Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue No. 41 - Evidence - March 22, 2018
OTTAWA, Thursday, March 22, 2018
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 8:02 a.m. to study the effects of transitioning to a low carbon economy; and in camera, for the consideration of a draft report.
Senator Rosa Galvez (Chair) in the chair.
[English]
The Chair: Good morning and welcome to this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources.
[Translation]
My name is Rosa Galvez. I represent Quebec in the Senate and I am the chair of this committee.
I will now invite the other senators around the table to introduce themselves.
Senator Mockler: Senator Percy Mockler from Saint-Léonard, New Brunswick.
[English]
Senator Neufeld: Richard Neufeld, British Columbia.
Senator Richards: David Adam Richards, New Brunswick.
The Chair: I also want to introduce the clerk and the analysts of the committee.
[Translation]
In March 2016, the committee began its study on the transition to a low carbon economy. The committee is looking into five sectors that, together, account for more than 80 per cent of greenhouse gas emissions — electricity, transportation, oil and gas, emission-intensive and trade exposed industries, and buildings.
[English]
Today, we welcome Mr. Stuart Galloway, Chief Executive Officer, Energy Services Association of Canada.
Thank you very much, sir, for joining us. I invite you to proceed with your opening statement, after which we will go into a question and answer period.
Stuart Galloway, Chief Executive Officer, Energy Services Association of Canada: Thank you very much for inviting me this morning. This table reminds me of dinner at school, going back a long time. I think I can pretty much make you all out from a distance.
My name is Stuart Galloway, and I’m here representing Energy Services Association of Canada. I’m here to speak to you today about energy performance contracting and, given your mandate, how it can help contribute to the role of lowering carbon in our communities.
I’m assuming you all have a copy in front of you. As I go through this, I’ve actually included additional notes so that you can read those at your own leisure. I won’t be speaking to all of those. Hopefully that should help put some of the pattern behind this.
I’m going to first give you a brief background of who ESAC, or Energy Services Association of Canada, actually is.
Then I’m going to talk to you about the energy performance contract, how it works, how it is structured and some of the benefits. I’m going to outline some recommendations for the committee, and then we have 35 minutes or so for questions and answers and, hopefully, answers anyway.
ESAC was incorporated back in 2010 and is a not-for-profit membership organization. On the slide you will see the six founding members. There are also a number of other members, and they represent roughly 90 per cent of this industry across Canada. That 90 per cent equates to roughly $300 million per year in the Canadian market.
I have to say that in energy performance contracting and retrofit style projects, that figure could actually be in the billions and perhaps should be.
I’m going to go through a high-level summary of what an energy performance contract is. I’ve provided here an extract because I think it’s always a good summary, and I often use this. The summary is taken from NRCan’s FBI, or Federal Buildings Initiative, and they are the ones that actually also promote this style of contract.
I’m not going to run through it, but essentially it is a public-private partnering arrangement between a client organization, such as the public sector, and an ESCO, which is an energy services company, and the crux of the contract is to actually provide energy efficiency retrofit projects over a term period.
What does that actually mean? The ESCO will initially go out and conduct, on behalf of the client, a comprehensive review of all the assets that they’re actually responsible for. This is tailored according to what the client’s needs are.
So when we’re looking at a building facility, they will be looking across the whole of that facility or portfolio of facilities. Once they’ve actually done that, they will come forward with a program. The ESCO will work then with the client’s organization, and they will look at what sits at the heart of the energy efficiency retrofit elements. But what we found over a period of time, obviously, is that technology has adapted and focus has changed. We’re now starting to see other elements creeping in, things like renewables, distributed power generation, water conservation and sustainable materials and operations and maintenance.
So from its origin in the late 1980s, the program has expanded now as technology and comfort have grown.
What sets an energy performance contract apart from just going out there and actually doing this project ourselves is something that sits behind it. That is the risk transfer around the actual performance guarantee.
A performance guarantee essentially says to the private sector, if you’ve told us that we’re going to produce all these savings and we’re going to base our project and our repayments against those savings, then we want you, the private sector, to put your money where your mouth is. What happens then is should the savings never be achieved, or not be achieved to the predicted amounts, then the private sector will actually, as it were, write a cheque for that difference. That’s the essential difference between an energy performance contract and a more traditional form of energy retrofit program.
I’ll come to why that is more important in a minute when we actually talk a bit about the financing, as well.
