challenging. Is it really worth putting them together? Does this look a bit naive, where we can all hold hands and be happy?
To ensure that once we took a close look at this space before we went much further and spent our own time and other people's time on it, we needed to convince ourselves that this thing made sense. We approached some key academics. We thought it was simple. We said, "Those of you who have been doing high-level energy economy modeling, could you please take a look at this integrated approach and give us a sense of whether this is real, how much value it has, how much greenhouse gas reductions there could be and what other things we could anticipate to see." Much to our disappointment, no one had the answer.
Our land use planning experts, world-class modelling out of UBC, recognized by everyone, knew the piece on land use really well. In Ontario and Quebec, we had expert transport modellers, again recognized internationally for their work and understanding of transport systems. Then we had people doing the high-level energy economy modelling for pretty much all of the provincial and federal government, and the two shall never meet. These folks could do spatial and look at communities, but the high-level energy economy could not do it.
We said, "Fair enough; let us go outside." Lo and behold, there were not too many external people who could help us. We ended up, much like the QUEST concept itself, bringing the dividing academics from the SSHRC world and the NSERC world, the social sciences and hard sciences, together. We asked if they thought they could work together and answer this rather simple question for us. We were not sure if we could get economists to talk with engineers and land use partners, so we phased it. In the initial phase, they took a hard look at the various models to see if they could make them work, and they came back and said, "We cannot answer all of your questions. However, we can take a stab at it."
That then sparked a large study involving many banks from a whole bunch of players. Four provinces — British Columbia, Alberta, Manitoba and Ontario — paid for the study, as did the federal government and some of our private-sector players. The study attempted to provide the answer to the question of whether one can integrate. Mr. Ogilvie will talk to you about the findings, which are quite exciting. The answer was yes, but we need to do a lot more. Mr. Ogilvie will get into that.
I now want to talk about what we have been successful in doing. By virtue of this diverse coalition, which has been rooted in the idea that there is value on the table that we are missing, we have managed to move some impressive silos out of their previous settings.
I have with me and I will email you copies of these reports. In 2009, the Council of Energy Ministers released Integrated Community Energy Solutions: A Roadmap for Action. In that roadmap the council referred to some of QUEST'S work, for which we are grateful. More important, this brought the energy ministers' attention to the need to weave the urban agenda to the energy agenda. If you do that, you can get benefits on the greenhouse gas reduction front and a lot more than that. You address some of your urban agenda issues, such as transportation, gridlocks, et cetera.
We were also blessed to have the premiers, this past summer at their meeting in Winnipeg, reference this document produced by the energy ministers and commit the provinces to work with one another to implement it.
Kenneth Ogilvie, Spokesperson, Quality Urban Energy Systems of Tomorrow (QUEST): I am hoping not to take too much time on my presentation, in order to maximize your time for questions.
The Chair: Do you have any hard data on the percentage of greenhouse gas emissions that come from the energy sector?
Mr. Ogilvie: Yes.
Ms. Rahbar: Absolutely, for most of our deliberations in Canada on climate change, we have been looking at the industrial sector. Carbon, as you all know, is pervasive in the economy; it is not your typical industrial pollutant. This cannot be dealt with as we did in the Montreal protocol. Carbon is not an industrial pollutant; it is pervasive.
We looked at the sources of emissions in our economy, roughly one-half come from the industrial sector, and the other one-half come from the Canadian cities and communities.
The Chair: Can you break it down in terms of energy?
Mr. Ogilvie: Yes, you can break it down both ways, both energy and greenhouse gases. Energy use can mean non- greenhouse nuclear power. You can have energy that is not greenhouse gas and you can have energy that is. The fossil fuel economy, particularly transportation, heating, and so on, where you are using fossil fuels, can be broken down according to industry sector, or you can look at a community in terms of about one-half of Canada's greenhouse gases. The data is there to get a good fix on sources.
The Chair: We have a statement in our interim report entitled, ATTENTION CANADA! Preparing for our Energy Future, under the climate change rubric, which suggests that 85 per cent of all greenhouse gas emissions emanate from the energy sector. A number of people have challenged that suggestion. To be honest, I am trying to check the data so I can give an intelligent answer.
Mr. Ogilvie: I am not an expert on the statistics. You could probably get that information from the Greenhouse Gas Inventory. What we are talking about is a bit different, because industry is producing and using energy and then producing a commodity and selling it. If you get to a community, that commodity is being consumed.
You need to be careful to look between production and consumption. What we are talking about in communities is consumption of fossil fuels, and about one-half of the Canadian domestic use is there.
What you will see on the industry side is that the numbers are double counted. I will get to that on the modelling. Transportation might say that they are responsible for so much of the greenhouse gases of the country. That is true. Part of that will be used in an urban setting and part of that will be outside the setting. That is where the confusion comes. It is important to be are careful not to double count.
This leads quite nicely into the modelling. One of the reasons we did the modelling is to ensure we were not double counting things when we were looking at savings.
Let me give you an illustration. We are putting in passenger vehicle fuel-efficiency standards. If we also intensify development and put in more transit, and if people walk and bike more and drive less because they do not have to drive as far, and if you take the current structure of our cities and say this is how much we can save on transportation, that is true. However, you have to net out the fact that we have a policy decision that says we will have more fuel-efficient vehicles. That is a simple illustration. However, when you start to knit it at the level of an entire community, you need the models to tell you when you are double counting, to ensure you are not overinflating the numbers. Otherwise, people will show up, as you probably know, and say, "Great. We can save 200 per cent of our emissions by doing all these things together." However, you cannot.
We tried to put together models that had never been put together at this level before, and at the scale of Canada, to say: When we actually run the models in our communities, how much savings do we think we can get? At one level, it is disappointingly small, if you look at the number of megatons. For example, 20 megatons or 30 megatons, you say we should be able to save a whole lot more than that. There are ways to do that, but you have to be careful not to double count your numbers.
The models were needed to say you cannot count an urban forum change and then count a transportation change and then count an energy production and use change and add all three numbers together, because some of them are the same numbers. The study was made to try to net that out, as a first attempt to put together models that had not talked to each other before. As you can appreciate, there are many assumptions.
The Chair: Sorry for that digression, but, as you say, it was a segue into the modelling.
Mr. Ogilvie: It is enormously confusing. I just finished a study on freight movement in North America. I did the study, which will be out in another month or so, with the Commission for Environmental Cooperation. The data side of that is a nightmare. We have all kinds of data gaps. In trying to get a fix on some of these issues from a data point of view, you find out that the data is not there, or that some data is there but it cannot be put together in ways you would like. It is important to get all the players around the table to ensure we are not misleading people about the potential of something.
I would like to draw briefly on your focus group. One of the big issues that came out around the table was to enhance understanding of Canada's energy system and the interrelationship among its parts — physical, technological, financial, governance, domestic, and export.
I think universally around the table of that focus group, people were saying, "I know my part, and I think I understand bits of the other parts," but by and large, Canadians and many policy-makers do not have a good understanding of what we call Canada's energy system and how it relates to each other. Therefore, you come up with a simplistic solution for one piece of the puzzle that does not understand what that means in terms of the whole system. Policy-makers have a hard time saying, "I cannot just implement a simple solution in isolation. I really do need to think in terms of a system and in terms of interrelationships."
QUEST operates it at both levels, and has been organic from the day we originally set it up. It has people around the table from the community level up, who look at the unique attributes of their communities and how to put the pieces of their puzzle together.
Here is a very interesting schematic diagram of how to put these pieces of the puzzle together. That is a pretty macro way to put together integrated energy solutions. Any given community might only have bits and pieces of that because it makes or does not make sense in a given community. This is not like a prototype for every community.
