Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue No. 41 - Evidence - March 29, 2018
OTTAWA, Thursday, March 29, 2018
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 8 a.m. to study on the effects of transitioning to a low carbon economy.
Senator Rosa Galvez (Chair) in the chair.
[English]
The Chair: Good morning. Welcome to this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. My name is Rosa Galvez. I am a senator from Quebec, and I am the chair of this committee. I will now ask senators around the table to introduce themselves please.
[Translation]
Senator Massicotte: I am Paul J. Massicotte from Quebec.
[English]
Senator Richards: Dave Richards from New Brunswick.
[Translation]
Senator Seidman: I am Judith Seidman from Montreal, Quebec.
Senator Mockler: I am Senator Mockler from New Brunswick.
Senator Dupuis: I am Renée Dupuis from Île d’Orléans, Quebec.
The Chair: I would also like to introduce our staff: Maxime Fortin, the committee clerk, whom you already know since he organizes our meetings, and our Library of Parliament analysts, Sam Banks and Jesse Good.
In March 2016, the committee began its study on the transition to a low-carbon economy. The committee is studying five sectors responsible for 80 per cent of Canada’s greenhouse gas emissions. They are electricity, transportation, emission-intensive and trade-exposed industries, oil and gas, and buildings.
[English]
Today, we welcome Warren Heeley, President, Heating, Refrigeration and Air-conditioning Institute of Canada; Martin Luymes, Director, Programs and Relations, Heating, Refrigeration and Air-conditioning Institute of Canada; Bruce Passmore, Board Chair, Heating, Refrigeration and Air-conditioning Institute of Canada; Dina McNeil, Director of Government Relations, The Canadian Real Estate Association; and Dil Puar, Manager of Government Relations, The Canadian Real Estate Association.
Thank you very much for joining us this morning. I invite you to start with your opening remarks, after which we will go to periods of questions. You have the floor.
[Translation]
Bruce Passmore, Board Chair, Heating, Refrigeration and Air-conditioning Institute of Canada: We are very glad to be here to speak with you today.
[English]
Thank you very much for having us.
We’re here to present some wonderful suggestions and opportunities. We have no complaints or suggestions. This is all very positive.
On behalf of the Heating Refrigeration and Air-conditioning Institute of Canada, I wanted to reinforce the message we would like to leave with you. That’s when you’re making decisions around climate change, please consider having a conversation with us. When it comes to energy consumption outside of transportation, heating, cooling and refrigeration represents 50 to 60 per cent of our energy consumption. Finding efficiency in that segment is what will be required to meet our commitments of carbon emission reduction. We are very pleased to help.
The HVACR industry — heating, ventilation, air conditioning and refrigeration — is an integral part of nearly every economic and social sector in Canada. Our membership keep homes and offices comfortable, but they do much more for our economy as a whole. They ensure climate management in the global supply chain; they get agricultural products from farms to market; they provide refrigeration processes required for the advancement of science and medicine; and they supply advanced air conditioning required to commercial server rooms that keep Canada on the cutting edge of our IT infrastructure and our telecommunications systems online.
Without our services and products, Canada’s economy would not be able to compete globally. Our industry generates about $7 billion a year to the Canadian economy and employs over 41,000 people. Really, we’re all but invisible. If you think about that heating system that runs in your house for 10 years, without you looking at it basically, it’s a mechanical device that operates all the time, 24 hours a day, keeping you warm or keeping you cool. It’s what our industry is about. We would like to have a voice with you and with the rest of Canada in how we can become more efficient and reduce our impact on the environment and global climate change.
Warren Heeley, President, Heating, Refrigeration and Air-conditioning Institute of Canada: Good morning and thank you for having us here to speak to you. I am going to talk about the association itself. We’re a national association with more than 1,300 member companies, representing the complete supply chain, from manufacturing of products and systems, through distribution to the actual installing and service contractors.
We were established in 1968 and this year are celebrating our fiftieth year as an association. The largest of our members are installing contractors. If you look at what they are like, they are small businessmen. The majority of them have fewer than 10 employees. As Bruce said, they’re responsible for your indoor comfort and essential refrigeration processes used every day in our lives.
The services we provide to our members are similar to many industry associations. Probably the most important thing in what we’re doing today is advocacy and relationships with government bodies, whether they be federal, provincial or right down to the municipal level because a lot of our members are small businesses and they work municipally or just regionally in their businesses.
We also provide a communication link. We are a highly regulated industry, both from an environmental and an energy standpoint. For that reason, our job is to try to keep our members aware of the sorts of regulations that are affecting their business on a day-to-day basis.
We are also involved in training. We get involved in looking at trades training and we offer post trades training to our industry so they can meet different building codes and other requirements across the country.
That’s a snapshot of what our association is about and how it’s structured. I’m going to pass it on to Martin and he is going to talk about our submission.
Martin Luymes, Director, Programs and Relations, Heating, Refrigeration and Air-conditioning Institute of Canada: Good morning. Considering the limited time we have available, we prepared a document which you have on file. I understand it hasn’t been translated into French so I apologize for not allowing enough lead time for that. However, you will have this, so I won’t reference everything in the document. Since the discussion is about industry in relation to the transition to a low-carbon economy, I want to talk about the role of our industry and some of the potential impacts of this policy direction on our industry.
The primary point of connection between our industry and the policy framework for climate change and the transition to a low-carbon economy is on the fuel switching side, for home heating and cooling, and on the energy efficiency side. A lot of work is being done in our industry. As you’ll see in the document, there is a great deal of work going on right now. Federally, we’re involved in the transformation of a space heating marketplace, and we’re in discussions with NRCan and what that should like.
I now want to move past all of the existing conversations and get to some of the key impacts on our industry and then some recommendations we have for this committee.
First, I want to talk about some of the opportunities this policy has for our industry. Clearly, the pan-Canadian framework creates a number of opportunities for our sector because HVACR products are becoming more and more efficient. It’s the direction the industry wants to move in, so it creates opportunities for the sale of products of our sector.
The transition on the fuel-switching side from products that burn fossil fuels to those that rely more on electricity also creates opportunities. There is a lot of retrofitting of products in buildings and homes that will create opportunities for our members if they are framed properly.
Our sector is also involved in smart building controls, which creates all kinds of opportunities for building management. The innovations and refinements of products are ongoing. Our industry is prepared to move forward, provided the pace is right in step with government direction. We also emphasize our industry is not just about products, but about processes. Installation is critical, and there is an evolution in terms of building systems. That is, what the best practices are for installation and servicing of equipment. That’s something we are also working on actively.
As I noted in the presentation, our industry has many tools in its tool kit. You can see some samples of those in the document for your reference. But there are many others. As I said, we’re in active engagement with government on those products.
The pan-Canadian framework also presents some challenges for our sector, and the first is, though there are tremendous opportunities, our sector needs to adapt. It means changes in how businesses are structured. The product innovation to accommodate fuel-switching can be a challenge for companies that have a bias to one or the other. The challenge to innovate on energy-efficiency standards creates challenges for our manufacturers who have to produce products that meet ever-more stringent regulations. The increasing sophistication of building codes and building systems creates challenges to keep up. A really important impact that we’re starting to see in real time is the need for skilled labour to be able to do all of this work.
The transition to heat pumps, as an example, which is being promoted very aggressively in some parts of the country, is creating some disruption in our industry. That’s a challenge. We can adapt. We can manage it. A lot of this has to do with time. A side issue is, because of regulations at the federal level, the transition from CFC refrigerants to HCFCs and now to HFCs and hydrocarbon refrigerants is creating a whole other set of product-innovation and skilled-labour challenges for the sector.
Just a note: Bruce was talking about the importance of our industry, and we’d like to impress on you how important our sector is to the economy in general and to life in Canada. But this is not a well-known thing. People take it for granted. That means that’s another challenge we have to overcome in our sector. Just getting the attention of policymakers has always been a challenge for us.
I want to move from those challenges and opportunities to what our recommendations are for the committee. In framing these, there are a number of principles that are very important for industry to see respected.
The first is our manufacturers and distributors need what I would call a long runway or a sufficient runway to implement legislation. When regulations come into effect, they need a runway to be able to manage the transition. In the longer term, we need a runway for them to be able to develop products that meet the requirements of the marketplace, and, in the shorter term, we’ve often seen governments introducing regulations or policies, even those programs of support, without consultation with the industry. So our sector is caught by surprise. That’s never good for consumers or for the industry or for the policy, for that matter, because you may not be able to achieve the goals without giving our industry time to prepare.
A second principle is we believe that regulations should be harmonized between Canada and the United States and, to the extent possible, among provinces. It’s a real challenge for our manufacturers to produce products for different markets in Canada, where the regulations vary. So we’re looking for unified regulatory harmonization across the country. You can see in the document what some of the specific concerns are around that.
Our industry is looking for clear and consistent signals from government in order to encourage them to invest in their businesses and follow the path that is desired. So we need to know what that direction is for the next five, 10 or even 15 years.
It’s important to have a level playing field for all products and all energy sources. The last point is that industry consultation really is the most critical. As Bruce said, we’re available to consult with government and will always seize the opportunity when we’re given that opportunity. It really is important for government to proactively seek advice of the industry because all of the technical knowledge that’s needed to make these decisions exists in our industry.
