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ENEV - Standing Committee

Energy, the Environment and Natural Resources

 

Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources

Issue No. 15 - Evidence - November 3, 2016


OTTAWA, Thursday, November 3, 2016

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.

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 would like to welcome honourable senators, any members of the public in the room and viewers all across the country who are watching on television. As a reminder to those watching, these committee hearings are open to the public and are also available via webcast on the sen.parl.gc.ca website. You will find more information on schedule of witnesses on the website under "Senate Committees.''

I will now ask senators around the table to introduce themselves. I will begin by introducing the deputy chair, Senator Paul Massicotte from Quebec.

Senator Ringuette: Pierrette Ringuette, New Brunswick.

Senator Patterson: Dennis Patterson, Nunavut.

Senator Mockler: Percy Mockler, New Brunswick.

Senator Seidman: Judith Seidman, Montreal, Quebec.

The Chair: I would also like to introduce our staff. To my far left is our clerk, Lynn Gordon and our clerk in training, Maxime Fortin; and on my right are our two Library of Parliament analysts, Sam Banks and Marc LeBlanc.

Today marks the twenty-second meeting of our study into the effects of transitioning to a low-carbon economy, as required to meet the Government of Canada's announced targets for greenhouse gas emissions. In the first segment of our meeting, I am pleased to welcome representatives from the Canadian Urban Transit Association, Alex Maheu, Director, Public Affairs; and Jeff Mackey, Policy Analyst.

You folks have a presentation. Thank you for being here this morning. We'll wait for your presentation and then go to questions and answers. Thank you.

Alex Maheu, Director, Public Affairs, Canadian Urban Transit Association: Distinguished members of the committee, I would like to thank you for inviting us here today. Addressing climate change is perhaps one of the greatest challenges we face as a society. It is a privilege to contribute to this essential dialogue on how to best move forward as a country.

The Canadian Urban Transit Association is the collective voice of urban mobility in Canada. Our members include both small and large transit systems, as well as transit manufacturers and many other stakeholders within the urban mobile industry. In total, we have 500 members, representing 96 per cent of total Canada-wide transit operations.

[Translation]

We are here today to talk about the action Canada can take to participate in international efforts to solve the issue of climate change. The public transit industry already helps to reduce greenhouse gas emissions in Canada every day. I am delighted to say that the industry is also ready and willing to do more to help Canada achieve this goal.

[English]

I would like to share with you three messages, and I hope these will inform you as you move forward with your sector-by-sector examination of Canada's transition to a low-carbon economy. First, public transit can reduce the footprint of individual Canadians by providing a greener alternative to regular car use, but this type of modal shift in transportation among Canadians will only occur if transit is convenient, quick and affordable. Second, the transit industry is ready to significantly reduce its own emissions through green procurement policies, though there are a few key hurdles that must be cleared before this will have a significant impact on GHG emissions. Finally, transit environmental benefits are maximized when transit investment from all three levels of government combine to forge long-term and economically sustainable transit-oriented communities.

Before I get into these concepts further, I would like to acknowledge the growth of the federal role in building public transit infrastructure over the last decade. If the trend of federal, provincial, municipal and private sector collaboration on transit projects continues, Canadians will soon enjoy the type of comprehensive and sustainable public transit systems they need and want in their communities. The question we must now ask is how this investment can best be targeted to meet national objectives like economic prosperity, improvement of quality of life and the reason we are all here today, which is to see how transit can reduce national GMG emissions.

Transit can help reduce individual GMG emissions through a modal shift, which is what we call it when people move away from private car use toward more sustainable methods such as urban transit, cycling and walking. Four out of five Canadians, or 80 per cent of, use private vehicles to commute to work each day. Private car use is a high GHG per-passenger method of transportation, and it contributes greatly to our congested roadways.

[Translation]

Traffic jams are unpleasant and have an economic impact on our cities, but they are also a risk to the environment. Simply put, having thousands of cars slow to a crawl twice a day, five days a week is more than unpleasant; this situation poses a risk to the environment.

Basically, traffic is a logistical problem with a simple solution: we can free up space on the roads by ensuring that people with similar departure points and destinations use public transit.

[English]

A 2010 report estimated that riders travelling by transit rather than personal vehicles resulted in a GHG reduction of over 2.4 million tonnes. The use of urban transit also reduces smog in cities, an issue related to but separate from GHG emissions. Smog is common in congested cities and is associated with serious health concerns, including heart disease, stroke, high blood pressure, Type 2 diabetes and cancer.

The environmental case for investing in public transit is well established. The hard part is actually getting people to change their travel behaviours. The transit industry harbours no illusions that a critical mass of people will suddenly switch from their private cars to transit based solely on the environmental merits of daily transit use.

Instead, the key to creating a modal shift in our society will involve three factors: convenience, efficiency and cost — in other words, making transit easier, faster and cheaper than taking a car for one's daily commute.

As an industry, we are also working hard to green our own operations. From coast to coast, transit systems are adopting green procurement and replacement policies, and are looking to build energy-efficient and climate-resilient fixed infrastructure.

The transit industry is looking to take the lead on GHG reduction within the larger transportation sector. Transit can reduce its emissions through the commercialization and utilization of alternative propulsion technologies — for example, natural gas, electric, fuel cell; as well, hybrid technologies in buses and trains are proven to reduce emissions and often provide more comfortable, quieter rides for passengers.

The high incremental costs of purchasing alternative propulsion buses and their supporting infrastructure create a procurement barrier for transit systems that are already struggling financially to provide their current level of service to Canadians.

[Translation]

Still, Canada's public transit systems are working to green their vehicle fleets. In Montreal, for instance, the 28 hybrid, biodiesel-electric buses recently acquired by the Société de transport de Montréal provide fuel savings of 20 per cent compared to the buses they replace. In fact, the reduction in GHGs by the electrification public transit fleets is one of the major pillars of the Province of Quebec and the City of Montreal plan to reduce GHG emissions by 30 per cent by 2020. After 2025, the STM wants all of its new buses to be electric. In addition, the STM wants its full system to achieve zero GHG emissions by 2040.

[English]

However, before the transit industry at large is capable of providing zero-emissions services, it must continue to optimize the next generation of transit technologies and processes, from cutting-edge alternative propulsion technologies to lightweight transit materials that offer improved fuel efficiency. That why CUTA has worked with its members to create the Canadian Urban Transit Research and Innovation Consortium, known as CUTRIC, to pursue an aggressive agenda of industry-academic collaborations in the development of next-generation technologies for Canadian transit and transportation systems.

It's because of the great work done by Canadian transit manufacturers that over 70 per cent of North America's urban transit bus market is supplied by Canadian-based companies and why there are competitive transit technology clusters in Ontario, Quebec, Manitoba and British Columbia. CUTA hopes the government will find ways to support green R&D and innovation in Canada.

[Translation]

This is a very dynamic period for public transit in Canada, as a result of phases 1 and 2 of the new Public Transit Infrastructure Fund and of the federal government's prior commitments. However, building green public transit systems in our urban spaces remains an aspiration and is in no way settled in advance.

[English]

Canada must go from taking a project-by-project approach to transit toward building a long-term fiscal framework for transit infrastructure development that thinks of transit expansion on a generation level. This will provide transit systems with the assurances needed for them to plan and, ultimately, build forward-looking infrastructure.

Finally, we as a country should also place a higher emphasis on transit-oriented development. This approach to development emphasizes high-density planning in close proximity to transit stations and with rapid access to employment centres all built into the community's core design. According to the Victoria Transport Policy Institute, residents of transit-oriented developments tend to own 15 to 30 per cent fewer vehicles, drive 20 to 40 per cent fewer annual kilometres and rely more and walking, cycling and public transit than they would in automobile-dependent communities.

I would like to conclude by thanking this committee and the federal government at large for their commitment and interest in Canada's transit sector.

The debate about how to reduce GHG emissions does not need to be an abstract conversation. The transit industry is ready to contribute further environmental efficiencies to Canadian society today. This starts with supporting a modal shift away from high GHG-per-passenger modes of transit and toward transit and active transportation. The shift should be supported by an emphasis on transit-oriented development for all new infrastructure projects. Finally, we must move to address the procurement barriers preventing the adoption of green transit technologies.

Thank you for your time, and I look forward to your questions.

The Chair: Thank you very much for that presentation. We'll go to questions. Senator Massicotte.

[Translation]

Senator Massicotte: Thank you for being here this morning. The topic is very interesting and very important for our society and for the entire world.

