Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 28 - Evidence - May 7, 2015
OTTAWA, Thursday, May 7, 2015
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 8:30 a.m. to study non-renewable and renewable energy development including energy storage, distribution, transmission, consumption and other emerging technologies in Canada's three northern territories.
Senator Richard Neufeld (Chair) in the chair.
[English]
The Chair: Welcome to this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. My name is Richard Neufeld. I represent the province of British Columbia in the Senate and I'm chair of this committee. I welcome honourable senators and any members of the public with us in the room and viewers across the country who are watching on television. As a reminder to those watching, these committee hearings are open to the public and available via webcast at sen.parl.gc.ca. You may also find more information on the schedule of witnesses on the website under "Senate Committees."
I would ask senators to introduce themselves. I would begin by introducing the Deputy Chair of the Committee, Senator Paul Massicotte from Quebec.
Senator Massicotte: Good morning.
[Translation]
Senator Rivard: Good morning. I am Senator Michel Rivard from Quebec.
Senator Ringuette: Good morning. I am Senator Pierrette Ringuette from New Brunswick.
[English]
Senator Patterson: Dennis Patterson from Nunavut.
Senator Black: Douglas Black from Alberta.
Senator Seidman: Judith Seidman from Montreal, Quebec.
The Chair: I would like to introduce our staff, beginning with the Clerk of the Committee, Lynn Gordon; and our two Library of Parliament analysts, Sam Banks and Marc LeBlanc.
On March 4, 2014, the Senate authorized our committee to undertake a study on non-renewable and renewable energy development including energy storage, distribution, transmission, consumption and other emerging technologies in Canada's three northern territories.
Today, I am pleased to welcome Mr. Jan Larsson, founder of Energy North, appearing before us by video conference from Yellowknife, Northwest Territories. Thank you for meeting with us today, Mr. Larsson. I know we tried once before, but we hope this works much better. We appreciate your coming out early this morning to do this. The floor is yours, sir, to make a presentation and then there will be some questions and answers.
Jan Larsson, Founder, Energy North: Mr. Chair, ladies and gentlemen, thank you very much for having me here today and for the patience to overcome some of the technical challenges of last time.
My name is Jan Larsson. I have lived with my family for the last 10 years in Yellowknife, Northwest Territories. Before that, I lived in France for 25 years with my wife and two youngest daughters. We moved to Canada because they wanted to go to school here. Energy North was founded by me and my two partners six years ago. I'm also the President of the N.W.T. Biomass Energy Association.
Today, different needs of the indigenous communities and regions of the North are due to weather, transportation, infrastructure or culture. Examples like the all-year road system, like in Yukon, is almost complete to all communities. But in N.W.T., it's only about 50 per cent. In Yukon, it covers more than 90 per cent. But in N.W.T. it's less than 50 per cent. Nunavut is 100 per cent. In N.W.T., we have more than 92 large wood pellet firms working since last winter, but the Yukon has only one. So there are differences, but why I don't know.
My next point is about legislation. I have shared with you the N.W.T. Biomass Energy Association's discussion paper, namely barriers to biomass energy installations in N.W.T. This work was done by our association in agreement with Finance Minister Miltenberger to showcase the lack of updated and clear technical guidelines and regulations. N.W.T., like the rest of Canada, has differences in codes, standards and regulatory authorities for national, territorial and even community considerations.
My next point is about regulations and certifications. Today, the industry, which works with wood pellet boilers, has to take into account regulations and certifications from places like Industry Canada's Corporate Social Responsibility, CSR; Canadian Registration Number, CRN; International Organization for Standardization, ISO, and so on. In my opinion, we need these regulations and certifications, but they need to be updated since the technical development of the products in today's market is way ahead. The present gap between the products and the regulations is too wide.
Next point is about insurances for homeowners. Today, homeowners face the risk of being penalized by an insurance broker if they install a wood pellet boiler. This situation is unclear and has hampered development and access for homeowners to this new type of technology.
My last point is on what project innovations can do for the North. Innovation is needed to move forward. I will give you three examples. First is co-generation using low-pressure technology that can produce electricity and heat by using biomass that is harvested locally. Two thirds of the N.W.T.'s 33 communities need 500 kilowatt to 1.2 megawatts. It's quite small. Today, these communities are all diesel-driven. Across Canada, 292 communities, according to Statistics Canada, are in the same situation. So we need this co-generation system to be developed and produced by Canadian industry.
