Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 6 - Evidence - November 3, 2011
OTTAWA, Thursday, November 3, 2011
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 8:09 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.
[English]
The Chair: I am pleased, this morning, to not only welcome everyone here who is in the room but also those who are sharing our deliberations on the World Wide Web, including on our dedicated website, www.canadianenergyfuture.ca, and on the CPAC network, as well as any other people who are starting to converse with us in what we call the Let's Talk Energy dialogue.
The committee is continuing its study with a view to developing a national strategic framework for more efficient and effective use of our wonderful energy resources in Canada. We are winding down a study that began in mid-2009, and we are hoping to come out with our final report in June of 2012. We are about to embark on a series of visits to Western Canada to complete our in situ, if you will, consultations with Canadians. We have already done Atlantic Canada, Quebec and Ontario, and we are hoping, in the next couple of weeks, to go to Saskatchewan, Manitoba, Alberta and B.C.
Here in Ottawa, we have been, in the last three weeks, not only hearing from involved ministers — Minister Oliver, from NRCan; and Minister Kent, from Environment Canada — but also from Minister Duncan from Aboriginal Affairs and Northern Development. We are getting a much clearer understanding, I think, of where the government is headed in this critical area, and where it has been. This morning, we are particularly pleased to have with us Ms. Carol Buckley from the Office of Energy Efficiency at Natural Resources Canada. She is the director general of this office at NRCan, which delivers a suite of over $1 billion in energy efficiency and alternative transportation/fuel programs in all sectors of the economy. Ms. Buckley has significant experience in the development and implementation of programs using regulatory, financial and information instruments. She has also held positions involving regulatory development and climate change policy and evaluation. She is a federal council member for the Green Municipal Fund, the GMF, which is operated by the Federation of Canadian Municipalities, from whom we heard last Thursday. The GMF is designed to improve sustainable operations in cities and communities across Canada.
On Tuesday evening of this week we heard from the Museum of Natural Science. We learned about the initiatives they are taking, as a federal government organization, to promote and increase energy literacy and to bring the amazing things about our energy system, and energy in general, to the attention of young Canadians so that our citizens will better understand better energy. This is the crux of our study.
It is very important, for those who think that the government has not been doing anything for these last many years, that Ms. Buckley is here to tell us some of the things that have been going on in her department. We are all ears.
I am Senator David Angus from Montreal, chair of the committee. Then we have: Senator Grant Mitchell, the deputy chair, from Alberta; our analysts from the parliamentary library, Marc LeBlanc and Ms. Sam Banks; Senator Rob Peterson from Saskatchewan; Senator Tommy Banks from Alberta; Senator Nick Sibbeston from the Northwest Territories; Senator Paul Massicotte from Quebec; our clerk, Ms. Lynn Gordon; Senator Richard Neufeld from British Columbia; Senator Judith Seidman from Montreal, Quebec; Senator John Wallace; and, last but not least, our elected senator, Senator Bert Brown from Alberta.
Without further ado, over to you, Ms. Buckley. We look forward to hearing from you.
Carol Buckley, Director General, Office of Energy Efficiency, Natural Resources Canada: Thank you very much for the introduction, chair. Good morning, senators, I am honoured to appear before you today.
As you heard from my minister, the Honourable Joe Oliver, at the end of September, and as you well know, Canada has a powerful energy resource that contributes 7 per cent of our gross domestic product. As with the rest of the world, our energy use is climbing. The National Energy Board estimates a growth of about 0.7 per cent per year going forward.
As mentioned by Minister Oliver, the federal, provincial and territorial energy ministers agreed on an energy framework in Kananaskis, Alberta, last July. They recognized the size and the importance to the economy of our energy resource here in Canada. Those ministers also called for continued improvement in energy efficiency in order to improve the competitiveness of our economy and the standard of living of Canadians, and reduce the environmental impact of energy use. I notice that, in your study, Preparing for the Energy Future, you actually label energy efficiency as a low-hanging fruit, which is an excellent term to describe energy efficiency and all of its potential.
Looking at energy efficiency globally, the International Energy Agency, the IEA, with whom we work frequently, has estimated the potential for energy efficiency if the 17 IEA member countries fully implemented its recommendations. The energy savings would reduce emissions by an amount that is equal to 1.5 times the emissions of the United States. That is a valuable energy resource in terms of contributing to emissions reductions.
All major economies have robust energy efficiency programs. I will use the balance of my time here today to speak to you about Canada's energy efficiency programs.
Here in Canada, we have the third highest per capita use of energy.
[Translation]
We have a very cold climate, a widely-dispersed population, and a lot of energy-intensive industries. It is a big country, which is also a great challenge.
[English]
We also have a great challenge with respect to energy use because of our personal choices and because of business preferences in how we use energy. I will give you a few examples, over the 1998 to 2008 period, of how our energy use has grown simply because of how we choose to use energy in business and at home.
The Chair: Would you mind if I briefly interrupt? In our June 2010 report called Attention Canada, we had a lot of basic information setting up our studying and educating ourselves. I think we either had ourselves as the number one or number two largest consumer of energy in the world. Who is moving ahead of us?
Ms. Buckley: We are third behind Iceland and Luxembourg in per capita energy use, but the Luxembourg figure is actually a bit of a reporting issue. They are a very small country with not much energy use. We are probably number two, if you take away the reporting idiosyncrasies that put Luxembourg ahead of us. We are number two behind Iceland.
However, our houses are getting bigger. Average living space is 10 per cent bigger than it was in 1990. We now have 21 appliances, on average, and we had 15, on average, in 1990.
Air conditioning in the commercial sector has almost doubled. Plug load — all the things we plug into the wall — has tripled in the commercial sector. There are more vehicles on the road, and they are travelling longer distances. Freight use has increased by 71 per cent, reflecting the choice of business to do more shipping by road than by rail.
Energy efficiency has, however, tempered this growth significantly. Based on energy efficiency improvements made in the economy since 1990, Canada used 18 per cent less energy in 2008 than it would have, due to energy efficiency. We value this at $27 billion worth of energy.
Energy intensity has improved by 22 per cent. Compared to 1990, we need 22 per cent less energy to produce the goods and services in our economy. We are among the top 5 of 28 OECD countries for implementing the IEA's 25 recommendations on energy efficiency.
I will zero in now on the specific accomplishments that we have achieved over the past four years of running our energy efficiency programs, called ecoENERGY Efficiency. We estimate that we have reduced by 2011, the year the programs ended, six megatonnes of greenhouse gas emissions for a savings of $1.7 billion. We undertook a number of evaluations, seven, in fact, of these programs. I will share with you a few of their results.
The evaluations found that we are making concrete progress in improving the efficiency of energy use in Canada. Provinces and territories are adopting energy efficiency in their housing codes. New housing starts are more efficient thanks to some of the work we are doing in the federal government. The workshops we provide to industry managers and truck drivers are making them more efficient; they are taking action after taking our workshops. Increased awareness of fuel efficiency in one part of people's lives is spilling over to actions in other parts of their lives. I am happy about all of those results, but probably the result from the evaluation that I am most pleased about is where the evaluations indicated the role for the federal government. There are a lot of actors in energy efficiency, including the provinces, territories, utilities and municipalities. I search for what the role of the federal government should be in energy efficiency. The evaluations underlined that there is a role for the federal government to lead, to provide foundation tools for others to build on and to act as a catalyst.
As those programs have just wound down, Minister Oliver announced in September $78 million over two years to continue our work in energy efficiency, where we will have a focus on making energy more visible to ordinary Canadians and to business decision makers, and in making the stock and operations more efficient through code standards and information tools. Furthermore, Minister Oliver announced a $400-million one-year extension to our home retrofit grant program, as well as programs to support information and codes and standards work for natural gas use in transportation.
Rather than give you a long list of our accomplishments and treat them rather superficially, because the list is long — we work in every sector of the economy, I chose to highlight three areas so I can give you a little more detail about each one.
[Translation]
I will start with equipment regulations. It is an illustration of the federal government's leadership role. The Energy Efficiency Act allows the Minister of Natural Resources to establish minimum performance standards for goods shipped into Canada and those that cross provincial borders.