Representatives from the Conference Board appeared before our committee recently, and I was struck by their comments that public transit, especially the bus, does not contribute greatly to achieving our goals because it is more a matter of convenience, congestion and smog, and not necessarily a matter of reducing our CO2 levels.

In the evening, when fewer people use public transit, it would be more advantageous for people to use their cars. Can you put that in perspective? How do you see it?

Mr. Maheu: The public transit sector in Canada represents about 1 per cent of all sectors in Canada in terms of GHG emissions.

Many changes can happen when buses operate at full capacity. So if a bus has a capacity of 65 people, we can significantly reduce GHG emissions by ensuring that people swap their personal vehicles for public transit. To give you an idea, every bus on the road can replace 50 private vehicles, which reduces congestion and GHGs.

In big cities, we can see a modal transportation shift, where people can leave the car at home and take public transit to work.

Senator Massicotte: Your premise is that buses are operating at maximum capacity, when often this is not the case, with our suburbs a little spread out and with the extended schedules of some people. What is the typical average number of riders on a bus?

Mr. Maheu: Peak times is really when we see a reduction in GHG emissions. You are right when you say that buses are not as full later in the evening and in communities with less density, which is why we want to promote the acquisition of greener, hybrid or diesel-powered vehicles. The quicker we can reach zero emissions, the better. Public transit is an essential service that we must provide to Canadians because not everyone can afford a personal vehicle.

Senator Massicotte: You mentioned the Société de transport de Montréal, which will reduce its GHG emissions with the electrification of its buses within five years. What will they run on? Not batteries because they do not yet perform well enough.

Mr. Maheu: We are looking at certain things for Montreal. Their metro is 100 per cent electric. They are trying to ensure that the buses will increasingly be electric. They are trying to have an acquisition plan for electric buses in 2025 that will be powered by fast-charge batteries. These are pilot projects at the moment. A partnership is being developed with Nova Bus, a bus company based in Saint-Eustache, Quebec. They are running tests to see if their technology could meet STM's needs.

Senator Massicotte: They are still at the pilot phase. Nothing is certain in terms of achieving the goals. Is that it?

Mr. Maheu: That is it.

[English]

Senator Seidman: Thank you for your presentation.

You talk quite a bit about research and innovation, and you said that you worked to create the Canadian Urban Transit Research and Innovation Consortium to pursue AN aggressive agenda of industry-academic collaboration. How is that financed?

Mr. Maheu: It's financed primarily by the members themselves, the manufacturers and suppliers in the industry who want to work in collaboration with academic institutions to do R&D and demonstration projects. They are putting forward their share of the funding. They are looking for the federal government to partner with them at this moment to the tune of $185 million for the next four years. This represents a 50 per cent cost share of what they have already put forward. They have money on the table right now. They are already starting this work.

Some provinces have shown interest as well. The Province of Ontario has dedicated some money toward CUTRIC, but we're looking to partner with the federal government right now to make sure we can see these projects move forward.

Senator Seidman: Is this an active file right now? Are you, as an organization representing these companies, actively pursuing government funding of R&D for this type of collaboration?

Mr. Maheu: CUTRIC is its own entity and came out of the Canadian Urban Transit Association. Our members are very similar to the members within CUTRIC. What we were seeing is that members within our association, the manufacturers and suppliers, were talking about the R&D and innovation they were doing here in Canada and the potential to export this technology and knowledge to other places around the world; however, they wanted to continue to optimize the technologies they were working on, and they realized they should be working together to get this going. The members are similar to the consortium we currently represent.

Senator Seidman: There is always a problem in R&D of people working in silos, and so this is obviously a good opportunity. The question is whether these companies are really working together to develop Canadian innovation, that they indeed, as you say, can share with the world and become leaders.

Mr. Maheu: What you have to look at is that the technology readiness levels, as you have probably seen, are one to eight, and where our members are working together is the pre-commercialization aspect, a lot of the academic research, including all the way to the demonstration projects just before commercialization, and that's when, on their side, they will go their own way and develop technologies.

What is good about these consortiums is they understand that what gets developed from it, these companies get to have the intellectual property associated with it, and it's shared with the universities and colleges that participate.

Senator Seidman: In other words, pre-commercialization is ticking along, but commercialization is the greatest challenge in this country. How do you see us overcoming that?

Mr. Maheu: Within our industry now, we see a lot of demonstration projects happening, particularly on the electric file. We have a Pan-Ontario Electric Bus program that is being demonstrated at this point in time. It is a lot of our members from the GTHA area, like Brampton Transit, York Region Transit; they are all partnering up, including with bus manufacturers like New Flyer and Nova Bus, based in Canada, to bring technologies together and test them out on their own circuits and operations to see how viable these technologies will be. They are also partnering with the electric utilities to see, when these buses are being plugged in or charged at a depot, how much it will take from the grid in terms of energy use.

The key is the demonstration projects happening across the country. There are some happening in Montreal as well, and once we see it is a feasible technology, you'll see a lot more commercialization. It has to be a proven technology, and once these tests prove that electrification is viable for the transit industry, we can see it commercialized.

Senator Seidman: Is electrification the key piece being worked on? What is the most promising?

Mr. Maheu: In the interim we are certainly looking at natural gas, but in the long term it would be battery electric vehicles because of the zero tailpipe emissions. You have to look at the upstream GHG emissions in Quebec. It is the most viable solution, because hydroelectricity is renewable, so low GHG emissions in general. It is case by case, province by province, but in Quebec you see electric as the favoured alternative transportation technology.

Senator Fraser: Thank you very much. On page 6 of your presentation, Mr. Maheu, you say a report estimated that riders travelling by transit rather than personal vehicles resulted in a GHG reduction of over 2.4 million tonnes. Is that people who are now using transit and who would be emitting 2.4 million tonnes, if they were in cars, or is it an estimate of what would happen if a given proportion of people switched to public transit?

Mr. Maheu: The estimate is based on whether public transit didn't exist and people were using private vehicles.

Senator Fraser: It's people who are now using?

Mr. Maheu: That is right.

Senator Fraser: In your very last line, you say that you must move to address the procurement barriers preventing the adoption of green technologies. Could you talk more about that?

Mr. Maheu: In various sectors of transportation, alternative propulsion technologies are more expensive than the conventional diesel technologies that exist within the transit industry. There is a high incremental cost of purchasing. For example, a diesel bus in Canada is around $500,000 to procure. If you want to buy an electric bus, it will be around $1 million. A hybrid would be $750,000.

You can see there is a high incremental cost there, and municipalities have tight operating budgets, and when it comes time to procure vehicles, they have to make these decisions. How far do you want your dollar to stretch? Do you want to buy two buses or one? These are factors they have to take into consideration. If the Government of Canada and provincial governments are looking at ways to reduce GHG emissions, we can certainly help because there are technologies out there that are commercialized that we can start procuring, but there is a cost.

Senator Fraser: We're talking about money rather than rules of some sort?

Mr. Maheu: Yes, money. Thank you for bringing it up. There is now a monopoly, I would say, in diesel and natural gas engines where there is one major provider in North America, Cummins, who provides these engines for transit systems. We are noticing, particularly for hybrid buses, that there are smaller engines that emit fewer GHGs that are smaller that we could use in North America; however, they are not tested to meet the Environmental Protection Agency standards.

When we look at the difference, they are at par with EPA standards. It is just companies in Europe having to come to North America to get these tested by the EPA. There are procurement barriers from that perspective as well. There are engines around the world that our systems are looking at that would be smaller than the current engines that could be useful for their hybrid vehicles, but at this time point they cannot procure them.

Senator Fraser: Are you going to cut me off, chair?

The Chair: No.

Senator Fraser: That brings me to a question that I thought of while I was listening to your exchange with Senator Massicotte. It's true we all see, outside rush hours, buses with very few people on them. It seems to me in most places there are two standards of buses — big and huge, like an accordion.

If you want people to shift to transit, you want, among other things, frequency of service. Maybe this is an idiotic question; if so, just say so. What would be the barriers to having, alongside the standard buses, a fleet of smaller buses using smaller engines that could go more frequently?

Mr. Maheu: It's an asset management question at the municipal level, and they have an operating budget. As they are looking to replace some of their fleets and see where the needs are in different communities, it makes sense to have smaller vehicles going places where there is low density.

We will see some transit systems that have trouble providing services to low-density communities maybe contract out some of their services. You see it with the taxi industry, and maybe in the future you will see it with ride share programs with Uber. Perhaps there are partnerships that can be done with public transit for the first and last mile, let's say, to help public transit agencies provide services to communities with low density.