In financing terms, it doesn’t really matter to an ESCO who finances the project. If we take it as a public sector program, probably 50 per cent of public sector bodies will actually go out there and either they will take it out of their own capital reserves or they will go out and raise a debenture financing in the market through their own streams.
The other 50 per cent will approach the private sector and say, “You go out and get the financing for us.” The ESCO will approach the mutuals, the pension funds, and they will bring that financing to the project.
From an ESCO point of view, they are financing-agnostic; they don’t make the money off it, they just manage that side. In my advisory background — I used to do more advisory on the public sector side — I would always recommend to push the finance over to the private sector. The reason for this is twofold. One is the risk. When we push energy performance guarantees out of the private sector, and we push the finance to the private sector, the public sector doesn’t want to get caught in the middle, should there be any shortfalls.
When I say should there be any shortfalls, since probably the late 1980s maybe fewer than a handful, five or six projects, have ever had that experience. We’re not talking about a great deal out of the hundreds that have been completed, but we always prepare for the worst case.
The second part of that — we’re passing the risk over to the private sector there — is if I’m the public sector and I borrow that money, I’m borrowing that money on my balance sheet. If I push it to the private sector, I can actually generate an opportunity cost of capital. So it’s not on my balance sheet, which gives me more headroom to actually go and borrow my own money to either supplement the project and do other things connected to it, or just simply go away and spend more money on different infrastructure development. So when it’s taken off balance sheet and pushed over to the private sector, that gives me that freedom.
The main thing is, the actual core of the project, which is around guaranteed energy efficiency savings, has existed since the late 1980s. What we’ve changed is some more of the parameters, how we finance it and some of the technology that has been brought into it. That’s the difference.
If you turn the page, this is an illustration that I do. This is more to explain how the money happens and how we generate this money. One of the catchphrases I generated is, “Not from the money you have but from the money you don’t have.” So we’re already spending the money, it’s just going to a utility company. So we’re paying our bills.
The ESCO that is engaged brings in new technology, which will actually reduce those utility bills. That reduction, when we forecast that over a period of time — 5, 10 or 15 years — then we’re able to project that back to today’s funding, so net present value at today, that anticipated saving, and that is worth a capital sum.
I can then take that capital sum and spend it on that technology. I’ll just change some light bulbs as a very basic example. It’s not that, but I can use that projected saving to spend on a light bulb today knowing I will get those savings.
It’s called non-recourse financing, so when I’m going to the private sector and going out and raising money through a debenture, the lender will actually say, “Yes, you’re going to produce those savings.” I have a guarantee from the private sector, so my money as a lender is safe. So I will give that money to either the client organization or the ESCO to then implement those works.
Those works also generate additional savings because we’ve also lowered maintenance, we’ve lowered life-cycle replacements, and we’ve lowered the operational costs.
Additionally, because it’s new technology now, we have the ability to report against the savings. We also have the ability to report against GHG targets. We can also produce all of that as part of the ongoing contract.
Once the contract is completed, 100 per cent of those savings go back to the client organization. So anything that’s left over stays there with the client’s organization.
When I come back and say, “It’s not from the dollar we have, it’s from the dollar we don’t have,” more importantly it’s not actually from taxpayer-funded debt. It’s from money we’ve already committed to spend to the utility companies.
The second illustration, on the next page, I’ve lifted straight out of NRCan’s report. It’s a useful one, and a lot of people understand this slightly differently to the one I’ve developed. If you look in the top right-hand corner, it illustrates that once the contract term is over, 100 per cent of the savings go back to the client organization.
If we turn over, I’m going to run over some of the benefits that we find using energy performance contracting.
One of the things that we don’t traditionally do, or we don’t do well, is measure our savings. With this form of contract, because it has an energy performance guarantee to it, measurement and verifications going forward throughout the term of the contract allow you to see the benefits. So we know what good looks like. We know whether the private sector has actually done what they promised they were going to do.
Typically around a building such as this, or an office building, a school building or a hospital, we will see anywhere between 22 per cent and 25 per cent savings against what they are currently committed to spending on utility bills.
This goes up on certain projects, so where we start to look at bundling a portfolio of projects and we introduce other power generation technology, it will increase. Similarly, when we do things like street lighting, they are up around the 60 per cent just because the technology there is straightforward.
