ENSU Committee Meeting

STANDING COMMITTEE ON ENVIRONMENT AND SUSTAINABLE DEVELOPMENT

COMITÉ PERMANENT DE L'ENVIRONNEMENT ET DU DÉVELOPPEMENT DURABLE

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, February 4, 1998

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[English]

The Vice-Chairman (Mr. Gar Knutson (Elgin—Middlesex—London, Lib.): I would like to begin by thanking everyone for coming today. My name is Gar Knutson. I'm the vice-chair of the committee. The chair, Mr. Caccia, couldn't attend so I'm filling in for him.

We're looking at the issue of district heating. We're going to start with the Canadian District Energy Association, followed by the International District Energy Association. They will be followed by the Corporation de chauffage urbain de Montréal, then the representatives of the Cree Nation. The Federation of Canadian Municipalities will follow, and finally the Department of Natural Resources.

It is likely the meeting will be interrupted, perhaps as soon as ten minutes, with a bell for a vote at four o'clock, but we'll start now and do what we can.

Mr. John Stephenson (President, Canadian District Energy Association): Mr. Chairman, members, ladies and gentlemen, the mission of the Canadian District Energy Association is to promote district energy, which we do primarily through education. We and many other energy experts in the world know that district energy is a proven path to sustainable utilization of energy for the purpose of keeping buildings warm or cool, whichever they need.

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Sustainability can be achieved because district energy provides opportunities to: (1) consume less high-grade fuel to provide a given level of service and thereby (2) produce less waste product. It allows easy substitution of different energy resources so that if one becomes too expensive or is found to have undesirable environmental effects, it's easy to switch to using a different kind of resource.

Actually, a large portion—we were debating this earlier, but I think it's around 40%, believe it or not—of all energy consumption in a country like Canada is simply for keeping temperatures around 20 degrees inside buildings and providing domestic hot water at 55 degrees.

These are very modest tasks, and they should be accomplished by the use of very low-grade energy resources with correspondingly low environmental impact. The problem is that it's not convenient in most buildings to convert low-grade energy resources into the low-grade heat that is needed. For example, it's not convenient for buildings to have a biodigester in their basements.

So what we do is to burn valuable high-grade hydrocarbon fuels like oil and natural gas, and that gives us temperatures of around 1,000 degrees, which is about 10 times what we actually need to do the job, when water at something less than 100 degrees would do the job quite nicely. The point is that we could avoid burning a considerable quantity of fuel simply by connecting buildings, through hot water pipes, to central plants where low-grade forms of energy could be used to heat the hot water. This is exactly what is done in district energy systems. Although some of them may run for many years using conventional fuel sources, sooner or later someone figures out that they can save money by using a lower-grade resource.

The types of low-grade resources that are used include waste heat from steel mills or refineries, or cogenerated heat from power plants. Some systems use heat pumps to extract heat from sewage water, even lakes, rivers, the sea, the earth, even out of thin air. Methane is used from landfills, sewage plants, and even digestives built specifically to produce methane. There are all kinds of renewables used, including biomass of various kinds—wood chips, waste wood, peat, straw, municipal refuse. Geothermal is used in a number of places like Idaho, Italy, and Iceland. And I've seen proposals for solar, wind, and surplus hydroelectric power.

It's easy to imagine how district energy would facilitate the thermal side of an integrated energy future that would use solar, hydrogen, and fuel cells. There are so many possibilities, because it's so simple to heat water to 100 degrees. I do it myself several times a day just to brew a pot of tea.

In 1995 the public works department of Metro Toronto published a detailed study of the potential for district energy in Toronto. It estimated the potential greenhouse gas reduction from not only displacing heating fuels, but also because a market would then be created for gas-fired cogeneration plants that would compete with and displace coal-burning power plants.

There were five phases proposed in the study. The first four phases alone resulted in a reduction in carbon dioxide emissions of approximately 18 million tonnes per year, which happened to be double Toronto's target at that time. This study proposes that phases be staged over 25 years. The 18 million tonnes a year reduction would be reached in the year 2020. There would be an 11 million tonnes a year saving by 2010 and 5 million tonnes a year by 2005.

