Proceedings of the Standing Senate Committee on
Transport and Communications

Issue No. 12 - Evidence - March 8, 2017


OTTAWA, Wednesday, March 8, 2017

The Standing Senate Committee on Transport and Communications met this day at 6:45 p.m. to continue its study on the regulatory and technical issues related to the deployment of connected and automated vehicles.

Senator Dennis Dawson (Chair) in the chair.

[Translation]

The Chair: Honourable senators, I call the meeting of the Transport and Communications Committee to order. This evening, the committee is continuing its study on the regulatory and technical issues related to the deployment of connected and automated vehicles.

[English]

Appearing before us we have, from Natural Resources Canada, Paula Vieira, Director, Transportation and Alternative Fuels Division, Office of Energy Efficiency; Dean Haslip, Director General, CanmetENERGY; Marc Wickham, Director, Energy, Science and Technology Programs, Office of Energy Research and Development; and Aaron Hoskin, Acting Chief, ecoENERGY for Biofuels, Senior Technical Advisor, Office of Energy Efficiency.

If I may ask the witnesses for a two-minute wait, I think Senator Dagenais would like to propose Senator Boisvenu as the new member of the steering committee. We need an extra member on the steering committee, and I think Senator Dagenais has a terrible feeling he wants to do that.

[Translation]

Senator Dagenais: Mr. Chair, I want to propose Senator Pierre-Hugues Boisvenu as a member of the steering committee.

Senator Maltais: Seconded.

The Chair: Are there any objections? Mr. Boisvenu, welcome to the steering committee.

I want to welcome the witnesses and invite them to start their presentations. The senators will then ask them questions.

[English]

Dean Haslip, Director General, CanmetENERGY, Natural Resources Canada: Good evening. First, I would like to thank the committee for this opportunity to testify in support of your study on the regulatory and technical issues related to the deployment of connected and automated vehicles.

As you are aware, the regulations, policy, standards or guidelines that will govern the deployment of connected and automated vehicles in Canada fall within the mandates of Transport Canada and Innovation, Science and Economic Development Canada. I understand the committee would like to hear from Natural Resources Canada regarding our work on electric vehicles, given that connected or automated vehicles can be electric.

Canada benefits from having one of the lowest greenhouse gas intensive electricity grids in the world, with more than 80 per cent of our electricity being generated by non-emitting sources. That means that fostering greater electrification of transportation fuelled by Canada's clean electricity grid can play a significant role in helping us lower greenhouse gas emissions from the transportation sector and contribute to the objectives recently laid out in the Pan- Canadian Framework on Clean Growth and Climate Change.

Over the last years, NRCan has worked closely with private sector stakeholders, academia and other departments on the development of the electric vehicle technology roadmap released in 2010 and subsequently, in 2016, we supported the development of the roadmap for accelerating the deployment of electric vehicles in Canada 2016 to 2020. Analysis carried out for these roadmaps suggests that to achieve greater EV deployment, a number of barriers must be addressed.

Specific barriers include the readiness of the electrical grid; the cost, range and durability of new battery technologies; the integration of recharging infrastructure with smart grid technologies and vehicle grid interaction; codes and standards for vehicle and infrastructure and alignment of these with those in the U.S.; the up-front cost differential between conventional vehicles and electric vehicles; access and availability of recharging infrastructure, where and when required; consumer concerns over such new technologies, issues such as range anxiety, battery life, safety and security; and, finally, availability of vehicle choice to meet the needs of consumers.

My department has developed and implemented a comprehensive suite of programs and policies aimed at addressing these barriers. I will speak to those related to the advancement of technology and then I will ask my colleague Paula Vieira to give an overview of our consumer-related actions.

My branch, CanmetENERGY Ottawa, is one of our four national energy laboratories. Our mission is to lead the development of energy S & T solutions for the environmental and economic benefit of Canadians. Along with our sister CanmetMATERIALS Laboratory in Hamilton, our transportation research and development program includes emission treatment technologies, vehicle lightweighting for increased fuel efficiency and studies of electric vehicles. In addition, our colleagues at the Office of Energy Research and Development fund research development —

The Chair: Slow down for the translation, please. Sorry.

Mr. Haslip: In addition, our colleagues at the Office of Energy Research and Development fund research, development and demonstration projects in this domain, with a focus right now on electric vehicle infrastructure demonstration.

Within the electric vehicle, or EV, domain, our research and development program consists of analysis of the GHG emission implications of EVs, field testing of EVs to look at their suitability in the Canadian climate and analysis of the impacts of increasing numbers of EVs on the electrical grid.

Automobile manufacturers are offering more electric vehicle options over time. We are seeing offerings with longer range that are also more affordable, driven to some extent by battery prices that are falling faster than had been expected. Thus, while EV sales forecasts are quite uncertain, it is not difficult to imagine that in 10 years, the total cost of ownership of electric vehicles could be at par with the gas-powered vehicle. In this scenario, electric vehicles could represent 10 per cent of new vehicle sales by 2027 and 5 per cent of vehicles on the road.

What, then, are the implications of such a scenario for our electricity system? In answering this question, it is important to point out that there are three kinds of constraints that might present themselves.

First, capacity: Do we have enough generating capacity to handle the charging of that many electric vehicles if they are all plugged in for recharging at the same time?

Second, energy: Let us suppose that vehicle charging can be scheduled so that capacity is no longer an issue. Do we have enough power over a long enough period of time to charge this number of electric vehicles?

Third, infrastructure: Does the local power infrastructure, such as local transformers, have the capacity to deliver the required power to these vehicles?

Our research has looked at this question. From current electric vehicle use patterns, we know that 80 to 90 per cent of electric vehicle charging takes place at night. We also know that electricity demand is lower at night, for example, by approximately 20 per cent in Ontario and B.C. This presents an opportunity because it means that there is a lot of excess capacity at night, enough to power up to 700,000 electric vehicles in Ontario at present.

This means that we could take 10 per cent of the vehicles off the road in Ontario today, replace them with electric vehicles, and we would still have the generating capacity to handle the recharging load at night. Furthermore, if we introduced smart charging, which is basically scheduling, up to 2.6 million EVs could be charged during a six-hour overnight period, say, between midnight and 6 a.m. That would represent up to 35 per cent of the vehicles on the road in Ontario.