Due to the long-term nature of the partnering agreement, and we go through the process of the long-term nature of this contract, the private sector is incentivized to work with the public sector in this case to continue to introduce new technology and new additional savings. The ownership and the responsibility always remain with the public sector, so they have the choice to engage, but the risk of that is passed over to the private sector for that implementation.
Often because of the way the cash is generated, we see organizations taking advantage of that technology to also then, through the additional savings, start to address some of the disrepair items or some of the items they might not be able to have capital reserves to carry out. It is things like fenestration, roofing projects, higher insulation. They’re all associated with energy efficiency, but they have much longer-term paybacks. When you cross-fertilize it with something that is more efficient, then it becomes more affordable.
It is a turnkey project, so it’s one contract with an ESCO. They are then responsible and take on all the risk around the coordination, the project management, the design, the implementation. As I said, they get it wrong, they’re the ones on the hook if they are directly taking out the financing themselves; the public sector doesn’t even get involved in the finance and ESCO sorts out the money between them and the bank. Otherwise, it has to flow through the public sector, and they’re still on the hook, though, for that payment.
As benchmarking is carried out right at the beginning of the project, we actually get to see what good looks like as well. This is most efficient. Most important, when we’re trying to measure and report and record what we’re doing in terms of savings, both energy efficiency but now more importantly GHG, this gives us that ability to do it because they are compelled to do it. And it’s not, “I’ve decided to push my budget in a different direction.” It’s already committed. It must be carried out in the reporting as well.
The irony of a contract like this is that the more costs go up for energy consumption over time, it becomes more value for money to us, the public sector, to implement a contract such as this because the higher the savings and the higher the cost of energy goes up, the more we actually make it a value for money. We’re hedging against the future cost of energy, against increased costs of our utilities.
My last slide is on some recommendations. One of the things I’ve been speaking about at both the federal and the provincial level is trying to get people to think more around a portfolio basis. When we think portfolio basis, a number of things come into play. A lot of the time, people only consider this on a building-by-building basis. When we do that, we lose a lot of the strategy and we lose a lot of the advantages. When we start to look at vertical and horizontal integration across a portfolio, we start to attract more of the economies of scale. When we attract more economies of scale, it becomes less about energy efficiency, and we can start focusing more on GHG and targeting those reductions.
Larger projects like that and larger reductions in consumption mean we can start to think more about micro-grid technology and energy storage. All of these have much longer paybacks and on their own require huge capital injections to actually get off the ground. We can actually start to bring those into those contracts when we look at a portfolio basis.
One of the frustrations I think from the industry side is that we can’t seem to get the attention of the C-suite, because they see it as building by building and a facilities management issue. So they push it down to facilities management. They are budget managers; they look at things like that. They don’t look at a strategy for an organization, whether it’s a school board, DND or whoever. They don’t look at everything; they just look at building by building.
When we make it a portfolio basis, we will actually see the C-suite start to pay attention, monitor and then see the advantages they can have across their portfolio.
Obviously, the larger the project, we’re going to attract more attractive financing terms as well — more money borrowed, the more they reduce their fees as well. Also, new players come into the market. At the moment, there is a market out there. It’s growing, but it’s still fairly small, especially when we compare it to things like the PPP industry.
I’m going to move on to government-led match funding. We do have some programs out there at the moment, but there’s an awful lot of simple grant funding. I refer most recently to the $200 million that was afforded from cap and trade to do energy efficiency projects for the schools in Ontario and Quebec. While admirable, it’s closer to $740 million.
There’s no real measure in place or no obvious way that we’re going to actually measure how that is spent, other than, “We’ve developed some energy efficiency programs and placed the money into that.” We’re not actually going to be able to measure whether we hit our GHG targets.
When we actually start to do match funding, then we again get the attention of the C-suite, but they also have to report, because they are putting up their own money. Therefore, they will also report against how they have spent their own money rather than just spending somebody else’s money that comes from the centre.
In terms of requirements for screening, when we look at public-private partnerships — anything that is a new build, $80 million or $100 million plus — we have effectively what is compulsory screening for PPP — P3 — projects. We don’t have anything like that in place here in Canada. South of the border in most of the states, anything that is going to be a large energy retrofit project must be screened for a value-for-money basis to look at an energy performance contract.