In my professional capacity I was involved in designing a cogeneration plant that would sell steam just to the existing district heating system in Toronto and that would give us a saving of about two million tonnes a year. And if we could clear away the local politics, that could be brought into service by the year 2001.

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Now, this is not science fiction. This rate of development has been achieved in other places. Even if we connected all the buildings in Metro Toronto, that would still be less than half the system that now exists in Moscow and St. Petersburg, and it would be about the same size as in several other cities. Warsaw, Prague, Berlin, Paris, New York, Copenhagen, Helsinki all have systems of about that size.

The capital cost of such a system is estimated to be $6 billion. However, the value of fossil fuel saved was estimated to be $600 million per year, and there were additional considerable savings in the displaced capital and maintenance of heating and cooling plants.

If you do the math, there is a business here. It's just a challenge to finance it.

So how might the government help? The committee's 15 recommendations in its recent climate change report were certainly on the right track: reducing subsidies to the fossil fuel industry, incentives to switch from coal to natural gas, promotion of the use of methane, and an awareness program which could include awareness of district energy.

The Canadian District Energy Association has lobbied and will continue to lobby for fair tax treatment, for example, district energy assets being eligible for accelerated depreciation, as are other energy-efficient assets. About financial assistance, of course anything anyone would spare would be gratefully accepted, but since district energy does offer good business opportunities, the government needn't take the whole or even a large part of the risk. I believe that's a principle which has been used in proposals which have been developed by the Federation of Canadian Municipalities, which the CDEA fully supports.

Another concept, which is not new but would be a good one, would be partial loan guarantees, which could be rescindable when a project achieves an adequate earnings ratio, which good projects would within five to ten years. You would only have to give them to good projects, as demonstrated by solid business plans.

In conclusion, district energy is a form of infrastructure. Like any user-pay type of infrastructure, it can be developed entirely on a commercial basis. Given no assistance at all, it will continue to develop, and some day it will be as commonplace in cities as water and sewer systems are today.

However, many forms of infrastructure have benefited from government assistance, and in the case of district energy I don't know whether the unassisted rate of development will reduce the waste products from energy utilization, including greenhouse gases, soon enough to be effective in mitigating undesirable deterioration of the environment.

If it were my money, and as a Canadian taxpayer for 28 years I suppose a chunk of it is, I would be inclined to bet more on district energy.

The Vice-Chairman (Mr. Gar Knutson): Mr. Grey.

Mr. John Grey (Past President, International District Energy Association): Good afternoon, gentlemen. I'm John Grey. I'm past president of the International Heating and Cooling Association, out of Washington, D.C.

I would like to present before this committee the dynamic opportunities for district energy in Canada. I think they can be very well seen from the fact that a picture is worth a thousand words.

If we look up here and we think of all the problems that result in individual district energy plants from pollution not only of the air but also of the ground from having all these various plants doing what they want to do and all this significant potential contamination by plants that do not have the money or the infrastructure or the complexity to be able to provide the type of equipment which can reduce these contaminants...is very significant. When we go from there to what we call a district energy plant, we remove all the contaminants from the factories, the hospitals, the commercial buildings, and the universities. We provide all the energy, heating or cooling, from here.

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For those of you who may have second thoughts about the dependability, it's rather interesting that here in Canada in the last month we had—in fact, we're still going through it—the greatest disaster that's ever happened to Canada, $2 billion lost in the Montreal area, yet we have a gentlemen here who works for a district energy plant in Montreal called CCUM, and not a day went by during this last month but every customer received their district heating requirements, with no shut-off. That is dependability.

For example, in Windsor, Ontario, and to a much larger extent right now in Chicago, we are actually supplying water to clients at 1° centigrade, where normally we would be supplying chilled water at 12° centigrade. If you can realize a savings by going to 1° centigrade over 12° centigrade, in the diameter of the pipe, in the infrastructure, in the exchanges, in the auxiliary equipment, and in the size of the complexity, it's very, very dynamic and very, very much a savings. That gives you an idea of what I mean.