On to our recommendations. Again, they are detailed in the document, but I’ll just give, at a high level, what our recommendations are. The first is, when it comes to transforming the space-heating marketplace, government should lead by example by looking at all of its own federal buildings. We do advocate for deep energy retrofits in federal government buildings. It does two things. It achieves immediate savings and is a very efficient use of government dollars. Secondly, it sets a positive example for business and consumers. We suggest that you do, strategically and quickly, act on the key elements of the pan-Canadian framework, including putting out to the marketplace labelling systems and information for consumers, like the EnerGuide rating system for homes and Portfolio Manager for commercial buildings. We believe the federal government could play a very active role in communicating the benefits of energy-efficiency investment to end users, to Canadians, to support the message that industry gives to the marketplace. It can be validated by effective government communication.
There is a need for some support for R&D — we’ve been in active discussions with NRCan about what that should look like — to support the development of certain types of products and practices, as I mentioned earlier.
We would like the government to commit to bilateral and interprovincial harmonization of standards, codes and regulations. As I mentioned earlier, we would like the government to always strive for consistency and continuity in its policies and regulations. Even a change in government should not result, in our view, in changing direction on long-term policy goals.
Where we believe the greatest opportunity exists right now — and we think we’re in line with federal government thinking — is that we support the development of financing tools to unlock private-sector investment for the long term. Government investment isn’t sufficient. We want to see stable financing mechanisms to help unlock private-capital investment in improvements in the building stock.
We’re looking for support for transitioning labour markets as the product mix and practices shift to meet the needs of the new low-carbon economy. We’re interested in exploring tax credits for businesses investing in energy-efficient building upgrades. Finally, our last recommendation that we would leave you with is: Consult early and consult often with the industries that have a direct stake in these matters. That’s our submission. Thank you very much.
Dina McNeil, Director of Government Relations, The Canadian Real Estate Association: Good morning, everyone. I’m Dina McNeil, Director of Government Relations at the Canadian Real Estate Association, or CREA. I’m joined today by Dil Puar, the Manager of Government Relations. We would like to thank the committee for the opportunity to participate in your study on the effects of transitioning to a low-carbon economy.
[Translation]
CREA represents over 125,000 realtors from across the country. As one of Canada’s largest single-industry associations, we advocate on behalf of real estate brokers and agents, as well as homebuyers and property owners across Canada.
[English]
With regard to the Senate study on the effects of transitioning to a low-carbon economy, realtors have a unique perspective to offer, given their close relationship with homeowners. Broadly, we recognize the commitment to the Pan-Canadian Framework on Clean Growth and Climate Change requires action. However, it is important to remember that the residential sector is responsible for relatively small portion of overall greenhouse gas emissions. Acknowledging the vast differences that exist between residential buildings and other sectors, such as electricity and transportation, commitments must take into account the origin of the majority of emissions and target policies appropriately in order to see the biggest overall reduction.
It is important to note the housing sector has already made significant progress, with voluntary adoption of higher energy-efficiency standards. In a 2013 report by Environment Canada, it indicated that GHG emissions in the residential sector will remain relatively stable between 2005 and 2020, rising only by 3 megatonnes, despite a projected increase of 3 million households by 2020.
Between 1990 and 2014, GHG emissions in the housing sector decreased by 11 per cent. A significant portion of this can be attributed to better technology, including more efficient insulation, windows and exterior materials, as well as voluntary adoption of higher energy-efficiency standards.
We would like to highlight possible unintended consequences, particularly for existing housing stock, by moving to a stricter building code and requiring energy labelling for homes and buildings. CREA and its members are concerned about the potential impact on housing affordability. While we support the move toward creating a more energy-efficient housing market, our primary concern is the cost of retrofits and upgrades for Canadian homeowners. With the recent and rapid rise in home prices, it is important to consider the impact these changes could have on home buyers and sellers. When faced with the cost of an audit or the cost of improvements that an audit may recommend, some homeowners may decide not to sell their home. Owners of older homes could be particularly impacted, as could low-income homeowners, who may not be able to afford improvements that a new code would require.
Also, homeowners who live in energy-efficient homes may lose the equity they have accumulated. Similarly, for homeowners who need to sell their homes quickly, conducting an audit and disclosure requirements could delay the transaction considerably.
New building codes labelling and disclosure could result in fewer home sales and increased prices which would be harmful to the market and ultimately the Canadian economy. MLS home sales and purchases in 2017 added an estimated $31.8 billion in spin-off consumer spending to the economy and created more than 220,000 jobs.
To address our concerns regarding the difficulties and challenges of older properties, a possible variation of a sliding scale could be considered. The retrofit code would be adjusted depending on the age of the home. For example, an older home could be subject to a less-intensive energy retrofit baseline that would take into account the age of the home and the cost of suggested renovations. In some cases, it may not be cost-effective to make extensive retrofits to older homes while not necessarily providing a substantial reduction of GHG emissions.
There are also legitimate questions regarding the enforcement and the use of standards and thresholds across the country by energy auditors or professionals responsible for conducting audits. Various conflicting options have recommended renovations which may be wide-ranging in cost and could result in a troubling lack of consistency for homeowners. We highly recommend a national standard or a common approach to avoid a patchwork of enforcement mechanisms across municipalities or provinces.
Providing progressive voluntary programming is the key to advancing energy efficiency and supporting innovation and the housing sector. Recognizing that energy efficiency is an effective route toward reducing GHG emissions, we recommend some form of cost-sharing to avoid imposing additional cost to homeowners. The cost to retrofit existing buildings can be reduced through credits or rebate programs that are effectively communicated or advertised to consumers. The ecoENERGY Retrofit program, for example, provided homeowners with credits of up to $5,000 to retrofit insulation, rooftops, windows and doors. Programs such as these complement provincial and territorial incentives and support the efforts of moving to a low-carbon economy.
We also acknowledge that consumer energy illiteracy must improve. That is why we collaborated with NRCan on a publication aimed at providing realtors, home buyers and sellers with useful information about energy efficiency for their homes. You have a copy before you.
The publication entitled A Homeowner’s Guide to Energy Efficiencyis being distributed across the country to realtors as well as home buyers and homeowners. We have received very positive feedback. We will continue to work with NRCan and share education-focused resources with our networks to increase awareness on this important topic.
We look forward to the committee’s report and working with you and the government on Canada’s priority to tackle climate change while focusing on avoiding unintended consequences on the housing sector.
[Translation]
Thank you for your time. Mr. Puar and I would be pleased to answer any questions the committee might have.
The Chair: Thank you very much.
[English]
Senator Massicotte: Thank you for being with us today. Everyone has something to contribute to where we have to go. It’s very important we go there as soon as we can.
I forget who made the presentation on the HVACR. You have given us a lot of challenges and issues, and you tell us to be careful about the speed of transition, we need some help. At the same time, you say to be specific about what you want from us. You realize that the whole Pan Canadian approach with your industry was to define goals, which is what people recommend, frankly. We’re not the experts as you are. We’re not involved in the details as you are. We want goals. You know what our goals are.
At the same time, in your presentation, you criticize us for not being specific enough. I think you have to choose. The goal approach is the right approach, and it’s for you to define how you get there.
You tell us there are a lot of constraints to that. We consider this and this. But if you know what our goals are, you know what they are for 2020 and for 2030, and the report this week from the Auditor Generals across Canada tell us we’re not going to get there, so I’m not very sympathetic to saying that here are the constraints. What I’m looking from you is, what is the solution? Where do we go? How do we get there? It has to be more than just the standard historical way, seek a promise, seek a solution. What is the big picture? Is it to improve technology?
Basically, at this point, we’re using existing technology and applying it, but is there something bigger up there? How do we get there?
Mr. Luymes: I can give a partial answer. Picking up on something Bruce said earlier, we’re not here to complain. We feel we are in constructive and active discussions with NRCan and the Minister of Environment and Climate Change Canada about the pace. As you said, this is a concern for the industry — don’t move too quickly; we would like to be able to deliver solutions in a timely fashion. But that requires constant dialogue. We are in those discussions, and our message really is that’s a good thing. We want to continue to be at the table.
In terms of product development, support for R&D, we know the primary transition, in terms of equipment, is going to be to electric heat pumps of various types — ground source heat pumps, air source heat pumps. That is already happening, but there are challenges in the industry to deliver product into the market cost effectively; so this is where we need time.
The federal government’s role is to, as you said, set the targets. We know the challenge is for provinces to develop strategies for how we will meet those obligations. We are also working with provincial governments to develop support systems.
Senator Massicotte: Where we are today, from the reports we are seeing, is not good enough. Past practice is not fast enough. I appreciate the pace issue, but I would say to you, not good enough. We have to go faster and deeper to where are we going. How do we get there? Because the historical pattern is, no, we need to significantly change the way we’re thinking and the way we’re going; so the old way doesn’t work. It’s not fast enough. How do we get there?