In the study, we suggest that taking the three models — business as usual, a moderate scenario and a more aggressive scenario — and get them to talk in this way. You can imagine how excited the researchers are about the future potential to do more research on this. They could model all of this with some assumptions and from it ask: What does this mean for greenhouse gas reductions by 2050? What does it mean for gross domestic product? What does it mean for jobs? What does it mean for the need for capital?
We all know models are just models but, at the same time, you create a kind of win-win-win scenario with lower costs, a bit of job creation, higher GDP, and lower greenhouse gases and air pollutants.
If you do this intelligently and in full consultation with any given community, where the changes will occur, the potential exists to save quite a few megatons of greenhouse gases and billions of dollars both economically and in households, who will spend their cost savings in another way. The study put all of that together.
Everyone can figure out on a piece of paper that if people live a little closer together, have good public transit and drive a little less, we will have fewer greenhouse gases and save a fair bit on capital investment. To do it with numbers is difficult because of the interrelationship issue I talked about. Rather than present all the slides in this study, I put to you that this system is about thinking at a community level and about taking energy into that thinking. The traditional approach is to do land use planning and some transportation planning at the community level and then feed in some electricity according to the need. It does not include a look at the whole community and its resource base, talent base, and other interests and needs to try to build up a view that it can be a really good community that produces fewer greenhouse gases and that saves money for other uses. This is the essence of the study.
From there it gets into the modellers and how they have to use the models they have and find the right assumptions, such as how much response people have to a parking policy. It cannot predict how people will live differently. People will have to decide that over time, and we will have to communicate with them about it. It cannot factor in any assumptions on a cultural shift or technology breakthroughs that do not exist. It takes only what we know now and those relationships and puts them into the models to develop a QUEST-type community.
We were also pragmatic about it. We decided to take four archetypes — the Greater Toronto Area, Winnipeg, Fort McMurray and Dawson Creek — as examples of small, medium and large communities. We asked what the energy use patterns are and what happens when we change things along these lines. We asked how to model that economically. We asked if the business case were better and people had incentives to do this, how many more district energy systems would we have if people lived closer together.
The models took these pieces, searched the literature, looked at the models themselves to find the links between them and then ran iteration after iteration to come up with a set of real numbers that were possible based on current knowledge and the way the models work.
Ms. Rahbar is more knowledgeable about the models.
The Chair: Mr. Ogilvie, you are kind to come here and give us the preliminary findings. I want to ensure that my colleagues and I understand. You call yourselves a collaborative. I would imagine that your members share in the financing of the operation. Is it basically a not-for-profit think tank? Ms. Rahbar described it a bit. Where would the results of the study be sent? Obviously you will get some exposure from your appearance here today.
Ms. Rahbar: Thank you for asking that question, senator. As an organization, QUEST does not exist. Those of us who are inspired by this idea make sense and, in our daily lives, we are involved in the public policy forum moving public policy.
We managed to find minimal funding to have a coordinator on board, who has been excellent at keeping us on the move. Most exciting, though, is that we have groups calling themselves QUEST caucuses that meet in four provinces: British Columbia, Ontario, Quebec and Nova Scotia. Alberta and Manitoba might be about to form their QUEST caucuses.
To give you a sense of who those players are, in British Columbia we have the City of Vancouver, BC Hydro, Fortis Terasen and a couple of large developers. They have come together and decided that if this makes sense, they want to know how to make it happen. Those discussions have been fascinating and remarkable. In British Columbia in 2011, Terasen will put $100 million in new capital into gas infrastructure. They will put $100 million in new capital into the grant on non-gas infrastructure that delivers energy services.
Quite excitingly, the report feeds into the caucuses as well as the policy-makers — people who will come together and move on this when they see the potential business opportunities.
In Nova Scotia last month, Premier Darrell Dexter presided over the signing of a memorandum of understanding by Halifax Mayor Peter Kelly, a large developer Clayton Industries, Heritage Gas and a few others.
We are thrilled to report that the QUEST conversation has morphed into an entity greater than just policy conversation. It has become a space to mobilize and bring together people from the private and public sectors to move the agenda.
Different people hold different levers. Municipalities hold the levers on land use and bylaws that currently prohibit some of the more interesting ideas; and the private sector undoubtedly holds a decent balance sheet. I am happy to say that they seem quite willing to come to the table with their investments to meet the energy demands of the communities that they serve.
The academic community around QUEST are energized and, through their academic funding, will explore ways to collaborate more closely and lead the way across the SSHRC-NSERC health divide. We hope to have more integrative capacity within the academic community.
Being in the private sector, my interest is to see we do not use the investments — and our members have major investments — to reproduce the infrastructure of the 1950s. If it does not make sense, we take a pause, we look at it and if there is alternative infrastructure that can better meet the energy demands of the 20th century rather than replicating the systems we have, then at least our members have stepped up to the table. I understand you might be hearing from some of them, and they are more eloquently capable of telling you what they are doing with their companies. The private sector is at the table, as well.
Mr. Ogilvie: It is collaborative; it is not a top-down structure. It is trying to unleash as much creative energy as possible to look at this issue through a different lens. Each province is different. Each province has its own interest groups and caucus, and each goes right down to the municipal level where they look at their interests.
We are trying to feed that by trying to provide capacity and share information. We give the study to try to put some numbers around it to make it real. At a high level, we talk about some policy moves that could help it. However, it is really more about unleashing that creative energy.
We want organizations to re-engineer themselves. There is so much opportunity out there now, if only they really look for it, I think they can find it.
The Chair: That is helpful and I am sure my colleagues will have questions on that. It is quite a unique structure, as I can now understand.
If you will carry on or complete your presentation, we will then have questions.
Mr. Ogilvie: You have the slides, so I will not read them. You can see at a very high level that we are building a picture of different sized communities that would look at integrated urban energy systems. We are looking at different policy bundles — business as usual — medium and comprehensive policies. We are looking at interactions, land use, transportation and energy. We did not have the resources to put in waste, water and urban freight movement. There are other elements of QUEST that can still be studied.
We are dropping out some of the numbers from the analysis. We are talking about greenhouse gas emission reductions in the 13 megaton to 35-megaton range. A moderate to comprehensive application of integrated solutions could increase Canada's GDP by 0.3 per cent to 0.9 per cent by 2050. The many billions of dollars that would be saved by not putting them into infrastructure that business as usual would require means the money could be put into other things.
Those are the outcomes of the study. Again, the modellers have done a great deal of work to try to put this together.
We concluded that you have to start with a sophisticated appreciation that land use is the base upon which all of this is built. If we do not get to the land use people, then integrate transportation and energy into their thinking and look at the energy and greenhouse gas implications of development at the beginning, you can end up wiring in a higher energy infrastructure. At that point, you can only try to get efficiency on top of that.
If you have a very large, centralized power plant and you are feeding electricity to a community, then you can look at end uses and make them more efficient. However, you might have lost some of your opportunities to generate electricity or heat and power and to use that energy more wisely in your community.
The study itself examines many details. There is a 300-page study filled with the details.
As you say, who gets the study? We want it to go to everybody. We thought very hard and had good involvement from the oil and gas business, the electricity players, the developers and others. We want these people at the table to tell us whether this makes sense, or that it can make sense but only if something is changed.
The study gives some ideas of some of the applications of the policy measures. However, QUEST is really a process and mechanism for getting them to the table. A great developer in Nova Scotia said a few weeks ago, "I can do this and I want to do this, but if I have to compete against someone else and I am doing something that will cost more or does not have the right metrics around it, I will try it but I can only go so far."