Second, Energy Wall, a company from Yellowknife, has a patented insulation system that insulates a building on the outside, old and new designs. However, it's a small company and doesn't have the muscles to flex to develop and give this technical product access everywhere.
Third, we have a UV-reflective polymer-added surfacing material. The product is used for N.W.T. roads and airport runways. Using this will allow more security and economic savings on a large scale when it comes to airport transportation for people and materials. Besides, it will allow the Canadian North to have more strategically-placed runways for airports than we have today.
Those are some examples of product innovations that can help to shape the future of the North.
In conclusion, even if we have challenges to overcome, the N.W.T. is in a unique situation to showcase success in the introduction of the use of biomass. The reason for this success is: First, the N.W.T. government's clear and long-term commitment to build the market and then the industry. That is the word from Finance Minister Miltenberger. Second, the territorial government and the private sector will work together for common goals. Third, and most important to me, private entrepreneurs are willing to invest in these commitments.
The Chair: Thank you very much, sir. We'll move to questions.
[Translation]
Senator Massicotte: Mr. Larsson, I want to thank you for participating in our committee. To summarize your comments, the technology is available, but we are lagging behind and there are deficiencies in the application of that technology in the North. You are talking about the needs of entrepreneurs or the people involved. What exactly is the problem? Why are we behind? Why are we not using technologies that already exist, which are not very complicated, such as biomass? What are the deficiencies in the system or in the structure of the community or territory?
[English]
Mr. Larsson: I must say that in the Northwest Territories, we are not behind. Canada as a country is behind. This has to do with the industrial culture we have, which is very much based on diesel-generated heating systems and such.
The Northwest Territories government has showcased that by using this new technology in N.W.T. in each community in the larger, major buildings that they are responsible for, it will also spill over to help commercial owners to use the same thing.
Biomass as such is very much in front here. When I say behind, on the regulatory board, it's a big headache, and we are very much heavy handed administrated when it comes to regulations, which are behind. We need to update to make it easier, especially for homeowners in Canada, especially for homeowners, to make it easier to access this kind of technology.
One more thing, senator, please. When it comes to behind co-generation systems where you use biomass to generate electricity and heat exist on the market, but this all exists on a large scale, large installations. But in Canada we have almost 300 smaller communities and it's sometimes more difficult to make a small scale than large scale. That's what I think we need to develop.
Senator Massicotte: Having said that, as you know, most of the regulations are determined by the government of the territory. What should the federal government do in that respect? How can it help?
Mr. Larsson: Actually, that's partly true, senator. CSA is an over-reaching national standard. We take the CSA. To change and help upgrade the CSA regulations in Canada, what we have done as an association, together with the government, is asked to have two representatives sitting on the CSA committee in Canada to give them updates on solid fuel to close the gap between what exists today and what will exist tomorrow. That's one thing we have done. We all know it will take some time, but I'm very positive about that.
When it comes to the territorial government, Minister Miltenberger has recently spoken out. I also shared this in an article with your committee, if you'd like to read about it. He is well aware of the problems we have today. They have to take this in hand and I think and I hope that we'll do it.
When it comes to biomass, senator, who has the right? Is it the territorial government, or is it a bylaw by the community? That's an unclear situation, so we're working on that at the moment.
[Translation]
Senator Rivard: Welcome, Mr. Larsson. Three or four years ago, the Standing Senate Committee on Agriculture and Forestry looked into the issue and into the development of wood pellets.
Have you had a chance to read the testimony of the 10 or 12 witnesses we heard from? If not, I invite you to get in touch with us. You will see that your problem is basically the same as what Quebec and Ontario are dealing with. Our witnesses were from Quebec, Ontario and the Maritimes.
Am I to understand that you have not read the report of the Standing Senate Committee on Agriculture and Forestry on wood pellets?
[English]
Mr. Larsson: Well, let's go back in history in Canada, senator, when it comes to the forest industry. The wood pellet industry in Canada used to be number one in the world. Today, there are other emerging markets, such as the United States and Russia, that are producing a lot of pellets.
We have done a lot of tremendous work to make a standard, especially in Europe. Since the Canadian wood pellet industry exported 90 per cent of the 2.6 million tonnes to Europe, they also have to apply the standard that has been developed in Europe, which actually is an ISO standard.