Thus, we know that the electricity grid in Ontario today already has both the capacity and the energy to handle significant amounts of EV penetration. This analysis, as I mentioned, was done in the context of Ontario. That being said, all provinces see a dip in electricity demand overnight that is useful for electric vehicle charging, although the exact figures will vary from jurisdiction to jurisdiction.

This certainly bodes well for our ability to absorb an ever-growing number of electric vehicles. Having said that, our studies have shown that the biggest hurdle is in the requisite infrastructure to charge EVs. Specifically, local transformers may need to be ungraded to handle the potential for several dozen electric vehicles needing to be charged at the same time in a single neighbourhood.

Similarly, market penetration and adoption of electric vehicles will be predicated on a reliable and more efficient charging infrastructure for EV charging away from home. A topic our department, together with our federal and provincial partners, is addressing through new infrastructure investment initiatives.

Going forward, NRCan will continue to carry out and fund research to address the three constraints I have outlined. Budget 2016 provided NRCan with $62.5 million in funding over two years to support the demonstration and deployment of electric vehicle recharging infrastructure.

Of the $62.5 million, the demonstration component received funding of $46.1 million over two years to fund technology demonstration projects that advance electric vehicle charging technology. Through this program, we expect to fund projects that will install intelligent electric vehicle charging stations that will provide data to utilities to determine whether the local power infrastructure has the capacity to deliver the required power to electric vehicles and provide utilities with the ability to adjust power provided to the charging stations on a time-of-use basis.

For example, on February 27, 2017, the government announced a contribution of up to $7 million to AddÉnergie towards a $17 million demonstration project that will have several subcomponents, including working with utilities on the above energy management issues and inter-operability.

Paula Vieira, Director, Transportation and Alternative Fuels Division, Office of Energy Efficiency, Natural Resources Canada: In the Office of Energy Efficiency, we complement these RD&D initiatives with a suite of initiatives aimed at increasing market uptake or deployment of EVs.

As Dean has already mentioned, Budget 2016 provided NRCan with $62.5 million in funding over two years to support demonstration and deployment of EVs and alternative fuel infrastructure.

The deployment component allocates $16.4 million to increase access to refueling infrastructure along key highways. This entails electric, natural gas and hydrogen vehicle infrastructure, using commercially available technology to provide an assurance to consumers that they will be able to recharge when and where it is needed.

The request for proposals we launched in May was significantly oversubscribed. We are estimating that we will fund 30 projects that have been selected, and this will result in 80 new electric level 3 fast-charging stations, nine natural gas stations and three hydrogen refueling stations in six jurisdictions coast to coast, exceeding our initial program targets for all fuel types.

The first seven projects were announced in December for the construction of 25 fast-charging stations in Ontario by AddÉnergie.

[Translation]

By establishing new infrastructure, we're making it easier for Canadians to choose cleaner options and setting Canada's transportation systems on a path to a lower-carbon future. This is important because the fuels and technologies adopted today will determine the mix of technologies on Canada's roads in 2030.

[English]

As with any new technology, consumers need to feel confident that EVs can meet their day-to-day needs. They need to have access to information that can help them understand the various EV technologies and help them to inform their purchasing decisions. Once they do decide that their next vehicle will be an EV, the purchasing and driving experience has to be similar to what they are used to in conventional vehicles. That is key to the success of the deployment of any advanced technology.

To address these concerns and others, NRCan is developing, promoting and delivering consumer awareness materials and tools to help inform the vehicle purchasing decisions of Canadian consumers. Above and beyond the well-known Fuel Consumption Guide, EnerGuide label for vehicles and fuel-efficient driver training programs such as AutoSmart, Budget 2016 provided $2 million per year for ongoing funding to expand our consumer awareness initiatives, with a specific focus on zero-emission vehicles.

We are working with the U.S. Department of Energy on the development of an electric vehicle and alternative fuel station location map. We are developing customized apps which, based on individual driving behaviour, can recommend low-carbon vehicle purchasing options. We have also undertaken a series of social innovation initiatives, analyzing the consumer vehicle buying process and developing a social initiative that will reward efficient driving behaviour.

Going forward, as one of the pillars for the transportation strategy under the Pan-Canadian Framework on Clean Growth and Climate Change, government is committed to work with industry on the development of a national strategy for zero-emission vehicles. The initiative is co-led by Transport Canada and Innovation, Science and Economic Development Canada. NRCan will play an active role in the development of the strategy and the implementation of key initiatives thereafter.

Finally, coming back to the deployment of connected and autonomous vehicles, it will likely be more than a decade before truly automated vehicles, those capable of independent door-to-door travel, are available to the average Canadian. During this time, clean vehicle technologies will continue to advance significantly.

It is difficult to predict how electric and connected and autonomous technologies will converge in the long run, but foundational work that NRCan has done to prepare Canada for electric vehicles will help ensure that manufacturers will be able to deploy the cleanest-powered CVs and AVs possible.

Thank you for inviting us to present today. We welcome your questions.

The Chair: Thank you very much. I'll start by introducing the senators, if I may. Senator Greene is from Halifax, Nova Scotia; Senator Griffin is from P.E.I.; Senator Bovey is from Manitoba; Senator Mercer is from Nova Scotia.

[Translation]

Senator Galvez, Senator Dagenais, Senator Maltais and Senator Boisvenu from Quebec are also here. I'll turn the floor over to the deputy chair, Senator MacDonald, and Senator Boisvenu and Senator Mercer will speak afterward.

[English]

Senator MacDonald: Thank you for being here. The budget you put aside, $62.5 million, have you measured demand for these services? What is the demand that has been measured, and of the stations that exist across the country today, do you have any figures for the demand and how much these are being used?

Ms. Vieira: I can speak to the deployment of commercially ready technology, and then I'll let Dean speak to the demonstrations.

The program — almost $16 million — was designed based on what we know to be the existing deployment of electric vehicles, of natural gas trucks, heavy-duty trucks, as well as the upcoming deployment of hydrogen.

It's really important to note that these were to address a barrier where consumers were saying that the lack of infrastructure is keeping them from purchasing the vehicles. The lack of natural gas infrastructure is keeping fleets from converting and fuel switching.