Mr. Luymes: To overcome the gap, my view is it’s a money issue; right? Why is certain technology not proliferating? It’s because the delivered cost to a consumer is too high. How can we overcome that? One way of overcoming that is through rebates. We’re not necessarily recommending a return to the ecoENERGY program because our understanding is the federal government has said that’s the role of the province; so we’ll work with the provinces to deliver appropriate financial support systems.
Financing, as we said earlier, is the other tool to help people overcome the up-front cost barriers to get to where we would all like them to be.
Senator Massicotte: What you said is very important, therefore. You’re saying that on the current cost investment versus return aspect, it doesn’t work; it’s not adequate. The natural behaviour of human beings and corporations is to do so when it makes financial sense; it’s not mutual at this point and time.
Mr. Luymes: Exactly.
Senator Massicotte: That’s a big issue. In other words, to make it happen, therefore, you either change the cost component or the investment component or, like you say, a greater subsidy from the governments.
Subsidies from governments can’t work long term. It’s an artificial stimulant, if you wish, and somehow you have got to get more to the issue of what the cost is for what the returns are.
Mr. Luymes: Reliance on natural gas in the heating sector is a challenge. It’s so dominant and the cost per cubic metre of natural gas has never been lower. As long as we face those market conditions, we have a serious challenge trying to move people from fossil fuels to more friendly technologies. That’s the biggest challenge facing the market.
Senator Seidman: Thank you all very much for your presentations. Ms. McNeil, we have heard a lot here about newly proposed retrofit standards and the impact they may have on homeowners, especially seniors who may want to sell their homes and move into smaller residences, condos or even seniors residences. A large part of their equity could be in their homes. So when they sell it, it allows them to live a higher quality of life.
There has been a lot of concern about demands made on them before they go to sell their older homes. You made reference to potential impact of the new codes. I wouldn’t mind hearing something about that and how one might deal with this issue. I would also like to hear from a representative from the HRAI who you mentioned in your industry recommendations that the government should lead by example, and you spoke about retrofits in public buildings that the government is responsible for. And some kind of targets as well as a certain kind of benchmarking and disclosure and transparency about how those buildings are performing and what the plans are for the future.
I’m integrating this concept of retrofits. You’ve each spoken to it and addressed it in a way, and I’d like to have your opinions.
Ms. McNeil: Thank you for your question. We do have concerns for the older stock, for people who live in homes built in the 1900s or early 1900s and who want to move to something smaller and what the impact of this would do. If you do get a lower rating for your home, what does that mean? That’s why one of the possible solutions we could look at is a sliding scale. If your home is built in 1950, it will never be as efficient as a home built in 2014. What does that mean for the homeowner if they get a rating of 5 out of 10, let’s say? They will never be able to bring it to 10. Maybe with that they know that if they bring it to 6, it will be efficient.
Those are the concerns for us and mostly for older homeowners who want to move out of their homes for a different lifestyle. A sliding scale for older existing stock is definitely something we should consider.
Senator Seidman: That would be your proposal for a sliding scale?
Ms. McNeil: For older homes, absolutely. You can change the windows and put more insulation in the attic, but because of the code back in 1902, will your home ever be energy efficient like new homes are built today? We don’t think so. We have to make sure that those homes are not impacted and homeowners don’t lose all the equity they’ve built over time. It’s something to consider for older stock definitely.
Senator Seidman: Okay. Thank you.
Mr. Luymes: I’m not really sure how the question relates to our submission, but without taking a position on mandatory home energy rating and disclosure on real estate transactions, we have never really taken a strong position on that. We have research, through the Canadian Energy Efficiency Alliance, that suggests Canadians want to do more to invest in energy efficiency. One of the barriers is access to capital financing. Another is access to good information. We’ve always supported home energy labelling systems, and we agree with the position submitted earlier that the information systems should be consistent across the country.
The federal government has had in place since 2012, I think, a revamped energy rating system for homes that we think is very strong. It talks about gigajoules of consumption. It doesn’t talk about a rating scale. It actually gives people the kind of data they need to make informed decisions in their homes and buildings. That has not been released on a widespread basis. From our perspective, it’s long overdue. We believe, that like a rating scale or performance data on an automobile, people should have performance data on their homes and buildings. That information should be consistent based on good science. We believe all the systems are in place to do that and we would urge the government to put that out in the marketplace. Our feeling is obviously there’s a benefit to our industry if people have good information and make informed investment decisions in their homes and buildings, but they need good, reliable data to make those decisions and the government has the tools to help with that process.
Whether it becomes mandatory or a voluntary process, we’ll just stay neutral on that.
Senator Seidman: I included you on this because in your presentation you said the government should lead by example. That was one of the industry recommendations. You said, “require benchmarking and disclosure of public building performance; impose similar expectations on private investors who benefit from government largesse; require new publicly owned buildings to be built to nearly zero energy; and upgrade public buildings through deep energy retrofits,” with recommendations you put forward for 2030.
We’re talking on one hand about personal investments, namely, my home or somebody else’s home, but here you’re talking about government-owned buildings and the implications for the government.
Mr. Luymes: They’re two separate policy tools. Moving the code forward and increasing performance requirements in law is one tool. That’s where the pacing is important for our industry. That is, moving along progressively but at a pace the industry can actually manage. That’s an important principle.
In meantime, while you’re moving forward, at the same time you can incentivize the market to move more quickly. That’s where incentives and providing data for not only consumers but also building owners is helpful. People who invest in commercial properties need good data to make informed decisions as well to see the return on that investment; all of that is good information. That’s on a voluntary basis. Those two tools work hand in hand.
[Translation]
Senator Dupuis: From the information you gave us at the outset, I see that small- and medium-sized businesses make up most of your membership. Does that give rise to specific conditions or challenges? I’m trying to establish the connection between that and what you said about the array of provincial and federal standards making things more complicated, depending on where you are doing business.
Is it harder in Canada than it is in the United States, given that each state has its own set of standards? What I’d really like to know is whether the situation here is that much different from that in the United States in terms of standards differing from one province to the next. Also, does having an industry primarily made up of small- and medium-sized businesses help or hurt you in the transition to a low-carbon economy?
[English]
Mr. Passmore: One of the interesting things about the heating industry in Canada is that it’s different regionally. If you turn a faucet on in British Columbia, it drains the same way as it does in New Brunswick. But in our industry it’s a little more complex because of the different fuels used, the different technologies used, the different rates for energy and the different access for energy. One thing that is certain is efficiency is the answer. Becoming more efficient regardless of fuel is the answer. Then leveraging the government’s influence to direct us at the most effective, efficient and least harmful fuels and employing them in the most efficient manner is the way we’re going to meet our carbon targets.
When we get into the entrepreneurs who are actually applying this technology, it’s a challenge because there are so many of them. They’re tradesmen who are very committed to doing great trades work, but staying ahead of the advocacy and technology curves is challenging. It’s our role as an organization and as an industry association to keep them up to speed with what technologies are available and which direction that governments and municipalities are moving with codes and to get their application of the technology and the new design philosophies up to speed so they can apply all the things we want to do to make the industry more effective and increase the efficiency of the infrastructure.
Mr. Heeley: In addition, there’s a fundamental difference between U.S. and Canada. In Canada, we work towards the harmonization between the provinces but in the area of energy and the environment, it’s provincial jurisdiction. There are problems with changes from one region to the next about how they apply energy efficiency standards.
In the U.S., in many of these areas they have federal pre-emption which pre-empts the state from moving ahead with something individual. That’s a fundamental difference between the two countries that our industry and many other industries have to deal with because Canada has a different governance and responsibility structure.
[Translation]
Senator Dupuis: Thank you for your answer. I would also like to know whether the building industry overall, on the residential or commercial side, has come to a consensus on how to achieve energy gains. Without being harder on you than you are on yourself, I heard you say you had trouble getting people to pay attention to your industry’s actual contribution. That advocacy is certainly important.
Is there any consensus in the building industry as a whole — on the commercial, industrial or residential side — on how to make progress, perhaps not on how quickly that progress should be made, but on what the objectives are and how to achieve them?
[English]
Mr. Passmore: Thank you. Other nations are employing existing technologies to improve their infrastructure and efficiency in how they heat their buildings. We look at some of the Scandinavian countries and their migration away from fossil fuels into highly efficient — more than 100 per cent efficient — heat pump technologies. The technology is there, and it is employed in other places in the world.
We don’t have to invent anything. We have to carefully select the technology that suits our existing electric infrastructure and apply it in Canada, and to incentivize the use of that technology. We don’t have to invent anything new; it’s out there, and it’s being used.
We’ve spent the last 25 years building on efficiency and administering demand-side management programs to help incentivize the improvements of our infrastructure and apply the high-efficiency technologies we’re talking about.
There is a consistent understanding of what we could do today. As Martin has said, though, it’s cost-prohibitive in some cases. It’s becoming more and more cost-effective in life-cycle costing, because fuels are getting more expensive every year. One thing that is absolutely consistent, though, is efficiency is the answer, and choosing fuels with the least impact combined with efficiency is the avenue we have to go down. Our industry association is your partner in getting from here to there.
The Chair: Before I give the floor to Senator Wetston, I just want to say a couple of things.