I think the wood pellet industry will grow, and hopefully even in the Northwest Territories, a local entrepreneur and the government is looking into building a wood pellet industry this summer. To build a wood pellet factory, for instance, 80,000 tonnes a year, which as kind of the break-even point, is about a $20 million investment.
British Columbia is the biggest producer of wood pellets in Canada, even ahead of the eastern provinces. Ontario is very shy on this. The quantity in Quebec so far hasn't been up to last year, hasn't been too much driven to produce wood pellets, but the present government in Quebec has changed this and is now promoting the biomass use for home heating and electrification.
I foresee a very good future for the future of wood pellets. Thank you.
[Translation]
Senator Rivard: You say that one of the irritants is the insurance issues for homeowners. Am I to understand that insurance brokers do not want to insure homes that use wood pellets for heating? Or is there a surcharge that makes the use of wood pellets not cost effective?
[English]
Mr. Larsson: Let me explain. Today, for instance, the insurance brokers in N.W.T. offer to insure a homeowner who installed a pellet stove or a pellet boiler, which are only installed by certified installers and products that are according to standards approved by Canada, and quite often, the insurance can double. When asked, they say, "Well, it's the underwriters who oblige us to double this." When you look at who are the underwriters of the insurance industry in Canada today, more than 50 per cent are European underwriters. The funny thing is that the same underwriters in Europe don't oblige anybody who invests in wood pellet stoves, boilers, to double their insurance.
In my opinion, I think there's not enough competition, and I think maybe somebody is using this new technology to make some more money. That's something our association is investigating. I hope that by having more competition and spreading the word amongst homeowners to look around, there will be some insurers on the market who don't take advantage of this, because this is very unfair. I don't like it.
Senator Rivard: Mr. Chair, I have some questions about co-generation. Do I have to wait for the second round?
The Chair: You can go ahead.
[Translation]
Senator Rivard: The cogeneration issue came up in the Quebec City region and is being experienced in Quebec. Whoever is producing electricity by cogeneration can use it for their own needs. If it is a paper mill, they use it and buy the rest from Hydro-Québec.
The problem in Quebec is that the surplus must automatically be sold to Hydro-Québec, which is the only entity that can produce electricity in the province. The same thing is probably true in Ontario.
There is a lot of surplus electricity, so much so that, 15 years ago, a cogeneration company in Montreal was allowed to produce it. Fortunately, the contract stated that, if Hydro-Québec would not buy it, there would be an annual compensation of more than $100 million. However, a plant that costs a fortune is going unused. I understand that the situation may be different where you live.
If someone produces electricity by cogeneration in the Northwest Territories, can they sell it to consumers, or do you have a company that regulates the issue and must receive all the power in order to sell it to commercial, residential or industrial users?
[English]
Mr. Larsson: Senator, there are actually two questions in your question.
First of all, when it comes to co-generation, we have different types of co-generation. We even have today the technology that a homeowner can buy his own pellet boiler, which would allow him to generate power and heat for his own house. Right now, I don't think it's up to point and it's not been certified in Canada.
The second one is that you also have smaller hamlets, which together with what we call the power corporation, a Crown corporation, will allow the co-generation to be utilized to make savings for the Crown corporations instead of using diesel.
When it comes to buy-back of larger installations, you mentioned Quebec. Let me be fair. In any country, France, Sweden, Germany, and in Quebec or even Yukon, it's a political will, in my opinion, that allows people to say that they can only buy back and so on. I believe that Quebec Hydro makes quite a benefit from selling their electricity to eastern U.S. markets, especially when the U.S. dollar is quite high. I don't think the buy-back is a problem.
When it comes in particular to solar panels and other installations that generate electricity in the Northwest Territories, there is a limit of 5 watts per household that they can sell back to the territorial Crown corporation. It started this year. It will stimulate some homeowners to do that, but there are co-generation needs. I work with two Quebec companies. We have in Quebec a very good engineering and mechanical industry with long experience. I hope that soon, this summer, we will be able to combine good heating via biomass and generating via a generator and offer this to smaller communities.
The big challenge is to have low pressure so we don't need too many operators working nonstop.
Senator Mitchell: Thank you for your presentation. I'm interested in a couple of things. One is the insurance issue that Senator Rivard mentioned. Have you done an assessment of the relative risk? It seems to me that natural gas, diesel and all of these are quite volatile. Why would pellets be any different? Is it just a prejudice or is it more than what you're saying, which is simply somebody taking advantage of a gap in the market to make some extra money? Is there any proof that there's greater risk?