Senator Ringuette: Has there been an increase in ridership on public transit in the last five years? If so, what has been that incremental increase?

Mr. Maheu: I can give you what it looks like in the past decade and what it is currently. In the past decade, ridership has increased by 20 per cent, which is substantial. However, in the past year ridership has remained stagnant. Now, there are a lot of reasons why we think that is, and one of them is sometimes with the economy there is a direct correlation or link with unemployment. When your economy is in a slump, your ridership goes down.

We've also seen the cost of fuel at a low price, historically, at this point in time, so perhaps people are choosing to use their personal vehicles because it's cheaper for them to do so — they can afford the fuel that way — than taking public transit.

Another aspect to look at is we're seeing more and more policies within organizations where employees can work from home. We're also seeing a lot more people cycling to work or walking to work; we're seeing an upward trend there. We're looking at all those factors that can impact ridership.

Walking or cycling to work is something we encourage because we're all about integrated mobility, so if more people want to walk to work or take their bikes instead of using public transit, that's fine as well. We just have to look at it from that perspective.

Senator Ringuette: When you said "convenience, efficiency and costs,'' what would be the average cost for a bus ride in Montreal, Toronto, et cetera? What would that cost be?

Mr. Maheu: It depends; obviously, it varies. The average is $2.30 to ride public transit. On average, on a yearly basis, if you were to purchase an annual bus pass, it would probably be between $1,300 to $1,500 a year.

Some estimates from CAA show that owning a sedan-style personal vehicle can cost $8,000 to $10,000 a year for operating and maintenance costs. Those include insurance, fuel and parking. There is a major difference there in terms of owning a personal vehicle and taking public transit, from a household cost perspective.

Senator Ringuette: I'm going to the daily cost of $2.30 times two for back and forth. You're looking at roughly $5 to $6. So I'm puzzled that, with that low cost, you identify it as a high cost to incite people to take public transit, on the one hand. I see it as a relatively low cost — $5 or $6 a day — to go back and forth to work.

The issue of cost to the rider is really not that big of an issue in comparison to owning a car or using your own car to go back and forth to work. Just the cost of parking is probably double or triple —

Mr. Maheu: It differs on a city-by-city basis. If you are looking at the GTHA, it's more expensive to ride public transit than in a smaller city or a medium-sized community.

But it's not just the costs but also the service and the frequency. We have to make sure that public transit provides an alternative solution so folks do not necessarily want to take their vehicle. It's about saying, "Public transit is 500 metres away from my residence. I know it's going to pass by frequently, it's fast and will get me to work in a timely fashion.'' That's the challenge we're up to providing to Canadians. We want to make sure we can provide that. It's going to take some investments, and we're certainly happy to see that the federal government is up to that challenge of investing in public transits.

Senator Ringuette: I would like the data on ridership. If you don't have it with you, could you provide that to the clerk of the committee? You say that ridership increased by 20 per cent in the last 10 years, but I'd like to see the data.

Mr. Maheu: As I mentioned, ridership in the past few years has remained stagnant. We've seen, approximately, a 1 per cent increase in ridership.

Senator Ringuette: So the tax credit that was allocated in regard to people who use urban transit did not provide the incentive it was intended to.

Jeff Mackey, Policy Analyst, Canadian Urban Transit Association: The tax credit has been around for some time now —

Senator Ringuette: About five years.

Mr. Mackey: — and we do think it was a driver and that it was an effective piece of policy to get people to use transit more.

When you look at transit ridership, the single biggest factor in increasing or decreasing ridership is the level of employment. People are using it to commute each day. So there are external factors beyond things like cost that have major effects on ridership.

Another issue that hasn't been brought up yet is that some of our major urban centres are dealing with an issue of capacity and coverage where there are some lines in Canada that, while they may not be at crush capacity, they are crowded enough that they are very uncomfortable to ride, and people will find alternative methods of getting to work.

The other issue is coverage where there are large areas of our major cities that do not have rapid and frequent transit. This is an underserved population that is not being included in the statistics. Obviously, large capital infrastructure projects for new LRTs, subways, buses and rapid transit will have an effect on those populations.

Senator Lang: I'd like to make an observation on the presentation to begin with. Like the chair, I spent many years at the provincial-territorial level in politics — the provincial and territorial responsibilities versus Canada. In some parts of your presentation, the provinces are mentioned but certainly aren't highlighted. It would seem to me that the provinces have to play a major role in this from the point of view of their responsibilities, constitutionally, and from the point of view of money, if we're going to proceed. You might want to comment further on that, because I would suggest there should be a significant cost-sharing of any venture that goes forward.

I want to go back to the question of GHG emissions because you never really touched on that. The previous government took, over a number of years, various sectors in the economy and discussed the targets that they were able to attain. They tried to come up with agreements with each sector that made common sense.

Was your sector involved in that? If so, do you have any idea what your GHG emissions are? What would you be able to attain by 2030 to contribute to the decrease?

Mr. Maheu: To address the point on jurisdiction, you're absolutely right. The provinces definitely need to play a role in helping to fund and expand public transit systems in their own provinces; jurisdictionally, it does come from the province side. Given that, we would like to see a cost-share there — perhaps one third federal, one third provincial and one third municipal. There are also opportunities in major cities for big expansion projects for the private sector to play a role as well.

In terms of our own greenhouse gas emissions, I don't recall what involvement we may have had with Environment Canada or Statistics Canada five years ago on our own targets within our industry. However, I can tell you that we have reduced our own GHG emissions by about 15 per cent since 2009. If we do some rough math right now, our footprint is approximately 6 million to 8 million tonnes a year. We think we can significantly reduce that just by making sure our own vehicles, stations and bus depots are procured through green policy initiatives.

Mr. Mackey: While urban transit constitutes about 1 per cent of national GHG emissions, the transportation sector at large is the second-biggest emitter as an industry. Our real efficiency on the national stage is in the model shift — people going away from private car use and toward transit. Success looks like emissions reducing from private car use as opposed to reducing, necessarily, in the urban transit sector.

Senator Lang: I understand that. But as you said, specifically for the fleets that your organizations are running across the country, there are 6 million to 8 million tonnes of emissions from your own systems. What I was getting at was with respect to your ability to go to gas. Do you have any data on what your emissions would be? And what would be the cost of doing that?

Mr. Maheu: The way we calculate GHG emissions right now within the association is to look at the rate of fuel consumption and multiply that by the CO2 coefficient. That's how we come up with our carbon footprint for our own industry, for our vehicles. As you move to, say, more electric vehicles that produce zero tailpipe emissions, we'd be doing the comparative that way and we'd be looking at nearing zero GHG emissions if we could replace all 16,000 vehicles rolling in Canada right now in the public transit industry.

But then again, you have to look at your buildings, right? There are a lot of depots and stations out there, and our systems are putting more and more LEED-certified buildings in place, but there is also infrastructure that needs to be rehabilitated.

Senator Patterson: Thank you for the presentation.

The Minister of Transport has launched consultation on developing a long-term agenda for transportation in Canada, and I believe he's making a speech today in Montreal to announce the results.

Did CUTA or CUTRIC participate in this consultation process, and did you make any submissions which could be shared with the committee?

Mr. Maheu: We participated in consultations for the Canada Transportation Act review. I believe that was last year, and I can certainly provide that to the committee. We also consulted with the Minister of Transport, and what we'd like to see in a strategic plan for transportation in Canada is a holistic vision of passenger and freight transportation, particularly in major cities where a lot of the imports and exports are coming from. If we can help to reduce congestion in our major cities and have freight and merchandise take up the highways and go back and forth freely, there would be an increase in productivity there.

What we're saying is we want to see a holistic approach between passenger and freight transportation. We feel we can help reduce the congestion on that side by getting people out of cars and into public transit, thereby freeing up the highways so the trucks can take the merchandise where it need to be.

Senator Patterson: The Vancouver Declaration spoke about advancing the electrification of vehicle transportation in collaboration with the provinces and territories.

You've mentioned natural gas, electric, fuel cell and hybrid technologies in buses and trains. In light of the Vancouver Declaration, and in order to meet Canada's emissions targets, do you believe that substantial electrification of the transportation sector must occur? And if so, since the electricity mix varies between provinces and territories, would electric public transportation make more sense in some provinces and territories than in others?

Mr. Maheu: I believe on the electric side, definitely it's a province-by-province approach. In some provinces, like Quebec, as I've mentioned, it would probably make a lot more sense to go fully electric.