[English]
Provinces, however, have jurisdiction over the sale of products within their own borders. In 2009, we amended the Energy Efficiency Act to make it broader, more modern, to close some loopholes and to regulate products that affect energy use, even if they do not use energy. We established standards or introduced more stringent standards for over 20 products, including motors of many sizes, air conditioning in both the home and the office, furnaces for both home and commercial use, refrigeration of all sizes and consumer electronics, such that our standards cover 80 per cent of the energy used in home and office and some industrial energy use. Compared to similar models in 1990, Canadian clothes washers are 50 per cent more efficient, refrigerators 40 per cent more efficient and furnaces 30 per cent more efficient.
We are doing extremely well vis-à-vis other jurisdictions in North America. Our products are as or more stringent in 92 per cent of the cases. Our standards for refrigerators, furnaces and motors are leading in terms of the entire world. We are global leaders for those products. To come in the next few years with our renewed funding, we plan to introduce new or more stringent standards for up to 16 products. We will be continuing our efforts with countries around the world to reduce the energy used in standby mode — off mode — to under one watt for consumer electronics and televisions. We will continue our efforts with the U.S. on air conditioners and laundry products.
The second area I would like to highlight is the code work we do. This is an illustration of the federal role to lay down foundation tools. Building codes are not within the federal jurisdiction; they are a provincial jurisdiction. However, over the last five years, we have funded technical work with the National Research Council of Canada in order to increase the stringency of the previous code by 25 per cent working with the Canadian Commission on Building and Fire Codes, who write the codes in Canada for buildings. With the provinces and territories, developers, architects, builders and equipment manufacturers, we have updated the code and are ready to publish it in a few weeks. We expect that six or seven of the provinces will adopt that code, which affect 80 per cent of new building starts in Canada. To illustrate, we estimated the savings for an average 10- or 12-storey building of about 10,000 square metres. The savings in energy over the life of that building built to the new code would be almost $2 million.
The federal-provincial-territorial energy ministers at Kananaskis in July asked us to continue our efforts with building codes so we would start again and look at a more stringent code to be published in 2016. As a companion piece, we intend to prepare a retrofit guide so that ding owners can retrofit their properties to the same stringency as the code because 80 per cent of buildings that will exist in 2020 are already built. The building code will not address them, so we need to get at them through a retrofit code.
The third area I would like to highlight is our home retrofit program, which illustrates the federal role as a catalyst to others. This program was launched in 2007, and its funding was increased three times due to its popularity with Canadians. We have now provided grants to over half a million Canadians, which is 5 per cent of household stock. These people have reduced their energy bills by an average of 20 per cent. The average grant was $1,400. It provided significant stimulus because the investments they made in insulation, windows and doors have a particularly high percentage of Canadian manufacturing capacity. Where those retrofit investments in the home touched those measures, there was a significant impact on Canadian manufacturers. Of course, all of the installations were domestic.
Going forward, we have a one-year renewal of this program and expect to reach up to 250,000 more households. All of the provinces and territories, with the exception of two, are currently administering related programming. In its role as a catalyst, the government has invited the attention and the action and the complementarity of provinces and territories to work with us on this program.
The last thing I would like to cover is to look forward a little and to share with you how our renewal programs will work heavily with the United States, given the high integration of our two economies. I will highlight three of the links we have with our American counterparts in energy efficiency.
We deliver ENERGY STAR for equipment, and you would recognize the little blue label that goes on the most energy efficient equipment. We cover 50 products. This is an easy way for Canadians, when they are going to purchase a new television, refrigerator or clothes washer, to determine without doing any research which appliances are the most efficient — look for the little blue label and it will be the most efficient in its class. We are working with the United States to expand our coverage of ENERGY STAR. Currently, 71 per cent of Canadians actually use that label in their decision making and consider that number the most important decision-making factor when they purchase a television or refrigerator.
We are importing the U.S. ENERGY STAR tool for buildings. It is a benchmarking tool that allows building owners to compare their energy use to that of a large database of Canadian buildings. If you manage a school, hospital or office building, you can compare your energy use per bed, per student or per square foot to all others in Canada in your category. If you are lagging in your energy use compared to your peers, you can make a business case to your board or to your management for an energy efficiency retrofit.
The final tool I will highlight is the SmartWay certification program for trucks. This program is used by shippers and truckers to demonstrate that they are particularly fuel efficient. We are adopting it in Canada so that shippers like Walmart, IKEA and others who want to get products only from environmentally sensitive organizations can simply ask for this certification. Truckers will be able to certify themselves and demonstrate that they meet certain environmental requirements.
I am pleased to have this opportunity to share these accomplishments with you and to share some of our thoughts going forward on energy efficiency in Canada. I hope to continue the good work that we are doing in collaboration with the provinces and territories as well as the utilities and industry.
I would be very happy to take your questions.
The Chair: Thank you very much, Ms. Buckley.
We hear from your department and from Environment Canada, and we sometimes get confused about who is on first base, if I may use that sports analogy. Are the two departments at odds with each other or do they work collaboratively on these issues? Does the left hand know what the right hand is doing?
I think it is good to get that out in the open. We have heard many anecdotal references to regulations coming out of one department while the other does not know about them. I am sure you can demystify that for us.
Ms. Buckley: I will certainly try from my perspective in the world of energy efficiency.
I will start by painting the picture over all. Environment Canada and its minister has the overall lead with respect to Canada's objectives in addressing climate change. Natural Resources Canada has responsibilities with respect to energy use. Given that energy is the source of a vast portion of greenhouse gases, it would be natural that Natural Resources Canada work closely with Environment Canada on solutions to climate change. Environment Canada has the overall lead, but at Natural Resources Canada we have responsibility for energy, a contributor to climate change, and therefore we have responsibility to deliver much of the analysis around energy use as a contribution to climate change as well as the responsibility to deliver programs that can help mitigate climate change. Speaking more narrowly, that is where my office comes in. We have the responsibility to deliver energy efficiency programs, which were funded because of their contribution to climate change.
More specifically, I personally work very closely with my colleagues at Environment Canada, as do my staff. I will give two quick examples to show how we work together. A horizontal issue such as climate change does require the collaboration of departments, and we have our own specific roles.
One example is related to climate change and one is a broader policy that has a climate change link. With respect to the regulations for vehicles, under the Canadian Environmental Protection Act, Environment Canada is bringing forward regulations for both light and heavy duty vehicles. It is their lead and their instrument and they are doing that. We at Natural Resources Canada, however, have a history going back a couple of decades in labelling vehicles. Environment Canada decided they would deal with the regulatory aspects and NRCan would deal with the labelling aspects. We will work very closely with them to ensure that we provide a product that is integrated with that of the United States.
We are working fairly seamlessly. NRCan is working on the labels; Environment Canada is working on the regulations themselves, and we work together to ensure that the whole is useful and understandable to the public and implementable by industry.
The other area I would mention, which has a similar regulatory program aspect to it, is in the renewable fuel strategy where Environment Canada is implementing regulations for the mandatory blending of renewable content in the gasoline and diesel pools and Natural Resources Canada is delivering a program to incent biofuels production in Canada, which supports the implementation of the regulations. We worked together closely over the past four years in the development of them. We provide analysis of various factors and input with respect to what we have heard from stakeholders, and then we work with them on the development and implementation of our program in order that they understand.
From my perspective, which is fairly operational because I deliver programs, we work closely with our counterparts to ensure that we each know what the other is doing and so that we keep each other informed as we go forward.
The Chair: Thank you for that answer. As you know, the name of our committee is Energy, the Environment and Natural Resources, so it is all tied in together. When I first became involved with the committee, it was confusing to me because there seemed to be a potential conflict. I also noted that there were two separate departments. I have concluded that the way our committee is set up may be a better arrangement.
Senator Mitchell: Thank you very much for your presentation. I would like to follow up on the questioning of the chair.
Is the development of the pending regulations for the oil sands being done exclusively by the environment department or does your department have a role in that? Do you know when those will be completed?
Ms. Buckley: They are led by Environment Canada. My colleagues in Natural Resources Canada who have responsibilities for oil and gas provide input and analysis. I personally have no role in that file because energy efficiency is a little removed from that. Therefore, I would not want to speak to the timing of those regulations, but certainly my counterparts would work with their counterparts in terms of providing their knowledge and expertise in oil matters to Environment Canada, just as I provide my knowledge of energy efficiency matters on regulations that Environment Canada is bringing forward.
Senator Mitchell: You manage a package of programs to create energy efficiency, and you have outlined those. Do you have an assessment of how much you think that will reduce greenhouse gas emissions over a one-year, two-year or five-year period? Have you been required to relate that achievement to the overall targeted objective of a 17 per cent reduction below 2006, I think it is, by 2020? Do you know how much you will reduce and do you know how that fits into the overall package that the government says it wants to reduce?