They are trying to be pragmatic by saying they are not against this, but we have to help them because if they have to fight upstream and all they will do is lose business, then they cannot be there for us. We are trying to find the people that would like to make it work and then say, "Okay, how do you make this a viable business?"
The study helps inform that: it looks at policy measures and knits it with this whole agenda. We have walked through details of the study but the higher level results are probably more useful to you than some of the micro details.
The Chair: It is interesting, sir, because we are trying our best to understand all these different things, as are your organization and a plethora of groups across the country. We are finding that this subject has the attention of many people. In our view, that is a great step forward.
Let me give you this example. Early in our study, nine of us went to Vancouver in the aftermath of the Olympics last winter. Our goal is to have Vancouver be the greenest city in the world and, if not in the world, in Canada. We think we are there in Canada. Therefore we say what do you mean "greenest city"? Does it mean we are an integrated community with an integrated community energy system?
If you follow me, one can be very simplistic. What does it mean to have a "green" Olympic Games? We think we understand what that means: You put in the infrastructure and you produce the games through VANOC or a similar organization that does not have any emissions, does not use unsustainable resources and so forth. However, that is pretty simplistic.
What you are telling us will help flesh out that simplistic view, or at least I hope so. Does that make sense?
Mr. Ogilvie: Totally. If you were starting from scratch, you could design this thing and be very efficient. However, we have a lot of existing built infrastructure and we will not get rid of that until its useful time has expired. Therefore, a lot of this is about how you go into your existing infrastructure, your brownfields and your communities, and what opportunities you have to make it happen. If you make something dense and efficient enough for district heating and other things, you can get more of that in. That is what the study shows. However, you have a lot of communities that are not designed to make that very economical.
We wanted some pragmatism on the economic side to say, "We do have to push a bit to make some of this happen, but we want to ensure this is a good business case."
You can make things greener in the short run but the study shows that if you actually get to the foundation of this and start to rewire towards a QUEST-type community, the emissions reductions and the economic benefits begin to shift. You cannot change infrastructure overnight; however, as you change it over time, efficiency builds on efficiency. As you go out over time, you get bigger and bigger reductions, and they keep going; they do not end because there is an incentive and suddenly people stop chasing that incentive. They go because the foundation is more efficient.
Being the greenest, for example, in Vancouver is not something that occurs overnight. If Michael Harcourt were here, he would tell you it has been 20 years or more of hard work in Vancouver to bring the greenhouse gas emission per capita down, with goals to go even further to be the world's greenest city. That is just one element of what "green" is all about. However, you cannot take an existing city and make it happen in two years. You will have to spend. That is why we went to 2050. Really, 2100 would even be better because you would start to see even bigger reductions.
If you do not do it, you will have wired a pretty energy intensive economy. Then you can try to decarbonize, if your goal is greenhouse gases. Nuclear power or something like that can take you away from greenhouse gases, perhaps. However, the bottom line is that it is still very high-energy use. If people have to drive and move great distances, you will have a lot of greenhouse gases until we are off a fossil fuel economy.
What this does is build in the ability to be efficient, and it pyramids over time. We need everyone at the table because this is really a national commitment; it is not one sector, one province or one group. It is really everyone working together.
The Chair: Are you ready for question period, then? Senators, I think we have a challenging morning ahead. Senator Mitchell, you know where to go; lead us.
Senator Mitchell: I am sure you will tell me if I do not. Thank you.
Thank you to both of you. Your group has undertaken a very interesting and inspirational effort. One message I am getting from it and correct me if I am wrong, is that you are not talking about new technologies. We hear repeatedly that the technologies exist; it is not really a question of technology. We can fix the greenhouse gas problem. The real issues are organization, regulations and leadership.
The chair mentioned Vancouver and British Columbia. I would like to note that Senator Neufeld was instrumental as Minister of Energy for eight consecutive years in the B.C. government for much of what has been accomplished. It is to his and his government's credit that it has been done. That underlines leadership.
I am not being dismissive. It is great to have all kinds of academics and different people looking at this and coming to the table, but some of us are impatient. We would like to get it done.
In a perfect world, if you walked out that door right now, who would be the person that you would meet with that could provide the leadership to get this done in community after community across this country.
Ms. Rahbar: Thank you for that very difficult question. I think it is about bringing the private sector, which is currently investing and putting the shape of our communities in there, together with the communities that are designing that shape. What the study told us was land use, which is a public policy decision — land use is not a market- driven decision. Last time I checked, city council determined the development pattern. Therefore, some level of government holds the levers. I would like to see public policy changed to motivate the private sector to invest.
The study also confirmed that unless you deal with communities, there is no way you can crack the GHG energy nut by looking only at the supply side. We in Canada are blessed with excess energy, and our conversations for decades have been focused only on the supply side. The supply side is hugely important; it puts bread and butter on the table, good stuff like that; we understand. However, if we are trying to manage our own emissions, it cannot be done only with the supply-side solution.
For me, the interesting aspect of the study was that governments using the various levers they have could create conditions that would get the private sector to invest and make this happen.
When we were talking to our builder-developer colleagues as to what it would take to make this happen, our government colleagues were all thinking about what kind of incentives they could use. In particular, the developer said, "I do not need an incentive. Time-limited money on the table may interest me to get involved in one or two projects. I know how to turn density into money. Tell me what you want to do. Give me density advantage over the next guy; I will be there. I will get all the engineering I need and make it happen."
We had provincial energy regulators saying, "Fair enough; we have for decades regulated energy delivery grids. Our provincial processes are transparent. We have interveners. You are telling us you would like to see a new energy grid that allows you to put heat, be it lake cooling in downtown Toronto or some of the fascinating technologies put into place in Vancouver by recovering heat from the sewer."
In our economy, there is a lot of waste heat. Forty per cent of the energy in our economy goes to heat, not transportation. Most of that goes up the chimney in one form or another. If you could capture that heat, perhaps have a grid like a district energy system that would allow you to get the excess heat from the chimney of this hospital and supply all the homes around it, such as downtown Toronto or basically any other hospital, you could reap existing efficiencies.
We are finding, for example, the energy regulators saying, "We have done grids before, so you are saying another grid is coming up. Could we get the private sector to invest and we would regulate and provide the oversight?" You have the private sector players saying, "Yes, that could work. Set the rules and we will step up. We have the engineering know-how and we can bring in the capital." I would have more of those conversations.
We need a commitment to demonstration. This stuff will vary from community to community. You learn from doing. The investment will not be lumpy. It is not like people are not building and putting infrastructure every day. Get demonstrations going: document them, learn them and disseminate. Learn by doing.
We have too few communities where people go and touch something and say, "Oh, yeah, I could live there. This is actually nice. Oh, by the way, my heating comes from a combination of the excess heat from the industry next door and some from solar. I can live with that as well." You need more examples so people can walk around.
Over the next little while, we will be putting an effort to bring the right players together and get demonstrations happening all across Canada.
Mr. Ogilvie: What we have done with QUEST is put a collaborative coalition together, which shows people wanting to work together. We rely on good political leadership at a number of levels. The premiers and energy ministers have endorsed this agenda. Individual provinces and individual communities have taken the lead. Individual industries and sectors are interested.
We are trying to provide that coalition of support, but we really need political leadership. The Senate could play a great role to the extent that you understand the whole spectrum of our energy system. This committee knows what we need and understands how QUEST fits within it. You can do a tremendous job of showing that this could be understood at a very high level and encourage people to put their attention to it.