Mr. Larsson: Thank you, senator, for that question. I'm very happy to answer you.
I went to Sweden last year to work with the energy board, which is part of defence in Sweden. Sweden made a study of all energy use to heat homes, small commercial buildings and such during five years. They did this study with 784,000 units, which was enormous, over five years.
Sweden has similar cities in the North as does Canada. Sweden has the same kind of climate, administrations and regulatory boards. What they found was that there was no difference between diesel-driven home heating installations and pellet boilers — none — and no difference when it comes to the number of deaths, number of big explosions or damage to the boiler room building, et cetera. I have these numbers in black and white. It was prepared by an agency of the Swedish government, and I must say that I trust them.
Having said this and knowing that insurance underwriters like Lloyd's of London and others, I don't believe they have two different measurements for an underwriter in low-risk installations in Europe or low-risk installations in Canada. To me, it smells. It looks to me like somebody is taking advantage of this situation and it's hampering and stopping development to offer these kinds of products to the public. That's what our association has stated. And that's why I'm happy to be here today to voice this opinion and showcase it to you.
If your committee needs more information about that, I can get it to you in writing.
Senator Mitchell: I'd very much like to see that.
Some years ago when the committee travelled to Yukon, I understood that there were pellet-burning units where the burning is actually done in the house or beside the house. You're talking about centralized plants, are you? Are you talking about actually moving the pellets to the house and then burning them in a furnace in the house, or are there both technologies?
Mr. Larsson: Senator, I believe I sent three articles, which I presented this week. We can follow up afterwards to showcase what it is really about. You referred to a wood boiler that is 30 metres outside a house. That's old technology. It's like the t4 of 1914.
Today, we talk about having a boiler room inside a building built to bio standard, et cetera, where you have the pellet boiler and storage unit next to it. You feed it with a vacuum system. In most larger schools, airport terminals, hospitals and corrections centres in the territories, we have a boiler room that sits outside, which integrates the boiler with the storage of pellets.
Norman Wells, one of the old oil towns of Western Canada, ran out of gas a year ago. Today we have a newly built camp for the oil industry with 110 rooms that has 10 boilers in cascade. That means one boiler after another. This doesn't exist in North America and was the first one built. We are really on the forefront to showcase what can be done.
Senator Mitchell: There must be a maximum size for a pellet boiler plant. It would tend to be dispersed energy. To some extent, you might need a number of smaller plants for a city the size of Yellowknife. You don't see some major, huge centralized plant like Genesee Generating Station, which burns coal outside Edmonton. It's more dispersed and, therefore, would be more supportive of regional enterprise.
Mr. Larsson: Senator, I'll give you the example of Norman Wells. Three years ago, Norman Wells had a town meeting where the engineer and company said, together with the chair of the council of Norman Wells, we're running out of gas. The engineering company proposed to make a district heating plant at a cost of $38 million. For 780 people that was crazy — $38 million for home heating for 780 people. It made no sense.
The difficulty sometimes is that big scale is big bucks. We are living in a territory where, except for Yellowknife, which is 19,000 people, we're talking about 500 people. We have 2,000 people in one or two places. Whatever we do, we have to innovate to make sense that it's easily installed and maintained. Home heating by diesel is not always the winner, although individual ones can often be more cost-efficient.
Senator Seidman: The Northwest Territories Biomass Energy Association released a discussion paper in May 2014 essentially about the barriers to biomass energy installations in the Northwest Territories. I'm sure you're quite familiar with it. They listed four main barriers and one of them concerned outreach and education.
What I'd like to hear from you is the role of education in further developing the biomass industry, especially educating stakeholders, communities and individuals, because a lot of the future development depends on homeowners, as you say, and local areas, and helping them to understand the issues. Could you talk a bit about the role of education and it being a barrier to further development?
Mr. Larsson: First of all, we start with the legal part of education. The legal part of education is when it comes to installing pellet stoves, when you have it inside in your home, living room, for instance. The Arctic Energy Alliance is a non-profit organization which has five offices in the territories with staff that is available to the public to assist them with information about how to go about things. They have town meetings, open houses, et cetera. We work closely with them. All installations today when it comes to pellet stoves, which we have over 1,000, I think we have 1,200, is all done by certified installers. It's called WETT certificated. That's the legal part. It's very important that you have certified installers. When it comes to pellet boilers, which is more in the capacity of 20 kilowatts to 7 or 800 kilowatts, that is done by professional people. Those professional people have to be certified by the companies who they install the product for, because only a certified installer can sign off the warranty paper after the installation is done. That's the legal point. When it comes to the education of homeowners and commercial owners for small shops and such, that may be one of your major questions.