We're a little bit of the chicken and the egg, but it's important to map these to what we know is existing deployment, to place them where we know these vehicles are travelling, but also to signal to consumers and to commercial fleet owners that the infrastructure exists for them to then deploy and to purchase these vehicles and do the fuel switching. It's a combination of both.

Yes, we understand that by placing them on heavily travelled passenger routes — Quebec City-to-Windsor corridor, for example — we know that that's where the vehicles are travelling. We know the numbers of vehicles on the road. But we're also signalling that the government is interested in future deployment and that these are the signals that people need to ensure that the infrastructure is available and that they can travel the way they do in their conventional vehicles today.

Senator MacDonald: In terms of the facilities that presently exist across the country, how much have they been used? What is our level of usage? What is the demand?

Ms. Vieira: I don't have figures on specific use for all the different stations, but certainly we can provide that to you. Part of the programming — our programming was just initiated this year — is the reporting back on actual use. Our hypothesis is, of course, increased use. There are already a lot of private stations that we can draw data from, and we certainly can provide it to you after the fact.

Senator MacDonald: I think we would find it helpful.

Ms. Vieira: Absolutely.

[Translation]

Senator Boisvenu: First, I want to congratulate you. We met with two important Department of Transport representatives, and I have the impression that the roles are reversed. I want you to know that I admire your leadership. When we heard from your Department of Transport colleagues, we wondered where Canada was headed with this matter. After listening to you, I'm reassured. Well done! Your presentation was very good. We learned that initiatives exist, which is important.

I want to take another look at two aspects of your presentation. First, regarding timing, how much time will people take to decide whether they should purchase an electric car right now or a conventional car that runs on gas and that will last another few years?

My second question concerns the costs involved in changing the infrastructure, which are enormous. I'm thinking of the era when we transitioned from horses to gas-powered cars. There needed to be roads, traffic lights and police officers responsible for traffic. What would be the costs for society with regard to the transition from manned to automated vehicles? Are you thinking of options? Who will pay for the vehicle motion sensors on the highways? Will the government pay for them? When we change all gas stations to electric charging stations, will we let the private sector take care of these initiatives?

In both cases, you must provide ways to inform people of the choices to make in terms of purchases and to inform municipalities of the costs to anticipate for this transformation.

[English]

Ms. Vieira: There are quite a few questions there and some very important considerations, of course.

With the perspective of timing, absolutely appreciate that the transportation system that we are taking advantage of today is 100 years in the making, and the transition of the transportation system to a new low-carbon reality cannot take another 100 years. We will never meet our climate goals if it takes another 100 years for us to reinvent the transportation system.

Yes, governments at all levels, as well as the private sector and key stakeholders, are actively working on how we transition the transportation system to a new low-carbon reality. It is a commitment we have made under the pan- Canadian framework. It is a strategy that has been defined, and one that all governments are actively pursuing.

On the investments in infrastructure, it's important to note that the lion's share of EV charging will happen in the home. That's also the least expensive infrastructure. It is less than $1,000 to install a level-one charger in your home that will allow you to charge your vehicle overnight. That is where the lion's share of charge will happen. You will leave with a full battery charge. You'll come back, and you'll still have sufficient battery, but you will be recharging and topping up at night.

However, in order to ensure that we have a similar experience, yes, there will have to be publicly available recharging. The next, most important place for charging is at the workplace. This is where we really see the private sector stepping up.

For the early adopters, there are government programs that are now supporting, the investment in electric recharging at the workplace, at businesses, at shopping centres, at libraries and at banks. Restaurants seem to be a very popular place. We are starting to see that build-out of infrastructure.

Are we going to see one at every corner? No, we're not, but it's not needed. It's a different model. You do not need to have the charging infrastructure at every corner. You have to kind of rethink how it is that we charge, and the lion's share of charging will be done in your home.

Is there a societal cost? Is there a huge investment to make? Absolutely. It's a shared investment. It is no different than the building of the infrastructure that we use today, where governments and the private industry all invested to get us what we have today. It will be no different. But let's not think that we are replicating what we have today. We are not. It's a very different model.

[Translation]

Marc Wickham, Director, Energy Science and Technology Programs, Office of Energy Research and Development, Natural Resources Canada: In the demonstration projects that we're funding, the entrepreneurs develop new business models. In the announcement we made last week with AddEnergie, it was mentioned that the support will enable the firm to

. . . continue developing a new and innovative business model that will help Canadian consumers and businesses access charging services on a monthly subscription basis. . .

Various business models will be tested, and the winning models will be maintained. The change in fuel will generate savings, because transitioning from diesel or gas to electricity is much less expensive. These factors will be taken into account in the infrastructure demonstrations and deployment.

Senator Boisvenu: We'll soon need to make different individual transportation choices. There will be electric cars, which are developing relatively slowly in terms of independence, and there will be a distance restriction. If I were to drive from here to Abitibi or Western Canada, I would have problems with the distance involved.

There's also the zero-emissions car, which has a more efficient motor and may consume pollutants. In both cases, where are the industry and Canada headed? Are they leaning toward zero emissions or the electric car? What directions will the industry and consumers follow?

[English]

Ms. Vieira: I'll just assume that when you're talking about where industry is going, we're really talking about the automotive industry and where the automotive industry is going.

It's very important to note that a key driver of where the automotive industry makes its investments and how it evolves its vehicle types is based on the light-duty regulations. Phase two of the light-duty regulations are ever more stringent year after year. By the time we get to 2025, those vehicles will be 50 per cent more efficient than the vehicles we have today.

That being said, the vehicle manufacturers, in order to meet those regulations, have to pick a suite of technology choices in their offerings to meet those regulatory requirements. That will mean that a percentage of their fleet offerings have to be electric vehicles as well as much more efficient gasoline vehicles as well as hydrogen vehicles. They will have a suite of technology offerings to ensure they meet the evermore stringent regulations. It is really those regulations that will drive the industry to put out those offerings.

It is our job at Natural Resources Canada to ensure that consumers are ready and understand those new vehicle choices and the new technologies and not only the economic benefits but the environmental benefits and, through our policy choices and our program choices, ensure that we make those vehicles as similar to the experience they have today.