With the technologies, as you say, there will be new ones, but there is a lot of technology already there to do this job. We do not have to invent technologies to run the numbers. There will be new technologies. These numbers will look much better in the future when the new technologies come on board, but there are technologies to get to the solution.
Then we need to get to the public. We need to take it I think at this point to the top of the house and down to the public. We have the centre and we are getting attention at the top, but we need more attention at the top and we need to take this to the public somehow and ask them what they think.
Senator Mitchell: We are taking this to the public. We will be going across the country and soliciting views.
Part of what you are talking about is demonstration communities and I am thinking show communities where you can walk through and see these things. Are you aware of what has been done in Okotoks, Alberta, which has been fantastic? In addition, when Edmonton closes its downtown airport to air travel, there will be a huge empty area in the core of the city. The city is soliciting developers and architectural people to come up with green projects for that site. QUEST should get involved with the City of Edmonton, and make that space into something that would be every bit as world-renowned as the City of Vancouver.
Mr. Ogilvie: Absolutely. We search for places across Canada. There is Premier Dexter's announcement of a QUEST- type community in Bedford West; Dockside Green in Victoria; the mayor of Guelph is pushing hard; and Alberta has Okotoks and Edmonton. We are looking for these things. When I said it is organic, it is happening even without QUEST. We are trying to tap into that energy and bring it together, but it is happening anyway.
Senator Massicotte: Thank you for being here. I am still involved in real estate development, something I have done for 30 years. I must say that I have heard of this idea for many decades, and it makes a lot of sense. We talk about high density, pollution, efficiency and environment. We are seeing some demonstration of it in the world, but not very much. It is so logical and so simple to understand, why is it not happening in a significant way?
Maybe my attitude is a bit different than Senator Mitchell's. I think two things are happening. First, politics get in the way, which means the political decision makers who wish to get re-elected say and do things that are popular and not necessarily the best or the most logical decision. There is resistance to change by population. Why go uphill?
The other error society makes is that we think leaders will do it all and that is wrong. The marketplace consists of consumers who turn on their thermostats, who decide to shut down their heat or use water. No matter all the books and articles written about efficiency, if it is not imputed into the system every day where there is a cost either financially or socially, it does not happen. You cannot read a book every time you want to make a decision; you use all the information you have available to you at that point in time. I think that is the problem. The changes will not occur until decision makers input the rules of the game into the marketplace. Why is that not happening?
Ms. Rahbar: I think you are absolutely correct. We are excited because we have brought some of those people who on a daily basis make those decisions together and allowed them to interact. We are finding that they are finding it useful.
The city planner did not know what the developer needed, or the developer was challenged with "my business model does not include sinking a bunch of capital into infrastructure and recouping it over 30 years," which is what you need. "I build, I sell; that is my business model." Then it was, wait a minute, you have a utility whose building model is exactly opposite; sink a lot of capital up front and recoup it through rates over 30 years. Maybe you two should be talking. None of them would have naturally come together.
We are trying to do both by addressing the policy leadership side but actually getting the players comfortable with interacting.
Senator Massicotte: I wish you luck. You can look at major cities like Toronto and Montreal where there have been some phenomenal developments and examples, but they all lost a lot of money. Most people will talk, but society is selfish to their own interests and unless it makes sense to them, they will not get there.
I hope you are right that utility will absorb the capital costs, but I guess I have talked for 30 years on this whole thing and it has not happened. Something more fundamental must change in the economic cost of decision-making.
Mr. Ogilvie: The answer is that we need more people like you around the table talking about what the barriers and the fears, and what is needed to make it an attractive thing and to make it profitable.
I am a civil engineer. My classmates are developers and so on. They love a nice green field where someone builds the infrastructure and they put the houses on it. They can predict profits and it works out well. Why would they abandon that model and take on additional costs and uncertainty just because there is a social objective of greenhouse gases?
The Swedish experience did not happen overnight. They talked about it for years before they talked themselves into the kind of district energy system type models they use, which makes their greenhouse gas emissions per capita less than half of an Ontario person's with the same population and a similar sized economy.
It does take years of work. We understand that at QUEST. The model took the elasticities that already exist, which builds in the constraints you talked about. That is why the numbers are not as big as some people would like.
Senator Massicotte: I wish you luck.
Senator Lang: I am not as negative as my colleague from Montreal. However, I believe Senator Massicotte brings a point of view to the table that I think must be given scrutiny by those organizations collaborating to see what can be done in order to take those, as he said, barriers down so that we can proceed.
We see so much in place here now because of government actions in the past, and they are basically built for the bureaucracy, not for those that are prepared to risk and those that want to make accomplishments in a short period of time. Subsequently, time is of no value from some quarters as opposed to others, where time is money.
I do believe that applies right across the country, whether it be in my part of the world, the Yukon, or in Nova Scotia. I think all levels of government are guilty of it. I think that we can learn from past experiences.
With respect to the potash decision that was taken yesterday, one can argue whether it was right or wrong. The reality of it was there was a timeline, certain information had to be provided and a decision had to be taken. You cannot continue on forever without making a decision. That is one aspect that must be brought forward from the point of view of these communities.
I want to go to the federal government's involvement. As senators, I think we are accomplishing some aspects of what you, Mr. Ogilvie, presented. We are trying to bring these groups together and trying to bring the importance of energy to Canadians. This provides a focal point in more of a non-partisan and less vested interest view.
As a newly appointed senator, I am trying to determine our responsibility from the point of view of working with the provinces. In the provinces and the territories, it is clear who has the pragmatic responsibility in many areas.
I would like to you expand further on what you see the federal government being able to do on the supply side and then on the other side, which is the implementation, and what we can do in working with the provinces and territories in encouraging maybe a change to some degree in how they view energy.
Mr. Ogilvie: I have had the pleasure of working for the Manitoba, the Ontario and the federal governments, so I can see things from three lenses. This is on the environmental side, which is only one piece of a complicated puzzle.
The federal government has the ability to not only show leadership at a high level of vision for where we are going but also can bring people together, can do research and disseminate it and can push technology. I am vice-chair of Sustainable Development Technology Canada, and that has had a massive impact on some of the clean technology industry in Canada.
The federal government can do many things that cannot easily be done one-off on a provincial basis. It can help in setting codes and standards to make things more efficient and take barriers away right across the country. It can help on the research side and with demo projects and so on. The provinces are responsible for infrastructure and energy decisions. We all know that. The federal government will not step in and pay for that, but it can say they are a player and can assemble a critical mass of expertise on urban energy systems, technologies and other things, and they can work to facilitate this happening. The provinces have to decide whether they want to do it. The municipalities have to be game to be leaders. They can do all of those things.
Eventually, if we have a carbon price signal, it will make a big difference on many decisions that will be made there as well.
I am an infrastructure, technology and prices person. The federal government has a great deal to do with technology and a little less to do with infrastructure, obviously, but they can be a player. They have something to do with prices. Those are three of the big levers that underpin big change. The government must concentrate on its most important levers and contributions. You take those three big levers and add information, research and demo projects, and the federal government can be a massive player in this area.
The Chair: That was a good question, Senator Lang. I see you had Transport Canada and Natural Resources Canada on your advisory group. Does that mean that one individual from each department sits on your board? Are they really working with you?
Ms. Rahbar: NRCan is really working with us. When we started the conversation, the department essentially said, "Let us see. We have done energy efficiency. We have just struck the deal with vehicle manufacturers. What else is there to do?" Today, there is a director level position at NRCan with communities as part of the job description. It is not only in name. That department is actually getting itself organized to be, and they are, a key player in recasting.