Our association, for instance, has been running advertising in newspapers. We're coming up with a new website. We inform people. For instance, in advertising, we say, "Look, here are all the suppliers in the territories that you can buy from, name, phone number, et cetera." "Here are all the major installers." Let people go around and shop and buy what they want. Every year in all the regions, the five regions of Northwest Territories, there are open houses and invitations for people to come and look. We present for them what is going on and how you save money.
Arctic Energy Alliance is also doing home assessments. That means that they explain to people how to save money by changing to LED lights, how to insulate your building, be careful of mildew, to have fresh air, heat exchange. There is a lot of money invested in this, and I must say they are quite successful.
Senator Seidman: That's helpful. Related to the issues that you are now discussing is perhaps another conclusion from the same report, and that is the need for adoption of national standards for biomass fuel and heating equipment, so could you please speak about that as a barrier and what we might learn from other jurisdictions regarding national standards and how that would feed in, perhaps, to a greater acceptance on the part of small businesses and locals and even the insurance industry if one had national standards? You talked about certification, but if one had national standards, would this be fruitful in terms of helping the biomass industry?
Mr. Larsson: Thank you, senator. CSA is the national standard for safety. And today, the 365 committee, the 365-10 is a CSA committee for solid fuel systems. Solid fuel systems is used as a standard when it comes to, for instance, wood pellet boilers, but the standard is based on use of cordwood or coal. Cordwood and coal in Canada have been around for a long time. So the CSA in the committee, 365, and the chair have agreed we need to develop a new standard which is specifically for the new technology of pellet boilers, for instance. I know that they are now starting to work on this.
At the same time, the 365 committee have also split up, since about a couple months only, to meet the standard when it comes to pellets. Because today, if you buy home heating fuel No. 2, which is a standard in Canada, you know what you get. You pay for it and you get it. You don't ask questions. You go to the pump and you buy regular or premium. You pay and you leave. By the fact that the Canadian wood pellet industry is exporting 90 per cent of the wood pellets to Europe, we in Canada also have to adapt to the ESO standard which has been put in place in Europe. It's under way, and I think it would be done quite quickly.
Those are some of the standards, but if you look at the report that you have in front of you, on page number 12 — oh, yes, right there. Right there in front of you. I can see it. This is residential pellet boilers and stoves. Okay? Imagine yourself. You go buy a car for $25,000. You get the key, and you get the registration plate and phone the insurance company, and you drive off. Painless, except for the bank account. When it comes to buying an installation for $25,000 for a wood pellet boiler, this is what the homeowner has to go through. Look at the page. This is crazy. I'm embarrassed sometimes when I talk to homeowners. I say, "Oh, you want to do this? Look at this page. This is what you have to do." So we do have a bit of red tape, you might say, that we're trying to clean up. That's what we're working on. That page is very well done. This is for homeowners only.
If you turn the page, that's for commercial buildings, but that's different because with commercial buildings, everything over 30 kilowatts has to be inspected by boiler inspectors, fire marshals and such, which is normal. So there are more engineering and design companies that are involved. I can live with this, more or less, but the first page you see for homeowners is definitely — it doesn't promote that kind of product, and it doesn't give the opportunity for homeowners to have a fair chance to use it.
Senator Seidman: Thank you very much, Mr. Larsson. I appreciate that.
Senator Patterson: Thank you, Mr. Larsson, for your presentation and recommendations and the resources you've made available to us. You've noted in your remarks that Nunavut is totally dependent on diesel for electrical power generation, unfortunately. I'd like to ask you maybe a naive question looking at the strides that have been made with biomass and pellets in the N.W.T. What about a place where there are no trees? Have you given any thought to whether this technology could be made available in a place like Nunavut where there are no local sources of biomass, at least that I can think of?
Mr. Larsson: Thank you for your question. I can answer you in two ways.
In Inuvik, they drive 5,000 kilometres to get pellets. That is the same distance if you drive from Toronto to Calgary. And it still makes sense.