Let's remember that those regulations that are in place today and evolve from now to 2025 are really going to help dictate the offerings of technologies in the marketplace. It is for us, as well as the auto industry, to ensure that consumers are ready to receive those and that the infrastructure, the codes and standards are there and the market is ready to accept those.

Senator Mercer: In your presentation, you said about 30 projects have been selected. Once fully connected, they will result in the installation of 80 electric vehicle fast-charging stations, nine natural gas and three hydrogen refuelling stations. Please don't tell me that they will be all along Highways 40 and 20 in Quebec and Highway 401 in Ontario.

Ms. Vieira: They are not. That's a great question. There will be six jurisdictions. We will have some in Atlantic Canada, and there will be some in Ontario, Quebec and B.C.

It's important to note that this was a two-year program, so the business cases had to be developed by the private sector and pitched to the government. Of course the deployment was going to be where the vehicles are today, so it was very expected that the three jurisdictions most active in alternative fuel transportation were going to be able to put strong business cases together. That's where you get the Quebec, Ontario and B.C. But other jurisdictions were interested as well and built good business cases, so we will see some in Atlantic Canada and in Alberta.

Senator Mercer: I notice my colleague from Manitoba quickly scribbling down some notes. My first experience driving a vehicle with new fuel options was in Winnipeg. Accessibility is going to be a real issue.

I want to go back to the electrical grid that we have in the country. Is the grid integrated and connected enough to support a country that's driving 10 to 20 per cent electric cars? Electricity has to be there.

The second part of that question: Is the technology progressing fast enough to ensure that fast charges can happen? If I pull into a gas station tomorrow, I'm out of there in 10 or 15 minutes; to recharge my electric toothbrush takes me a few hours.

Ms. Vieira: I'll handle the last part, the part about the toothbrush, and then turn over the grid readiness.

Level 3 right now is about 20 minutes. The average refuelling time is actually about five minutes that you spend in a gas station fuelling up your car, so we're not there yet. We're not at an equitable charging time, but that is part of the research that the private sector as well as my colleagues are doing to ensure that we cut down that charging time and we increase battery capacity so you don't have to do it as often.

So 20 minutes, even if you are on a highway and going to Toronto and have to stop for a coffee and a washroom break, is reasonable; you can now drive long distances and refuel maybe once. That's a level 3 charger, and our program exclusively only installs level 3s.

Mr. Haslip: Bringing down the charging time is definitely important, but I think perhaps a bigger driver is having longer range in the vehicle in the first place so that if you are driving that long haul, you are only having to stop once as opposed to four times. Four times 20 minutes is a long time, but one times 20 may not feel so bad.

With respect to your first question about the readiness of the electrical grid, our analysis has shown that the electrical grid in multiple jurisdictions across Canada — and we have not yet completed the analysis to give you the numbers for every single province in the country, but in the jurisdictions we've looked at — is ready to handle significant penetration of electric vehicles.

We know, and I think one of the senators mentioned earlier, that the penetration rate of electric vehicles is steady, but it's not going to immediately be 50 per cent of the vehicle sales. So our feeling is that the electrical grid is already ready to take significant numbers of vehicles. Based on anticipated growth patterns, the utilities across the country should easily be able to adapt to those changing conditions as more and more electric vehicles are introduced.

Senator Mercer: There are four senators around the table from Atlantic Canada. If parts of Atlantic Canada don't have complete access to the grid and easy accessibility to electricity, how do we fix that? How does the department or the government recommend that this be fixed?

Mr. Haslip: Are you referring to the charging infrastructure so that people can charge?

Senator Mercer: Yes, but the grid also has to be available to service those charging stations. We don't have a fully integrated grid. For example, in my province, and Senator MacDonald's province and Senator Greene from Nova Scotia, our electrical generation is somewhat suspect because of our reliance on fossil fuels. We don't have the benefit of hydro projects nor nuclear power.

Mr. Wickham: There are a couple of things we are doing at NRCan on the demonstration and R&D side. The constraints we see are on the edge, so it is in the buildings areas and in the cities. We're doing work on smart grids and focusing on problems that occur on the edge and at the community level or in downtown cores and things like that. We are working with utilities and companies and providing funding so that new equipment can be developed that could manage loads.

We're also doing studies on usage of electric vehicles, where people are and when their cars are being charged and where they are driving, to provide information to utilities so they can better plan. So the combination of new tools, network management systems to manage the grid, manage loads, and to help utilities cope with the changes in patterns of distribution.

Senator Bovey: We'll get to Manitoba in a minute.

My first question is: I was interested in the report done in 2008 for Industry Canada, the Electric Vehicle Technology Roadmap for Canada. My sense is it seemed pretty exhaustive. In that report, it was predicted that there would be 500,000 electric vehicles in Canada by 2018, which of course is next year. Am I right that there are about 30,000 now?

With the roadmap you are doing now, I would be interested to know why the difference between this comprehensive earlier one, the reality now, and what that does to the predictions going forward with the sales you're predicting for 10 years hence. I'm looking for the factual basis of the predictions and what slowed it down.

Aaron Hoskin, Acting Chief, ecoENERGY for Biofuels, Senior Technical Advisor, Office of Energy Efficiency, Natural Resources Canada: For a point of clarification, it was Natural Resources Canada that supported the 2008 roadmap as well.

Senator Bovey: Oh, good.

Mr. Hoskin: I was part of that working group.

At that point, EVs were not conventionally available on the market at all. There was no electric vehicle available in terms of an OEM-produced, so a factory-made, electric vehicle in Canada. A lot of it was crystal balling. It was a technology roadmap as opposed to a deployment roadmap, and it was meant to be pie in the sky. Where does the technology need to go to get us to that 500,000?

Obviously the technology hasn't quite gotten there yet, and if you look at the EU or Japan or the U.S., at that point in 2008 everybody was saying numbers in that same ballpark. Nobody has reached those at all, and that's why we did the reset in 2016, to look at the actual market, how much uptake there had been in the market. The number of new vehicles that entered the market from 2008 to 2016 is substantial, and that's why you are seeing more and more new vehicles entering the marketplace and consumers actually jumping onto the electric vehicle market.