Ms. Buckley: We just finished delivering a program suite that ran from 2007 to 2011 called ecoENERGY Efficiency. We have estimated that when it ended in 2011 it would be contribute 6 megatonnes of reductions in the Canadian economy. We can extrapolate that out to 2020 and say that by then those actions will contribute over 20 megatons. These numbers are reported publicly in the report to Parliament and other places.
We provide our estimates to Environment Canada. Environment Canada has the responsibility of taking on board all the estimates from all the programs and regulations that are mitigating greenhouse gas emissions in Canada, and they report on what the progress is against the goal, Canada's 17 per cent reduction in 2020. I do not carry that information; it is not my responsibility to speak to it.
Environment Canada takes our inputs and they model them to determine what the overall impact is. If there is any interaction between measures, they will weed that out. It is not just a matter of adding up what departments give them. I am loath to speak on their behalf for how they roll it up across the Government of Canada and then report it against the 2020 objectives.
I am taking it from my responsibility. This is what our estimate is; this is what we would provide to Environment Canada, and then they would do their analysis and estimate what the contribution is against the overall target.
Senator Mitchell: Do you relate the amount of reduction in each of your programs to a cost per tonne of reduction? Could you give us that rating so we could see what the absolute cost is? It is probably a lot less than most of us think it is. I firmly believe that when we do these things it is always cheaper.
I am sure that you would want to do this because you could see that something is costing way too much with not much result and something else is costing just a little with a lot of results.
Ms. Buckley: It is a good point. When we are preparing our evaluations and analysis for our proposals for program renewal, the cost per tonne, the cost effectiveness of delivering government programs with the objective of reducing emissions, is an important indicator.
Speaking from memory, we have calculated across the energy efficiency suite of programs the cost per tonne, which is the government cost divided by the tonnes that they reduce going over I think it is a 20-year life of the actions that the programs stimulate. In dollars per tonne, the energy efficiency programs range from just under $1 per tonne for the regulations we deliver under the Energy Efficiency Act to a couple of dollars a tonne, in the $2 to $3 a tonne range, and I am going from memory and would be happy to correct this, to maybe the low 20s for our incentive programs, about $18 or $20 a tonne.
Senator Mitchell: Your incentive program is reducing carbon at as little as $18 to $20 a tonne, and some $1 or $2 a tonne.
Ms. Buckley: Yes. I would just caution you that if you see the cost of a government program and you see the tonnes, if you do a straight mathematical division to get cost per tonne, it will not be aligned with the numbers I am giving. The numbers I am giving you were calculated by discounting both the dollars and the tonnes, so we are using the time factor of money to say that the tonnes and the dollars from 20 years from now are not as valuable to us as the tonnes and dollars today. It is not a straight mathematical comparison, but that is the standard methodology that we use.
Senator Mitchell: You use present value.
Senator Massicotte: If you did the straight math, what would the number be?
Ms. Buckley: I am sorry. I do not have that in my head, senator. I do not think in those terms.
Senator Mitchell: Would it be easier to do all of this if we just had a price for carbon, if we just priced it?
Ms. Buckley: Certainly many stakeholders have said that a price for carbon would be useful, but it is the government's policy not to impose a price for carbon, and we are implementing a variety of regulations, some from my department and some from others.
Senator Mitchell: I will not ask you for your personal opinion on that.
In a perfect world, if you had a wish list and you could set up one more program, what would be at the top of the list? What do you think would be really effective? What would you like to see us implement?
Senator Massicotte: A carbon tax.
Ms. Buckley: I always have a wish list. I have to say that I am really pleased with the slate of renewal that was approved for us. I am particularly excited about the instruments that I outlined and others that I did not have an opportunity to outline. I think those are really good. We made those recommendations because we thought they were the best instruments. Coming back to what I said earlier, they speak to the role that the federal government should be playing and not role that others are playing very adequately.
If I were to add something to the slate, it would be something around innovative financing for supporting energy efficiency investments. It is something we are looking at in a very small way right now, but it is the idea of how to support financing in the economy for energy efficiency that does not involve government incentives.
Senator Mitchell: We heard that in the Maritimes. I think it was one of the cities that was putting money up.
The Chair: On that point about innovative financing, we heard from SDTC. They are under your department, are they not?
Ms. Buckley: They are an arm's length organization. We provide financial oversight to the dispersing of funds to them. They manage their own affairs and make their own program funding decisions, but we flow the money to them through NRCan and Environment Canada equally.
The Chair: Is that an innovative financing tool? Does it seem to work well? I believe they are limited to $6 million per grant. I am not sure how it works.
Ms. Buckley: If you are speaking of Sustainable Development Technology Canada, they are funding technology development and next generation, commercial-scale biofuels plants. It is an innovative way to fund those things.
When I am referring to innovative financing, I am thinking more of creative ways for building owners or industry facilities managers or homeowners to have access to funds to put in place energy savings renovations, so it is more at a local scale. SDTC does not deal with that form of financing.
Senator Brown: As a group of people that would like to see less energy used, why do we not have major shutdowns of electricity in cities that are not using it after certain hours? It seems like we are trying to compete with Las Vegas for how many lights are out there, or maybe we are trying to attract space ships. Every city I fly into at night is lit from end to end. I know that there are examples. One is Federated Cooperative's eight-storey building in Saskatoon, Saskatchewan. They installed motion sensors and all their lights go off every night, for a long period of time, until people start coming back into the building. They found that with that and their warehousing, they saved over $10,000. This is only an eight-storey building and a warehouse that is only one storey, and they were saving, six years ago, $10,000 a month on just lighting. It boggles my mind that we are not doing anything about that. We talk about energy use and charging for energy, but we never try to actually reduce tremendous amounts of energy. Calgary is lit up all the time. I know Edmonton is the same. We have bypasses now that have lights a couple hundred feet apart and, at three o'clock in the morning, I do not see that it is used much. At least they could shut down half of them.
The Chair: What are you doing up at three o'clock in the morning? I am trying to get you to come up with a question, please.
Senator Brown: That is the question. I think I started with a question. Why do we not shut off the lights?
Ms. Buckley: Thank you for your question and your comments, Senator Brown. I agree with the sentiment behind your question. We are puzzled. Those are enormous energy savings. With the potential in buildings across Canada, it is extremely difficult to understand why building managers do not act on them. I see it as part of my job, and it has been part of my job and will continue to be part of my job, to try and convince building owners and managers to make the investments and to take the action required to emulate the co-op in Saskatoon. Examples abound that demonstrate these significant energy savings. The barriers that I hear from building owners and managers are, "Well, our buildings are not wired for sensors, and it would take a capital investment to wire them for sensors. Maybe the next time we do some renovations, we will think of doing that, but we do not have access to the capital. It is not high on our list."
The raison d'Œtre behind our programs is to raise the opportunity into the front of the minds of people who have responsibility for energy in buildings and to give them the tools and the methods to build a convincing business case so that they can get the investment needed within their organization to make that kind of investment, because it will pay for itself in a very few years. That is just one example of energy efficiency, but a very glaring one, if I can say glaring.
I would mention something else that we do, because you mentioned street lighting. Street lighting is one of the heaviest expenditures for a municipality. Of course there are enormous safety issues related to lighting up roads in cities and towns in Canada. We have been working with some of the equipment manufacturers of high-efficiency municipal street lights and, along with the utilities, have been testing some technologies that are extremely efficient, light-emitting diodes, LED, and other forms of lighting, in order that we could demonstrate to municipalities that, if they change them out, they could provide the same amount of light, the amount of light required for safety purposes, but at a significant savings. That is something we would certainly intend to keep working at.
Senator Brown: My last comment is that I think they are lying to you when they tell you they are not wired for that, because there are buildings right in this place where the lights come on when you go in; and the lights go off when you go out. I do not think the wiring is the problem. I think they just do not want to do it.
Ms. Buckley: Thank you.
The Chair: The record will show that the witness was nodding her head affirmatively.
Senator Sibbeston: To follow up on Senator Brown's question, do the power plants not keep running? How can there be a savings when these plants must carry on whether the lights are on or off? Is there an answer to that?