I used to live in Europe at the beginning of 2000. At that time, when you wanted to buy a house, there was already a folder with information on houses. One of the efficiencies was energy, but the other was water. There was also the question of waste. I’m talking about 18 years ago.
You said we are long overdue to move on certain things. From your side, you’re saying everything is clear with respect to new houses, but old houses are a different issue, because it may cost a lot. But when I compare it to the Europe situation, they all have old houses, so there must be something we are not really understanding or focusing on.
This story with the building code seems to be that one is in favour and the other is not — “stop it; don’t do it.” But building codes have to evolve. We need them. I understand the new one and the old ones should be different.
I think we are all asking the same question: How do we move faster? The technology is there, you’re saying. I agree that money subsidies cannot be the long-term situation. What is lacking?
Mr. Luymes: I’ll give a very short answer, from our perspective. As Bruce said to me, this is my answer too: The primary driver in Europe has been the cost of energy. That has not been the primary driver here. I’ll go further and say research suggests Canadians have a sense of entitlement to low-cost energy. That has been a bit of a handicap for promoting super-efficient buildings, because Canadians feel they have a right to low-cost electricity and to the lowest-cost natural gas. That’s just the privilege of living in a country with abundant resources. I think there’s a bit of a cultural tendency that way, and that has to be overcome.
We won’t tell government how to address fuel pricing, but carbon tax is one way of getting to the answer and to start making the cost of energy more of a driver for behaviour. We believe that’s probably the right direction to go. In order for people to make informed decisions as to how they can use energy more efficiently, they need good information. We support the model you described in Europe of giving people all the information they need to make informed decisions in their homes and buildings.
Mr. Heeley: The thing to add is we were talking earlier about the need for incentives and the dollars that have to be spent for incentives. We’re starting to see them arise in parts of the country, and some of them are significant. Our industry does not necessarily agree, but one of the impediments of selling retrofits is the inability to sell them on the return they get on that retrofit because of the cost of energy. That’s simply a financial decision they’re making all the time, particularly in the commercial sector. If one of our people can walk in — a contractor, designer or what have you — and sell something because the return to them, over a reasonable period of time, is going to be significant, it becomes a very easy sell. But with the cost of energy comparative between Europe and Canada, as an example, it’s a much harder thing to do. That’s why incentives have had to be introduced in a lot of cases.
Dil Puar, Manager of Government Relations, The Canadian Real Estate Association: My colleagues have hit on both points I was going to make on that front.
It’s important to note that when it comes to the housing sector specifically, mandating energy efficiency in codes is not how we got to where we are. When it comes to climate change and greenhouse gas emissions, the housing sector is a Canadian success story. The residential sector is the only sector to meet its original Kyoto protocol reduction targets. That’s important, because the building code changes for energy efficiency only came into place in Canada in 2012. By then, you had already seen an 11 per cent reduction in that time, even before changes to those codes.
It’s something to note that for the housing sector specifically, we are making improvements every single day. Guides and outreach like this help homeowners make their homes more energy efficient.
Senator Wetston: It’s all about the money. It’s always about the money. I’m not going to talk about the money.
There are two areas I’d just like to chat with you about. I have a great interest in governance models, particularly ones that don’t work very well. My colleagues here have heard me say before that I think one of the biggest challenges we have in achieving the goals you’re talking about here — which I think we can all agree with — is the country’s governance models — federal and provincial governments, and municipalities.
Can you talk about your views of where the opportunities exist to achieve the goals that I think we all collectively agree with in this fragmented model of government oversight and the inability, from time to time, to coordinate and collaborate? We do a lot of it, but it takes a huge effort, and the results are not so apparent.
I would like to talk to you a little bit about municipalities. I’m an Ontario senator, by the way. I live in Toronto.
Second, there are 150 new high-rises being built in the GTA. I think we know that. Are they all energy efficient? Do they meet the standards that you would be supporting to achieve energy efficiency? Can I have your thoughts about that issue, if you have any particular points of view?
Mr. Luymes: I would make a short comment about the first question: I don’t think we can solve our constitutional issues through this process. We have seen measures put in place recently through the pan-Canadian framework that are encouraging, where we see some collaboration among provinces and some commitment to have timely adoption of building codes, for example, across the country, in step with the federal government. But a couple of changes in government at the provincial level could change that level of collaboration very quickly, and we’d be back to where we’ve been in the past. So I don’t know that we can solve that issue.
Regarding the municipal challenge, we think Toronto is actually a bit of a leader on promoting super efficient buildings. They have a variety of standards they can use. Not all of the buildings you’re referencing are being built to the standard we would like to see. It’s not really just about the building code; it’s about an aspirational code. I can’t even think of the names of the different standards. There’s the Toronto green standard or whatever. There are a number of different voluntary standards out there.
To some extent that’s about marketing. As you said, some of this is putting that information in front of developers so they know that building the most efficient building with a geothermal heating and cooling system, for example, can yield all kinds of benefits, maybe not in two years but for sure within a 10-year time frame. Part of that is education. Also, voluntary codes and standards is one way of getting there.
I would suggest, back to our previous point, that education of the marketplace is another tool we can use. It’s not just about the money; it’s also about good information.
Senator Wetston: I have a quick follow-up question. How about mandatory codes? Forget about voluntary ones.
Mr. Heeley: The mandatory codes, the National Building Code, the provincial codes, the majority of which are picked up by the provinces, they’ve been moving in this direction for quite some time. I trust the committee is aware. They’re adding energy efficiency requirements for specific products, whether it’s commercial or residential building. There has been a lot of advancement. If you look at the 1985 code and you look at the most recent, 2012 or 2015, there are huge moves they’ve made in a lot of different areas, insulation, windows and HVACR equipment as well.
When you ask about the apartments that are being put up, it’s the most recent code that Ontario has adopted that is setting the standard for efficiency for those particular units. Martin brings up our concern that once the model code comes out, sometimes it’s anywhere from five to seven years for the provinces all to get aligned with that particular code. I think that’s where the challenge becomes a real problem because you don’t have uniformity.
You talked about governance models, and we don’t want to go down that constitutional route, but there is an issue with provincial resources. Do they have the people to get themselves into how they adopt that code? Sometimes too many resources mean they’re going to make changes because they feel it’s important to the province to make changes to that model code. It continues to be a problem for us to get some consistency in energy efficiency, things that are being applied both in new construction and in some cases, the retrofit side.
Senator Richards: This question is for Ms. McNeil, or any of the panel. You talked about how inefficient the houses in the 1950s were. I’ve seen houses built in the 1950s. I live in a house that was built in 1895, which could use some upgrades, but I also have a summer house that was built in 1920, and that’s great.
I’ve seen houses built in Toronto. They no longer use plywood. They use pressed board, which is petroleum-based. I’m just wondering, do the codes really matter when the manufacturers and the developers aren’t using top-of-the-line equipment to build these houses? For instance, we now have two-by-twos running through a basement instead of two-by-fours. You have pressed board instead of plywood going up all over Toronto. I’ve seen them.
For instance, if a fire happens, those houses will go up three times as fast as any of the houses from the 1950s. It might seem to be energy efficient, but I’m not really sure, because of what they’re using to build those houses, if they’re really doing justice to the people who are buying them.
Mr. Heeley: I think the biggest change, probably in the 1980s, is we looked at the typical Canadian home or commercial building being built and at current technology. They moved toward a building envelope, and that’s what didn’t happen in the 1920s and the 1950s. No question. With the substantial aspect of the building materials, there’s no question, you can’t compare the two. They used brick and all sorts of different things to create the structure and, to some degree, create efficiency. When you put a cinder block and then brick on the outside, you’re creating a pretty good insulating value, of sorts. Once they moved, in the 1980s, into creating a type of sealed-up home, because in this climate we are a net heating country, we need to have technology that works towards not having air escape and not having air infiltrate, particularly in the heating season.
I think that’s the difference. I’m not one to sit here and compare the building materials, as you have, and whether that’s going to be a better one in the long term or not. That’s not my area of expertise, but that was why they moved that direction.
As well, I think some of it is cost, and looking at that cost and availability of those different materials over time.
Senator Richards: Of course. And that’s what my question was. If developers are going for the lowest common denominator of cost in order to put up these buildings as quickly as possible, is that really serving the public interest?
Mr. Heeley: You’ve got to be careful when you say that. They’re set by the building codes. There are standards for just about every type of material used in a home or in a commercial building, and they have to meet those minimums. Now, is that good to meet the minimums? That’s a debate we can go on for some time about, but there are standards for just about everything, and the building code has all of those in it.
Senator Richards: You and I would rather have a wall put up with plywood instead of pressed board. You go to a developer today, and he’s going to say his costs are going to be astronomical, so pressed board is the answer. That’s all I’m trying to say. Buildings today might be more efficient as far as these codes are going, but I’ve seen the buildings being put up and I’ve seen the buildings built in the 1950s; I think I’d rather go with the building built in the 1950s.
Mr. Passmore: Senator, one thing in our industry that’s absolutely wonderful and that I’m proud of is that the base-model furnace you’re going to get in a new home today, the heating technology that’s typically applied into a new home today, is at a standard level that was the elite level of quality 10 years ago, five years ago.