If I may offer one observation, it is an interesting challenge for us to try to slice and dice between the levels of government. This Senate committee has a unique opportunity to recast or at least articulate the conversation on energy, emphasizing that it is about long-term transformation of the whole economy. It is not about silver bullets on one supply side versus another supply side.
The way the House of Commons committees are structured, environment and resources are not together and therefore, the conversation is split. This committee has the mandate to profess long-term transformation. Even just framing the issue is about long-term transformation. In my humble opinion, it would be hugely helpful to move the discourse.
The other key piece is to focus on demand matters. We talked about 50 per cent of direct emissions coming from urban areas. Some would argue that indirect emissions could be as high as 85 per cent because of all the production and heavy industry, supplies, goods and services going to 90 per cent of the people of Canada living in 120 Canadian cities. That framing is not in place. Policy discourse will run to the comfortable silos on production. Even framing the conversation would be useful.
Senator Lang: If I could follow up, you mentioned the price of carbon. There is a difference of opinion obviously in North America on that question. I do not believe that Canada can go ahead without the United States. It would be perilous if we did so from the point of view of our society and our economy, looking at the long-term ramifications. At the same time, the population of the world will go up by an additional two billion in the next 30 years. Certainly, that tells us the price of fuel will go up because there will be that many more people chasing each barrel of oil. This is not rocket science. Accept the fact that the cost of fuel will go up, not man-made through carbon tax or cap-and-trade. The marketplace will determine that it will rise. It seems to me that if organizations such as yours said that we will be looking at projecting ahead for costs, therefore the marketplace will move in and take care of some of this so that we can afford to maintain our lifestyle. If we accept that as a premise, then that gives more validity to this type of planning for any community. That might be another message in what you have said that we must continue at the federal, provincial, territorial and municipal levels.
Mr. Ogilvie: Markets set prices. Governments can influence prices, but it is difficult and it is political. You have to know what you are doing. You can wield influence but just look at the price of gasoline. I remember the debate on sulphur and gas when the price of gasoline was going up 1 cent per litre. The thought at the petroleum institute was that everyone was going to die economically. I was part of that debate. The price of gas goes up and down 10 cents, 40 cents or even 50 cents. Markets drive the volatility and the price. Yes, you can layer on more prices. If you price carbon, people will look at ways to improve profitability by saving on carbon. On the margins, it gets their attention, and getting people's attention sometimes shows them there are big profits to be made by going this route. It probably had nothing to do with the carbon price at the end of the day.
The kinds of carbon prices that we are talking about are attention getters, and they drive information. On the margins, they drive some new technologies and practices.
When we talk about land use planning, we are not talking about a small carbon price. That will not change land use planning over decades. It will have to be a vision of what we are doing with our communities.
We are less onto the price side of things. The price will change how people behave, to some extent. We are onto the system side, the infrastructure side and the land use planning side.
Senator Neufeld: Thank you both for your presentations. It is an uphill battle to find ways to bring change to communities. It is not so much about the federal or provincial governments doing something; it is about houses. Starter houses today are a heck of a lot different than what I lived in, which to me was only yesterday.
It is difficult to convince people to change their yard sizes or their transportation methods or their city councils. You talked about Dockside Green in Victoria. Some of its greatest difficulty was with city council in trying to build. In fact, they had to quit building the way they wanted to do some of it, especially in the area of energy generation. I commend you for doing what you are doing because it works into all of this over time.
Senator Mitchell talked about Edmonton, but I do not know whether the decision has been made to build high density in that large space. Certainly, you cannot build high density single family houses. You need high rises to have the density for utilizing waste heat and those kinds of things.
On page 17 of your brief, you say:
Canada could reduce urban GHGs between 5 per cent and 12 per cent by 2050 by applying integrated community energy solutions.
You say that would be 13 megatons.
Mr. Ogilvie: It would be 13 megatons to 35 megatons, I believe.
Senator Neufeld: How would that relate to the cost to an average person?
Mr. Ogilvie: At page 15, you will see that households will save. We have not worked it out per person because in each community each person would be driven different. However, the modelling at page 15 shows a savings of $6.7 billion to $10.8 billion in energy costs and $10.1 billion to $29.3 billion in overall costs. It costs people less because they are paying less for energy and less for the infrastructure, et cetera. That is a macro number, but it is less. People would save money.
Senator Neufeld: That is the part I have a hard time with. I read that, too. I am a bit from Missouri on that, to be honest.
The Chair: We finally got him outside of British Columbia.
Senator Neufeld: The old saying is "I am from Missouri and that dog don't hunt."
I have trouble with how you get that across to people. I know there are ways to do it but you need to do it in a way that people can understand. If you talk about building high density, et cetera — what Senator Mitchell talked about — it is guaranteed that condo will cost more money, as happened in Dockside Green, than one in another part of the City of Edmonton. How do you get that sale?
I am not saying your information is wrong; I am saying you need to get people to understand it and do those kinds of things.
Mr. Ogilvie: I will use myself as an illustration. I live in Toronto, at Bayview and Eglinton. The transit is great and the stores and shops there are so good that eight years ago, my wife and I got rid of our cars when they were breaking down rather than buying new ones. If I lived in the suburbs, I would need a car.
The cars were not being used. The guy at the garage said we were not driving them enough; they were seizing up. It was then I realized that we did not need a car. I thought I would miss it. I am an engineer and I love technology and all that. Yet I do not miss it at all. In fact, I am happy I do not have to take care of it. If I want a car, I can rent one.
I now walk and bike more and stay in my local community more; I shop in that area. We save about $15,000 a year by not having those two cars. My total transportation outlays for the year, with the transit pass and renting cars, are now about $2,500.
You are right: A condo would probably cost more where I live. Therefore, you have to look at the whole cycle of costs, but there are some pretty stunning savings available. That is not even a full QUEST community; that is just an easy place to live.
Senator Neufeld: I appreciate that. Not everyone is exactly like you Mr. Ogilvie; some are and some are not.
Is it in Stockholm where they burn their waste downtown and generate electricity?
Mr. Ogilvie: Helsinki.
Senator Neufeld: That has been going on since the beginning of time. Take that argument to Vancouver. I tried to tell Vancouver to burn their garbage and generate electricity and what are they doing? They will probably haul it to the U.S. or even up to central British Columbia by rail. Those things are tough to deal with.
I want to go to your slide entitled Integrated Community Energy System. On the left-hand side of the page, you have a LNG terminal. Why do you have that when in Canada we have huge resources in natural gas? Why do you even have an LNG terminal there? You are indicating that we will import it; that is what it indicates to me.
The Chair: This community is Prince Rupert.
Senator Neufeld: No, they will export it.
Ms. Rahbar: The report out of which this was taken refers to a community in Japan. They have no energy; all of their energy is imported. That is why you see a LNG terminal there.
Senator Neufeld: This is Japan?
Ms. Rahbar: Yes.
Senator Neufeld: Let us do something to bring that home to Canada. I will take you across the page to the central power station. It is always interesting to me that there are smokestacks.
In Canada 75 per cent of our energy comes from clean sources. Are we perfect? No, but we are darn good. Along with you folks, we need to start telling people about how good we are in that generation of electricity instead of comparing ourselves with others. You are right in that Japan does it with a whole bunch of different sources.
There are different ways to do that. We should talk about Canada. If Europe had 75 per cent clean electricity, they would not have any problems because in those places we refer to — Sweden, Denmark, et cetera — there is a ton of coal generation. Alberta and Saskatchewan, for instance, where they generate a lot with coal, are looking at innovative ways to deal with their GHGs. We have to give credit where credit is due if we want people to change. That is a point of interest.