District energy systems in Canada developed early in the 20th century in such cities as Montreal and Toronto, London, Winnipeg, and Vancouver. The proximity of these customers to the core of the city resulted in an economically feasible operation for supplying district energy to these customers. However, during the abundance of fossil fuels and with the way we wasted our fossil fuels in the 1940s up until the 1970s, it resulted in a very slow growth of any, including district energy.

The serious fuel crisis of the 1970s and the introduction of the commercial district cooling operation provided an ideal opportunity for the stabilization and growth of district energy in Canada. It was the district heating system that provided the environment for the beginning of the growth of district cooling in Canada. In fact, today the interest in district cooling is also the leading reason why we are actually having an increase in district heating also.

The primary reason for this dynamic growth is the fact that buildings are experiencing a cooling load expansion of two to three times that of the heating load increase per square metre of space. This is a result of an increase in people per square metre, more and larger computers, and a far tighter building envelope. In Canada as well as the United States, and in fact in all the world's highly industrialized nations, there has been a resurgence of new district energy plants being actively built, being planned, or in service.

The renaissance of district energy is the direct result of the following key factors which have occurred in North America: one, the trend towards outsourcing; two, concerns about the environment, and three, the impending deregulation of electric monopolies, which will now allow the consumer to choose their source of electricity.

Downsizing companies appear to be one of the essential keys to being successful in today's very competitive environment. Therefore outsourcing has become one of the answers. The vast majority of companies are allowing functional experts to take over certain areas of their responsibilities so they can completely concentrate on the core sections of their business activities, in which they have been specifically trained. To me it makes good economic sense, for example, to let district energy look after an insurance building's heating and cooling requirements and let the insurance company concentrate solely on its insurance business.

The serious effect on the delicate ozone layer from chlorofluorocarbons, or CFCs, and hydrochlorofluorocarbons, or HCFCs, has resulted in the refrigerant gases being either banned or restricted. The very critical and costly situation has resulted in management seriously evaluating the distinct advantages of district energy. District energy eliminates the very difficult decisions about how to cope with the rising costs of coolants and the very costly and complex decisions about exactly what to do. Do they refit their present cooling equipment? Do they purchase new chillers? What about the serious long-term effects, the environmental issues? These are all questions that really an insurance company or a bank or a hospital or a university should not have to look into.

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Deregulation of the electric utility industry has had a significant effect on the dynamic growth of new district energy plants, not only in Canada but also in the United States. The shift that is under way from what was essentially a government-regulated monopoly to an open market industry has resulted in dramatic changes to electric suppliers of North America. In a competitive marketplace, gentlemen, the low-cost producer of electricity will prevail.

New technology has also resulted in electricity being replaced by chilled water for most large air-conditioned systems. Thermal storage, to chill water and ice, can use low-cost, off-peak power at night to generate and store the coolant for the next day's cooling requirements.

Two good examples of this is the IBM plant in Toronto, where they have 10 million gallons of chilled water, and also the Northwind energy plant in Windsor, Ontario.

The new cooling water technology has played a significant role in the tremendous growth of district energy in Canada. Cogeneration is the simplest method to more than double the efficiency of electrical generation and simultaneously—and what a joy to our government it is—be able to reduce the stack emissions by more than half.

Dramatic improvements in gas turbine technology has also resulted in substantial energy cost efficiencies and also environmental benefits.

Notable new district energy plants that are now in operation include, in Charlottetown, P.E.I., biomass and municipal-waste fired; in Oujé-Bougoumou, Quebec, biomass fired; in Fort McPherson, Alberta, cogeneration; in Cornwall, Ontario, cogeneration; and in Windsor, Ontario, heating, cooling and ice storage.

Active district energy plants under development right now include Sudbury, Ontario, cogeneration; Hamilton, Ontario, waste heat from industry; North Vancouver, British Columbia, waste hydrogen or heat pumps; Revelstoke, British Columbia, biomass waste; Fort Smith, Northwest Territories, surplus hydroelectric; Halifax, Nova Scotia, cogeneration; New Glasgow, Nova Scotia, biomass or cogeneration; Toronto, Ontario, deep lake cooling; and Fort Simpson, Northwest Territories, cogeneration.