In the Mackenzie Delta today, there are wood pellet boilers heating homes and saving money safely. They drive 5,000 kilometres to do this. If that can be done and still make sense financially, it can make sense in Nunavut. But in the beginning when Nunavut was established as a territory, you took the decision on a shipping principle based on: If you send out a regular container, we charge you for the weight. If you send out a container of insulation material, which is very light, we charge you for the volume. As long as Nunavut maintains this principle, which works, in a way, over the long term, and doesn't change it, I don't foresee any hope for you to save money.
Senator Patterson: Thank you for a thoughtful observation. I would respectfully say that Nunavut didn't make that decision. I think the airlines and shipping companies made that decision about cubing the freight. I wouldn't want to be seen as having taken responsibility for that.
The N.W.T. held an energy charrette last November to look at the future of energy challenges in the N.W.T. I wonder if you're familiar with that process and the outcomes and whether you'd recommend that we look at that recent summit of community governments and other stakeholders on energy in the N.W.T.
Mr. Larsson: At the charrette held in Yellowknife in November, it was clearly said by the territorial government that it doesn't plan any large investment, billion-dollar investment — electricity power lines, to the grid, to new electrical dams. It was said that the territory first had to look for regional local solutions. It was important because a charrette was held two years before and everyone was excited about building power lines to wherever that would cost $2 billion. There was a clear difference between the two charrettes. Somehow people have learned that, in this case, smaller is better. Also, the differences between the regions in the territory are varied. For example, in Tuktoyaktuk, there is no forest. In Senator Sibbeston's hometown, the forest is used for biomass.
The first charrette conclusion was, "Let's do this." The second charrette conclusion was to look into new innovative systems, such as co-generation and solar. Solar has a future in Nunavut and the Northwest Territories because we have the best sun from February to about October. Solar panels and associated products have come down in price. China has been dumping them on us and the Canadian government is looking into anti-dumping. Solar has a long future. The only thing we have to look after is how to store the energy — what kind of battery system and such. Again, we will find solutions in the next four or five years. I'm very sure about that, because there is a big future for it. Solar was talked about at this charrette — smaller is better and flexible is better.
Of course, there was another point taken up, which you haven't mentioned, and I've read a lot of your questions. In Northern Europe, it's against the law to have open garbage pits, as you might be aware, because they are highly polluting. In Sweden, it is all burnt in highly sophisticated plants that create heat or electricity. It's done with the latest technology in air filter systems. Here again, Quebec is at the forefront with its legislation on the strictest and most well-developed air filter system for such utilization of garbage. The EPA in the United States just changed the law two months ago. It comes very close to the standard of Europe. That was in another study. That's what was important, in my opinion, at the charrette last year.
Senator Mitchell: Mr. Larsson, I'm interested in the national standards issue. In your documents, you've outlined a list of CSA standards that apply and two national federal coding organizations, the National Building Code of Canada and the National Fire Code of Canada. The National Building Code of Canada is only moral suasion. The provinces territories and municipalities don't have to pick up and do it. I believe that annually those codes are revamped and published but simply for the consideration of these jurisdictions.
Mr. Larsson: To my knowledge, you're correct, and those standards are updated. As of today, the gap is too big between new technologies for wood boilers and stoves and what the standard says. That creates a grey zone. Each time it creates a grey zone, it depends on the person who is to implement. If you have a fire marshal who is open-minded, so to say, it can be easy. If you have a fire marshal who sticks to the codes and standards, then we can get into a stressful discussion.
Anywhere there is a grey zone or personal interpretation of a standard that is not clear, it's never good because it creates bottlenecks and friction and that's what we're trying to get away from and why our association has suggested to have people involved in development. I'll give you an example. If you have a pellet boiler heating a home in the southern part of Canada, say in Granby, Quebec, you run it for about 800 to 2,000 hours per year. In the Northwest Territories, we run them for a minimum of 4,500 hours. As I said before, we need good standards and so on. That means that our installation will be tested and stretched twice as much in run time. Of course, we want strict standards and quality installations, quality certifications, et cetera. We don't want or need grey zones where it doesn't help.
When you have a CSA standard based on the code for regular wood burning and you have to apply it to a biomass wood pellet boiler, the latest technology that runs by itself, there is a big grey zone.
I'll give you another example. You mentioned the fire code. In Canada today there are two plants that produce laminated wood, one in Quebec, which makes tremendous laminated wood, and one in B.C. Laminated wood and wood beams, for instance, is way safer than steel beams in large public buildings because they don't burn. They just get warped. If you have a big shopping centre that burns and it has a steel roof and steel beams, it falls down right away. Firefighters are not allowed to walk under the roof. If you have a building that is certified to use laminated wood, which, for instance, is developed in Quebec and B.C., it's way safer because laminated wood takes hours and hours to burn, if they ever burn.