When we look at natural gas, there are more and more systems out west that are using these types of buses right know. There's a company called Cummins Westport that's based in Vancouver that has just developed a new natural gas motor that is near zero emissions for air pollutants for NOx. There are many technologies being developed even in natural gas, so in the interim, perhaps that might be a more viable solution for them, but it really is a province-by- province approach.

On the electrification side, I can tell you that there are a lot of demonstration projects happening across the country, but there are some companies, right now, who have commercialized their fully electric buses. The batteries are also warrantied for 12 years, which is great for a transit system looking to procure these, in terms of maintenance and operating costs. They know the battery is guaranteed for 12 years. The company I'm referring to is BYD, an acronym for Build Your Dreams. They have tested their bus in the Canadian market. At the STO across the river here, they tested their fully electric bus for one year, and it performed really well in the winter conditions. On the operations side, typically the cold is something that our transit systems want to make sure won't impact the batteries, but it didn't. Their batteries performed well, and the buses and the driving range are good.

Senator Patterson: Did the bus have to be put in a heated garage when it wasn't operating in the winter?

Mr. Maheu: It needed to be charged, so it had to go to a depot, which probably was heated. That's a good point.

Senator MacDonald: Although I'm here on the Energy Committee, which I love, I'm also on the Transport Committee, and there seems to be a lot of cross-pollination in some of these subjects.

You mentioned the arrival of disruptive services like Uber and Lyft, and I think they are going to have an impact on how people move around, particularly in urban areas.

On the Transport Committee we're soon going to be studying, at the suggestion of the minister, and we were pleased to take the suggestion, the arrival of disruptive technology such as automated vehicles. What sort of preparation is going on by the people who manage transit in urban areas for the arrival of these disruptive technologies? It looks like they're coming fairly rapidly.

Mr. Maheu: Absolutely. It is a topic that we are continuously looking at. We have several conferences and policy sessions where members from transit systems across the country come together to talk about these issues. Automated and connected vehicles are not necessarily new in the transit industry when you look at them from the rail operations perspective in Canada. We have several trains that are currently automated. The SkyTrain in Vancouver is a driverless train and has been like that for a while, so there are some technologies there now. If you have a dedicated rail line, it's a viable option to go to automated or connected.

What we have in some cities is bus rapid transit, with dedicated lanes specifically for buses. We feel there could be an opportunity there for pilot projects to perhaps have a few connected buses in dedicated lanes not shared with private vehicles, so you can ensure that you can test these pilot projects.

The one thing we want to make sure we look at is the safety and security aspect of these things. Public safety is the number one concern for public transit systems, and we want to make sure these technologies are fully operational and safe before we implement them across the entire country.

Senator MacDonald: I'm going to give you a heads up: We may have you fellows in again for the Transport Committee.

[Translation]

Senator Mockler: I listened carefully to your presentation on the five steps to reducing GHG emissions. It was mentioned that public transit can play a role in reducing GHG emissions, both individually and industrially. We can also see that the results are different for the small provinces with lower populations. However, you still want to achieve results per person. So if that is the case, given the challenges of total infrastructures, do you think that governments — municipal, provincial, territorial and federal — should give priority to public transit instead of building new roads in urban centres and the surrounding areas?

Mr. Maheu: Certainly. Urban centres should give priority to public transit. The option of building or widening a road would only increase the number of vehicles on the road, whereas if we build roads dedicated to public transit, we could instead encourage people to change their transportation habits.

Since the federal government is investing heavily in public transit at the moment, we are taking advantage of an exciting opportunity to build rapid and comfortable public transit systems. If people had access to a public transit service within one kilometre of their homes, they would most likely be more inclined to give up their cars.

Senator Mockler: So if I understand correctly, you are facing a fine challenge. What is the current state of public transit infrastructure in Canada, and which provinces are the most forward-thinking, the leaders in the race to reduce greenhouse gas emissions?

Mr. Maheu: About 25 per cent of the need for public transit in Canada relates to rehabilitating existing infrastructure, which means replacing older vehicles or renovating stations. The other 75 per cent relates to expanding needs. The demand for public transit has increased in recent decades.

As for the most forward-thinking provinces, I would say that Ontario is committed to public transit. In Toronto, The Big Move is a long-term, forward-thinking plan. British Columbia also has an interesting plan for Vancouver. Canada's major cities are generally leading the way with public transit. Even Calgary has major initiatives under way with the C-Train.

[English]

The Chair: The HOV lanes are used a lot, which buses can occupy, for more than two or three passengers. That's a way that communities or cities are trying to adapt and make it easier for buses. Would you agree?

Mr. Maheu: Absolutely, yes.

The Chair: You say batteries for a bus last 10 to 12 years. What does a battery cost?

Mr. Maheu: The battery for an electric vehicle would be the most expensive part. When we're looking at the incremental aspect of purchasing an electric vehicle instead of diesel, that $500,000 cost difference has to do with the battery. I have mentioned that the battery life was 10 to 12 years, but that is according to this company called BYD.

We've seen other technologies in hybrid vehicles tested here in Canada where some of the batteries were supposed to last five years and unfortunately only lasted two and a half years and needed to be replaced. There was a huge cost to replace all those batteries.

Again, the technology is being optimized. We're close, but it comes down to how well these batteries perform.

The Chair: Can you tell me what a battery costs?

Mr. Maheu: I don't have that off the top of my head, but I can provide that information to the committee.

The Chair: In bullet 4 in your pamphlet, you talk about train operators reducing emissions through operational best practices and streamlining. I'm familiar that the mining industry has been doing this for decades. How far along is the transit system in doing that?

Mr. Maheu: It is a training program called SmartDRIVER put on by CUTA, and we provide it to our transit systems across the country. There is a cost to that, so not everyone receives the training. Essentially the idea is to look at driving patterns and behaviours from drivers and help them optimize the use of it; so when looking at anti-idling policies, that's part of the program. Also driving patterns in terms of high acceleration or braking, we're asking them to look at that, and optimizing the routes.

These are all little things that can ultimately help reduce the diesel or fuel consumption of the vehicle but also GHG emissions.

The Chair: How long has the transit industry that you represent been doing this, and when did it start taking place in real life? When did the rubber hit the road?

Mr. Maheu: To my knowledge, it has been happening for about a decade, and it's still happening. We're still providing this service and training. We're also seeing a lot of bus manufacturers implement software programs in their own buses that tell the driver in real time how their own performance is doing relative to driving the vehicle. There is innovative software that bus manufacturers are working on that helps contribute to drivers reducing their GHG emissions.

The Chair: That's very good. In your presentation, you said the 2010 report estimated that the reductions in greenhouse gases were 2.4 million tonnes. I know taking people out of their cars and putting them in buses is where you're going to get the biggest reduction in GHGs.

Mr. Maheu: Absolutely.

The Chair: Do you measure that every year? Is there some place where you move that forward so there can be a measurement, or was it just 2010 we're going to do something?

Mr. Maheu: We have Transit Vision 2040. It is this big encompassing plan that we have for the industry and where we want to see the industry go by the end of 2040, and part of it is the environmental footprint.

We don't measure it on a year-to-year basis. Based on government's interests, we will be looking at doing reports and updates so that we can have better benchmarking and see how the needle is moving in terms of trends. At this point, it's not being done on a yearly basis. We do track our own GHG emissions, but it would be great to see with the modal share and split how we continue on a yearly basis to reduce that.

Senator Seidman: In your presentation, you twice referred to a few key hurdles around enhancing green procurement policies that must be cleared before you can have a significant impact on national GHG emissions. You referred to a few of them, but very directly, what would those key hurdles be?

Mr. Maheu: It's the high incremental cost of procuring alternative propulsion vehicles. That's a key hurdle because municipalities have tight operating budgets, so if there is financial help from perhaps the provincial or federal governments to procure these green buses, that is a big step.

In terms of other policies, we're looking at transit-oriented development, and that comes from a municipal jurisdiction. But the federal government has announced a lot of funding for public transit; perhaps some program parameters could be made around that, that if there is an expansion of services it should focus on transit-oriented development policies. That's another big one.

Senator Seidman: That is a big one. The transit-oriented development makes me think of, for example, a young family living in the suburbs that has to take kids to daycare in the morning, get to work and get back. There is urgency to their travel, and these are the people saying they don't fit into the programming of the public transport currently available. Does this figure into the planning?