Ms. Buckley: Certainly. There is a certain amount of base load required at utility companies. They run whatever form of equipment is needed to provide that base load. When we, the consumers, reduce our demand, they reduce the power that they supply. In fact, they have to balance supply and demand very carefully because you can only send out over the wires the amount of supply that is demanded from the equipment demanding it. Utilities have very significant operations that I not describe in any detail, but I am aware of them. They are balancing at every minute of the day the supply and demand not only in their network but in neighbouring networks because the grid is interconnected. As we the consumer power down and turn things off, they respond by scaling back at their plants. Utilities have major lines of business call to demand-side management to try and convince us to change our behaviour so they can turn off the most expensive power- producing plants at peak times and have us conserve our use over all. In some cases it is more economic for them to sell their power to another jurisdiction than to sell it within their own jurisdiction. Power companies spend a lot of time, energy and money trying to change how we use electricity, which includes having us reduce our electricity use. There is very much a savings if Canadians reduce energy use in the way that the senator was describing, as well as in many other ways.
Senator Sibbeston: In the Northwest Territories, Arctic Energy Alliance is the main agency that deals with energy efficiency. They are also involved in community energy plans promoting alternative energy projects. The Northwest Territories is a big place, and it has many difficult energy challenges. Throughout the North, communities are powered by diesel, which is very costly and produces a lot of emissions. What is the relationship between your department and the NWT's Arctic Energy Alliance? What more can be done to assist them in their work?
Ms. Buckley: I have a good relationship with the representatives of all of the provinces and territories on a steering committee that includes the folks who have similar responsibilities to me at the provincial or territorial level. The Northwest Territories participates actively on our committee. We try to tackle common problems together and put our resources and our heads together so that we do not duplicate work. It would be silly if we developed a code in one part of the country and then another part of the country developed the same code. In support of the Northwest Territories and other jurisdictions, for example with the building code, we will spend the money and do the technical and economic work to develop a code and put it on the table for all jurisdictions to adopt. We tend to move to projects where there is a locus of interest around the table. If the Northwest Territories and two or three or four other jurisdictions agree that they all need a way to deal with home energy use and for Canadians to understand home energy use, then we would allocate some of our dollars to work with those provinces and territories to create the tool needed. That is literally how we define our priorities: We sit around a table and find out what has the most interest, and we allocate our funds in that direction.
You mentioned the Arctic Energy Alliance. My program staff would work directly with them to provide information tools or assessment or even just to chat about the best way to address a certain issue. We hear things from across the country and from our own experience, and that is often helpful to share. We are happy to work directly with a jurisdiction on their particular needs. Where those needs coincide with others' needs, we can usually do something substantive.
Senator Sibbeston: One simple program in the North facilitates changing from a diesel-fired furnace to a propane- fired high-efficiency boiler. I believe there is money available under a program. Is that your program?
Ms. Buckley: No, senator, we do not offer any fuel-switching program incentives at the federal level. The last time we had such a program was many years ago, perhaps even decades. We focus on the efficiency of whatever energy source is used. Certainly, we recognize that in jurisdictions like the Northwest Territories, it is a particular problem. I believe the program you describe is territorial.
The Chair: It might be administered through Minister Duncan's Department of Aboriginal Affairs and Northern Development. Is that a possibility? Do they not deal with these kinds of programs in the North?
Ms. Buckley: Yes, they have some programs to promote renewable alternatives and some funding to allow a changeover from traditional diesel to renewable energy sources. I do not remember offhand if they have a diesel-to- propane program.
The Chair: I was pleased to note the degree of cooperation between the federal and provincial levels of government, which you outlined. One of the first duties of Minister Oliver was to go the conference of energy ministers in Kananaskis last July. The provincial ministers met with the federal minister to make attempts at developing a cooperative way forward, which has not happened much in the past. I saw mixed reports in the media about the success and/or failure of that conference. Have you any comments on that? I believe the initiative was announced at the energy meeting in Montreal in December 2010. We had great hope then but we are still hearing the provinces say they will do their thing while the federal government does its thing. For our report on this study, it is important to know to what extent there is a role for the federal government and how it is working. You have given us one example; are there others?
Ms. Buckley: The report signed off on by the minister, and I have a copy of it here, is tremendously important. Energy is a very important resource to the provinces and territories and, of course, to the federal government. Not every province and territory has the same primary objective with respect to energy issues. The federal government, with the assistance of Alberta who co-chaired the meeting in July, led the exercise to develop this document to try to frame an energy policy for Canada and to address the numerous objectives of the provinces and territories in one document. It is not a one pager; it is eight or more pages. It is a significant accomplishment. To those who do not spend much time in federal-provincial-territorial circles, it may not seem like a significant accomplishment, but it really is. If you read it, you will understand that it will encompass the interests of the various provinces with different energy sources, challenges and objectives. I consider it a significant accomplishment. I am pleased that the energy efficiency portion of it is so robust.
A companion piece to the report is an action plan. It is nice to have agreement on a document, but the action plan addresses what the various jurisdictions will work on together. Energy efficiency is one of the three elements of the action plan, with a number of concrete things that we will demonstrate progress next September at the next energy ministers' meeting.
I apologize for the long answer, but I wanted to suggest that the framework in itself is evidence of successful collaboration, but the action plan will give some longevity to that accomplishment.
The Chair: Will you leave us a copy of that document so that I can circulate it to our members?
Ms. Buckley: With your permission, perhaps I will send the website link. I have a dog-eared personal copy with my writing all over it, but we can email the clerk the website link, which has the framework document and the action plan.
The Chair: Thank you.
Senator Banks: We are constantly reminded of how much easier things would be if this were a unitary state. It would be so much easier.
I want to caution us all to note in the record of this meeting that Ms. Buckley used the words "national energy policy" when she was referring to what was being talked about at Kananaskis.
We try to avoid using those three words together in the same sentence if we possibly can, Ms. Buckley.
The Chair: We are gradually tiptoeing there. If I were you, I would avoid using them because we do not want to get tarred with a brush like that, but it is working.
Senator Banks: Exactly.
I will ask a couple of simplistic questions in the hope of eliciting simple, but not simplistic, answers.
I think that you will agree that energy efficiency requires, in the end, in one way or another, that we change the way people live. We have to live differently if we are going to achieve the kinds of aims you talked about. We have found in our examination of the successes that have been obtained in other jurisdictions that urging, education, advertising, cajoling and scolding achieve certain amounts, but that it requires the third leg of the stool, and that is sometimes a hammer, sometimes a regulation: Thou shalt do this or not do this.
As you pointed out, the minister has the authority to determine the efficiency of certain kinds of engines, for example, including automobile engines, I think, when they are either imported or move across a provincial border, which virtually all of them do.
You talked about the expansion of the number of appliances that we all have and the ENERGY STAR component, which I think we all know about. In appliance stores there are rows of refrigerators with this label on them, and the most expensive one is the most efficient one. At the other end of the line there is a much less expensive refrigerator that is much less efficient and does not accomplish the object of your office.
Why do we not just say that we cannot manufacture, sell, import, or move across a provincial border the worst offending refrigerators, which we still sell? Why do we not just say that it is important that we to deal with energy efficiency so therefore we cannot do that?
Ms. Buckley: That is exactly what we do. We do that for over 40 products. We prevent importation into Canada or transfer across borders of the most inefficient models. We have changed the regulation for refrigerators three times. We keep moving the floor higher as new technologies develop and we can require more stringent standards.
Our first regulation for refrigerators was between 1990 and 2000, and it set a certain floor. At that time, for the first time ever, manufacturers and retailers were not free to import every refrigerator into Canada. They had to leave off the last number of models so that every refrigerator bought in Canada was above a certain minimum energy performance standard. This was invisible to consumers. No one complained that they could not get a particular model. It is automatic savings and there is little concern or complaint from Canadians or, for that matter, from industry. We have twice lifted the floor, making the minimum energy performance standard more stringent.
In a few product categories, we lead the entire world. For furnaces and motors in particular we lead the world. No one does a better job than us in putting forward a minimum performance standard. We will continue to move those floors higher in a way that respects the gain from the environmental perspective and the cost to manufacturers with regard to the readiness of the technology. We would not introduce a floor before it is ready. We use other mechanisms to get more use of the leading things, but we are very good at establishing a floor and keeping those products out of Canada.
I can provide the committee with a list of all the products that we currently regulate, if that would be useful.
Senator Banks: It might be for our report. I am glad to hear that you have done and are doing that.