Ironically, across here in Canada, we have in Alberta — and it only relates to schools — again, if they’re going to engage in a large energy retrofit they have to screen for this. It doesn’t exist otherwise in Canada. If we bring in that kind of screening program across the board, we actually start to bring in some accountability, and then we can start to report and measure properly when we’ve done that screening, because we’ll also do the look-back test once the project has been completed. We’ll also force people to look longer than just at the project itself but at the full term of the life cycle of that property or facility.
The last point is rather a left-field one, and it’s more an idea of my own: I think we should involve the NRC. At the moment, it’s done in two ways: Either the private sector conducts its own measurement and verification, and then the public sector will audit that on a periodic basis to make sure that they are telling the truth and reporting what they’re actually doing; or, the other model is the public sector engages a third party and the third party will, at the the public sector’s cost, sit on the private sector ESCO to monitor and measure.
If we bring in the NRC, we bring in an independent, credible third-party review that will continue to look at that measurement and verification throughout the term of the project. Not only that, we can then, because of the nature of the NRC, provide ourselves with valuable benchmarking that could be used across Canada for all sectors — for the public, for all the private sector — and we can actually then use that as a benchmark for future projects.
They will also attract additional funding; just by their nature, they attract a different scale of funding and a different source of funding to this industry.
Last, they actually provide a really good platform, just because of their nature. Companies come to them for a platform to test new technology. Then the three parties get to work together to be that test bed for the new technology. The irony is that the private sector bears the risk of it performing.
I’ve slightly overrun. That was my presentation. Thank you very much.
The Chair: Thank you very much, Mr. Galloway. What you presented is very important and interesting, because we hear most of the time the idea that when you go to retrofit and renovate your buildings, it’s cost, cost, cost, and, “Who is going to pay for those costs?” However, I believe there are gains to be made in the long term, and this is what you were explaining.
For the benefit of the members of the committee, could you very quickly take one example and work us through the steps so that we can see?
Mr. Galloway: An example of a building or a contract?
The Chair: An example of a building.
Mr. Galloway: Let’s take a school retrofit project. The private sector would be engaged through a public procurement process, an RFP. They are brought in once they are chosen and do a full audit of the school. They’ll work through the school, identify furnaces, if it’s got a swimming pool and all the ways that energy efficiencies could be made to that existing school, bearing in mind a lot of the last investments are 20 or 30 years ago. Technology has changed considerably — a big thing, building management systems, for example.
They will also take a cursory look, depending on the scope, at the wider envelope — things like insulation. Depending on where the school is located, they could also look at power generation, solar, and micro-grid technology if the municipality in that area is looking at that as well.
Once that’s done, they sit down with the client organization, the school. If it’s on a school-by-school basis, it’s the building manager. They will decide the extent of the work to be carried out. They will have a shopping list, effectively, of all the potential savings against that and how that can be produced.
They will recommend a term repayment. If you take LED lights, they pay out the capital investment in about two years. If you are taking larger envelope refits, it could be 10 to 15 years. Traditionally, a building manager will actually bring it down as low as possible — five years. A portfolio manager will consider things on a longer-term basis, and it will be up to 10 or 15 years. That’s the difference.
Once they’ve actually developed the scope, then the private sector will go out, secure all the trades, change all the apparatus over and make all of those changes. They will then monitor and report on a regular basis, depending on what the client wants, back to the client on how the project is performing. They can do that over two, three or sometimes the full term of the contract.
Again, depending on the shopping list, they can actually operate and maintain that apparatus, but that’s not very often the appetite for public sector, mainly because we have the involvement of unions a lot of the time, and they don’t want to take that engagement on. But when we have taken the engagement on, the unions do understand it’s not about jobs; it’s about job change, because the employees’ profile changes slightly. That’s not in all cases; it doesn’t work in all cases.
That project will continue for the term. They will continue measuring the savings. The savings will go back to pay the actual loan that has been taken out, whether it’s private or public sector. Once the loan is paid out, if it’s the five-year program, then the public sector and the private sector shake hands and say goodbye, and the public sector has the choice then to either continue on as it is and look after the apparatus itself, or they can engage another private sector partner or engage the same, and do another energy retrofit. But after that, they enjoy 100 per cent of the savings.
The Chair: Thank you very much. That was very illustrative of what you said.
[Translation]
Senator Dupuis: Thank you, Mr. Galloway. I have a very specific question for you. In the example you just gave involving a school, would you say that the process is the same if you are dealing with a school board with some 30 schools under its responsibility?
Are the savings in energy that fund the work significant? A number of school boards could decide to take all the schools at the same time. Is the work being done in one school at a time? Should it be planned differently?