If you take a wood pellet bag and go out in your back yard and dump it on the ground and you try to put fire on it, it will not burn. You have to push air on it to make it burn, but it doesn't burn by itself.
We have products today that are very safe, but the standards are a little bit behind. As I mentioned to you, the grey zone is not good. If you are speeding and you're over 50 kilometres and go 60 kilometres, you pay for it. It's crystal clear.
Senator Mitchell: We'd like to get this technology up to 60. Whose attention do we have to get, and how do you recommend that we get it so that these standards can be improved? What buttons do we press? Where do we apply the pressure?
Mr. Larsson: Thank you, senator, for that question. I think there are a few things that you can do. First, I would be very happy if you would look into why and how certain insurance brokers penalize people, homeowners, for no reason. I would go to the underwriters association in Toronto and invite them and say, "Please explain yourself."
Second, CSA is working on this, and they have a very good committee called the committee of solid fuel bonus, 365-10. It's a good working committee. Any kind of support for their work would also help.
Then it has to come from the territory or provincial jurisdictions themselves. I don't know how you can interfere or provide support there. Thank you.
[Translation]
Senator Rivard: Before I asked my question, you talked about CSA standards for Canada. Do products exported by the Americans have to be UL and CSA approved, whether we are talking about heating equipment or something else?
[English]
Mr. Larsson: Thank you, senator. There is an agreement between the United States and Canada. When you have a CSA-approved product, for instance, which is exported to the United States, at the same time, it is UL. If it's, for instance, UL approved, it will also automatically become be CSA approved because they have very close collaboration. That's what I understand.
When it comes to the Canada national registration number, it's in Halifax. The head office is in Halifax, and if you have a Canadian- or an American-produced product in this field of work we're talking about, it needs to be designed and overlooked by professional engineering. If it's going to be installed in any federal building or territorial or provincial building, it has to have CNRN certification, which I actually approve of. Because otherwise, we would have a lot of shady imported products from you know where coming onto the market. I don't approve of that. We need strict standards to ensure the end users have good quality.
To answer your question, the CSA and UL go hand-in-hand.
[Translation]
Senator Rivard: Once in a while, when the economy is stagnant or slows down significantly, governments, especially the Canadian government, can use incentive programs for renovations. As we are talking about clean and renewable energies, we are generous when we say to taxpayers to use those programs to replace energy-consuming appliances with electric furnaces, heat pumps, solar panels or LED bulbs that last 10 times longer and save energy. Those programs are always welcome. They cost taxpayers money, but they get the economy going. I assume those programs are available everywhere, including in the territories? Some provinces have their own program. Has the Northwest Territories had programs to convert heating equipment in order to use biomass or pellets? If not, could it provide such programs and does it have the means to do so?
[English]
Mr. Larsson: The first part of the question is that a homeowner who installed a pellet stove in the territories gets a cheque for $1,000. A homeowner who installs a pellet boiler gets a cheque of $5,000. A commercial building owner who installed a pellet boiler gets $15,000. A hamlet or small community that does a major renovation can get up to $50,000. Those programs in the Northwest Territories are in the Northwest Territories only and are very popular, and actually too many. It's too successful.
But I don't think we should look at this as being the driving force for using it, because the data doesn't exist. France 10 years ago had a very similar program to install heat pumps. They paid 50 per cent, and they made savings because France couldn't generate enough electricity because they wanted to sell it to Germany instead. The day the program stopped, the installation stopped.
You see, when it comes to Northwest Territories, the major drive for people to do, for instance, installation for pellet stoves is they do save money. They do save money. And today, heating is very expensive. Right now the dollar and the home heating fuel is cheaper, a little bit, but most likely it will come up as before. So the driving force for people to do this is the large-scale savings and payback time is four, five, six years after installation.
That's the driving force. Does the territorial government help them? Of course it helps, but it doesn't drive the market.
The Chair: Thank you. That ends our questions. Thank you very much, sir, for being with us today. It has been an interesting presentation with some good answers and some good questions. Thank you for being patient and working with us to actually be able to testify. Have a good day, sir.
I would ask senators to stay for a few minutes.
(The committee continued in camera.)