Mr. Maheu: Transit-oriented development is built about people being able to live, work, play and shop all within their area, while reducing car dependency. We're not pitting one mode of transportation against another. If a family needs to use their vehicle, that's fine, but for those who don't necessarily need to, then perhaps they could take public transit. It's about offering a bunch of transportation solutions for Canadians so that they make the best choice for themselves. Everybody has a different case, and everybody has different needs.

These families may not necessarily make use of public transit; however, as I mentioned, transit-oriented development is about high-density, mixed-use residential and commercial areas, where people can get groceries and also walk or bike for these services.

[Translation]

Senator Massicotte: I would like your opinion as a public transit expert on VIA Rail's proposal to spend $5.4 billion to triple the number of passengers, while reducing mass transit wait times by 25 per cent. Are these numbers realistic?

Mr. Maheu: That is a good question. You would have to ask VIA Rail. We can work on an interurban basis with mass transit, such as with a high speed rail line in the Ottawa-Toronto-Windsor corridor. When the trains are arriving in big cities, stations could be installed where urban transit could pick up riders to take them to their destinations.

[English]

The Chair: Thank you. We appreciate that.

In this second portion of our meeting, I'm pleased to welcome representatives from Hydro-Québec: France Lampron, Director, Transportation Electrification; and Louis Beauchemin, Senior Director, Subsidiary Management.

Please make your presentations, and then we have questions.

[Translation]

Louis Beauchemin, Senior Director, Subsidiary Management, Hydro-Québec: I will take a few seconds to give you a brief overview of Hydro-Québec. Hydro-Québec was created in 1944, and the nationalization of private businesses ended in 1963.

Last year, Hydro-Québec contributed $3.5 billion to Quebec's public finances. It is one of the largest electricity companies in Canada, with revenues of $13.7 billion. It is also one of the top renewable energy producers in the world. It is responsible for close to 45 per cent of hydropower generated in Canada.

Hydro-Québec produces, transmits and distributes electricity. We have been active in electric mobility for over 25 years. We are a leader in Canada with several pilot projects, including the deployment of the largest public charging network in Canada, and we will talk about that a little later.

Hydro-Québec has the lowest electricity prices in North America. Our business priorities for 2020 are to double our revenues within 15 years, become a leading example of customer service, contribute to the economic development and energetic transition of Quebec, and to limit rate increases to a level less than or equal to inflation.

Mobility is changing completely, not just in Quebec and Canada, but around the world. The graphic before you will give you an idea of where we are headed.

People who have a personal vehicle will be able to charge it at home most of the time. More than 90 per cent of charging will be done at home. Some people will use public transit, others will not. There will be more and more lanes reserved for public transit, like buses, or for electric vehicles. Some people who do not have a driver's licence will use self-driving cars. It will be easier to rent a car for an hour, the day or the time needed, as we are seeing increasingly in Montreal.

Today, there are about 12,500 electric vehicles in Quebec, or half the number of electric vehicles in all of Canada, even though Quebec accounts for only 23 per cent of the Canadian population. One reason for this phenomenon is the significant economic advantage of electric vehicles. A Honda Civic, for example, uses an average of 8.2 litres per 100 kilometres. Gas currently costs about $1.18 a litre, which means that the approximate cost is $9.67 per 100 kilometres. Yet, for a comparable electric vehicle, the cost is $1.98, which is an annual savings of $1,500 to $2,000.

For example, I have a hybrid electric car. I filled it up with gas in August. Since then, I have driven 2,000 kilometres, and I still have half a tank of gas.

France Lampron, Director, Transportation Electrification, Hydro-Québec: I would like to give you an overview of what Hydro-Québec is doing in the area of transportation electrification. We have been working actively in electric mobility for 25 years. However, activity became even more robust in 2009.

In 2009, for the first time, the company added a full section on transportation electrification and an action plan to its five-year strategic plan. In the following years, this led to several electric vehicle demo projects. Remember that electric vehicles were not available on the market in 2009. So we conducted demo projects to ensure that using an electric vehicle in a climate like Quebec's was feasible. The response was tremendous: no problems were noted in using an electric vehicle, even on the coldest days when the temperature was -30 oC.

In 2012, we launched our public charging network called the Electric Circuit. In 2014, we continued with a fast charging corridor on highway 40, which connects Montreal with Quebec City. In 2015, we signed a partnership with the City of Montreal to deploy 1,000 curbside charging stations in the metropolitan area by 2020. These stations will be used for car-sharing, for drivers who do not have a station at home and for the general public. We have about a hundred stations, which should increase by 2020. We should end the year with 800 stations throughout Quebec, including about 60 fast charging stations.

That gives you an overview of what we have accomplished in recent years. Now, I will explain what is ahead for Hydro-Québec in terms of electric mobility. We have currently deployed fast charging stations along highways in Quebec, with one station per location. However, we are seeing increasingly that lines form at certain strategic locations. We will have to double the number of charging stations and install a station of the future, which resembles the Star Trek Enterprise to some degree. We want to design a station that would look like a conventional service centre but that would only offer fast charging stations. A fast charging station is 50 kilowatts. It takes 20 minutes to recharge a vehicle. As car batteries become larger, we will need 100 kilowatt, 200 kilowatt and 300 kilowatt charging stations.

That's what we are working on right now. Next year, we should have a prototype of those stations. By 2018, we should start deploying them all over Quebec.

We have another pilot project on power exchange, the V2G/V2H. The idea is to use the energy from the battery of the electric vehicle while it is parked at home, either by putting it back into the grid or by supplying the home in case of power failure. Right now, we have 12,000 vehicles. It is still a small number, but if we were to have 1 or 2 million vehicles someday, this could be a very useful tool to manage the power grid.

We have conducted a pilot project with our research institute. We converted a conventional vehicle, a Jeep Compass, into an electric vehicle with a bidirectional charger. Our research team has also developed a bidirectional station, which has been a success. We do not have any technological issues, but we have commercial issues.

In terms of public transit, the solution is not to replace all conventional vehicles with electric vehicles. We are convinced that public transit must play an important role in reducing greenhouse gas emissions and congestion in major cities. We are contributing financially to various pilot projects on public transit, which are in the list.

We are conducting a project called Cité Mobilité, where three quick-charge buses from the Société de transport de Montréal (STM) are expected to start running at the beginning of next year. We also have a quick-charge plug-in hybrid bus project with the Société de transport de Laval. For your information, a quick charge takes a few minutes at the beginning and at the end of the trip. We are also involved with the AVT. That association brings together all Quebec transportation companies to look for the most appealing electric solutions for transportation companies. In addition, we are working with the Caisse de dépôt on its 67-kilometre electric train project in the greater metropolitan area. Lastly, through our subsidiary TM4, this year, we will equip 6,000 buses in China with Quebec engines developed in Boucherville.

In conclusion, you have discussed this with the witnesses before us. In the province of Quebec, 99 per cent of electricity is renewable. Clearly, transportation must be electric. It is clean fuel that costs a lot less. We can take advantage of an existing infrastructure, because drivers recharge their batteries at home 95 per cent of the time. There are already sockets in houses. This is a net benefit for the trade balance, providing us with greater energy self- sufficiency.

Senator Massicotte: Thank you for being here today. This is a topic of great interest to us. It is a challenge for Hydro-Québec to contribute to the entire world.

The gap that is still there is the range of cars that we can access to avoid internal combustion engines. You have invested hundreds of millions of dollars in technology. Will the miracle battery be found soon? Are we ready? In 10 years, do you think we will find a battery that will use a lot of energy to provide all kinds of solutions?

Mr. Beauchemin: I would first like to answer a question that the chair asked earlier. Batteries around the world represent about $350 to $500 per kilowatt per hour in terms of the cost of production. Hydro-Québec has being doing a tremendous amount of research for over 25 years on batteries, particularly for power grids. In a few months, we will be installing two batteries that will bring 1,200 megawatts per hour to our power grid in Hemmingford.

The time is coming when it will no longer be necessary to have greater autonomy because one of the solutions will be to have service stations close together, like Esso, Shell or Petro-Canada are now. These days, I often drive on electric power 100 per cent of the time. I know where the stations are, and my car is recharged in 20 minutes. Of course it takes more than 10 minutes to fill up, but it's just 10 minutes more.

Senator Massicotte: I understand your solution, but I did the exercise recently. Say I'm leaving from point X to go to California. It's very difficult to plan the trip. It would be possible with a battery allowing us to drive for four or five hours without stopping, the way a gas tank does. Will the technology enable us to do that?

Mr. Beauchemin: In January 2017, we will be able to buy a Chevrolet Volt that will be autonomous for about 380 kilometers, which is quite sufficient.