We hear that a significant part of our energy use has to do with transportation; trucks and cars. We have learned that in the trucking industry, which is a significant user of energy, there are much more efficient engines available, the capital cost of which is not much higher. LNG and hydrogen are examples.
The problem that the operators have with changing their fleets to use those much more efficient fuels is the infrastructure. There are not service stations that can provide them with hydrogen or LNG in the places they need to go.
Would it be efficient for NRCan to assist by providing no-cost or low-cost financing to someone to help the chicken get ahead of the egg, that is, to install the needed infrastructure so that truckers who do not return to the fleet base at night but rather go from one small town to another distant small town in Saskatchewan, for example, would be able to use this technology? Would it not be a good move to help whoever wants to provide that service to do so by providing low-cost financing?
Ms. Buckley: Industry has recommended that we fund infrastructure and developments to allow natural gas or other fuels to have a deeper penetration of the market. We do not currently have an instrument that does that, but we have recently had funds approved for us to assist in the penetration of natural gas in the trucking market. These funds will allow us to do three things, and they come out of an intensive 10-month study that we did with industry, manufacturers, vehicle representatives, trucking companies, provinces and fuel suppliers.
We developed a round table for the implementation of natural gas in transportation, recognizing the 20 to 30 per cent GHG savings associated with natural gas in transportation and recognizing that transportation is a tough sector to deal with. The report made a number of recommendations and we have funding to deal with three of them. The first is to establish an implementation committee to look at all the recommendations and to work together with all the actors around the table to implement things in the economy, because we believe that it is not up to only the federal government to lead the charge but that industry and energy companies also have responsibilities to make investments. This fall we will be putting in place an implementation committee that can deal with these issues.
In a more substantive fashion, apart from the implementation committee we have funds to do the technical work to develop or improve the standards available for liquefied and compressed natural gas, because they either do not exist or they are extremely out of date and not comprehensive enough.
I forget which applies to which form of fuel. It is a real barrier to getting natural gas used more frequently in the trucking sector, if you cannot guarantee the quality of the fuel and how it needs to be used in the equipment. That is something we will be funding over the next few years that will have a significant impact.
Third, we are establishing two, or possibly three, education hubs in different corners of the country. We will put experts on the ground who can communicate directly with the trucking industry and help share with them how natural gas works in their vehicles. It is a risk-averse industry; it has very low margins. They do not want to change out their rigs for a new fuel type they do not have experience with. We want to put people on the ground who do not work in office buildings in Ottawa, who truckers will know and trust, and who will give them the kind of technical information they need for the investments they want. It is not exactly what you were asking about, senator, but it is definitely on that same topic of increasing the penetration of natural gas in transportation.
The Chair: I have a comment on the "post-Kananaskis" documents to which Ms. Buckley referred. They were actually circulated to all of us, on October 11, by the clerk's office. We all have them as background information for our study.
Senator Peterson: I have a comment on buildings being lit up at night, particularly older generation buildings. Operating costs can be passed on to tenants, whereas capital costs cannot. You may have to find a way to encourage building owners to make the necessary changes.
Senator Banks: You can just shut off the lights, you know.
Senator Peterson: That is a novel idea.
In your presentation, you indicated that energy intensity has improved by 22 per cent. What are the main drivers of that? Is it new products, tougher guidelines, or the cost of energy?
Ms. Buckley: I think those things you named are all drivers. The price stimulus is certainly first and foremost amongst energy users. When energy prices go up, there is a direct correlation with people wanting to do something about it. In fact, we can track the calls and emails that we get in our transportation programs against gas price movements. People will be calling and looking up our energy labels for vehicles on our website in far more frequent numbers after gas prices take a little spike. Prices are certainly a driver for people to take action on energy efficiency.
Other drivers are around simple awareness. Cost is a factor in the back of people's minds, but when we put information in front of them, it has an impact on their purchasing and behaviour decisions. Let me give you an example.
We can track Canadian purchasing patterns across the efficiency of a range of fridges, dishwashers, clothes washers or what have you. Once the ENERGY STAR mark was introduced, and we started to educate people about what it meant, they started to change their buying practices. Now, they are much more heavily oriented toward the more efficient end of the market. We can see the evidence of this. Companies like Whirlpool and Sears, and so forth, are stacking their product lines much more heavily with ENERGY STAR, energy efficient products than with inefficient products because Canadians are buying more of the efficient ones. Canadians are driven by having the information in front of them. Simple awareness of the opportunities to save energy does drive behaviour. That really is a way of saying that the programs the federal government and the provincial utilities deliver can get Canadians to change their behaviour by informing them, by changing the price, by offering an incentive and by the other means that we use.
Senator Peterson: If I inadvertently leave my interior car lights on, the car is smart enough to shut off after a few minutes. Why could we not have this in TVs and equipment? If you have not used it for five minutes, it just shuts off.
Ms. Buckley: That is an excellent question, senator. In order to provide us with the services we need, products that use energy in off-mode are required to run auxiliary functions. In your clock radio, for example, when you are not using the radio, the clock is going. I guess that is always performing a function, so let me give another example. There is a clock on your microwave. I am not using my microwave 99.999 per cent of the time. It is drawing energy to run that clock. You could ask manufacturers to take off all these peripheral services that their goods provide. That is probably a difficult discussion to have with manufacturers. It is easier to ask them to take the energy-draw of these peripheral features and reduce it to a very small amount, which is technically feasible.
There is another issue. In some cases, some power is needed to keep the products ready. For example, on top of your television, if you have cable, you have a set-top box that brings in the signal from the cable provider. It needs to run all the time to bring that signal in so that it operates when you turn on your television. If they turned off the power on a set-top box when you were not using it, and you turned on your television, it would take some time for the equipment to connect with the satellites and bring the signal in. Consumers do not want that. Any manufacturer who put that in their set-top box would not be able to compete with the guys who do not have that in. Our approach is to work with the cable providers and to change the technology, such that we minimize the energy needed to hold that function when it is not in use and still give the consumer what they want in that instantaneous feature.
It turns out to be quite complicated if you look at it product by product. We are making inroads. We are introducing the second of two regulations. We already have one in place to bring this power down to under a watt. It has been as high as 6, 7, 8, or 10 watts for small functions. The 1-watt will be introduced shortly. That will help to minimize that.
Senator Peterson: I think there should be a limit to convenience. It is all marketing.
The Chair: The clerk has just pointed something out to me. When we were in Halifax and we had those witnesses who told us about the LED street-lighting project, I think they told us on the record — and this from our notes — that Charles Cartmill, president and CEO, was looking for federal support to drive the adoption of LED technology within federal departments, et cetera.
I know you follow our committee like a hawk. You have taken note of this, and you are helping these folks?
Ms. Buckley: Yes, actually. We have met with the company. I think they are called LED Roadway. I corresponded with a member of the company in the past couple of weeks. We have done a couple of things for them. They were hoping that we would have the authority to mandate streetlight changeover in municipalities. We do not have that authority. However, what we did offer to do for them, and have done, is to invite Nova Scotia, at our last federal- provincial-territorial meeting of energy-efficiency folks like me, to demonstrate the street-lighting program that they have in Halifax. It is a mandatory change of streetlights for more efficient LED lights. We had them do a little presentation to their provincial colleagues so that they would understand this opportunity and maybe be convinced to take this step, at either a provincial or municipal level.
The other thing we did is work with our colleagues at Public Works and Government Services. They have a program that demonstrates emerging technologies in federal buildings. We helped facilitate the choice of a federal department who will demonstrate their equipment here in Ottawa. Certainly, we offered any other opportunity they are interested in to test and demonstrate their product in different settings, not just municipal ones, that have large lighting loads. That offer is on the table for them to follow up on with us. We will be happy to help them.
Senator Neufeld: Thank you for being here, Ms. Buckley. It is all very interesting stuff.
I want to add one thing to Senator Peterson's comments. I remember, because I was involved heavily in energy efficiency in British Columbia, when HDTVs first started hitting the market. We did a little study to find out how much electricity they used. I think it has obviously changed a bit now but, at that time, it was four times more electricity than the old ones.
Ms. Buckley: Yes.
Senator Neufeld: That is not a significant amount of electricity, but it is still four times. When you multiply that over thousands or even millions of TVs, it is a lot of electricity. I think the manufacturers were embarrassed and had to do something to have them use less electricity.