Senator Bovey: If I want to have all my colleagues come and visit me in Manitoba, they will not be able to get there in their electric vehicles. For some years I lived in British Columbia, and we got very interested in buying a hybrid car and then found ourselves moving back to Manitoba, and I have to say I'm very glad we didn't buy a hybrid car because the availability for charging is not nearly as great in Manitoba's capital as it was in British Columbia's capital.

If we're talking equality across the country, equal access across the country, I appreciate the testing is done in some parts of the country, but what will happen to those parts that will be slower getting the electrical cars, thereby fuelling our cars on gas? What will happen when we want to go visit our friends who are in the electrical part of the world? Will we see a great discombobulation like we did in the industrial revolution between coal fires and non? I am looking for projections based on historical realities.

Ms. Vieira: That's a really good question, and especially where we started with demand. I think one of our first questions was about demand and are we ensuring that we are addressing the demand by putting in our infrastructure where there is current demand, and my answer to that was it's a combination of both. There is demand, but we also want to signal to others where potentially there isn't a lot of deployment that this infrastructure is available and so you can safely and securely buy one of these vehicles.

Let's talk about the investment that was announced in Budget 2016. It's very important to note that was a two-year investment. It is the first two years of the green infrastructure program. It's a 10-year program. I guess in a couple of weeks we'll find out, but we can expect that there would be a phase 2 of infrastructure investments.

Those investments can come via bilateral agreements with provinces and where infrastructure dollars flow to provinces for them to make and be able to make those investments should they choose that to be a priority in their jurisdiction, but there is an important role for federal government to continue to play, to answer exactly your question, to ensure that there are no have-nots, to ensure that although an industry may be ramping up in a given jurisdiction and have a lead there, that there are no have-nots and that there is essential infrastructure in all jurisdictions, allowing Canadians to drive coast to coast along our key highways and all of the major tributaries to our key highways. That is the role for the federal government.

We've certainly proposed to decision makers that there needs to be a combination of funds that flow to provinces allowing them to make these investments if they choose it as an infrastructure priority in their jurisdiction, and we hope that many will, but also a central government role to ensure that we are getting coast-to-coast infrastructure so that no province, no jurisdiction, is left out.

The Chair: I only have an English version of the document Senator Bovey referred to, but the analyst has found a French version, and the link will be sent to all the members of the committee if they want to print it in the language of their choice. It is a thick document, and we wanted to make sure we had it in both languages.

[Translation]

Senator Galvez: I'm happy to have heard from you. It's very refreshing and motivating. I bought my first hybrid vehicle, a Prius model, in 2005. Back then, I think I was the first and only person who drove around Quebec City in a hybrid vehicle.

[English]

I still have it and it has 300,000 kilometres, and I'm not getting rid of it.

I bought it because I was thinking that the transition between the fuel and electrical was going to take much longer. In my very short month here at the Senate, I hear it's difficult to get to this target. The government has said it's very difficult, but all we are hearing is that it's possible. Maybe it's a generational problem; I don't know. When we are young or when we have children, they force us to see the future.

I'm very happy for the things that you are saying. We were in Varennes visiting your R&D with the environmental committee, and we saw these mega batteries that are filled and drain within 15 minutes. It was unbelievable, so I'm very happy about that.

I have two questions. Can we do a little bit for the common transport? Everybody seems to be very excited about, "Okay, I don't need a chauffeur; I'm going to go there without a driver, and I'm going to get there fast and I don't have to worry about driving,'' but if we want to be synergistic and contribute to the fight against climate change, what is being done about common transport?

Mr. Wickham: Thank you for your question.

In our Budget 2016 demonstration program, we requested proposals in the area of transit for electric buses. We haven't announced any projects in this area yet, but we're discussing with transit authorities and municipalities, and we hope that we will have some projects announced soon. If that's the case, that would be a foundation on which we could build in the future, if we received additional funding.

Most of what we've talked about is for passenger vehicles up to now, but in our demonstration work we are working with trucks, commercial vehicles and electric buses.

Senator Galvez: That takes me to the second part of my question. What can we do here? The key is the municipalities. The key is convincing municipalities for this common transport and civil construction and building codes. You said we have to put the infrastructure there. We understand the capacity is there. The infrastructure needs to be built, so what can we do as senators here to help you accelerate this pace to realize your projects?

Ms. Vieira: That question I was not expecting. It's usually what more can we do. That's a fascinating question: What role can the Senate play? Certainly the fact that you've engaged in such a study is important work in that you have all the testimony and helping support the analysis and pushing us in our thinking, and we look forward to the report that comes out of this. That in itself is important because it's putting the issue in the mainstream. Also, through your support and through the conclusions and recommendations that come out of your study, the government then needs to look at what other policy and programming options we need to consider in order to facilitate greater deployment.

I really appreciate your question on mass transit, because it isn't just about single personal vehicle transportation. Part of transitioning to a lower carbon reality is the fact that we have to get people out of their cars. We have to get them into mass transit. We have to make mass transit more effective.

Mass transit can be electrified. Hydrogen could be a source. We are leaders in hydrogen technology here in Canada. We are leaders in hydrogen production and hydrogen technology for mass transit. We are selling it all over the world. We need to adopt more of it here in Canada, as well as fuel switching to natural gas for heavier-duty vehicles and buses.

There are a lot of options for mass transit, and I think we need to explore all of them — not pick winners but explore all of them, as there is great potential. We also need to take Canadian leadership, because many of these companies are Canadian.

[Translation]

The Chair: Like Senator Galvez, I'm from the Quebec City region.

[English]

We had an experience with a tourist bus in Old Quebec because of the small streets and protecting the environment and not having too many fumes. They had this electric bus that would go around Vieux-Québec. For those of you who have been to Quebec, there are a lot of hills. Passengers had to get off and cooperate with the bus driver in pushing the bus up the hill. It was not a great success. It was an experiment that proved to be difficult.

Ms. Vieira: Good intentions.

The Chair: It's not too bad. It's good exercise, but it's not good promotion for the vehicles themselves.

Ms. Vieira: Great intention, and still some technological evolution to happen.

Senator Griffin: Thank you for being here. I really like how you're tying in the vehicles that are already out there, that were leading edge a few years ago, and how they have improved.

Of course, in this committee, we're looking ahead to connected and automated vehicles. I want to ask a question regarding the regulatory regime. What are the key regulatory issues that the Government of Canada will need to address regarding connected and automated vehicles?