There’s no question there are some materials compromised for cost-effectiveness, but we’re very fortunate in our industry that codes have evolved. With a focus on energy efficiency and quality materials, the base model furnace that you get in your home today is a furnace that you would have paid a premium for five years ago, a highly efficient and quality product.
Senator Richards: I agree absolutely with you, and I’m not questioning that. I’m talking about the structure of the houses, that’s all. It was a little worrying to me when I saw them being put up all over Toronto when I was there for 14 years. That’s all I’m mentioning, sir.
The Chair: Thank you very much. We have two supplementary questions.
[Translation]
Senator Dupuis: My question is for Ms. McNeil. In reference to codes, you talked about the importance of taking into account the age of the building. Do you differentiate between condo owners whose homes were built 40 or 50 years ago and those whose condos were built this year, as well as single dwelling homeowners? What I am mostly curious about is a 1920s-built home that has been well maintained even though it is not up to today’s standards. In other words, the owner paid out of pocket to maintain the home, and, as a result, it is still efficient. Should the owner be penalized because their home was built in the 1920s or 1950s?
It is a fact that some multi-unit residential dwellings have not been kept up at all. Shouldn’t renovation incentives also take into account whether a homeowner has maintained their home? In other words, landlords who have not kept up their buildings and allowed tenants to live in apartments that were not up to date should not be eligible for funding. Simply because the building was built in a particular year, for instance, they would be eligible for funding.
Ms. McNeil: Yes, that’s a good point. It’s not something we’ve looked at closely. Our focus has been on homes mainly. What you said about homes that have been well-maintained is true, but so many factors come into play. Buyers cannot upgrade certain homes in accordance with various codes. It’s something that requires more in-depth study so that all homes built in the 1920s aren’t labelled as non-efficient. In some cases, buyers may have done considerable renovation work, such as cooling and heating upgrades. What’s on the outside of the home is not all that matters; what’s on the inside is important as well. The whole picture has to be taken into account.
[English]
Senator Wetston: Where’s the low-hanging fruit in the energy efficiency cycle? Is it with the contractors? I’ve been a homeowner for a long time. My age would demonstrate that. Skill set, knowledge, information — read as many brochures as you want, all over the place. I think there is a real challenge in the contractor community. You must see that in your work. Where is the low-hanging fruit here, is it with the contractors? Is that where you need go? Let’s not talk about the money. That’s another issue.
Senator Massicotte: I knew you’d get there.
Mr. Luymes: I don’t know that contractors are low-hanging fruit, but I would suggest strongly in the retrofit marketplace, contractors can be ambassadors of efficiency, a term we’ve used before. That requires them to be trained, whenever they are in a home or a building, to see the opportunities for upgrades as opposed to how our industry is traditionally oriented to just solving technical problems.
You have a furnace that doesn’t work or your air conditioning needs to be replaced, so we will give you the most cost-efficient product available. That’s their orientation, that’s their training.
Our organization tries to educate our contractors to see opportunities to upgrade the home. We have actually suggested some of our members ought to explore being more whole-home contractors, so, as Warren suggested earlier, the mechanical system should be working in sync with the envelope.
If we address envelope issues and tighten up the home to make it more efficient both in terms of the insulating value and the air sealing value of the envelope, that creates opportunities to reduce the need for a large furnace, for example. You can potentially downsize the heat load requirement by 50 per cent.
Those sorts of things should be addressed together. Contractors really need to see there is a business opportunity in doing that because their customers aren’t asking for it. That can be handled a number of ways. You can either motivate the marketplace to start asking for those kinds of retrofits or train contractors to proactively promote those kinds of adaptations.
Mr. Heeley: The better of our contractors are those sorts who go into the home and look at the whole home for the customer. We wish we had more of those. That’s what we’re working towards. Any help from government about that would be, I think, a very positive thing.
The Chair: Thank you so much.
Mr. Puar: Education and awareness is the low-hanging fruit. The more you educate people, the more they know what they can get from their retrofits and the more likely they are to get there.
The Chair: Thank you so much for this very interesting dialogue and discussion. We appreciated both the questions from the senators and the answers from the panel.
I would now like to welcome our second panel of witnesses. We have, from Indigenous Services Canada, Lyse Langevin, Director General, Community Infrastructure Branch, Regional Operations.
We also have Mark Hopkins, Director General, Natural Resources and Environment Branch, Northern Affairs Organization, Crown-Indigenous Relations and Northern Affairs.
And from Canada Mortgage and Housing Corporation, we are joined by Mrs. Luisa Atkinson, Director, First Nation Housing.
I will give you the floor for your opening statements, after which we will proceed with questions and answers.
[Translation]
Lyse Langevin, Director General, Community Infrastructure Branch, Regional Operations, Indigenous Services Canada: Good morning, Madam Chair and members. Thank you for inviting me today. Before I begin, I would like to acknowledge that we come together on unceded traditional Algonquin territory. I am pleased to join you to provide the committee with an overview of Indigenous housing programs provided by Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs.
[English]
Indigenous communities are among the most vulnerable to climate change due to their relationship with the natural world, traditional lifestyles and, in some instances, geographic location.
Climate change and natural disasters such as erosion, flooding and fires are impacting their relationship with nature and their traditional lifestyles. Work is already underway in partnership with Indigenous organizations to develop effective long-term approaches to support the care, control and management of safe, healthy and affordable housing and related infrastructure.
To address urgent needs, Budget 2016 provided a total of $554 million over two years, beginning in 2016-17, to Indigenous Services Canada and to the Canada Mortgage and Housing Corporation to address immediate housing needs on reserves.
With this targeted funding, Indigenous Services Canada awarded, as of December 31, 2017, 1,254 First Nations-led projects resulting in the construction, renovation or servicing of 5,553 units located in 452 First Nations communities serving more than 412,000 people.
Moving north, the three Inuit regions funded by Crown-Indigenous Relations and Northern Affairs, Nunavut, Nunatsiavut, and Inuvialuit have received $80 million earmarked in Budget 2016 delivered through funding directly to Inuit land claim governments and organizations to address housing needs in these regions over two years.
Building on this momentum, Budgets 2017 and 2018 dedicated $600 million over three years for First Nations housing, $400 million over 10 years for Inuit housing — which is in addition to the $240 million over 10 years provided by the Canada Mortgage and Housing Corporation to support housing in Nunavut — and $500 million over 10 years to support Metis nation housing.
Though these investments represent a first step in the right direction, we know much more needs to be done as even with recent increased federal support, funding has not kept pace with population growth and needs.
The government is working with Indigenous partners towards shifting care, control and management of housing by Indigenous people.
In the spirit of a renewed, respectful and inclusive relationship, Indigenous organizations and the government have been collaborating to develop effective long-term approaches to housing that meets the needs and aspirations of Indigenous peoples in the forms of distinctions-based national housing strategies for First Nations, Metis and Inuit people.
Next, I will address the current housing programs. Inuit housing funding is delivered by Crown-Indigenous Relations and Northern Affairs in the three regions of Inuit Nunangat and is based on a self-determination approach that gives Inuit land claim governments and organizations the responsibility, decision-making power and capacity to address housing needs in their communities.
The cost-related benefits of adopting energy efficiencies in northern housing have encouraged Inuit communities to adopt energy-efficient designs.
For example, in 2013, the Nunatsiavut government received an Arctic Inspiration Prize for its Healthy Homes in Thriving Nunatsiavut Communities initiative, Nunatsiavut’s first sustainable multi-unit residential dwelling.
The new multi-family prototype apartments are equipped with electric heating and solar panels to maximize energy efficiency, and with cold porches to minimize heat loss.
The Nunatsiavut government also used Budget 2016 to support its affordable warmth pilot project, which provides high-efficiency wood burning stoves to households in need.
[Translation]
Finally, in 2015, the Makivik Corporation collaborated with the Société d’habitation du Québec and other regional organizations to create prototype housing with 11-inch thick exterior walls filled with high-density blown-in insulation, increased window sizes on the south wall and high-energy efficient triple-glazed windows to maximize solar gain.
[English]
First Nations housing is managed and delivered by First Nations. Indigenous Services Canada provides First Nations, on average, with $143 million annually through the 1996 On-Reserve Housing Policy. This is in addition to the recent budget announcements.
First Nations may use this allocation at their discretion towards the construction, renovation, maintenance, insurance, capacity building, debt servicing and the planning and management of their housing portfolio.
As a general rule, First Nations communities construct housing consistent with national and provincial building codes, which may include energy efficiency and ungraded materials. The department strongly encourages compliance with current building codes.
For example, with regards to targeted investments contained in Budgets 2016 through 2018, all construction and renovation projects must meet national or provincial building codes applicable to the regional location of the First Nations community, and inspection certificates are required upon completion.
The department is currently also supporting the First Nations National Building Officers Association’s partnership with the Canadian Construction Materials Centre to develop a technical specification manual for First Nations to support the implementation of building codes and standards, which will include energy efficiency guidelines.