When you say building codes are total provincial jurisdiction, I do not quite understand that, because I have been told there is a building code in Canada, the National Building Code, which provinces need to abide by. Can you explain that a little bit for me?
Ms. Buckley: I would be happy to. I appreciate your comments about the television, if you will indulge me. It used to be the refrigerator was the biggest energy user in the home, and now it can be the television if you have one of the really large ones. We do not just have one anymore, but tend to have six or seven. That is not me personally but, on average, Canadians tend to have many televisions.
With respect to the building code, it is a provincial and territorial jurisdiction to mandate how buildings are built. We have no authority over building codes at the federal level. Given that absence of authority, we created, in 1997, the model National Energy Code for buildings. We put it forward as a model that provinces could adopt. They did not. The one we are working on now, which is 25 per cent more efficient than the 1997 version, is again simply a model. We developed it with the provincial and territorial fire and building codes commission, and those are the people who write the codes that the provinces use. We worked with them to develop this model code.
It is up to the provinces to adopt it in their jurisdictions and make it law, or they may, if they wish to, simply ignore it. They may wish to take it and adapt it if they have their own particular concerns that they want to address. British Columbia has moved faster than we have with the development of our model, and they are adapting it and using another source. They are moving more quickly. It is nothing that the federal government can impose in a mandatory fashion, but we do put the instrument forward in a voluntary fashion for others to impose, should they choose.
Senator Neufeld: You say there is a strong role for the federal government to lead others who are active — provinces, territories, utilities — and provide foundation tools. Can you give me a couple of examples of what you mean by "foundation tool"?
Ms. Buckley: The model National Energy Code for buildings is a foundation tool in that the document we produce is not in itself a building code. If B.C. took that, however, they might have to make some format changes, but it is written in code form so they could adopt that as their law, their building code, or their energy requirements in their building code.
Senator Neufeld: What else, though?
Ms. Buckley: Another foundation document would be all of our regulations. Six provinces have energy efficiency acts of their own to govern the energy performance of products sold within their borders. Typically, we will be working together with the provinces that have this interest on regulations. We will write it, test it, announce it, and they can then adopt our regulations. Sometimes they get a little ahead of us, as has happened with B.C. and a couple of cases in Ontario, but typically we will work together, and then they will adopt our instrument.
Another example would be one from the past, and I will tell you what will happen in the future. You have heard of the LEED environmental assessment for buildings. For the energy portion of that, my office did the energy analysis for about 60 per cent of LEED buildings up until the past year. We did the energy input and analysis as a tool that this private sector label could borrow, and LEED is fantastically popular and growing all the time.
In the future, when we bring in our new benchmarking tool from the United States, it is a foundation tool, an even more rigorous assessment of energy use across buildings in Canada. LEED, a private sector tool, will be using the energy portions of it to make their energy portions even stronger, and so will the Building Owners and Managers Association. They have a label as well. They will use our instrument to strengthen their energy requirements in their label. It is a foundation instrument that they can use.
I will give you one more example. If a utility — Manitoba Hydro, BC Hydro, Hydro-QuØbec — wanted to give an incentive for energy-efficient light bulbs or Christmas tree lights or motors or refrigerators, they would not have to invent a rating system. They can simply say they will give consumers an incentive for every ENERGY STAR refrigerator or clothes washer they buy. It is a foundation tool. They do not have to replicate it in their jurisdiction. They can simply use our tool and build their program on top of it.
Senator Banks: What is the extent of the uptake of the national suggested model building code? How many provinces have signed on to it, as it presently exists?
Ms. Buckley: The 1997 version was not adopted.
Senator Banks: By any province?
Ms. Buckley: By any province. I think that is correct. I think there may be a city that adopted it, or portions of it. Forgive me if I am not exactly right on that. With the new one, which I call code 2011 and which will be released in the next couple of weeks, we anticipate between six and eight provinces or territories will adopt it. I cannot guarantee that. It is not my say. In working with my colleagues, it appears that between six and eight provinces or territories will adopt that in the coming year.
Senator Banks: Is the difference because of consultation?
Ms. Buckley: I think so. I was not associated with the 1997 work, but I do know anecdotally that our relations with the provinces and territories are much closer and more collaborative, literally working together on things, so we have a better idea of their needs. I suspect our work is more relevant to them than in 1997, meaning no disrespect to that work, but I just know the atmosphere of collaboration is much more concrete.
Senator Neufeld: The capital cost of doing some of these things when you are building a home, especially spec homes, was briefly mentioned. They are usually built to the basic standard, and they move it out, and then 20 years later, everyone says the government should pay for actually putting in the ENERGY STAR and all of those kinds of things. Is there not a way that we can work with the provinces to begin that at the start? Let us use geothermal heating as an example. That is available across Canada, other than in the very High Arctic. Where you live, senator, Fort Simpson, you could use geothermal heating. It could be a mandatory part of new construction, whether you are building it privately or whether it is a government building.
That is maybe where we should start, leading by example, federally and provincially, both. I am not just saying the federal government, but provincially as well. We can put those kinds of things into place now, with all the light switches and all those kinds of things. The capital cost would not be that great because they could spread it over the life of the mortgage. If you do not do it and four or five years later try to go out and find the kind of money to put in geothermal heating and the light switches and all those neat things, it is a little harder to do for the average citizen. It is easy for us to sit here and say we should do it, but we have to think about that. You could ask your department how many light switches you have changed so they are automatic and how many light bulbs you have changed. What have we done federally? We have a huge suite of buildings. What have we done federally to lead by example? The answer usually is capital. It is up that the individual too. Maybe to start with, we should be doing those kinds of things. Are we moving to that federally in our buildings and moving into that smart world instead of just getting by? That is a long question, but leading by example is usually the way to do it.
Let me add to that something that just came to mind. One of the biggest buildings in Vancouver is the BC Hydro building. When I was responsible for it, we were talking about energy efficiency, and I said, "Why do we not turn the lights off? Why do you leave them on from top to bottom?" They had all kinds of reasons. I said, "How much does it cost to keep this building lit up light? Can we not lead by example?" "We do not know, minister." I said, "What do you mean, you do not know." "Well, we do not meter our own building." "Oh," I said. "Well, you will as of tomorrow." They started doing that.
That was quite a while ago. I do not think that has really changed. When you drive downtown Vancouver, you still see BC Hydro's building lit up. It is unfortunate. Tell me what we have done federally to move forward and lead by example.
Ms. Buckley: Senator, your illustration shows just how hard it is to make things happen when a minister says "we shall meter" and does not know whether it has happened.
Senator Neufeld: It is metered but it is not turned off.
Ms. Buckley: As the senator said, it boggles the mind. These things seem like no-brainers, yet they are so are hard to implement.
You have a few questions, and I will do my best to respond. Federal leadership is important to us. I agree it is an excellent thing to do. We have several leadership elements in the federal government. In my area of responsibility, we run a small program called the Federal Buildings Initiative, whereby we facilitate federal departments' access to energy retrofits financed by the private sector. When a department does not have the capital budget to make an energy-saving retrofit, it can take advantage of a private sector offer to assess the building, provide a list of improvements, find the financing for the work and then pay themselves out of the energy savings over a seven- or eight-year contract. This is known as "energy performance contracting," which no doubt you have heard of. Our program facilitates the contracts, which are different from regular contracts. Our expert staff will help departments to mount these projects.
The program has been running since the early 1990s. One third of the federal departmental floor space has been renovated for energy savings through the Federal Buildings Initiative over that period of time. There is a lot of potential left. We work very hard and currently have four or five projects with departments. These would offer deep energy savings at 20 per cent, for example. Our department has a request for its second multi-building project, and we are entertaining the companies visiting our buildings.
Each department has its sustainable development strategy goal, which aligns at the federal level with the country's 17 per cent reduction by 2010 in greenhouse gas emissions. Each department has a requirement to put together a plan to demonstrate how they will meet our target. NRCan's plan is in place. We have investments identified against our target, including the initiative I just mentioned, which will get us halfway to our target. Departments are required, when building new facilities, to construct LEED buildings. Measures are in place to demonstrate federal leadership. The funding from Public Works and Government Services Canada for Light-emitting Diode, LED, road lighting is a leadership program whereby departments get support to demonstrate new technologies that might otherwise seem risky or expensive and for which departments do not have the budget.