Senator Massicotte: We are still talking about small cars. Will the battery be powerful enough for trucks and buses?

Mr. Beauchemin: We talk a great deal about personal vehicles, but buses and taxis will be the ones benefitting. For example, in Montreal, Téo Taxi has more than 100 taxis that are fully electric, which means that they are saving a lot. For a taxi that travels an average of 250 kilometres a day, that's $25 a day for gas. The electricity costs about $4. The owner is a good accountant, not a visionary. Clearly, he will be making savings.

Senator Massicotte: On your map are projections for the future with self-driving cars. Where will public transit be in 10 years?

Ms. Lampron: That's sort of what is shown in the illustration from the Mackenzie report. Our current model, where each driver owns their own personal vehicle, is not viable in the long term. As we can see in every major city centre in the world, drivers are stuck in traffic, and there are serious problems with air quality. We need to rethink our city centres.

I don't know whether this will happen in the next five, 10 or 15 years, I don't have a crystal ball, but it's certain that autonomous vehicles will play a big role in mobility in the future. All car manufacturers have an autonomous vehicle project on the go right now. It will be interesting to follow them. Vehicles will be shared. The sharing economy is reaching just about every area, including mobility. We can anticipate a lot of mobility sharing, and we also hope for a more robust public transportation system. This will have two effects: to eliminate greenhouse gases and congestion, two glaring problems in our city centres today.

[English]

Senator Seidman: Thank you very much for being here today, and we should say congratulations to Hydro-Québec, truly, for all the vision and the investments that you've made in integrating, regionally at least, our plans to reduce the carbon footprint in Quebec. I'm sure your leadership is evident in Canada and probably in the world as well.

We should also say thank you to an old premier of ours, Robert Bourassa, who had enormous vision to invest in hydroelectric infrastructure or dams in the North. People might have thought he was a little crazy at the time, but obviously he wasn't.

I would like to ask about the infrastructure issue, because you did refer to it specifically with regard to the facility in electric cars. We've heard that there is an aging infrastructure, and it is perhaps one of the greatest challenges and would require major financial investments. And I know that Hydro-Québec is currently participating in feasibility studies conducted by the public transit authorities to determine what electrical infrastructure is needed and what Hydro-Québec's level of investment might be in this infrastructure. Are you able to give us some overview of the level of investment required in order to see through this electrification of public transport in Quebec?

Mr. Beauchemin: I'm not going to answer about the cost of infrastructure in general, but for electrification it's actually a lot lower than people think. What we found is of our 800 charging stations we'll have installed at the end of the year, we've only paid for half of 60 of those. We have over 150 or 160 partners now. We have a project where we were the lowest bidder to install charging stations in northeastern Ontario, including Cornwall and Ottawa, and we are doing that now. It has to be completed by the end of March. Almost all of that is being done by partners who see the advantage of having a charging station, and then they can charge whatever they want: $1 an hour, $2.50 a day or $10 per hour if it's fast-charging. They know they will attract people to Tim Hortons or St-Hubert or their shopping centre. It's a win-win. When I see a movie, I usually go to a movie theatre that has a charging station so that I can charge my vehicle while I'm watching a movie.

Our budget has been around $1.5 million a year, not even, and we already have 800 charging stations, and it will be 2,500 in a couple of years. The cost has been pretty low, and that includes personnel, labour, everything.

Senator Seidman: I'm going to look at my own example. I do have a hybrid car, and I adore it when I'm driving in the city, and I can hear how quiet it is and it's not using one ounce of fuel, and that gives me great satisfaction for many reasons.

But I do drive to Ottawa, and as a result I use gasoline to make that trip. Your presentation here today, in terms of battery capacity and charging stations, for someone like myself who does the mix of inner city and highway driving, you're saying that that has a future for people like me to use a car without using gasoline?

Mr. Beauchemin: Maybe Ms. Lampron should take this, but the cars will evolve. We're still at the beginning of it, so it is still complicated. To drive from Ottawa to California, you are going to go through no man's land, and electrification, that will not happen, although maybe in five or ten years, but in Quebec you can go just about everywhere all electric.

Ms. Lampron: One of the major hurdles for electric cars is the price of the battery. When I started working in 2008 in transportation electrification, it was $1,000 a kilowatt hour. Now we're down to $350, and the vision is that by the end of 2030 we'll be down to $50 or $60 a kilowatt hour. That hurdle is behind us, and we will be able to have larger batteries at a decent cost.

In January or February, I believe, in Canada we will have the first affordable car that will almost have 400 kilometres of range. It's here, and I think it's coming very shortly. Very soon you'll be able to do Montreal to Ottawa without any worries, and I have to mention that in the next few weeks we're installing a fast-charging station in Casselman, which will be very useful. It's really coming.

Senator Ringuette: My first question is a follow-up to Senator Seidman. Why is it that it seems that the charging station isn't able to have partnership with the current gas station where everyone is so accustomed to stop and refuel?

Ms. Lampron: This is a very good question. We are in discussions with several oil companies now that they are interested in electric transportation. It took them a while, and maybe a bit of denial, but they are getting there, and so we have discussions with several of them. Now these are long discussions. We're hoping that in 2017 you will start seeing fast-charging stations pop up in gas stations everywhere in Quebec.

Senator Ringuette: My other very important question is that since the start of this study, we've been hearing two different scenarios from witnesses. One scenario is that we will need to invest huge amounts of money to build new hydroelectric facilities in order to supply the future demand for electricity, and another scenario was, no, the current facilities that we have have the capacity to supply the needs of Canadians up to 2040.

What is your evaluation of the supplying Quebec scenario? I'm not anticipating that you have done the study nationally; or maybe you have?

Ms. Lampron: In Quebec it's easy because right now we have surpluses, and even when we didn't, a few years back, we did an impact study on the grid. From it we know for sure that, right this moment, we could supply 1 million electric vehicles with our current installation, without any new investment.

This is a situation of Quebec —

Mr. Beauchemin: Actually, it's more than 1 million.

Ms. Lampron: Probably more, but we have 12,000, so we have a little bit of leeway in between.

Senator Ringuette: Nationally, what is the — you don't know?

Ms. Lampron: Like I said, our expertise is Quebec. We are involved in national organizations that are talking about transportation and electrification. But we don't hear that there is a major problem.

The penetration of electric vehicles is happening gradually, and it gives enough notice to utilities to be able to satisfy the demand. That's what we hear, but in Quebec I know for sure there is no problem at all.

Senator Ringuette: Your current surplus and the needs for the next few decades — will that involve Hydro-Québec reducing its export to the U.S. market?

Mr. Beauchemin: What's happening right now on a global scale is that when people use LED light bulbs, it doesn't change much, but they see an improvement. But when 20 million people do that, there really is a reduction in consumption. That's why we've been able to sell more.

Also, industry is consuming less and less because they are either closing or optimizing.

To answer your question, we have a group of people at Hydro-Québec who look at the long-term thing, including Quebec, the rest of the world and North America. One thing that is coming very quickly is solar. With solar energy, which emits no greenhouse gases, you will need those mega-batteries, and that's what we're working on.

What happens is you have peak demand at 6 p.m. when everyone comes home and turns on the TV, and there is no more sunlight. We can see that. But it's coming, and it will be competitive — not in five years, but maybe in 10 or 15 years, even in Quebec. We are convinced of that.

The Chair: Hold those thoughts, Senator Ringuette. I will put you down for a second round.

Senator Lang: Just a couple of things. It was a very good presentation, and it gives us a good overview of where we're going.

First of all, I would like to ask you a pragmatic question, referring to the chairman here. When you have your electric car and you go to the movies and you plug in, if you get there ahead of me, where do I plug in?

Mr. Beauchemin: Last weekend, there were two spots, so there was one for you as well.

Senator Lang: Seriously, though, I want to understand: For us to plug in, everyone is going to be there at the same time. Can 50 people be plugged in?

Ms. Lampron: One of the things that we always forget — and I drive an electric car also — is that 95 per cent of the charging occurs at home. To take your —

Senator Lang: But I have to invest in a certain type of plug-in at my home in order to do that, right?

Ms. Lampron: No, you can use just a regular wall outlet. It's longer because it's a 120-volt. If you want to charge faster, for instance, I have a charging station at home that is at 240 volts. It's about $1,000 to install.

Senator Lang: How long does it take to charge — eight hours?

Ms. Lampron: It depends on the battery. In my case, I have a Chevy Volt, and it takes me three hours.