District energy provides a win-win situation for Canada in that the customer wins with reduced capital costs and increased energy efficiencies. It eliminates environmental, health and safety concerns, and the buildings are less complex to own and operate. Society wins with reduced CFCs and improved energy efficiency that results in less objectionable greenhouse stack emissions.

I think this is so important. You can see that we're not looking at one little section of Canada but are now going right across Canada, in every large metropolitan city. You will also notice from my comments that we're also hitting the little areas of Canada, which is so important. In so many cases of what we do we seem to forget sometimes about the little areas. Yet they are Canadian. They're just as important to all concerned.

I believe changes will continue to occur in our ever-evolving technological and dynamic industry. District energy will, however, effectively meet these challenges. If we all strive together, we can successfully challenge and overcome the environmental, economic and energy efficiency issues of the future.

I would like to thank you on behalf of the Canadian District Energy Association for your presence here today and for listening to our discussion.

The Vice-Chairman (Mr. Gar Knutson): We can take questions now, or perhaps we can hear from the International District Energy Association.

Mr. Blanc.

[Translation]

Mr. Yves Blanc (General Manager, Corporation de chauffage urbain de Montréal (Montreal District Heating Corporation)): With your permission, I will be speaking French.

My name is Yves Blanc. I am vice-president of the Canadian District Energy Association, and vice-chairman of IDEA's international committee. However, it is as general manager of the Montreal District Heating Corporation (Corporation de chauffage urbain de Montréal) that I will speaking to you here today.

The Montreal District Heating Corporation is a thermo energy production and distribution business serving downtown Montreal. I will therefore be speaking as an operator. In 1949, Canadian National founded CCUM to meet its own needs. The corporation was expanded in 1960 to meet the heating needs of buildings in downtown Montreal. In 1990, it was incorporated as a business corporation, then sold to an international group, and then bought back by Gaz Métropolitain in 1996.

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So today, CCUM is a wholly-owned subsidiary of Gaz Métropolitain, and therefore of the group that also includes Hydro- Québec and Consumers Gas. We are energy specialists.

The document I distributed is a district map, showing the thermo-energy production plant for the city. The distribution system consists of tunnels containing steam pipes. This gives you some idea of the control room, and of the size of boilers; here is a steam unit; we make our own electricity.

The core of our steam distribution system is under downtown Montreal. In the document we distributed, you have a map of photographs of our clients, as well as the latest equipment we have purchased—a boiler. You can imagine what this heating boiler represents.

What is CCUM's role? This may not be the issue in which your committee is most interested, but I think we should still mention it: our role is to provide clients with competitive heating services. This includes air conditioning services.

We have therefore organized our systems for optimum efficiency. A building can be heated by means of its own equipment, or by the steam we bring in, which provides the thermo-energy needed to heat spaces and to produce hot water. If developers and owners want to use our services, it must be because we are competitive.

Why are we competitive? Because the size of our organization allows us to take advantage of economies of scale. Many buildings ask for our service. For each building, peak demand falls at different times. So our production is more stable, making us more efficient and competitive. Our production stability and reliability means that boilers do not lose heat. In a home, the boiler is only going for 20 minutes an hour. The boiler cools down, and then heats up again.

When we combine the supply to a large number of clients, our boilers stay hot, and remain stable. Moreover, anything I'm now saying about heating also applies to air conditioning.

Our clients choose us because we are more specialized. In a building, people only focus on heating issues part-time, spending the rest of their time dealing with air conditioning, woodworking, carpentry, and carpet cleaning. We are a big enough organization to have specialized employees who focus on nothing but heating. This means we have more specialized technical expertise, and are therefore more efficient.

All these factors make us more reliable, as my friend John Grey pointed out earlier. During the ice storm, we succeeded in providing our downtown Montreal customers with an uninterrupted service. That was not easy, because we had a great many problems to overcome. Not only did we not have power, at one point we also had no water because the city had lost its ability to deliver water. We had to find solutions, but we were equipped to deal with all the problems that arose.