Ms. Vieira: I certainly can start on that with some of the most basic, and certainly where our colleagues in Transport Canada and ISED are focusing, and that is the safety and security concerns. There is a whole range of regulations that go far beyond what needs to be available for the traditional passenger vehicle. It doesn't matter whether it's an EV or a gas vehicle. The idea that vehicles are speaking to and communicating with each other, communicating with the system, and a Level 5 automation where they are driving themselves, requires a level of safety and security regulations that are like nothing we have ever seen. So that has to be first and foremost.

For our colleagues in ISED, the dedicated spectrum to allow these vehicles to communicate is important because the stability of that spectrum and the availability of those channels for communicating are going to be incredibly important. If they are truly dependent on communication and automated, what happens if there is some kind of telecommunications issue? Can you just imagine? Those are the hurdles we need to look at today.

Above and beyond that, you're looking at the regular codes and standards that would be available for any vehicle, for the charging and fuelling of that vehicle. As well, connected and autonomous vehicles will be part of the vehicles that are regulated under the light-duty regulations that exist today. They will be part of the choices that automakers are putting out in their suite of vehicles, so they will be implicated in those regulations. Certainly those are the ones that would be top of mind from my perspective.

Mr. Haslip: My answer was going to be the same. The top-of-mind one is safety and security. The introduction of autonomous vehicles on the roads is a completely new paradigm in terms of the transportation and the issues around that. Undoubtedly, that will be the top-of-mind issue.

Senator Griffin: That gives me some appreciation of your role as a federal government. Another level of government will be the provincial governments, which of course license vehicles. They too will probably have to have some regulatory changes. I don't know if you have had any chance to talk to the provincial governments about that.

Mr. Haslip: As we pointed out at the outset of our opening remarks, the mandate of NRCan, or Natural Resources Canada, does not actually include autonomous vehicles per se. While we have lots of interaction with the provinces — and Paula spoke to some of those — on alternative fuelling, whether it's electric or natural gas or other, we are not talking to the provinces about issues around autonomous or connected vehicles.

Ms. Vieira: Back to the mandates and the fact that, right now, the work that is paramount is being governed by Transport Canada and ISED, once these become more mainstream and now you're looking at mass deployment, commercially ready technologies and energy use implications, that's where we will take a much greater role. Just like the deployment of any other vehicle, that's where we really have expertise in developing the appropriate policies and programs to support mass deployment of commercially ready technology. I think that, in the near future, NRCan will start to play a much greater role. But, as Dean says, right now we wouldn't be undertaking dialogue with the provinces on that.

[Translation]

Senator Dagenais: First, the governments promote green energy and the use of electricity a great deal. However, on Parliament Hill, there's no charging station and there are only a few hybrid limousines. I haven't been to the National Assembly of Quebec in a long time, so I don't know whether there are charging stations. However, having charging stations at Parliament and at the National Assembly would set a good example and would promote green energy.

I want to talk about automated vehicles. When I bought my first car, it had one key. I could open the window, turn on the radio, and everything worked. Today, vehicles have so many buttons, and they scare me. I use only the first three or four buttons in case I open the roof, the trunk or something else. It's frightening!

I find one thing very encouraging. People are living longer and longer, and older people will need automated vehicles. I think this is good news. You reach a venerable age and your driver's licence is revoked for some reason. Imagine programming your vehicle to take you where you want to go. It's the nicest thing that could happen to you.

Does your industry plan to train people? Whether your vehicle is electric or automated, the salesperson spends only one hour with you before you leave with your vehicle. Technology is changing quickly. A few years ago, no one had an iPad. Today, we use them to work and we understand how they run. It's a good thing. However, if I leave with an automated vehicle and something happens to me, an unforeseen event, what will I do?

Does the industry plan to focus on training to help people learn how to use these vehicles? We hope so. We're living longer and longer, and we'll all want to drive without a licence and glasses because our vehicle can take us where we want to go.

Senator Maltais: Do you wear dentures?

Senator Dagenais: I don't wear dentures, but I have teeth!

[English]

Senator Mercer: How old are you again?

Senator Dagenais: I am 67, my friend.

The Chair: Do you want to try to answer this?

Ms. Vieira: So the elderly, as a benefit, yes, absolutely. Those who have never driven, who don't know how to drive, who get beyond an age — not now, but in the future — will have an option for transporting themselves in a much more independent way.

The other thing about automated and connected vehicles that is of great benefit and interest is the idea that right now our vehicles spend about 96 per cent of their time parked. They are either in the driveway at night or at the workplace or whatnot. These vehicles can potentially be applied 100 per cent of the time, 24 hours a day. They can be driving you someplace and then you someplace and then you back. They could be driving people everywhere all day long. Fewer of us will need vehicles. Whether we're elderly or we have never driven or we're not elderly and we just don't need to have a car, many of us can share these vehicles because they can be implicated 24-7, so great efficiencies, great benefits.

Training, great point. We're seeing that with electric vehicles. Salespeople, yes, may spend an hour with you. It's not enough. Some of the work that we're doing is in developing programs that we can work with sales agents to ensure that they're properly trained and they can pass on that training.

The other area where NRCan excels and has world-renowned training is in driver behaviour training. We have been doing it for years, teaching people how to drive more efficiently and more effectively. We see the extension of that to these new vehicle types, how best to drive them, whether it's an autonomous vehicle, connected, EV or hydrogen. All of those will present new challenges and new learning.

That's where NRCan excels. We have been doing driver training courses and different applications for years to try to get people to drive more efficiently and therefore reduce their gas consumption. We see that as an extension of what we will be doing for those vehicles.

It's also important that at the point of sale, those people are well-prepared and well-trained, because that can support the purchasing decision. If they are well-informed and well-trained, it can really push that sale, so that is a very important consideration and, yes, one we're very much looking at.

Senator Dagenais: Thank you so much.

[Translation]

Senator Maltais: Green energy is the ideal for the future. I'm particularly interested in a certain energy, namely, the energy tax. You know the governments seek to heavily tax a litre of gas. If gas is eliminated, electricity could be taxed, of course. The governments can't live without taxes. Let's not kid ourselves. This applies to all levels of government.