Your earlier remark was about moving now to the most efficient ways for new housing starts to save having to retrofit 20 to 40 years later. I guess it has to do with the use of different instruments. From a federal perspective, and from my knowledge of the provinces and territories, I can say that when we regulate, we tend to take out the worst performers and then use other instruments to pull the market toward the highest performers. When you regulate to the highest performance level, it may be that there is not enough knowledge, skill, awareness, acceptance or even affordability in the economy to deal with that at the mandatory level. There needs to be a certain level of market acceptance, availability and affordability before we can place a mandatory requirement. All of that said, the federal government does not have the authority to mandate that in housing.
Your question was to the effect: Why does my work around codes in houses not take it to that level? The answer is that we would always move the floor up. We have work on the housing side similar to the work I described on the building side, although we use a different instrument. We have a rating system for buildings that provinces are adopting as code to make law. They are increasing the stringency over time, based on our fundamental instrument. However, they tend to and put the floor, improving over time, but the floor would not ask for the most efficient performance possible because it would be difficult in terms of acceptability, affordability and accessibility to the technologies. We keep trying to move the bar forward. That was a very long answer.
Senator Neufeld: What LEED standard does the federal government use: silver, gold or platinum?
Ms. Buckley: I cannot remember. I will have to get that answer for you; I apologize.
The Chair: Around the issue of building codes, next week on November 15, we will hear from witnesses from the National Research Council to talk about national building codes. Could you put that in perspective for us? You were clear that we do not have federal authority to do building codes as it is a provincial matter. However, we do establish a model. I am beginning to think that maybe you are working with the NRC on that.
Ms. Buckley: Absolutely, senator, we work with the NRC. We worked on code 2011, which I described. It will be announced in a press release from the National Research Council with input from our minister in the press release. We funded the work of the National Research Council to do all of the technical assessments required to build a new code. It was a four- or five-year process in conjunction with provincial and territorial fire and building codes people, who get to say yes or no to something becoming code. It is available for adoption by the provinces.
Your witnesses will be excellent and will be able to get into far greater detail than I can with respect to improvements in the code. They may speak to their thoughts, and I would not want to lead them on this, about what would be ripe for the next code five years from now.
The Chair: That is very helpful. We will also hear from the Canadian Home Builders' Association. Are you familiar with these people as well?
Ms. Buckley: Yes, absolutely.
The Chair: Do you fund them?
Ms. Buckley: Absolutely. We work with the Canadian Home Builders' Association in every province and territory that uses them as a vehicle to train home builders in energy efficiency techniques, chiefly but not inclusively for building new homes. We can literally test the energy efficiency of homes built by builders before they have the training and after the training. We can see that these builders will be building more efficient homes. Our rating system is a robust way to test that. All Canadian Home Builders' Association regional outlets adhere to this work and work with us on our rating system and training programs — a very good partner.
The Chair: That is helpful.
Senator Wallace: I listened to your presentation and your responses to the questions. Certainly, the breadth of initiatives and issues that your office deals with are impressive. In particular, I understand your office administers at least seven federal programs that deal with energy efficiency.
The issue of measurability, goals and objectives that your office has in relation to various programs was raised somewhat by Senator Mitchell. For clarification, are you involved in establishing measurable goals and targets for each of these programs that you administer? They obviously involve a considerable amount of money. I believe the ecoENERGY biofuels program is $1.5 billion in itself.
Do specific measurable targets and goals exist so that you can assess the performance of each of these programs and decide where they should be tweaked or even eliminated if you feel they are not meeting those goals?
Ms. Buckley: They do, indeed, and we pay great attention to them in the Office of Energy Efficiency. We would not get the authority or the funds to deliver programs if we did not submit extremely detailed documents outlining our activities, their outputs, and the medium- and long-term outcomes in the economy of those activities.
I mentioned the evaluations earlier. We evaluate one suite of programs while developing the next in order to learn what did not work so well, what could be improved and what was working especially well and to improve our understanding of our activities, the outputs and the outcomes.
Concrete measurable outputs and outcomes are reported in our program terms and conditions. I, as the manager of the office, require my programs to report to me mid-year and at the end of the year. We take a day each time and go through them as a community to learn from each other and ensure that we are on track to make mid-course corrections, if required, and to inform any future suite of programs we may be called upon to propose.
Each program is different. For a training program we would have objectives around how many truckers or industry energy managers we get into it, and then we would have objectives around how many of them would make investments in energy efficiency and what the energy savings and emissions savings would be. It is not enough to get someone into a training course. We also require ourselves to measure what happened to them after they were trained and if they actually did anything, because if we ran training programs that people loved but did not act on, we might as well shut them down. We are always looking at not only the training project but at what happened after the participants went home.
It is easier to track and measure the regulations because it is easy to notice that we have introduced a regulation. It is announced through the Canada Gazette process. We do surveys in the economy of the equipment available and the savings. We can go back and measure what the energy use would have been had we not regulated. If we do not let a certain fridge into economy and we track how many fridges are bought, we can do the calculation of what the energy use would have been had we not regulated that fridge. We do that with all of our projects.
In our report to Parliament every year we report on all of our progress against our objectives. You can read about it there, and it is also in our departmental performance report, which is a departmental document. When a program comes to an end and was not very successful, we propose that it not continue. Through evaluation and our own observation of the last suite of programs we found that the incentives we provided for small- and medium-sized organizations, industry and buildings were not highly cost effective and we did not propose to continue with those. Even though the proponents liked getting money to make an energy efficiency investment, we proposed that it was not an effective use of taxpayer funds and did not propose the extension or renewal of it.
Senator Wallace: Your standards or goals would include energy savings, obviously, and specific emissions standards to which Senator Mitchell alluded earlier in terms of tonnes of emissions that would be reduced. I understand that.
The work you do does impact industry and manufacturers. I think you mentioned in your presentation that when manufacturers are responding to the changes that you administer, it results in additional manufacturing in the country, which is obviously beneficial.
Does your office try to assess the economic impact at the private sector level, that is, what will be created in terms of jobs, opportunities? That should, of course, be considered in the cost of implementing these programs. Would that be part of your responsibility?
Ms. Buckley: Yes, it is absolutely part of our responsibility. The primary objective for our funding in the previous and current suite has been to support greenhouse gas emission objectives, but the positive impact on the economy is also well noted. It is definitely something that we assess. I do not have the results of an assessment to share with you here, but we are putting more energy into that because it is more important than ever to demonstrate the impact that energy efficiency has on the economy as well as on greenhouse gas emissions. It is definitely something that we look at and we will continue to focus on it even more strongly going forward.
Senator Wallace: Do you expect that would form part of your reporting to the department in the future?
Ms. Buckley: Yes, it likely would.
Senator Wallace: Would the information be available publicly?
Ms. Buckley: Yes. We automatically report on all of our specific goals, and our specific goals are all articulated in terms of energy and greenhouse gas emission reductions. I am thinking of the venue for reporting such work in the future. We can certainly include it as extra information in the report to Parliament, but I would also be happy to speak at a future committee hearing. You would always have access to that information.
Senator Wallace: That would be useful information. Thank you.
[Translation]
Senator Massicotte: Thank you, Ms. Buckley. This is very interesting. The work you are doing is very important for our country, the planet and its long-term efficiency. Efficiency is very important. It relates to the consumption of businesses and of Canadians. There is a lot of psychology to this, and it is not always very easy to manage.
The Canadian experience shows us that, from 1990 to 2008, we increased efficiency from 1.5 per cent to approximately 1.7 per cent. You made a comment in your presentation that this is fairly comparable in North America. How do we compare with countries in Europe and around the world? Are we doing a good job? Can we improve?
Ms. Buckley: There is always room to improve performance.
[English]
I cannot give you a categorical answer about exactly how well we are doing vis-à-vis other countries because it is very difficult to make the comparisons given that we are comparing countries with different industrial structures, populations, geography, et cetera.
We are always looking for methods of comparing ourselves in order that we can do better. One means of comparing that is independent from our own assessments, which we also do, is the study by the International Energy Agency that I mentioned earlier. They studied the energy efficiency programs of 28 countries and made very detailed country visits in order to get the data for their assessment. They ranked all the countries against full implementation, partial implementation, impartial and not at all.
Of those 28 countries, we ranked fifth in 2011 for the comprehensive and depth of our energy efficiency programs. That is one way to look at us vis-à-vis other countries.
Another way is to look at specific program areas and compare the building codes. I can compare the building codes of Canada to those of the United States. We are well in advance there because 11 states do not have a building code at the state level, and I think our new code is superior to the code in place in the other 40 or 42.