As I said, we do better in a competitive market because we are efficient. However, we are also more efficient and economical from an environmental standpoint. We use less energy. And because we use less energy than our competitors, we emit fewer pollutants, and thus reduce our environmental impact.

Studies have upheld our claim to be more efficient than our competitors. At the last ACDT conference in Montreal in November, Professor Kajl—who is with the École de technologie supérieure, Université du Québec—presented the conclusions of his study of our particular system. Through complex simulations, he demonstrated scientifically that the decentralized CCUM system was more efficient than having individual heating systems in different buildings.

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Other studies have also been carried out, for example on the Trigen system in the United States. The study assessed buildings before their hook up to the Trigen system and after.

The studies were published in the ASHRAE Journal, the journal of the American society of heating, refrigeration, and air conditioning engineers. They also concluded that centralized heating systems were more efficient than decentralized heating systems in individual buildings.

In addition to efficiency, centralized systems offer other advantages. Some of you may know that centralized heating systems are highly developed in Scandinavia. I have visited a number of them with members of the Canadian District Energy Association, as well as with Mr. Wilfert and other Canadian politicians.

Take the city of Göteborg, for example. Part of the city is heated by recovering thermal energy from the Shell oil refinery located in the area. By using this energy, which would otherwise dissipate into the atmosphere, fuel use is reduced. Without the system, there would be double consumption: thermal energy would leave the refinery and remain unused, while the Göteborg refinery would consume fuel.

We are applying the same principles. A number of projects are at the discussion stage, particularly in Montreal. We are in the midst of discussions with the Société de développement de Montréal on a certain building. We are planning to use waste thermal energy to heat the building.

We are also discussing projects with Quebec City. The mayor, Mr. L'Allier, is interested in this type of project, though he has not committed himself as yet. Another possibility is to recover waste thermal energy from industries in the Limoilou area, in addition to what is recovered by the incinerator, and deliver the thermal energy to buildings.

Centralized urban heating systems offer another advantage other systems cannot: they can use waste thermal energy to deliver heat and save on fossil fuels, for example.

Another advantage they offer is flexibility. The downtown Montreal heating plant was built in 1949; at the time, the boilers burned coal. When markets and ecological conditions became so different, we had no difficulty in converting the plant to oil, and later to natural gas. We also have a project to use biomass, specifically wood.

These are only some of the advantages offered by centralized urban heating systems, which are not available with decentralized heating.

If I may, I would like to make some recommendations. We have presented these recommendations to a number of authorities, but I would like to submit them to you so that we can continue to develop our systems, which occasionally encounter economic difficulties.

Our first recommendation is that government should include the development of district systems in its range of tools to ensure efficient energy consumption, energy resource management and environmental protection.

Our second recommendation is that the government should conduct a study on the conditions favouring the development of district cooling and air conditioning systems, as well as promote research. In Canada, we are lagging behind the United States in this area.

Our third recommendation is that ways should be found to discourage the decentralization of heating and air conditioning systems and to disseminate information on the benefits of hooking up to the district systems.

Our fourth recommendation is that the future of thermal power plants controlled by the government be protected. The government has many thermal power plants, for example on military bases, in Ottawa and elsewhere in Canada. When the Canada Real Estate Corporation gets around to selling these sites, it should think about the heating systems located in those areas and protect them. They represent an important asset.

Our last recommendation is that the government foster the development of district systems through tax measures and financing facilities. I don't have time to say a great deal about the risk involved in developing a system. It's a chicken and egg situation. You need the clients before you can develop the district system, and you need the district system to get clients.

And to promote the displacement of polluting energy using heating by clean energy recovery, the government could use programs similar to those that applied to displace oil-based energy systems in 1980. This would facilitate the development of district systems.

Those are my recommendations. I would be happy to answer any questions the committee may have. Thank you.

[English]

The Vice-Chairman (Mr. Gar Knutson): Thank you very much for that presentation.

We'll now go with Chief Bosum of the Oujé Bougoumou Nation.