If the LNG is in Japan, it is interesting it goes from LNG to a natural gas pipeline and turns into hydrogen. You need a fuel source to make hydrogen. You can do it with either a fossil fuel or electricity, but there is no indication of what the CO2 involved in transferring that LNG into hydrogen. Where does that CO2 go?
Even if it is in Japan, we need to explain that. It does not magically transfer from natural gas to hydrogen. You have to take the GHGs out to CO2 and actually do something with the CO2. Would you like to comment?
Mr. Ogilvie: As I said, every community everywhere around the world will have different sets of needs and opportunities. You have to look at things from a lifecycle basis. Basically, that is the point you are making. We totally support that; otherwise, you end up with a different answer.
Canada is blessed with all kinds of different energy sources. Economics may dictate that you use coal somewhere because it is lower cost. Other areas will have huge opportunities. On burning waste, yes, the public has been sensitized to that. There are other things, such as pyrolysis, and you are aware of this because you were the Energy Minister. We met in B.C. some time ago.
Senator Neufeld: Yes.
Mr. Ogilvie: We have all these opportunities. We have a suite of technologies that will work. Which ones will the public accept? In part it is a process of getting to the public and getting them to think about these things up front. It does not matter what technology you take into a community, they fight back if they feel they are being imposed upon. We have learned that. You really have to engage people.
QUEST has looked at how we introduce these ideas into a community. How do you identify the leaders who need to be part of it? How do you reach out to the public early on?
You do not stomp in and say, "Here is a QUEST community." If you were to do so, you can be sure you would have massive opposition. Therefore, how do you bring these ideas to people?
I guess that is where we think the Senate has a great role to play to challenge Canadians to think about alternatives and help that process along.
I totally agree with Senator Massicotte. There are so many embedded barriers. They are not all insurmountable, but they are in many cases. We are watching good initiatives collapse under that pressure to do something different.
Let us have that dialogue and have a vision for the country so that people know we have a vision of where we are going and that these things are part of it. Then you must take it right down to the community level and build that support.
I think the Senate has a role to play in helping the country move there.
Senator Banks: Thank you very much for your presentation.
Everything the senators have spoken about is right. We kind of knew that. I will ask you to comment on a point this committee made in a report several years ago.
We looked at the question worldwide, from as many sources as we could find. We looked at places that had succeeded in beginning the kind of process you are talking about — and there are quite a few — and looking at the impediments to doing those things. We concluded that until and unless some order of government brings it down and provides leadership, then it cannot happen for all of the reasons that my colleagues and you have said. The government has to have a heavy hammer to do this. It is true that you will have to do all of the advertising, cajoling, lecturing and education. You said you have a developer who looked at it and said, "I would love to do the right thing here and give it a shot, but not at the cost of losing my business to my competitors who do not do it."
That is what it comes down to, and we have been tap dancing around that for decades.
As senators have said, we have the means of doing this, we have the knowledge to do it and we know that it must be done. What is lacking is not education, not cajoling, not lecturing, not knowledge and not efforts to convince people to do these things. All of those things have been done and you cannot find anyone who does not say, "Yes, we have to fix this." What is missing is the means by which to even out the playing field, such as that developer you talked about. Dockside Green is a perfect example because it is not a big success. Dockside Green is something that the next developer will look at and say, "I will not do that because they are not sold yet." I think I am right. In any case, it has not been the success that everyone hoped it would be. It was developed on industrial lands that were fixed up and it was green, green.
The Chair: It was geothermal and the lot?
Senator Banks: The lot. I think —
Mr. Ogilvie: Biomass, geothermal, they tap heat from the —
Senator Banks: You nailed it when you talked about land use because that is what it comes down to. Land use in the main is determined by municipal governments. In this country, the Constitution itself is an impediment to bringing about the kind of — we do not like top-down things, but it is a political impediment. I hope your members are taking that into account. There are a couple of perfect examples, but I would like to talk about how we can do that. Senator Lang asked that question.
We would like to provide the leverage. If you fly over Toronto, it is flat, single homes, single homes, boom, high- rises, and then an LRT station. Then it gets flat, flat, flat, boom, high-rises, then an LRT station. Toronto City Council had the jam to say we are rezoning the land where those LRT stations will be.
If you fly over Edmonton, the LRT station goes along, it is flat, because City Council in our city did not have the jam to say an LRT is going there and we will rezone around that in order to make the LRT functional and viable.
There are many other things that Edmonton has done, to bang the Edmonton drum, including the fact that it is now building the world's first industrial-level conversion of garbage into biofuel. We are proud of our city and our recycling effort, but in respect of building LRT as a specific example, we have not done that.
How in this country can the Senate, the federal government and even provincial governments oblige municipal governments to pay attention to that kind of land use?
Mr. Ogilvie: I do not want to answer all of these questions. I cannot hand it to you, but QUEST has submitted to the Ontario process for looking at the provincial policy statements, and there are a lot of good things about smart growth, et cetera, but they do not go all the way to QUEST.
The Ontario QUEST caucus has submitted to that process in Ontario saying, "What you need to put on top of this is a look at your community energy picture and the greenhouse gas implications of your development. That needs to be in your provincial policy statement so the Ontario Municipal Board looks at the energy side of things. Your municipal plan does not do this, so take it back, do it and bring it back to us."
You are absolutely right; you need to wire it to the level that the municipalities have to bring forth a plan so at least they have to look at it. It does not mean they will be driven by it. California Senate Bill 375, requires this in California. You will submit a community energy plan, and if we do not like it and it does not show how you are reducing greenhouse gases, money may go somewhere else. How this will play out, I do not know, but they are levering it onto their communities and saying, "Come forth with a community energy plan. If you do not, accept the consequences, but here is our intent from a policy point of view." It does come down to that.
The Ontario QUEST caucus has produced a municipal toolkit for that very purpose, to determine how we deal with municipalities. I have not even had a chance to read it, but it was released two weeks ago in Halifax. Ontario has taken that particularly because Ontario is where QUEST can really work well because of the dense population of Southern Ontario and the need to conserve energy and so on.
I agree with you 100 per cent. It does require that leadership. Hopefully QUEST can bring together people who will stand up and support that leadership as opposed to having a poor politician walk the plank without any backup. We are trying to get a broad-based collaborative and coalition support that says, "Please do it, and try these demos."
Dockside Green sold well, but the economics may not have worked out or something. That is a learning experience because we are in the demo phase, and that is where the federal government can help. Someone must politically and financially de-risk some of these things so that we can try them out and say, "Gee, that did not work well, but this part did." The next community then says, "We will do that part and we will try something new." We have to get this learning and innovation chain going. It will take someone that can de-risk it for the developers and the politicians so that we work together as a team. Then we hope it will work out. We do not know.
The Chair: Senator Banks, in your own way, you illustrated that what is needed is an orchestra leader that can coordinate the percussion, the strings, the brass and so on and bring it all together. You almost did so literally in your question.
Senator Banks: It is easy to do in an orchestra because an orchestra is not a democratic institution. There are certain advantages to dictatorships, chair.
Ms. Rahbar: If I may offer a couple of brief observations. Governments have mixtures of carrots and sticks they can use. I would encourage to you look at both.
An example with which Senator Neufeld will be familiar is an example of the carrot in British Columbia. When carbon tax was introduced, municipalities were given the option of an exemption if they signed up and became carbon neutral by a certain date. At the date they all signed up, it looked like the end date would never come. The end date is upon them now. What you see is a flurry of activity within the B.C. municipalities who have signed up for the deal and frankly have no idea how to deliver on it, nor do they have the finances to deliver on it, which in its own way is quite positive. The private sector people who do have the money are now being pulled into the picture and are working with the municipalities to figure out how to do it.