Mr. Beauchemin: But in a wall, it would be six hours.

Senator Lang: But I don't understand this electric station issue. If it's going to take 20 minutes to charge a vehicle, you're going to have a lot of these electric charging stations to attract people. I'm not going to sit there and wait for you and you and you.

Mr. Beauchemin: We're tracking all of this. For example, if you go to go from Montreal to Quebec City, halfway is Drummondville. That is the highest-use charging station we have. In October, it was just over 345 charges.

Senator Lang: Per day.

Mr. Beauchemin: No, per month, but that's still 10 per day, so there must be times when people are waiting. So we will install another one.

We're following demand.

Senator Lang: I know. I just want to understand how this works, because you will have 1 million people in a lineup.

Mr. Beauchemin: We'll be ready.

Senator Lang: We talk about electric vehicles, but my colleague Senator Seidman talked about hybrids. How many hybrids are actually on the road now that use gas or electricity?

Ms. Lampron: There actually are two types of hybrids: the conventional ones that do not plug into the wall, so we don't count them —

Senator Lang: They plug into where?

Ms. Lampron: They don't plug in.

Senator Lang: Oh, they're battery-charged.

Ms. Lampron: Yes, and they only have maybe one kilometre of range. They let you start with electricity, and then you're using gas as soon as you pick up speed.

So we don't count them. We only count what we call the plug-in vehicles. This is interesting, because it used to be a majority of plug-in hybrids and a minority of all electric, but now it's inversing. Right now, we have about 50-50; of the 12,000, we have about 50-50 of plug-in hybrids and all-electric, so we see a trend. When we look at the United States, it's the same trend: The all-electric are taking over.

This is what we're envisioning, especially with the all-electric that are going to have close to 400 kilometres of range. I have to tell you that the people who are driving plug-in hybrids like Louis and me, we're maniacs. We do not want to put gas in the car, so we do everything we can to drive electric. It's quite easy when you do home to the office. You don't need gas.

Senator Lang: I want to go on to the question of batteries. We talk about batteries like they've appeared from nowhere, which they have not. They require various minerals, from the point of view of resource development. Perhaps you can comment on that, because there is another variable here from an environmental point of view of those commodities that are required to build these batteries.

Where do we get them, and are there enough resources to provide for those million cars?

Mr. Beauchemin: The quick answer is yes, there are enough. There are different types of batteries and chemistries, but most are based on lithium. There is a lot of lithium in Canada, Chile, China and other countries, so there is no shortage. These batteries can all be recycled. They have to be dissolved and reactivated; the element doesn't disappear, but you have to refresh the thing. So it's not been an issue.

[Translation]

Senator Fraser: I want to join Senator Seidman when she speaks as a proud Quebecer, because I too have been very proud of Hydro-Québec's work for decades, especially in terms of prices. When I bought a small condo in Ottawa, I was shocked and called the company, thinking there was a mistake on my bill. I learned how to save on electricity in Ottawa.

There are already 12,500 electric vehicles. Your goal is to have 100,000 by 2020, within four years, or three years and two months.

Mr. Beauchemin: Yes.

Senator Fraser: Will we get there?

Mr. Beauchemin: The Canadiens will win the Stanley Cup this year.

Senator Fraser: But seriously.

Mr. Beauchemin: Quite frankly, pragmatically speaking, the higher the price of gasoline will be, the more it will help us. As long as there are incentives to buy, it will help. The Government of Quebec offers $8,000 for every purchase of a plug-in vehicle with autonomy of at least —

Senator Fraser: Hybrids too?

Mr. Beauchemin: Yes, but it takes a minimum of 20 kilometres.

Ms. Lampron: That's 16 kilowatts per hour.

Mr. Beauchemin: The Government of Quebec has set a target of 1 million electric vehicles for 2030. All the people who have had or have a plug-in hybrid or electric vehicle will not go back to a combustion engine. It's over for life. They are converted and there will be more and more of them.

Senator Fraser: Let's be conservative and look at the 100,000 vehicles. What will happen to the GHG emissions?

Ms. Lampron: The assumptions are that one vehicle is replaced by an equivalent all-electric vehicle, driving an average of 20,000 kilometres per year. Each vehicle would reduce CO2 by 3.5 tonnes.

Senator Fraser: So if I multiply by 100,000 —

Mr. Beauchemin: That is 350,000 tonnes of GHG emissions.

Senator Fraser: That is not insignificant.

Mr. Beauchemin: Yes. The other benefit for Quebec is that it becomes an attractive client because we calculate that 1 million electric vehicles are equivalent to three terawatt hours, or about $300 million in revenue for Hydro-Québec, which fully stay within Quebec; it will be the same for the other provinces. In economic terms, it's very dynamic and very positive. It is a win-win-win situation.

Senator Mockler: You are certainly on the right track, as they say. From what I see, 80 per cent of all greenhouse gas emissions are produced by motor vehicles in Canada.

You are part of a network that will affect a lot of people; when you say 3.5 tonnes, that's substantial. You are leaders in this area and I'm not questioning that, but how do you compare yourself with other parts of the world, particularly with California?

Mr. Beauchemin: California used fewer carrots and more sticks for automakers. A certain percentage of zero emission vehicles must be sold by manufacturers. There is also the mindset. I do not have all the statistics from all the countries.

Ms. Lampron: Actually, we have to compare ourselves in terms of percentage. Our market is much smaller than that of California, which is larger than Canada's. So we are among the leaders in terms of percentage of vehicles sold.

The truly undisputed leaders around the world are Norway, the Netherlands and California. They have invested quite impressive resources in transforming their fleet of vehicles. There are even discussions to ban internal combustion vehicles by 2030. Those discussions are under way right now in some countries, such as the Netherlands and Norway.

Mr. Beauchemin: I think the percentage of electric vehicles sold in Norway is over 12 per cent today.

Senator Mockler: Did you come here with your electric car?

Mr. Beauchemin: No, we took the train, which is also economical.

Senator Mockler: I had the opportunity to try a Tesla in Moncton, New Brunswick. What is the difference between your all-electric technology and that of the Tesla, which is battery operated?

Ms. Lampron: We do not manufacture cars or batteries. The difference between the Tesla and the rest of the world is the charging standard. All rechargeable vehicles, whether hybrid or fully electric, use the same charging standards. They are called J1772, CHAdeMO or COMBO. Everyone uses those standards. Tesla has its own charging standard. So it needs its own charging infrastructure. Tesla owners may buy an adapter for our charging stations, and they do, because our terminals are much more widely available than Tesla's. That's the big difference between the two. Tesla provides a battery of 85 kilowatts per hour and more, which ensures its great autonomy, but it comes with a cost. Not everyone can afford to pay 85 times $350. It is a fairly substantial cost. That's where the differences lie.

[English]

Senator Lang: We referred to California and other places around the world, and I think we have to be careful what we're comparing ourselves to. Hydro-Québec is in a good position because they're providing renewable energy for the purposes of providing electricity, and I think British Columbia would be in the same situation because of the long-term vision that premiers in the past have had and had the ability to do. To build that same hydro today would be somewhat difficult, if not impossible, depending on where it is.

The point I want to make is I understand that in California, for example, they import a great deal of their electricity, and a great deal of it is coal-fired. When you compare this environmentally, what are we speaking of? All of a sudden, now, in California, where you have your electric vehicles, you have to depend on an expanding coal industry in order to be able to provide the energy. I would like your comments on that.

Mr. Beauchemin: I don't have all the numbers in my head, but we can provide those to you. A new-generation coal- fired plant is still cleaner, energy-wise, and has better energy efficiency than the internal combustion engine in a car. We agree that you don't enjoy as much savings as you do when the electricity comes from a hydro dam, but it's still better than it used to be, especially if your plant has a scrubber and all that.

Senator Patterson: Thank you for a most stimulating presentation.

Could you describe the two-way charging that you mentioned a bit more, where somehow energy would supplement the grid?

Ms. Lampron: We call that V2G, for vehicle-to-grid, or vehicle-to-home. Right now, the electric vehicles being sold are not bidirectional, which means you can put energy in it but not get it out, other than driving it. It is not available commercially, but it's coming. We know that in Japan there is a lot of vehicle-to-home in use since the tsunami that happened a few years ago. Mitsubishi has been very active, and they sell this device that can take electricity from the battery and inject it into the home in case of a power outage. It's not widely commercially available, but there are demonstrations being done in Europe, the United States and Barbados. Many people see the interest in that type of technology.