Compared to Europe, as close as we can assess, our building code is level with the Europeans if not close to the leader, Germany. It is a very difficult assessment to make. It is highly technical and their buildings have some different characteristics. However, we are definitely equal to the leaders in building codes in Europe.
For specific products, we are definitely amongst the leading 10 countries doing regulations on household appliances. In some cases, as I mentioned in my remarks, we know that we are leaders in the world, but other countries are leaders in the world for some other products. We happen to lead with furnaces, for example, and motors. We have very aggressive standards for the energy use of motors. Europe will not be able to meet our motor standards until 2015, as they are just that much behind us, but they would have higher regulations for vehicles than we do. Depending on what you are looking at, it is hard to get an exact picture. That is why I fall back to the International Energy Agency, which gives us an overview across the suite of energy efficiency activity. It is also third party, therefore impartial.
[Translation]
Senator Massicotte: Canada is still the largest consumer of energy in the world. Some of the reasons we give to justify this are the country's size, area and cold climate. How does the energy efficiency of Canada compare with global energy consumption? We are talking about efficiency, but what is the starting point? Are we far behind?
Ms. Buckley: I am sorry; I did not do an analysis on that. If we take away the transport sector, it is difficult to understand the results in terms of efficiency.
[English]
I do not have that kind of analysis that I have seen or that I can quickly calculate in my head of what our energy use would look like if you take out the particular Canadian circumstances that have given rise to our high per capita energy consumption. It is not only the distance, climate and geography, et cetera. You quickly get to why it is difficult to make these comparisons, because you can correct for one or two factors and still find other factors explain our higher energy use, such as the fact that we are a resource intensive economy, unlike many, and that uses a lot of energy, and then we export the goods and someone else processes them and it does not take as much energy. It is hard to compare that. We take our lumps as an energy-intensive country and work hard to improve it as aggressively as we can.
Senator Seidman: You have given us an impressive overview and most of my questions have been answered. I do have one small one, shall we say, left.
Innovativeness is extremely important in this particular area, and I think you have touched on it in some ways in response to other questions. Is there any program within your purview to involve small businesses, academia perhaps, in developing R & D and innovative programs or techniques or products, and then as well as taking the opportunities in some kind of a program to take those to market? In other words, the process in approaching this in some coherent way from the point of view of R & D from academia, small business point of view, and then taking that innovation to market, if I could put it in a better way.
Ms. Buckley: The responsibilities through the innovation chain are spread. My colleagues at Natural Resources Canada who work in the office of energy research and development and who work in the federal labs have programs and activities that are centred around working with small business, academia and others in order to bring forward those next energy innovations that we need for economic and environmental reasons. That is outside my purview.
If you think of technology, innovation and development as a continuum, I see my office situated right beside the folks who work on research and development and demonstration. In fact, you can start to see some fuzziness between the first technical demonstration of a new technology to the very last commercial demonstration in 12 different markets. Somewhere in that continuum, the responsibilities of the Office of Energy Efficiency start. I like to think that my colleagues are responsible for helping the innovations become market ready, and our responsibility in the office starts at taking those market-ready innovations and getting them disseminated into the economy. We will work with our colleagues who have the R & D results available such as — I will give you an example to make it more concrete — the heat recovery ventilator, which is a mechanism used in a house to very efficiently exchange heat and move heat around in the home. Instead of relying on drafty windows and doors to do it, in an air-tight home, you have to have air circulation or you will have problems. There is deep Canadian investment and knowledge and expertise in creating a heat recovery ventilator. My program takes this knowledge of new technology, and it is not new any longer but when it was new, and we build it into our program function. We ensure there is information available as we are training the homebuilders in Canada.
New technology? Let us make sure they start building with it and are doing so in the appropriate fashion so it works as it needs to in order to get the savings. We start building that into our rating system, and slowly and surely we can help disseminate that new technology into the economy because we are working with so many of the actors in the economy who are responsible for designing and implementing and choosing how innovations in technology will turn over.
One other example is the LED Roadway group that you heard from in Halifax. We have been testing with them, not the lab bench test, since we know the technology works, but the municipality does not want to take a chance on it if they do not know the economics in different seasons and different locations in Canada. We would fund, maybe with utility funds as well, a demonstration of that that is not technical, but it is more a final commercial "ground truthing" of the actual application in the economy, and then we use that information to try and help sell that technology.
Senator Seidman: That answers my next question, which was about incentives. You have talked about your ability to fund that transitional piece.
Ms. Buckley: Yes. We have, in the new program suite, only one direct incentive to the consumer, the energy consumer, and that is the one-year home retrofit program, which will end March 2012. We do have funds — which I do not call incentives — whereby we can cost share these technical projects or demonstration projects with companies directly, with universities and with associations such as the Canadian Gas Association. We are doing significant work on hot water heaters, for example, to develop the next generation of efficient home hot water heaters. We are both putting money on the table to examine the technical and economic feasibility.
Senator Banks: Ms. Buckley, what is the uptake on residential retrofits, either by amount or by percentage? You get a specific amount of money during a specific amount of time to spend on that. What is the effect of your marketing of it? Do folks know enough about it? Do you send some money back to Her Majesty at the end of that? How effective is it?
Ms. Buckley: We have just finished four years of that program, and I think Canadians knew about it quite well because, as I said in my remarks, we did have to get an increase to our budget three times. Our original budget was $160 million over four years, and our final budget was $745 million. More Canadians knew about us than we thought at the beginning of the program would need to know about us. At the end of four years, we reached 510,000 households. That is 5 per cent of the eligible stock, which is the low-rise building stock, residential building stock, homes. With the one-year extension, we could reach up to 200 or 230,000 additional homeowners if that many can participate in the time frame. With respect to leaving any funds, we did not leave any funds in the four-year program we have just finished, and I would find it difficult to speculate about the next six or seven months. The interest on the part of Canadians has been very steep. We have a large number of registrants. The phones are ringing off the hook. The emails are buzzing. People are happy to have access to the grant.
Senator Banks: That is very good news.
The Chair: Just to be sure I understand correctly, this money is separate from the other repairs or renovations that came in with the stimulus program — if someone put on a new roof — which had a limit up to $1,400, I believe. Is it a different thing?
Ms. Buckley: There was a tax credit that was provided. I think the limit was $800. It was administered by the Canada Revenue Agency and the Department of Finance had a hand in it. That is quite separate and apart from our incentive, which is paid by a cheque issued through our department directly to the homeowner. Our maximum is $5,000, although the average uptake is $1,400 or $1,500. When that tax incentive was in place — and I think it was in place for 10 months — homeowners could take advantage of both. That increased our numbers of uptake as well.
The Chair: Ms. Buckley, thank you on behalf of all my colleagues. You have been articulate and have a good grasp of your material. I feel this kind of exchange with a group like us has to be helpful, and it needs to happen more often.
Ms. Buckley: Absolutely.
The Chair: I mentioned to the clerk and Mr. LeBlanc — who is working on our report — that I hope you will be available to interact with us. I know everyone has the Internet, but they do not necessarily access and see all the wonderful things that you are doing and that we hopefully will all do together. It has been an excellent morning. I reiterate my thanks.
Colleagues, if any of you — with respect to these trips we are about to embark on — have ideas for witnesses we should see in Winnipeg, Regina, Calgary or Edmonton, the clerk and I would be delighted to see your suggestions. I know some of you are already helping us.
Senator Massicotte: Have we firmed up the dates?
The Chair: The dates are firm. It is just the authorization.
Senator Massicotte: Can we be advised?
The Chair: We did go through it, but we can give it to you again. The first trip would begin on November 28. We arrive on a Monday in Vancouver. We would have fact-finding in the afternoon.
That week we do public hearings in Vancouver on Tuesday. Then we go to Edmonton and have hearings there. Then we go to Calgary and have hearings for two days and go home at the end of the week. The next trip begins on a Tuesday. I think it is December 6. It is two weeks in a row. We do the Tuesday, Wednesday, Thursday and Friday in Winnipeg and Regina. It is looking good.
Senator Sibbeston, if there are northern witnesses who — without too much inconvenience — would be available, maybe Winnipeg would be the best place.
That is it, grosso modo. We already circulated a draft, but maybe only to the steering committee. We are waiting for whip approval, but there you have it.
Thank you all very much.
(The committee adjourned.)