Chief Abel Bosum (Oujé Bougoumou Cree Nation): I would like to thank this committee for the opportunity to address you today and to bring good news from the aboriginal country—good news of the kind that we believe Canadian society as a whole can learn from.

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You have all heard our leaders say to Canadians many times over the course of many years that if our communities were given the opportunity to control their own affairs, many of the well-known problems facing us could be successfully addressed. We are pleased to have the opportunity to describe for you a tangible example of the responsibility and the creativity which can be applied to community development when a degree of control has been present.

Oujé-Bougoumou is a new Cree village in the southern part of James Bay, Quebec, an area we refer to as Eenou Astchee, meaning “Cree Territory”. We began construction of our village in 1991, and in our planning and construction we were guided by a set of instructions given to us by our elders regarding respect for and harmony with the environment and the importance of incorporating important elements of our culture, with its emphasis on conservation and environmental protection, in our work. As well, we were told to keep in mind the future economic and social development of our community. The totality of these instructions can be summarized by the non-native concept of sustainable development.

With these instructions in mind, we decided, as part of our planning for the new village, to incorporate a district heating system fuelled by waste biomass from a nearby sawmill in the region. In effect, our district heating system converts industrial waste into useful energy. Just as traditionally our hunters find a use for every part of the animal or plant that is harvested from nature, so too we have found a use for the waste created by the forest industry operating in our region.

The type of district heating system we decided on was a hot water system, utilizing a network of a very flexible and highly insulated plastic piping. Hot water systems, unlike steam, require less sophisticated engineering expertise for the ongoing maintenance of the system, and the flexible insulated distribution pipes are easy to instal. The combination of these two factors meant the installation and the ongoing maintenance of the entire system could be carried out by our own community members.

In our decision-making process for this project, the criteria we applied in evaluating the appropriateness of this technology were more than environmental ones. We also took into consideration the short- and long-term impacts of such a system on our local economy and other aspects of our community life.

I would like to suggest to you that there is some advantage in studying the impacts of technology innovations on a small community such as ours. Unlike larger and more complex municipal areas, our community does not have a large number of competing stakeholders, each with his own interests, perspectives, and expectations. It is therefore easier, in a setting such as ours, to see very directly and immediately the benefits or the downside of any innovation or change. A small community can be like a crucible in which it is possible to conduct very controlled experiments to analyse the interactions of few elements.

When we assessed the long-term potential benefits of a district heating system, we were convinced they far outweighed the short-term financial burden represented by the initial capital costs. I would like to summarize these economic and social benefits.

Our analysis showed there would be a reduction in heating costs for the community users. Clear economies were associated with district heating, and these economic benefits can be passed on to our local consumers.

We could obviously expect an increased level of capital circulation in the community. Dollars which otherwise would be exported out of the community to utility suppliers or fuel distributors would be captured locally. Once the initial capital costs were repaid, these captured dollars would be available for a range of other community projects.

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We could also expect a positive potential for the economic use of any excess heating capacity. We are now actively looking at the feasibility of both an aquaculture project and a greenhouse project, whose bottom lines could look better with the availability of an inexpensive source of heat.

In our situation we also noted that the district heating system could have an extremely beneficial impact on our local housing program. Under our community's innovative housing program, individual residents are required to pay a fixed percentage of income toward the total housing costs, which include mortgage repayments and operating costs. Since the district heating system results in reduced energy costs for the consumer and reduced operating costs, we found that a greater proportion of what the individual homeowner pays into the housing program goes to pay off the mortgage. In other words, the housing program receives more direct cash, thus enhancing the capacity of our housing program to build more houses and to meet the shelter needs of our community members. To this extent, the district heating system makes an important contribution to the community goal of housing self-sufficiency.

We have also been able to create local employment. Had we decided to favour a conventional means of meeting the heating energy needs for our community, which are hydroelectric or oil, there would have been zero impact on local employment. With our district heating system, local labour was used in the installation of the system and is used to maintain the plan and deliver wood waste to the plant. It is clear that the district heating system has met all our assessment criteria and is proving to be a positive element in our community development.