Another carrot that the federal government has used was the percentage of the gas tax that flowed to the communities, instituted by the previous government and made permanent by the present government. It was an interesting approach. Feds normally have strings before they flow money. In this instance, "Here is the money, give us something." They almost expected to get nothing back. The department was not really resourced because they thought they had given out the money and would not get anything back. To their amazement, the carrot really worked and they had to build a department to deal with the community energy plans that were coming in. Of course, there are sticks that can be used.
One observation on the technology side with respect to Okotoks and Dockside Green, we have historically looked at technology demonstrations. What is feasible; let us demonstrate them. What we are trying to do through the QUEST conversation is determine how we make this garden variety so no one actually talks about it any longer. This is just the way you do business if you are a builder and you know how to make money. This is part of your business plan.
The way we are accomplishing it is trying to get the people who know their own business to figure out how to make money at it. Canadian home builders and developers had a conversation of their own, conducted workshops and said, "If we get it, what are our barriers?" If all these other people at the table are asking what we would need to make this garden variety profitable, what would it be? They have come up with a report that I understand will be reviewed by their board and will soon be released.
On the energy side, we have done the same thing with our own members. We said, "Look, we are putting in infrastructure; what would it take us to put in different infrastructure?" In our case, regulated utilities need to go to the regulatory commissions. Therefore, the electricity distributors and ourselves have started a conversation with the economic regulators to see how we can move this forward.
The Federation of Canadian Municipalities and provincial municipal associations have formed their own entities to look at this. What are our perverse bylaws?
Most provinces have progressive legislation dealing with energy. Most have progressive programs about places to grow. Ontario's is called Places to Grow. I cannot remember what the Alberta program is called, but there is one. The problem is how to get them together to reinforce one another.
Senator Dickson: Thank you for your excellent presentation.
Bringing it back to a micro-level, I want to ask about what happened in Nova Scotia. Could you give the committee some information on the conditions of the memorandum that was signed by the province and the mayor of Halifax?
Ms. Rahbar: I can give you a brief overview because the QUEST Nova Scotia group pulled the molecular thing together. I believe it relates to a district energy system in Halifax, the name of which I cannot recall.
Mr. Ogilvie: We had better get more information, because we do not know all the details. I thought Bedford West was eventually 25,000 people or something of that scale.
Senator Dickson: You are talking about the new development, Bedford West.
Mr. Ogilvie: Yes.
Senator Dickson: That development has already been approved, has it not, by the city council?
Mr. Ogilvie: I am not familiar with the details. I only know that the announcement was to use the QUEST principles to try to deal with it. I do not know where it is in the approvals process and what it requires. We will have to get you details on that. We can give you some contact names and we can get some information.
Ms. Rahbar: I can send you a copy of the memorandum of understanding.
Senator Dickson: Will it require any regulatory change by the City of Halifax or by HRM?
Ms. Rahbar: More than likely it will, but again, I am not privy to the details.
Senator Dickson: When was this memorandum signed?
Mr. Ogilvie: Our workshop was on October 12 and 13 and it was announced on the morning of October 12, I believe.
Ms. Rahbar: Yes, it was signed on the morning of October 12.
Senator Dickson: So there was no consultation with the general public in the area when the memorandum was signed?
Mr. Ogilvie: We heard about this two or three weeks before we got to Halifax, and we did not pay much attention until we got there. The announcement was made, but I did not get any materials at the meeting on the details of it. We will have to get you that information or we could mislead you, because we do not know enough about it.
The Chair: Please send that to our clerk so that we can pursue it.
Senator Dickson: Is Conserve Nova Scotia, which is part of the government of Nova Scotia, looking at conservation? Are they involved in the process?
Ms. Rahbar: Yes.
Senator Dickson: Could you give me some idea of the extent of their involvement?
Mr. Ogilvie: Nova Scotia has also set up the Efficiency Nova Scotia Corporation.
Senator Dickson: Yes, it changes from time to time depending on the government.
Mr. Ogilvie: It was just set up. I believe that in October the money was to be transferred, and I am not sure if that happened. It is that new.
That is an agency with a mandate to get efficiencies; it is not an urban forum group. It would be complementary to the QUEST agenda. When you have done your infrastructure and load your energy footprint, you start to look at end- use efficiencies and ways to save money at a micro-level, such as with appliances and so on. It is complementary.
Senator Seidman: Several of the senators around this table are pursuing the same issues. I would like to look at your recommendations for how the Standing Senate Committee on Energy, the Environment and Natural Resources can help. On page 19, you say:
Advocate for and support the development of showcase projects across Canada.
You also say:
Gage receptivity of Canadians who are living in QUEST type communities.
Those are two of your four recommendations. I would like to pursue both. There is no question in my mind, as a consumer, that demonstrations of showcase projects are inspirational. The few opportunities that I have had to view such demonstration projects have allowed me to think beyond anything that I had previously been able to think, because it shows the possibilities.
I live just off of the Island of Montreal on a very small, self-contained island. There are opportunities being looked at and developed there now for more eco-friendly environments. There are condo buildings that are achieving LEED requirements and are eco-friendly. However, the units are much more expensive.
The second recommendation deals with gauging the receptivity of Canadians. There must be a certain amount of public education and positive promotion of this way of living, and I do not think we are there yet. If we focus only on what government can do, we will not get there.
Considering health promotion activities is the way to think about what we ought to be doing with regard to community living promotion.
Mr. Ogilvie: I would call QUEST health promotion as well, because of the significant reduction in pollutants. There is very strong scientific evidence around the impact of that, so it is health promotion, and it is also social connectivity promotion. People connect much more in this type of community. It has a number of those values.
Environics gave us an opportunity to ask a question in their most recent poll. We had only one question, so we asked people how they would react to having to live in a QUEST-type community. Canadians are about half there, but there was fair receptivity. People already living in urban centres understand that and say that if they had more of those things happening, they would be happy. People who live in rural settings and like their space are less inclined to say they would like it. Obviously, how you feel about it depends a lot on where you live.
That only gives us a general idea of where the public might be on this subject. No one has promoted this. We would really like to have demonstration projects so that people across the country could see one of these places and decide whether they like them and why. We need to be able to show people and get their feedback. It is a little too abstract to ask them the question with only a diagram. We have to show them on the ground.
Ms. Rahbar: As well, we need different scales. People will look at downtown Victoria and say, "That is not for me. I am from a rural community in Northern Quebec. This will never be for me." That is why getting the demos in small, medium and large scales will help.
Senator Seidman: Thinking about socio-demographics going forward, there will be many aging Canadians whose families will grow up and leave. They will want to sell their homes in rural and suburban areas and perhaps move into these kinds of communities in cities. It is a much more user-friendly and easy way to live. As you say, it builds networks. There are many to aspects this model.
It seems to me that there are opportunities, despite the fact that there are people living in suburbia who do not understand that kind of living. However, in the not-so-distant future they may understand it far better.
Mr. Ogilvie: It is happening in Toronto. Many people say that after the kids grow up, they want to be close to the theatre or the restaurants. They want to walk; they do not want to drive through that nightmare of dangerous traffic. People are moving back downtown for a lifestyle. There is that scenario, but I think you can design communities that are good for children. The more people out and on the streets, the safer it is.
The Chair: We can derive inspiration from that old song, "Mamas, don't let your babies grow up to be cowboys."
Senator Peterson: This is a challenging discussion for first thing in the morning. I am trying to understand the timelines. It goes out to 2050; I do not think I will make that date.