[Translation]
Sustainability is not just limited to how homes are constructed but what helps them run after they are standing. For example, 72 out of 99 communities in the Yukon, Northwest Territories, Nunavut, Nunavik and Nunatsiavut rely almost exclusively on diesel power generation. South of the 60th parallel, there are also currently close to 40 diesel-dependent communities. We must find more affordable, and environmentally friendly, energy solutions for northern homes. An example of a funded project to reduce diesel dependence is the recently announced project to connect Pikangikum First Nation to Ontario’s electricity grid, which will provide sufficient electricity to meet the community’s needs for many years into the future. The estimated cost is $60.2 million. This project is estimated to be completed in fall 2018.
[English]
Further, Crown-Indigenous Relations and Northern Affairs Canada’s program funds solar, biomass, wind and small hydro projects, but the current scope does not include housing.
In conclusion, we recognize Indigenous communities are among the most vulnerable to climate change due to their relationship with the natural world, traditional lifestyles and, in some instances geographic locations, as I have mentioned.
We continue to work with Indigenous partners to promote the implementation of energy-efficient measures and technologies for Indigenous housing, including low-carbon fuel. The government is making substantial progress in developing distinctions-based housing strategies, in collaboration with First Nations, Inuit and Metis groups.
As we make gains towards infrastructure and housing reform, the government will continue to work with Indigenous communities to incorporate energy efficiency considerations into planning and construction, renovation, repair of housing and, notably, by supporting governance training and capacity initiatives.
Thank you for your time.
Luisa Atkinson, Director, First Nation Housing, Canada Mortgage and Housing Corporation: I am pleased to be here on behalf of Canada Mortgage and Housing Corporation. CMHC is Canada’s national housing agency. Our mission is to help Canadians meet their housing needs.
Many know us through our housing finance activities like mortgage loan insurance, which helps Canadian access the housing market. We also provide market analysis, information and research that helps businesses, governments and the public make informed decisions about housing.
You will recall last fall my colleague Duncan Hill spoke to this committee about some of our research demonstration activities around green homes.
[Translation]
CMHC also funds affordable housing solutions in communities across Canada — including the North. We do this in partnership with the provinces and territories, Indigenous communities, municipalities and others.
[English]
The housing need in the North is great, and the challenges are many. For example, in 2016 there was a 36.5 per cent rate of housing need in Nunavut compared to the national rate of 12.7 per cent. This means that over one third of all people living in Nunavut are paying more than 30 per cent of their income on housing and are living in overcrowded homes in need of repair.
Some of the challenges in northern housing include a lack of sustainable land available for housing; logistics and cost of transporting construction materials and equipment to the North; and the specialized and often costly materials and building practices needed to build houses for an extreme climate.
That’s why is the National Housing Strategy allocated $300 million over 10 years to offset the higher need for, and cost of, housing in the North. This funding will help approximately 3,000 northern families find an adequate, suitable and affordable place to call home.
Important to note, especially for this committee, is the National Housing Strategy will help shift and prepare the housing sector to build a higher degree of environmental efficiency. It will do this in a number of ways.
For example, applications for federal funding for new construction and repair or renewal of affordable housing projects will be prioritized based on how energy efficient they strive to be.
Also under the NHS, CMHC will launch new demonstrations and solutions lab initiatives that northern housing stakeholders can apply to help them innovate, problem solve and advance the environmental sustainability of northern housing.
One key initiative of the NHS I would like to mention is the National Housing Co-Investment Fund. I can’t go into great detail on this yet, as we’ll be announcing it in the next couple of weeks. I can tell you that projects applying for this funding must make energy efficiency a priority.
The fund’s focus on projects that bring together many partners at all levels of government and across sectors can help promote environmentally sustainable solutions.
We’ve seen this happen with past projects in the North, for example, in the Plateau Subdivision in Iqaluit, the first Arctic subdivision based on sustainable development principles. This award-winning project was funded by CMHC and the Federation of Canadian Municipalities’ green municipal enabling funds. The City of Iqaluit offered the land and its planning authority set sustainability standards for developers. The project was carried out in consultation with the residents.
As a result, there was a neighbourhood with protected natural features, such as berry picking areas, walking trails and snowmobile trails. Roads were aligned with prevailing winds to reduce the snow clearing costs and homes were built to R2000 standards or greater.
We’ll be looking for the same collaborative and comprehensive approach to green buildings throughout products funded through the National Housing Strategy. CMHC has carried out a number of studies on pilot projects to better understand how houses can be more efficient in the North. I won’t go over these because my colleague Duncan Hill has already addressed this in an earlier appearance. It suffices to say that our studies consistently point to the need for local expertise on construction and maintenance of energy-efficient homes suited to northern climates and to look to Indigenous communities on how best to build housing that meets cultural needs.
Bringing specialized trades people from the South adds considerably to the cost of building and maintaining green homes in the North.
CMHC currently has a few programs and initiatives to build housing capacity in Indigenous communities. Through funded targeting at skills development, CMHC collaborates with First Nations communities to identify capacity and training needs. This has included supporting community members through schooling in the trades. We have also been working closely with the Southern Alberta Institute of Technology and the First Nation Technical Services Advisory Group on a housing manager training program. In fact, the first class of 14 students celebrated their graduation from the program this past January. It has been a real success.
Just a couple of weeks ago, we met with other educational institutions to discuss how we can expand enrolment and develop the program further. We also run an internship program for Indigenous youth that has promising results in encouraging careers in housing, including one recently organized through the Repulse Bay Housing Association.
Building local capacity in the field of housing will be more important than ever with the federal government’s decision-based approach to support Indigenous housing.
Madam Chair, I hope this overview helped to show how CMHC programs encourage energy efficiency and environmentally friendly programs, and how the green priority for the National Housing Strategy will ensure this investment in housing is also an investment in more sustainable communities in the North. I would be pleased to answer any questions.
[Translation]
Senator Dupuis: I have a question for Ms. Langevin and one for Ms. Atkinson. I’ll start with Ms. Atkinson. You talked about the National Housing Strategy, which I think is an extremely important federal initiative. Underlying the strategy is the right to housing. The government is endeavouring to adopt a new rights-based approach that recognizes every person’s right to affordable and adequate housing that meets specific standards.
In your presentation, you said the federal government was adopting a distinction-based approach to supporting Indigenous housing. On page 3, you indicate that the National Housing Strategy allocated $300 million over 10 years to offset the higher need for, and cost of, housing in the North. The funding should help some 3,000 families. Do you have some sort of table indicating how many housing units are needed right now? Is that information available for all of Northern Canada? What are the housing needs and how do the various supports and housing programs address them? As I see it, one thing is not clear, and it has nothing to do with your role. This is not in any way meant as a criticism of the work you do. Given that the government decided to take the strategy in a new direction, the housing programs flowing from the strategy should also reflect that new approach. With that in mind, do you have any specific data you can share in terms of how the measures meet the needs that have been identified?
[English]
Ms. Atkinson: Thank you for the question. I don’t have it at my fingertips right now, but we do have data that shows there is extreme need in the North in housing for all three distinct Indigenous groups. My colleague can speak more about the Indigenous housing strategies that will be developed as a distinction-based approach for these communities.
Under the current programming, we are very limited in what we can offer to these distinction-based groups, but the National Housing Strategy is working towards creating opportunities that are more inclusive of Indigenous people. Indigenous people across the country will be able to apply, based on the criteria, for the National Housing Strategy programs and initiatives which will identify different needs, whether it be skills development or capacity in training of technical services. Many of the programs will be to help build new, affordable social housing units, renovation, of course, and remediation of existing housing.
The need is very diverse depending on where you go in the country. It’s about working with Indigenous communities directly, identifying what their priorities are and where we can help them meet those priority areas. From one community to another, it could be completely different. In the North, it would probably be more around making sure the housing is adequate for the climate and addressing some overcrowding issues there as well.
[Translation]
Senator Dupuis: Mr. Hopkins, I found it interesting that Indigenous Services Canada gave us information not only on its behalf, but also for Crown-Indigenous Relations and Northern Affairs. The department was split in two, if I understand correctly. Who is responsible for what on the housing front? When you say the money is transferred to First Nations, who address the needs, it means they administer the funding. Again, I’m trying to understand the link with the National Housing Strategy. If housing is a right, you could certainly take the following position: “You are in charge of housing, so here is $123 million to do what you can to tackle your priorities.” Although that’s a commendable approach, it is possible that little is being done to meet the real needs. The department was split in two. Crown-Indigenous Relations and Northern Affairs is supposed to build the new relationship we want to have with First Nations people. On a practical level, what does that mean for housing?
Ms. Langevin: Thank you for the question. Improving housing conditions for Indigenous people is a priority for both departments. You are right that it can be confusing. Both departments work very closely. I’ll try to make clear what the difference between the two is and how it works. Indigenous Services Canada is responsible for First Nations housing, and Crown-Indigenous Relations and Northern Affairs is responsible for Inuit and Metis housing. The two departments do, nevertheless, work very closely on the issue.
As far as the housing strategies for Indigenous peoples are concerned, First Nations must lead the development of their national strategy to ensure their needs and views shape the future of housing reform. The concept of what determines the requirement is another consideration. The needs are great, totalling nearly $9 billion. So you’re right that the $143 million annually does not meet the needs. We are working with First Nations to figure out what the reform will look like, what the new programs under their management will be — further to the concept of care, control and management by First Nations — and how that will take shape. We are working jointly on developing that strategy right now.