The federal government currently returns part of the gas tax to municipalities to fund infrastructure, roads or other things. The municipalities will continue to need these things, and they'll need tax revenues. If gas is eliminated, should electricity be taxed? If electricity is taxed, more will need to be produced. Senator Mercer touched on the topic earlier. Half the electricity producers in Canada generate nuclear or coal power. Nuclear power is reaching the end of its era and must be replaced.

Will we lose anything we save in carbon emissions with electric cars by producing coal-fired or oil-fired electricity? Has your study helped analyze this aspect?

[English]

Mr. Haslip: That's a pair of interesting questions.

On the question of gas taxes, I do not believe that we have studied that particular question. What I would say is that the introduction of electric vehicles is something that is going to take place gradually over time. Just as gas taxes will fluctuate from year to year, the provision of gas taxes from the federal government to other orders of government will change over periods of time. I think governments will adapt over a period of time as the volume of gasoline that is sold in this country changes.

With respect to the point you made about electricity grids and provincial grids and the differences between them, I was tempted to speak earlier, but Paula did such a good job of answering the rest of the question that I didn't jump in. I wanted to make the point that it's clearly true that some jurisdictions in Canada, such as British Columbia, Manitoba, Quebec and Newfoundland, have extremely clean electricity systems, such that if you take a vehicle on the road today and replace it with an electric vehicle, you have effectively completely eliminated that greenhouse gas contribution, very close to 100 per cent. Then there are other jurisdictions like Ontario, for example, where, while there are some fossil fuels burned in the production of electricity, we still have quite a clean grid. But I would say that there is no jurisdiction in Canada where the replacement of a conventional, gas-powered vehicle today with an electric vehicle would make you worse off.

Even in a jurisdiction that uses a lot of coal like Alberta or Saskatchewan, the replacement of an internal combustion vehicle with an electric vehicle is, at worst, carbon-neutral and could produce some greenhouse gas emission savings, depending on the assumptions in your model. Certainly, I think with the signals that we have seen from, for example, the Alberta government on phasing out of emissions from coal-fired power, with the steps we have seen in Saskatchewan towards implementation of carbon capture on coal-fired power plants, with the increasing emphasis in New Brunswick and Nova Scotia on increasing amounts of renewables in their grid, I think all of the trend lines are very positive for the benefits of electric vehicles from coast to coast.

[Translation]

Senator Maltais: You didn't talk about Ontario. You talked about the other provinces, but not Ontario.

[English]

Mr. Haslip: I thought I mentioned Ontario.

Senator Maltais: No.

Mr. Haslip: In Ontario, we have quite a clean electrical grid. I don't have all of the figures at my fingertips.

Ms. Vieira: The Canadian average would be a reduction. So replacing a conventional vehicle with an electric vehicle, on average, Canadian power would be 80 and Ontario 45. So based on the power source and the power generation and combination in Ontario, you're still looking at reductions of 45. The national average is 80 because we have some provinces that are — for example, British Columbia and Quebec — anywhere from 80 to 98 per cent reductions in emissions by replacing that one vehicle with an electric vehicle. In Ontario, you're still looking at 45, so much to Dean's point, there is no jurisdiction where you're going to get a negative.

Mr. Haslip: I was going to say I think we should check that figure, because that's not the figure I have. I have 91 for Ontario.

Ms. Vieira: Sorry, 58 to 70 are the numbers we have. I'm sorry. I apologize.

[Translation]

Senator Maltais: I was talking about the renewal of coal-fired, nuclear or oil-fired power plants in Ontario, because there aren't many dams. If the amount of electricity is increased, more energy must be produced.

Senator Boisvenu: Or, Quebec could sell electricity to Ontario.

Senator Maltais: Wait a minute. The Americans thought of it before you. I want to know how the energy renewal process will go in Ontario.

[English]

Mr. Haslip: I think a detailed question about how Ontario is going to meet its power questions in the future is outside our departmental mandate. That's a question for the province to answer.

However, as I pointed out earlier, the introduction of electric vehicles, even in significant quantities, is not going to cause turmoil in the energy system. The specific examples I quoted in my opening remarks were about Ontario. Ontario can already handle a large number of electric vehicles, given the fact that 80 to 90 per cent of that charging occurs at night. As I believe I said in my opening remarks, even as electric vehicles grow in significant numbers over time, the year-to-year increases in energy demand are going to be such that we feel that provincial utilities are going to be able to make those adjustments.

Senator Greene: I would like to pick up on the same line of questioning. You mentioned "carbon neutral'' before. I suspect that Nova Scotia is probably a jurisdiction that is carbon neutral with regard to that, or worse.

Mr. Haslip: It's close.

Senator Greene: It's close. Okay. So if it's true that it's carbon neutral — and it's true that we all want to reduce the carbon footprint — what is the incentive for the provincial government of Nova Scotia to invest or help to make this technology available?

Ms. Vieira: I think that one of the things we have learned through our dialogue through the pan-Canadian framework is that all jurisdictions are committed to supporting Canada in meeting its climate goals. All provinces are seeing, in some cases, that major transformations of their power sources and their power supplies are required. Major investments in infrastructure are required. Carbon pricing regimes will be put in place and a whole series of instruments. But we did not see, without exception, any province that felt that they could not do more and that they could not support Canada in meeting its climate goals.

Are the options and what is implemented coast-to-coast going to be the same? No, there is no magic bullet. There is no one-size-fits-all solution. But even in the Atlantic provinces, we saw a real willingness to come to the table with a multitude of solutions. The government is supporting that through huge infrastructure transfers to the provinces and billions of dollars introduced in Budget 2016 to help that transition.

Senator Greene: I'm sure that the Province of Nova Scotia and any province would want to help, but my question is, what is the economic incentive for them to do so if the result of what they are going to do is not going to really change anything with regard to the carbon footprint within the province?

Mr. Hoskin: We have talked about electric vehicles specifically, but the other side of electrification of transportation is hydrogen. Using hydrogen allows more renewables to enter the grid. I know that Nova Scotia has invested a little bit or maybe more than a little bit in renewables like wind. By bringing in electrification, using hydrogen, you can use that as a controllable source so that when the wind is blowing to the point that demand is not there, you can just take all the excess electricity and generate hydrogen. Then it's there to use in your vehicle afterwards. So the incentive to provinces like Nova Scotia, for instance, would be supporting other alternatives, other electrification options, that allow them to green their grid by providing a controllable load while also helping Canada to meet the transportation options.