You said you have to make a number of assumptions when you do your modelling. I am interested to hear about those assumptions and if they are achievable. I look at your projected household savings. Is that in real time or some other module out to 2050?
You talk about land use and rezoning. I was in the development industry for 30 years and although it is difficult, it is not impossible. The land use, we found, was a societal issue, not an economic issue. As a developer, once we know the ground rules, we will deal with the economic issues.
I am wondering, in what you have here, if this whole debate is societal rather than economic.
Mr. Ogilvie: You can search for the assumptions. I think you are right; it is a cultural shift, reinforced by but not totally constrained and driven by policies and costs and so on.
There are people with a sufficient surplus of resources to choose to live where they want to live. You have to make this attractive to people and they have to have this debate.
There are good compelling economic reasons to save capital and save household income and so on, but people do not make choices totally on that basis. It is something that we think requires a dialogue, which is why I have been excited about the Senate's work on this subject. Someone has to open up that dialogue, so that it is not seen as a vested interest or one part of the country trying to deal with its particular interests versus another. It really is a dialogue for Canadians.
It will not shift the entire population one way or the other, but on the margins you start to influence how people think and you open up their ability to look at things differently. Then you do have to wire it so the developers know what the charge is and how to make money and so on. This is our system. It will not work any other way, so there are some hard policy decisions to be taken.
Canadians need leadership. They have to see someone at the political level stand up and say we think you have to think about this. We also have to build these support structures. We would like to have a QUEST caucus in every province.
This is not an advocacy organization that we built with baseball bats. It is not out there to criticize people. It is out there to bring them together, inform them, help them move on and give some suggestions and ideas. It is not there to force people to do something. It is there to make the case, if you will.
I think the politicians need some kind of structure that brings these people together, saying it is not just me. I do have developers that say we will do this if you set the parameters. I do have technology providers, environmental groups and health groups that say this is good for you. We are trying to build as much of that base as possible. It is still a risk for any politician to step out and cause change. I have never been a politician but I have watched.
Senator Peterson: If we did this with vigour and determination, what is a reasonable timeline that we could maybe start with — five years, two years, 10 years? You have done your studies and we are just getting started. What would be reasonable?
Mr. Ogilvie: There are places already doing it. A community in Nova Scotia decided they wanted to do some of these things. They went over to see an Austrian community and brought back information. They are doing it now. They are figuring it out.
There are hurdles. They have hired a full-time person to help them bring everyone in the community together. I am sure these people had no idea QUEST existed before we showed up there. People are doing it already, but not necessarily fully in the way we would like. Guelph and communities like that are looking very hard at how to shape our future communities. Vancouver has been looking at this for a long time.
These are already happening. What we need to do is to get more demos in place fast, more communities physically talking to people and doing it. Then we need to look at the policy shifts that can flow behind that to make it a good business case.
We need to have parallel tracks; but policies do not happen overnight and demos take a bit of time. Therefore, we need to have a bit of patience.
We think it is an exciting concept, and it is happening organically across the country anyway. Wherever we go, we find more people doing these things. We are inspired by them. We think, my goodness, you did not have any support at all from high level people. You decided in your community you wanted to do something differently. We are quite taken by that.
Senator Brown: I think QUEST is a very interesting project. As Senator Peterson said, I probably will not live to see that timeline of 2050, and I think you mentioned going on to 2100.
An Hon. Senator: Where are you going?
Senator Brown: It is either up or down, depending on what your opinion is of me.
I think our cities have been evolving because of their locations. Vancouver's situation is that it is backed up against a gigantic mountain range so its land is more valuable for building on than probably any other place in the country. You see Vancouver making huge efforts for transportation corridors that do not require cars and many other things. They also have a lot of hydroelectricity.
At one time, Calgary was the largest city in North America, on a land basis. It was over 30 miles almost on each side. I do not know where it is now, but I know it has a population of 1 million people and that they all love to have big spaces. They like to have big lawns, big houses. That is their culture. They came from the Prairies to begin with, all of their families that moved into Calgary.
The next generation is starting to build lots of core condominiums and that kind of thing. They have even changed warehouses into condominiums.
I know in Calgary that there are some things happening around what you would like to do, but they are happening to a city that already exists.
The Chair: Is there a question coming?
Senator Brown: Yes. I sit on a committee for the MPs of Alberta every Wednesday morning. I was surprised to find that ENMAX wants to build four jet turbine generators on the four corners of Calgary. Apparently, they just got a very large one approved last month, 800 megawatts.
Why do we not start by telling cities how they can improve conditions for people and lower their energy costs? If they go to jet turbines, they could knock off 50 per cent of the GST right away because Alberta has always been dependent on coal. At the same time, ENMAX also said that their scrubbers and storing GHGs in underground storage facilities will take 60 per cent of the GHG gases out of the environment. Such things that could lead to a first step for planned communities.
You have a planned community for Japan, but it will take quite a while for Albertans and Saskatchewanians to get their heads around everyone living closer together. That was the first thing you said and it is the first thing that many Prairie people will be slow to accept. However, that does not mean we cannot give them better energy sources or better transportation sources or do away with some automobiles, et cetera.
What do you think about that?
Mr. Ogilvie: Each community will do what is within its ambit and interests to do. ENMAX has built a district heating system downtown. Over time as the boilers in office towers burn out, they can go to the ENMAX system. If it gets to cogeneration in electricity, it will be 80 per cent to 90 per cent efficient. I toured that facility with the chief technology officer of TransAlta and asked him about the efficiency of a coal plant. He said that it was 50 per cent at the plant and another 30 per cent is lost down the line. Let us say that a coal plant is roughly 20 per cent efficient on an energy basis, whereas that facility in Calgary will get 80 per cent.
If you are concerned about overuse of energy in greenhouse gases, the more you densify the more that becomes a good business case for ENMAX; it is a subsidized plant. However, in the right density and configuration, it can pay its own way. You are trying to design to make things cleaner and to make them a good business case.
Calgary can change many things without having to densify the entire city. Over time, you can retrofit and densify within the existing structure. You must work with what you have.
Senator McCoy: This is the energy story of the 21st century. Going back to your analogy of an orchestra, this seems to be a song that we are all trying to learn. Lately I have been saying this to people, including Alberta Energy. That department has spent hundreds of thousands of dollars over the last two years trying to learn the new energy song. However, the score has not been written yet.
I am excited about exploring with the committee what that score will be. Perhaps this committee will end up adding the grace notes so that we will be singing the 21st century energy song together.
The Chair: That is interesting. Senator Mitchell picked up on something that both of the witnesses said: "We think we need to think about this." That might be the title of our report. It could be "We think you need to think about it."
In any event, that winds up today's hearings. I thank Mr. Ogilvie and Dr. Rahbar very much for their thoughtful input.
I remind senators that most of us have agreed to meet briefly this afternoon from 3:15 p.m. to 3:45 p.m. with the European Community delegation at 1 Wellington Street beside the Château Laurier Hotel. They have a tight time frame so we should arrive early to be in our seats and ready to go shortly after 3 p.m. It is in room 160-C.
As well, I remind senators that when we return from the Remembrance week break on November 16, we have a meeting that day at 5 p.m. Jacob Irving's group will appear; and on November 18, nine senators will travel to Chalk River. There will be nine senators, the clerk, our researchers, and some senators' staff. I believe that on the bus with us will be people from the Canadian Nuclear Association.
The next trip will be on November 25 and 26. Much is happening in the area of nuclear energy. Certainly, I will use some of my time on the break to read up on the materials on nuclear power. If you need anything that has been submitted, we have a lot of information on file.
I wish everyone a good break.
(The committee adjourned.)