Senator Dupuis: How much housing does that $9 billion represent? Are some regions in Canada more in need than others; do some have more overcrowding than others?
Ms. Langevin: It depends on the province. I have the national figures. They’re from a study that was done in 2011 and updated in 2016 using census data.
Senator Dupuis: Could we get that information?
Ms. Langevin: In 2016, it covered 41,000 new dwellings and 44,000 major renovations. Last year’s investment covered 5,000 renovations and new dwellings. The number is a bit lower. In 2016, some 41,000 dwellings were built and 44,000 renovations were carried out.
The Chair: The birth rate among First Nations people is much higher. You said the pressing needs were reflected in the figures you just gave. What are the needs in the medium and long term, given the growth of the Metis and Indigenous populations?
Ms. Langevin: The figure is only for First Nations and covers a projected period of 10 years.
The Chair: You’re saying we would have to ask a different organization for the data on the Inuit and Metis populations.
Ms. Langevin: Mr. Hopkins has the information here.
The Chair: If you could provide us with a copy of the report, we would appreciate it.
Ms. Langevin: All right.
[English]
Senator Patterson: By the way, the Senate Aboriginal Peoples Committee did extensive studies on First Nations housing and housing in Inuit Nunangat in the last couple of years.
I’d like to direct my question to Ms. Langevin. Thank you for your presentation. I have to say you observed that a big majority of communities in the North rely almost exclusively on diesel power. It’s 100 per cent in my region of Nunavut, as you know.
We’re studying on moving to a low-carbon economy in this committee. I was surprised you made no mention of a budget initiative of Indigenous and Northern Affairs Canada, first announced in 2016-17, a budget of $10.7 million over two years, “to implement renewable energy projects in off-grid Indigenous and northern communities that rely on diesel and other fossil fuels to generate heat and power.” I’m quoting from your website.
Then, in 2017, $53.5 million over 10 years to implement renewable energy products with the same goal, getting off diesel. What’s happened to this money? What projects have been put in place in my region of Nunavut, which is 100 per cent reliant on diesel?
Ms. Langevin: I will defer the question to my colleague Mark.
Mark Hopkins, Director General, Natural Resources and Environment Branch, Northern Affairs Organization, Crown-Indigenous Relations and Northern Affairs: You’ve asked a very specific question, which we’ll follow up on in terms of providing a list of projects that have been funded in Nunavut specifically over this period, which I think was your question. More generally, yes, those programs are in place and have been running on an ongoing basis, based, in fact, on a program we’ve had in place for close to two decades. I can give you a couple of examples in Nunavut right now. One would be support for the district heating system, the new pool in Iqaluit, which was quite expensive relative to the size of the program. As you know, this is roughly $5 million per year, which is very small relative to the scale of the challenge of making a dent in even the 25 Nunavut communities, never mind the Nunatsiavut, Nunavik, Northwest Territories and the Yukon. Understand that this program is very small relative to the scale of the challenge.
We’re also funding primarily, again because of the size of the program, projects that are more sort of feasibility and assessment. For example, we’re supporting the wind assessment through the construction of MET towers, as they’re called, which are important to gather data to assess whether or not wind power is feasible and where it would be best situated in communities. We’re doing work on that in Iqaluit. We’re also supporting four MET towers in various communities in Nunavik that will progressively move to different communities to give a mapping of hopefully much of Nunavik. That gives you a bit of a flavour.
Senator Patterson: Yes. Thank you for your candid answer that the funds available are very small. I am aware that the aquatic centre in Iqaluit is now using waste heat from the nearby power plant, and that’s great progress. But, really, there are no significant alternative energy projects in place in Nunavut, and I’m happy that studies are under way to consider where we could go.
That brings me to my next question. The pan-Canadian climate framework, which Nunavut bravely signed onto, establishes carbon pricing, to use the politically correct terminology, as an incentive to drive citizens away from using fossil fuels. Of course, this is a goal we all have.
In my region, since there are yet no alternative energy projects and a very small budget available for removing reliance on diesel, as Mr. Hopkins kindly stated, I’m just wondering whether you think it would be wise to implement carbon pricing in Nunavut in 2018, as is the stated government goal, when there’s nowhere citizens can go as an alternative to fossil fuel. Some people have said to me, “Well, we can go back to dog teams instead of using snowmobiles for hunting maybe. We can use seal oil to heat our homes, as we did when there were igloos. Kids can maybe walk to school in blizzards or take bicycles in January.” All that carbon pricing is going to do in Nunavut, practically speaking, is drive up the cost of everything — air transportation, home heating, the production of electricity — most of which is already borne by the Government of Nunavut itself.
I guess I’d like to ask you: With the primitive progress we’re making in developing energy alternatives in Nunavut, is carbon pricing in Nunavut a good, effective public policy incentive to reduce greenhouse gas emissions?
Mr. Hopkins: Well, that’s not within the mandate of my department or my minister. You seem to be asking me a personal opinion, which I’m obviously not going to provide here. It’s really out of the scope of our department’s responsibility in terms of the carbon pricing, which falls to the Minister of Environment.
The Chair: Can I jump in and ask a complementary question in the same area? Really, I agree with Senator Patterson that we have to be coherent.
We hear, in this committee, about natural gas, and they say they are ready to go to the North. That, of course, continues to be fossil fuel, but with a much lower carbon footprint and, therefore, a lower carbon tax.
You said you are building houses with solar roofs. The new houses have solar roofs and very high energy windows facing south.
Among these ideas and these projects to bring in natural gas, is that something you have evaluated or imagined?
Mr. Hopkins: I don’t know that we have a study to present. The logistics are a really important factor. There are areas in the North — such as in the Inuvialuit region, Inuvik — where there is a very close source of natural gas; so the feasibility there is quite different than in other areas of Nunavut and Nunavik, for example, where you are needing to ship fuels in. You still have the same problem you have with diesel in terms of needing to ship it ; therefore, it still becomes very expensive because that’s a main component of the cost. But it certainly has a much lower carbon footprint than diesel.
The Chair: Maybe I’m being too technical, but transporting liquid natural gas is not more dangerous or difficult than transporting diesel. Wherever diesel can travel, natural gas can get there too. I don’t necessarily understand the real problem.
Mr. Hopkins: I’m giving you only a partial answer because you’re also asking about whether or not — because the other factor is the diesel-generating facilities themselves, many of which, especially in Nunavut, are very old, some of which, as you may have heard, are 20 or 30 years beyond their expected life. Infrastructure Canada, as I’m sure you know, has a program trying to address that.
The question becomes whether those diesel facilities can work on natural gas. The capital expenditure around the diesel facility is also a big cost component. Now, I can’t answer that question with complete confidence here.
The Chair: Do you think you will be able to complete the answer and send the clerk some complementary information?
Mr. Hopkins: Yes, we will.
The Chair: Thank you.
Senator Patterson: I’d like to turn to housing, as discussed by Ms. Langevin.
You pointed out the monies allocated for Inuit housing in a 10-year period. Nunavut is probably among the most generously funded regions for housing. This may well be justified by the exploding population, which our chair has pointed out, Third World natural population growth rates.
Let’s be realistic here. I’ll focus on my region of Nunavut. There is $240 million committed in last year’s budget over 10 years for Nunavut for housing, as you pointed out. That’s $24 million a year. I believe, based on the current cost of housing, that’s about 40 to 60 housing units a year.
The Senate committee documented a current shortfall, and the Nunavut Housing Corporation reported a current housing shortfall, of 3,000 units. We now have a commitment for, let’s say, 60 houses a year in Nunavut from the federal government, and you say we know much more needs to be done.
You’ve said this in your presentation, even with increased federal support, funding has not kept pace with population growth and needs. I’m quoting you: “The government is working with Indigenous partners towards shifting care, control and management of housing by Indigenous peoples and now there’s going to be a distinctions-based National Housing Strategy for First Nations, Metis and Inuit people.”
Do I understand that the federal government strategy is by somehow shifting care, control and management of housing to Indigenous peoples, the severe shortfall is going to be addressed? Is that your department’s strategy to address the severe shortfall that I’ve outlined in my region and every other region?
Ms. Langevin: Thank you for the question. It is more system-wide than just your region, and I acknowledge the shortfall in your region. It does apply to First Nations as well as Inuit people, and with Metis people, but more in an urban context.
The plan is certainly not to move the care, control and management of housing to the three distinctions-based groups and hope that with the same amount of funding better outcomes would come out. That is not the plan. The plan is to work with First Nations and see what innovative approaches can be done, what sufficient funding could be, and how we could together, and eventually themselves, come to a better place.
Minister Philpott has said in her January press conference that the creation of Indigenous Services Canada, one its goals is its own obsolescence, but it is to make sure that Indigenous people can see themselves and be ready and equipped to do a better job than the old department has done in the past.
It is co-developed, and there are long conversations about sufficiency and sustainability. Just taking the programs and doing the same thing with different sets of people is going to give the same outcome. That is not the outcome being looked at.