As a final remark, I would like to state that projects such as ours have an important potential in remote resource-based communities, especially in the context of enormous expenditures that are made annually in many of our communities to instal inappropriate diesel-fueled electric generators. With a proven technology, which over the long term is cost-effective and contributes to community self-sufficiency, it would seem to be a natural energy solution.

There will be important discussions in the near future on the financing of aboriginal self-government. As an energy system with the potential to generate surplus revenues after the repayment of initial capital costs, district heating systems may not be irrelevant in these discussions.

In order for district heating systems to be installed in aboriginal communities, creative financing efforts and financial support to these communities will be required. In view of the very positive and extensive community benefits of this system, it will be worthwhile to consider the application of the national infrastructure program to the aboriginal community district heating systems.

The Vice-Chairman (Mr. Gar Knutson): Congratulations on your success.

I will now go to Ann MacLean, the Mayor of New Glasgow, from the Federation of Canadian Municipalities.

Ms. Ann MacLean (Chair, Working Group on Community Energy Systems, Federation of Canadian Municipalities): Thank you, Mr. Chairman and members of the committee.

I want to introduce the Federation of Canadian Municipalities to you by saying that the FCM has been recognized as a national voice for municipal governments since 1937, with some 630 municipal governments as members representing a combined population of over 20 million people.

District energy systems, as we heard before, are used extensively in countries with climates similar to Canada's, but despite their commercially proven technology these systems are largely unexplored in Canada. Community approaches to providing district heating and cooling have been of particular interest to FCM for the past six years.

FCM's working group on community energy systems encourages municipal governments to consider district energy in their communities for two reasons: to reduce emissions responsible for climate change and to reduce energy costs.

The working group has lifted barriers to district energy in Canada, including tax treatment of district energy investments compared to other energy investments. The working group has also arranged technical study tours to Sweden, Denmark, and Finland, and has encouraged the participation of the key decision-makers, which include municipal elected officials, technical and administrative staff, those involved in the delivery of district energy, and representatives from the federal and provincial territorial governments.

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As a result of our efforts, new projects are being considered in different parts of our country—we heard a list of them earlier—from Fort Simpson, Northwest Territories, to New Glasglow, Nova Scotia. The understanding we at FCM wish to leave with the committee today is that we have to move beyond consultations and discussions about district energy. We believe it is time to act on it.

Since 1994 the federal government has been working to identify and address impediments to environmentally sound energy use in Canada. Our 1995 federal budget included the commitment to investigate whether there was a level playing field in the energy sector. In 1996 Natural Resources Canada and the Department of Finance held consultations on tax incentives and other options to improve the treatment of investments in energy efficiency and in heating and cooling from renewable energy.

Following these consultations, the report entitled “The Level Playing Field—The Tax Treatment of Competing Energy Investments” found that investments related to district energy were disadvantaged compared to most other energy investments.

In December 1996 FCM made a presentation to the joint meeting of energy and environment ministers in Toronto. At the meeting, FCM urged federal, provincial, and territorial government ministers to agree with the concept of intergovernmental cooperation on climate change matters and asked that the ministers appoint a liaison person to work with the FCM 20% Club and their municipal governments. The club was formed in 1995, and members strive towards a 20% reduction of 1990 greenhouse gas emissions by the year 2005 or within 10 years of joining the club. More than 30 municipal governments across Canada have committed to this target.

Following that joint meeting, all provinces and one territory appointed a liaison person to work with FCM on local initiatives. This recognizes the role of municipal governments as key players in Canada's efforts to reduce greenhouse gas emissions.

We believe the involvement of municipal governments in Canada is crucial if Canada is to meet the international commitment as a signatory of the UN Framework Convention on Climate Change. For its part, Canada has agreed to a 6% reduction of carbon dioxide from the 1990 level for no later than 2021. However, Canada is likely to fall short of this commitment if no serious action is taken, and this certainly concerns municipal governments as well. Canada has to identify innovative ways to meet its international commitments. We believe that district energy is part of that solution.