Senator Patterson: Quebec provides a substantial rebate of $8,000 for the purchase of electric vehicles, and $600 towards the purchase of a 240-volt home charging station, and you have this goal of a million.

Are the recipients of these incentives and the buyers of these vehicles mostly high-income earners? Is this inequitable, socially?

Mr. Beauchemin: I don't have the statistics on that.

Ms. Lampron: We have AVÉQ in Quebec, an association of electric vehicle owners, and they have done a profile of the electric vehicle driver. Yes, they have higher incomes because right now the cars cost between $30,000 and $40,000, but they're not billionaires. They're regular people. I even know some people that had a Honda Fit and changed it for a Tesla because they wanted those savings, which are very appealing when you drive a lot.

EV drivers in Quebec come from all economic levels.

Senator Patterson: I'm ignorant of the province of Quebec. I mostly commute out of Ontario now that our airline systems have changed for the North. I hear that traffic in Montreal is a nightmare, and I don't know if that's an exaggeration.

You've talked today about single vehicles. What about progress on transit and on trucks? We heard the trucking industry has been slow to evolve towards electric vehicles. Could you comment on this congestion issue and how electrification could help?

Mr. Beauchemin: Downtown in rush hour, it's a mess. It's an island, and while I'm not sure "nightmare'' is the correct word, yes, it's pretty bad.

What we've been working on for the last few years has been mostly geared toward the private vehicle. I strongly believe the future will involve a lot more light delivery trucks, and these people have a huge financial incentive.

We have a program on right now with Purolator. The more you drive, the more you save, and believe me, these people are not doing it to save the planet but to save dollars.

It's the same thing with our program with the bus company in Laval. They told me a bus uses 55 litres of fuel per 100 kilometres, so they're doing it for the savings. It makes pure economic sense. I'm sure everyone, including Canada Post, will eventually be looking for that because of the huge financial savings. That's where the big bucks are, because these trucks cover a lot of kilometres.

Senator Lang: Why do we have to subsidize them?

Senator MacDonald: This is such an interesting topic. You also have such great structural advantages that you can apply, which is an advantage for the country as well, to support this technology and the way it's used.

I'm looking at the station of the future and the infrastructure that will come with this. Is Quebec only providing power, or is there an opportunity here to get on the front end of the development of all of the infrastructure? Who provides the infrastructure for these stations? Is it coming from California, or somewhere else? Are we missing an opportunity to create a new business model?

Mr. Beauchemin: We are trying hard to increase Quebec content and Canadian content, but if something we definitely need does not exist here, we'll go and get it elsewhere.

On a different topic, for example, we're working on batteries for the utilities. We believe this is huge right now. This is a different topic. We have a joint venture with Sony because it has 8,000 people, while we have about 100 people at Hydro-Québec. We signed an agreement, and we're working together and putting these batteries in the grid. They are our patents, but they have the manufacturing facilities, and it's the same thing with the station of the future.

Senator MacDonald: That's exactly what I'm talking about.

Ms. Lampron: Right now, what we're deploying in terms of public charging infrastructure is made by a company from Quebec City. It's manufactured in Shawinigan, Quebec —

Mr. Beauchemin: — with aluminum from Quebec —

Ms. Lampron: — so we are using local content.

We work through RFPs, so we really want to pick the best technology, and right now, the best charging stations are from Quebec. If it changes, we will have to follow, but right now they are made here in Canada.

The Chair: The DCFC station is very appealing to the eye, that's for sure. You say it will be operational by 2017-18. Is that an investment by Hydro-Québec? Are you all on your own, or is this with, as you said, multiple partners?

Mr. Beauchemin: We want to make sure the driver gets a great experience so that they can get a better coffee and have free Internet, but we're not sure yet who will supply the land, so we're working a lot in partnerships. I'm not sure yet how much Hydro-Québec will put in there as a percentage — maybe a lot, but we're open to it. We're working on it now; 2017 is just around the corner.

The Chair: It's just around the corner. I was just going to say Christmas is soon, and to my knowledge 2017 comes right after that.

There is another thing we talked about that I'm a little bit interested in. If the answer will take too long, I will ask you to send it to the clerk. .

I just want to say I'm glad we had W.A.C. Bennett in British Columbia in the 1960s at about the same time. He nationalized all the private ones, and we have BC Hydro, which is smaller, but much the same.

You say you will double revenue in 15 years and limit rate increases to a level less than or equal to inflation. What else will you invest in?

Mr. Beauchemin: We made a bid for a utility in France that's quite public, and we're looking at utilities in the U.S. and South America; we have people in Peru as we speak. The idea is to export our management skills and money from the pension funds from Canadian companies.

The Chair: That answers the question very nicely.

The other thing on which I have cautioned some other people is that when we compare ourselves to other countries, we should be careful about Norway. It's a great place. I've been there. You had better have a fat wallet when you go, because everything costs a lot of money. Norway has only 5 million people. That's less than the population of Quebec, and you could stick Norway in a corner of Quebec and you'd hardly see it, so it's much different. I know it's got 100,000 kilometres of roads, and there is more than 1 million kilometres in Canada, so there is one huge difference there. They're a great country and they do some great things, so I appreciate that.

Senator Seidman: I would like to ask about the CROP-La Presse poll that was published recently, based on a survey done in 2011 and 2016. One would have expected a little more movement in the population's attitudes about the acceptance of and desire to purchase an electric car in the future, but it was quite surprising in that it was quite stagnant. Do you have something to say about that?

Ms. Lampron: When we think about promoting electric vehicles, there are three actions that have to be done. One is subsidies. Another is infrastructure, and we're working on that.

The third one is communication, and this is where we are lacking. We need more public communication, public education. This is where are weaker in Quebec. It is amazing. I have been doing presentations for eight years on the topic, and I've never passed the 101 level. People still do not know the basic facts about electric vehicles. This is what we have to address in the coming year.

[Translation]

Senator Massicotte: We are fortunate to have Hydro-Québec in Quebec, as well as a geography that makes those benefits possible.

Am I mistaken when I say that Hydro-Québec is predicting a 2 per cent or 3 per cent decrease in its demand despite this opportunity? I have trouble understanding how it depends so much on exporting.

Mr. Beauchemin: I was not quite prepared to answer that type of question. Industrial demand will decrease, but the demand of individuals in homes and apartments will increase with immigration and needs. We are building La Romaine right now, we are focusing on solar energy, and we already have wind power. We will have 30 terawatts per hour a year available for export.

[English]

Senator Ringuette: I was pleased to hear that the analysts at Hydro-Québec see a big future in solar, and I was wondering if our committee could invite your analyst unit to appear before us to talk about their research and the future they see in regard to this technology.

Mr. Beauchemin: With pleasure.

Senator Mockler: You have the opportunity to make a recommendation to governments with this report. What would you recommend to us on the education side of our society so that there would be a better acceptance, following a question from Senator Seidman?

Ms. Lampron: We absolutely need a campaign to promote electric vehicles. I'm not a communication expert, so I couldn't tell you what specific form it should take. Would it be a TV or radio campaign or schools? You know the kids, they get it.

Mr. Beauchemin: It's not impossible for them.

Ms. Lampron: It's amazing to talk to children and see how much they understand, but a communication campaign.

Senator Lang: It sounds to me to some degree there are smoke and mirrors here, because we talk about how beneficial it is on an O&M maintenance basis to have an electrical vehicle, which one cannot argue with, but at the same time we subsidize the purchase of that vehicle. If you increase the sale of electric vehicles, when do you get the situation where the taxpayer doesn't have to subsidize the purchase of a vehicle?

Ms. Lampron: That's a good point, because the battery is really the over cost, so as the battery cost goes down, we are not going to need subsidies. As soon as the electric vehicle is the same price as a conventional vehicle, it will be a no- brainer. The research is expecting the kilowatt hour to be down to $100 in the next decade. I don't have the exact date, but it's coming where the EV will be the same price as the conventional car.

Senator Lang: So we won't have to subsidize.

Ms. Lampron: Absolutely. It's just for a while.

The Chair: I can take from your presentation that electric vehicles within an urban setting are something that we should be promoting.

When you get to sparsely populated parts of the country, in the North where Senator Patterson lives, or Yellowknife or Whitehorse, to try driving from Whitehorse to Fort St. John, which is only 900 and some miles, in an electric vehicle might be difficult. In urban areas where there is a huge population, it makes very good sense. In time, it would make sense to move that further out. Would you agree?

Ms. Lampron: Absolutely, yes.

The Chair: Thank you very much for your interesting presentation.

(The committee adjourned.)

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