We are working on the set of outcomes that would define success with our First Nation, Metis and Inuit partners, and we are co-developing, co-writing, the strategies with them. We are at the development stage, and I wouldn’t want to talk on their behalf, but sustainability and sufficiency are very large topics being discussed.
Mr. Hopkins: I will go back and provide more of an explanation about how the program works in the North because we missed that from the earlier question. In terms of how Crown-Indigenous Relations and Northern Affairs provides funding in particular to three of the four land claim agreement holders across Inuit and Nunangat, our funding goes basically in the form of a grant to the Inuvialuit, Nunavik and Nunatsiavut. Nunavut’s funding, as you realize, flows through CMHC to the territorial government. That is based on the premise of what we call a self-determination approach. The premise is these land claim agreement holding organizations receive the money. It’s not unconditional, but there are no particular requirements in terms of the attached investment. That is up to the land claim agreement corporations themselves to assess, in a similar way, in terms of quantity and quality. Sustainability becomes an important factor, hence the discussion earlier about Makivik Corporation and the experimental buildings with the thick walls they’re putting in place.
That’s a positive development, I would say, but it’s not yet extensive and it will take some time and money to fully deploy those kinds of building practices across those regions of the North.
The Chair: Before I give the floor to Senator Mockler, I have a quick question. I worry about climate change impact in the North, and when you see a map of all the communities, they are all very close to water. We know water levels are rising and the permafrost is melting. Now the construction for this housing needs to have solid bases and people are drilling down to get into the rock, to provide stability.
With these new houses you are constructing, are you taking these aspects into consideration so as not to need to reconstruct in a couple of years?
Mr. Hopkins: We’re not constructing these houses; we provide grants to land claims agreement corporations to build the houses. It’s their responsibility to determine and build to standard and code.
We do have a separate program called the Climate Change Adaptation Program, which is dealing in a very targeted way with the impacts of climate change in the Arctic, and it does provide funding for exactly that. It provides funding for permafrost mapping and hazard mapping so communities can identify where the permafrost is at risk.
For example, we’ve invested in precisely this, in some geotechnical investigation on building in permafrost for a housing complex in Sanikiluaq. There’s a separate funding program to address those housing needs as they arise.
Senator Mockler: I’m the Chair of the Standing Senate Committee on National Finance, and I just want to share this with the officials and then ask you a question. To Canada Mortgage and Housing Corporation, it’s somewhat appalling to hear, and I don’t see much progress, especially when I look at shortfalls. For example, in Nunavut, 3,000 units; that will take 50 years to build.
Senator Patterson: That’s just to catch up.
Senator Mockler: That’s just to catch up. I’ve read the report done by the Aboriginal Affairs Committee on housing. I have two small questions.
If you look at the complete North, what is the shortfall per area? Can you give us those facts? It’s nice to talk about carbon protection, but there are other areas in Canada we could manage better still, but we could target rapid programs to help the North.
[Translation]
If the will is there, solutions and programs could be identified quickly.
First, as far as urgent needs go, do you know what the shortfall is? Could you provide us with some sort of grid or table, from the Canada Mortgage and Housing Corporation, so that the committee can do something even though that is not its responsibility? We could make recommendations to the government. The Standing Senate Committee on National Finance could bring these issues to the government’s attention to ascertain what it will do in the immediate term to help certain populations in our society. Everyone is talking about the problem, but things are moving in slow motion. I am not trying to point fingers. The government officials are professionals. You are speaking with parliamentarians. You were asked to appear before the committee so that we could develop recommendations aimed at helping the most vulnerable members of society.
[English]
Mr. Hopkins: We will strive to identify some sort of measure of need across the North. I don’t know that we have it. There are challenges in identifying the need. One is because it grows. Two, there are issues around family arrangements. There are issues around quality of construction, how many units, what sort of units, how many people, multi-family arrangements, what scope is there to adjust the way you build the living environment all factor into your calculation of need. That isn’t to say I don’t think everyone understands how dramatic it is, but quantifying it becomes a challenge.
I will look and see what we have. There will certainly be many assumptions that need to be made around it.
The Chair: You wanted to add something?
Ms. Atkinson: I did. I wanted to add that your comments ring very true. We all are very passionate about seeing change and being able to enact some real change with communities.
It takes a whole-of-government and a whole-of-community to enact change. It’s not a one-size-fits-all solution. We are doing more research. We are working with our partners. We’re working with housing proponents across the country to find out how we can stretch dollars to do more. That takes all of us.
I wanted to mention this because research is being done continuously. There are partnerships being built with construction companies, with scientists, a number of different Canadians who want to see some solutions. The funding my colleagues have been talking about is a step in the right direction. It’s the first step, but there is much to do and we recognize that. Thank you for your question.
Senator Patterson: First of all, let me acknowledge the shift to control of housing monies for Inuit to three regions in Northern Canada was recommended by the Aboriginal Affairs Committee, and I’m pleased the government did respond. The money was being eroded with administration costs and delays when it passed through provincial governments in those three regions.
We understand that government alone cannot deal with these huge housing shortfalls. The government can help First Nations and other Aboriginal peoples to lever existing programs so as to find private partners and develop other sources of revenues. I just want to mention some areas the committee has examined and supports.
Not to be controversial, but the excise tax on marijuana production on reserves left out First Nations. They have social and housing and mental health and education needs. The tax revenues are being divided up avidly among provinces and the federal government and territories. First Nations are left out. Your department is going to get a recommendation, or your government, about giving a share of those revenues to First Nations so they can start developing their own source of revenues.
Second, monetizing contributions through the First Nations Fiscal Management Act has been a successful vehicle for levering private sector money.
There’s a golden opportunity to move further by monetizing the contributions for First Nations bands that have good governance, as certified under the First Nations Fiscal Management Act. It’s a vehicle.
There is the issue of Indian monies collected by the federal government and are available, one would hope, to lever additional monies privately. I hope the First Nations Major Projects Coalition is working with your department to get support for participating in resource development opportunities where there are willing First Nations.
I mention these possibilities. I hope they are on your radar as you talk about co-developing strategies. There are probably more.
I don’t know if you would have any comments on that. We understand the government can’t do it all.
Ms. Langevin: Thank you. It’s very interesting. It lines up with the conversations we’re having with our partners.
We have a working group comprised of the Assembly of First Nations, Indigenous Services and the Canada Mortgage and Housing Corporation. We regularly invite other federal colleagues from different departments. We’re doing regular and future engagement sessions.
Throughout last year, a policy framework co-developed by First Nation partners and Indigenous Services Canada, with the help of CMHC, was approved at the December 2017 special chiefs assembly. That was a key step to develop a national First Nation housing and infrastructure strategy to increase First Nation care and control of housing and infrastructure.
At the same time, we’re also working with many First Nation organizations to look at things such as monetization and access to private capital markets through monetization. There’s also stabilizing funding streams for on-reserve private ownership. There are a whole host of issues about private ownership on-reserve. For example, because the land is Crown, a house can’t be repossessed, and therefore at times banks get nervous about mortgages. We are looking at that.
It can’t all be social housing. There is a requirement of social housing in every stride of life, but there are folks who would like own their own house. We are working at developing tools to have the full continuum of housing. In the past, you applied to our programs, and we fund you, as a First Nation, to build a specific type of house. We’re now looking with our partners to the whole spectrum, from apartments when you’re younger and beyond. As we sometimes like to say, the house is never the right size for the stage you’re at in life. When you’re young, it’s too big. When you have a family, it’s too small. When you’re elderly, it has stairs.
That’s why we are looking at the full continuum of housing with our partners so there are different costs for different models of housing. If we build the same house — you had a cost of about $300,000 to $400,000, because building up north is expensive — we’ll never get there.
Senator Patterson: It’s $400,000 to $600,000.
Ms. Langevin: Sorry, my math was off. It’s important we look at the full continuum and the different types of things that can be done. On your behalf, I will ask the Assembly of First Nations if they can share that strategy. They were sharing it widely, so I think they would be happy to do that, but I will have to ask them.
[Translation]
Senator Dupuis: Mr. Hopkins, you said you were going to submit data or documentation on Inuit-related matters. Could you give us an assessment of the Inuit housing needs? We heard that $9 billion was for First Nations, Inuit and Metis housing. Could we get the department’s assessment of those needs?
In addition, could you provide a comparison of federal carbon reduction initiatives by territory? That way, we could see how Nunavut, the Northwest Territories and the Yukon are doing comparatively.
[English]
Mr. Hopkins: I’ll start with the latter question around federal initiatives to reduce carbon across the three territories. That will take a period of time; it’s not something we have easily available, because there are an awful lot of federal departments whose activities have an impact on carbon emissions across the North.
I can relatively easily give a picture of specifically targeted programs and what impacts they have had. I can narrow the scope in that way.
[Translation]
Ms. Langevin: With respect to the Metis population, there has never been a program until now. I’ll check with my colleagues, but I don’t know whether enough research has been done to quantify the results, considering how new the approach is. We’ll check, but we can’t make any promises.
The Chair: Maxime will follow up on the commitments made to provide the committee with additional information.
[English]
Thank you very much for the questions and answers.
(The committee adjourned.)