Mr. Haslip: I would say one other thing, which is I think what we have seen in terms of electric vehicle purchase patterns over time is that it takes a while to get from there to here. So even if it's sort of no net advantage or a small net advantage today, I think the important point is that in 10 years, when penetration rates are much higher, that's the goalpost you're aiming towards.

Not to pick on Nova Scotia, but I think we have seen lots of examples in their support of marine projects in the Bay of Fundy. Our research centre works with Nova Scotia Power on biomass co-firing in some of their plants. There are lots of initiatives in Nova Scotia to green their grid today that are going to help in the future.

Senator Greene: Have you done any economic modelling on the impact on consumers, for example, the typical family of four that has two cars so they have to put fuel into two cars, both at night and on the road, comparing that under an electrification scheme with what they burn and pay for in terms of fossil fuels? Have you done a comparative modelling like that?

Mr. Haslip: You're talking a straight-up cost comparison?

Senator Greene: Yes.

Mr. Haslip: Not in terribly great detail and taking account of differences in prices. Electricity prices vary from province to province today. You have to look at escalators and what not. I think what you see today is that for some people, an electric vehicle is actually a more economical option. One of the engineers at my research centre owns an electric vehicle. He shared with me the spreadsheets. For him, total cost of ownership of an electric vehicle in Ontario today was a better buy for him. But that involves a certain set of assumptions that may not be the typical driver.

That's important as well, that people have different use patterns. They live different distances from their homes, and are you the kind of person that leases for three years and flips it back, or are you going to hold on to that car for the long haul? There's a bunch of different assumptions that go into that.

What we can say is that based on the significantly declining price of the battery technologies, that's going to do two things. It's going to drive longer range, and it's going to drive reduced cost, and over the medium term, we can expect the costs of conventional vehicles and electric vehicles to cross for a larger fraction of the population.

Senator Greene: That's good. Well, I encourage you to do some economic modelling, and if you do, we would like to have it.

[Translation]

Senator Galvez: I want to finish by speaking about two things, including technology.

[English]

Technology seems to be the key for the success of this. What do you think at present is the most difficult challenge? What is the time frame that you think is required to be able to pass to the next step or phase?

And just one little ricochet question: You have mentioned needing new regulations and new policies. Can you be more specific and say what new regulation or new legislation will assist you with your work?

Mr. Haslip: So let me be clear. Are we talking about electric vehicles?

Senator Galvez: Yes, we are talking about electric vehicles.

Mr. Haslip: Very good. I'm going to say the battery technology. That's the biggest one. One of the principal concerns for consumers in purchasing electric vehicles and one of the biggest barriers for commercial offerings of electric vehicles has been range. That's driven by the battery technology. There are many people who feel that if their car is only going to be good for 50 kilometres, that's not going to be a vehicle that is for them. It may be good for short hauls around the city. If you only use your car to drive to work, and it's 10 kilometres each way, then that's fine. But that's not everybody's situation.

But as I was just mentioning, what we have seen is increases in battery technology. Regarding batteries in 2017, when you look around the world, you look at not just the issues of electric vehicles but issues all over the place. Intermittent renewables require in many cases new approaches to managing demand, and storage is an important component of that. Battery technologies are being driven from a whole bunch of different directions, whether it's your laptop computer, your electric vehicle or your power grid. Very large industrial players with very large research budgets are working very hard on these things. Let's hope that we are seeing a tipping point there.

Of course there are other barriers, which we talked about at the beginning, but if you are looking for the one technological issue, I would say that's it.

Mr. Wickham: Another one would be the charging infrastructure itself, which is evolving. It's the speed of the charging infrastructure, the integration. There are a lot of different places where you might want to have a charging station, so it needs to be developed for those different applications. We are currently working on developing those.

Ms. Vieira: In terms of other policies, I wouldn't necessarily say regulations as we're really not a regulator. But for the policies and programs that can help support greater deployment, one of them is connected to battery. Remember when I said that the key to the successful deployment of any new technology is making it similar, if not better, than something people are accustomed to. The battery is one those things. And it's not just the range, the ability to go further and the recharging, but the battery itself.

Let's remember that in these vehicles, you cannot run out to the Canadian Tire when your battery is dead and spend $200 to replace it. You are looking at an $8,000 investment, and that is scary to people. If you have a vehicle and the battery dies, you go to Canadian Tire and spend $200, and I'm done. But that is not the case.

In trying to tackle that barrier, we need to be putting policies in place, whether it is battery guarantees or assurance programs that allow for some kind of cost-shared replacement with the OEMs or greater warranties on these products — as it will be the most expensive replacement part that will be needed — so consumers can confidently buy that vehicle.

The other issue is resale. This technology is still very new. Everybody understands how to go on to autotrader.ca and see the value of their vehicle. They are accustomed the Camry and the Honda Civic. Anyone can tell what the resale value of those vehicles is. With these, not so much; it's difficult. It's still an unknown and still new.

That changes the ownership model. I'm used to having my vehicle, switching it out every five years, and I'll sell it on autotrader. I don't know what will happen when I buy an electric vehicle. I don't know who will buy it from me and how much it will be worth when everybody knows that that battery may need to be replaced. There are some common consumer ownership issues that need to be tackled.

Another issue is the experience, convincing them that an electric vehicle can actually meet their needs because, for the most part, we do not drive 400 kilometres in a day. It's about ensuring that it's more than an hour test drive, ensuring people fully understand their own driving behaviour today and that these vehicles are viable options for them. It's about designing programs and initiatives that help get consumers over some of these ownership barriers.

Senator Galvez: Thank you.

The Chair: Thank you very much. Since one of the objectives of these meetings, and the televising these meetings, is to educate Canadians and keep them informed, I'm like Senator Boisvenu and I appreciate the fact that you gave us confidence in the fact that our government seems to be very up to date on the issue. Canadians appreciate the fact that you made a wonderful presentation tonight, and I thank you.

I would like to tell colleagues that after the break, we will be hearing from the Office of the Privacy Commissioner of Canada.

The committee is adjourned.

(The committee adjourned.)