[English]
Mr. Galloway: Absolutely. When you’re engaging the firm in the first place, it has to be a firm that is large enough to actually scale out, because you don’t come in and do 50 schools in one go. They will actually take a pilot project, or what I call a pathfinder, because “pilot” seems to suggest you will do one and look back to see whether it went well.
Pathfinders you can actually overlap. If you do a pathfinder project of three or four schools, you’ll get a certain amount of economy of scale, but you will also be able to secure the principles of the financing for the future 50 schools.
As you start to then bring more of those schools in and complete the others, then you have actually got something that completely scales up. You can then absolutely combine it with portfolio management, so you also start to work directly with the school board to look at which schools maybe need closing and which schools are worth investment. Then you actually get a proper program. The Toronto District School Board, when they get going, is actually starting that path now, and the French district school board in Toronto is also looking at it.
[Translation]
Senator Dupuis: Does the same logic apply to a municipality with low-cost apartment buildings that are all a few decades old? So the reasoning would be the same for a municipality.
[English]
Mr. Galloway: Absolutely. So even better, take a municipality; they have multiple property portfolios they have to look after. Schools by nature tend to be a bit more scattered, whereas when you take a municipality, it’s within an area.
For example, if you combined it with a street-lighting program, then you are starting to introduce smart cities. When you introduce smart cities and you bring in affordable housing and the actual properties owned by municipalities as well, then you have smart buildings that can be linked in. You can start to look at micro-grid technology and other forms of power generation, and actually, by reducing our consumption, now we don’t need to draw so much from the grid.
We can start to look at much more innovative ways in that grouping. It’s much better. London and Windsor have come together to look at doing exactly that. They are trying to put that together with one of my members. If we do things collaboratively, where we can get those economies of scale, perfect.
Senator Neufeld: Thank you very much for your interesting presentation. I’m sure there are lots of places we can look, especially with the federal government as the largest property owner in Canada. Some of it is pretty ancient, so some of it would probably be at the demolition stage. But there are lots of opportunities there.
Is anything like this going on with the federal government now? Is any department in the federal government actually working with you on these kinds of programs?
Mr. Galloway: I would actually say it’s the federal government that is leading the way. I have made reference specifically to NRCan and the teams that are working in there. I’m sorry — I have the acronym wrong because I keep calling them PWGSC. It’s now PSPC, the old Public Works and Government Services Canada. So I understand the building across the road that is being fitted out now is being done as an energy performance contract?
But absolutely, the federal buildings are leading the way, and also things like DND. I think seven bases at the moment are in the process of trying to get to contract close to actually do exactly this. Again, coming back to Senator Dupuis’s point about a municipality, a DND base is a miniature city. That’s exactly what they are trying to get achieve.
Senator Neufeld: Okay. Can you provide to us through the clerk a list of where these things are happening that you’ve talked about?
Mr. Galloway: Sure.
Senator Neufeld: If you don’t have them all in the back of your head, I don’t expect to you list them all out, if you say there are many. Tell me where they are and what is happening. Where is the rubber hitting the road? Tell us where the real construction is happening so that maybe we can go look at it and see what is actually taking place.
Mr. Galloway: Absolutely. There are some exciting ones taking place now.
Senator Neufeld: I think that would be helpful to us.
Also, can you tell me, for a private person, I have changed all my light bulbs to LEDs in my house. What is the payback on switching an incandescent light bulb to an LED bulb? How long does it take? One year, two years, three years? Six months, 20 years?
Mr. Galloway: I’m not going to do your house because I have probably only changed over half of mine in my own house. I don’t even put my money where my own mouth is.
Senator Neufeld: You should be.
Mr. Galloway: I should be. I come from Yorkshire, so it’s just that physical throwing away of a good bulb.
Senator Neufeld: You’re waiting for it to burn out.
Mr. Galloway: That’s right. They say copper wire was invented by two Yorkshire men fighting over a penny. What I will do is a street-lighting project. So it’s the same idea of changing HPS bulbs over to LED bulbs. In its simplest form, the street-lighting project can pay out in five to eight years, and when you think about it, that is much more complicated than just changing out some bulbs in your home.
We are in the process of trying to close a project at the moment which is actually a PPP in the City of Vaughan, but the original business case was done on an energy performance contract, and it was five to eight years for the simple trade out of bulbs. I say five to eight years because there were other elements around changing some of the hoods that involve the LED. The actual LED was closer to the five years when you didn’t have to change out the mountings as well.
Senator Neufeld: The reason I’m interested is because we heard so much about the “curly” light bulbs. When they came out, all the world was going to change. Just change to these and they will last you forever. They burn out as fast as incandescent bulbs, or faster, and then they are more dangerous to get rid of. One always has to be careful when one hears some of these things.
Mr. Galloway: That’s a good point, actually. When you look at the recycling point of view, it’s a lot better as well for the future.
Senator Richards: Thank you for coming.
Are there any public models in other countries that work with the private sector in this way? Do you have models to pin your expertise on so that you know how you’re going to go forward?
How much savings does this really anticipate when the codes keep changing within the building structures themselves every five or six years? New codes and new dynamics come in, along with new regulations by the federal government.
This still relies on carbon energy, doesn’t it? I mean, most of this is still going to be relying on gas and oil, for the most part. There will be some solar, maybe. I’m trying to get a feel for how this is really going to change things a lot.
I’ll also throw this in as an aside. When things don’t go well with the private sector, they are going to start reneging on these loans because this is what people do. They are going to blame the federal government for it because it’s what people do, too. It’s great in theory. But empirically, it hasn’t been proven yet. I’m wondering if you can give some sort of sense of how other countries do it and how it works with them.
Mr. Galloway: I can say it has been going on throughout the entire world, so out in the Far East, and obviously from my accent you know it has been happening in the U.K. and Europe. South of the border, it’s something that they have been doing. In Canada, we have been doing it since the late 1980s. It’s not something new and untried. I’m sorry, senator, but there is empirical evidence of those savings.
The savings have increased over time because our technology has changed. Let’s go back to the old rubbish replacement light bulbs that came in and now we have LEDs. As technology has increased, our savings have increased.
As far as codes and regulations are concerned, the more stringent the codes and regulations, the more imperative it is to do this form of project. Because the idea is you’re bringing your buildings up to that code. You’re bringing the buildings up to those levels of savings. When we have building standards for insulation, this is the way to achieve that. At the moment, we can’t without just going into capital reserves. As we know, we don’t have those capital reserves.
With gas and oil, you are absolutely correct. We do reduce the whole consumption. That is the idea of the whole project. What we’re trying to get to with both the industry and the public sector is that by thinking wider, we can actually now start. Nobody is looking in the world out there at the GHG targets. When they are looking at these projects, they are looking at saving money, saving their budget. They put it down to a building-by-building basis. That is what they are accountable for. That’s what their drivers are for.
We are constantly trying to get them to look higher, and say, “We have these 2020, 2030 and 2050 targets coming down the line. We need to be doing things differently and thinking smarter.” By reducing energy consumption, we can then start sizing our energy production. That’s where we are really going to start hitting more on the GHG savings.
Senator Richards: I have a quick follow-up. When I said theoretical and not empirical, I wasn’t talking about the building codes and the building. I was talking about the overall idea, the overall strategy of global warming. That’s what I was trying to get at. That’s a different problem. So I wanted to straighten that out. Thank you very much.
Mr. Galloway: I didn’t cover the renege on the loans part.
Senator Richards: We’ll leave that for another time.
Mr. Galloway: We take that out of the direct pockets, the balance sheet. That is good.
The Chair: We have two minutes.
Senator Mockler: Thank you for the presentation. Which part of Canada would be smarter and would have more intelligent buildings?
Senator Neufeld: I can answer that.
Mr. Galloway: Is it possible not to answer that question in this forum?
Obviously, I come to Ottawa and I start to get dizzy because the world spins around Toronto, so Ontario is the biggest market for this type of energy savings contract in Canada. I have to say though — for the senators representing Quebec — Quebec is the one that really is behind it, apart from the feds. But Quebec is actually the one that is really behind this type of contract. They have a slightly different structure of contract, and they are working to improve that with Treasury. But Quebec actually embraced this form of contract. They don’t mandate it. But they do embrace it. They seem to get it very well.
Ontario seems to be the biggest market by far. There are some complications over in B.C. with implementation, which we’re working to unlock now. And Alberta is the up-and-coming market.
Senator Mockler: Thank you.
The Chair: Mr. Galloway, thank you for your testimony and for your answers to our questions. It is very much appreciated.
(The committee continued in camera.)