Over 20 municipal governments across Canada are now evaluating the possibility of developing district energies in their communities, but there are a number of impediments in the way.

First of all, the current tax treatment of CES impedes private sector investments. This has a direct effect on municipal governments because the absence of favourable tax treatment makes it more difficult for us to secure private partnerships. This is a fundamental problem because in most cases the development of CES projects has been championed by the public sector. FCM strongly believes that making district energy eligible for capital cost allowance depreciation under class 43.1 of the Income Tax Act would assist municipal governments in attracting private partners.

FCM also supports the recommendation of this House of Commons standing committee regarding the need for additional tax incentives to promote development of environmental technologies, innovations such as district energy, cogeneration and alternative energy sources.

However, better tax treatments in district energy will not automatically lead to its wider development. A close examination of successful CES projects shows that municipal governments acted as a catalyst. Mechanisms are needed to attract greater interest among municipal officials.

Moreover, the lack of financial resources often results in municipalities putting aside viable CES projects and continuing to use fossil fuels. FCM believes that preferential interest rates and extended payback periods should be established for the development of municipal projects. The Toronto Atmospheric Fund could be used as a model for the establishment of a national atmospheric fund. It is also important to note that the federal government controls, leases, or owns a number of properties across Canada, and its cooperation would be instrumental in helping municipalities to get systems started and to secure large customers at the beginning.

In the short term, the federal government, with the support of the FCM, could identify demonstration projects in municipalities that could act as catalysts to encourage the construction of CES. These demonstration projects would showcase the economic, environmental, and social benefits that have been mentioned by a number of my colleagues here, including increased energy efficiency; reduced dependence on single energy sources; cost stabilization; use of local resources, such as biomass, municipal solid waste and waste heat; local job creation and business opportunities; reduction of energy costs; decreased air pollution; and, of course, quality of life improvement.

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These demonstration projects will promote district energy and clearly communicate the opportunities and benefits of such technology to the three orders of government and to the public.

In conclusion, FCM believes that community energy systems are an effective means of improving the energy efficiency of Canadian urban communities while contributing to the reduction of greenhouse gas emissions and the creation of local employment.

Municipal governments are obvious and key players in relation to climate change, and certainly are prepared to cooperate with the federal government. But, indeed, this is always a two-way street. Many levers necessary for the implementation of measures to reduce greenhouse gases, including district energy, reside within the powers of municipal government.

FCM would like to recommend that the federal government develop financial incentives to favour the development of municipal community energy system projects and that the federal government require federal properties to connect to municipal-based CES projects where environmental benefits are clear and costs are comparable, establish demonstration projects, create a national atmospheric fund and support making district energy eligible for capital cost allowance depreciation under section 43.1 of the Income Tax Act.

I want to thank you for your attention to these municipal concerns.

The Vice-Chairman (Mr. Gar Knutson): Thank you very much.

We're now scheduled to hear from Frank Campbell, CANMET Energy Technology Centre.

Mr. Frank Campbell (Director, CANMET Energy Technology Centre): Thank you, Mr. Chairman. It's a pleasure for us to have an opportunity to address the committee today.

Being last in the series here, much of what we will be saying has already been said, but much of it also bears repeating. I'll try to put somewhat of a Natural Resources Canada perspective on it.

Before I introduce my colleague, Mike Wiggin, I'm just going to make a few introductory comments. I'll note that we're speaking from a deck, which I believe we've circulated to everyone.

Natural Resources Canada has been involved in district energy for about the past ten years through what is now the CANMET Energy Technology Centre. We're one of three departmental research centres looking at environmental issues associated with energy production and use.

We are Ottawa-based. We also have a research centre based in Alberta and another in Varennes, south of Montreal.

One of the characteristics of the way we try to work is to work in partnership with other people interested in the same area. In fact, I think many of the people who have already spoken are partners with our program in this area.

Why did we get involved in the community energy opportunity? We got involved because through our interactions with the International Energy Agency we could see there was a lot of application of these technologies in Europe, so we began to ask ourselves the question, why not in Canada as well? I guess we've spent the last ten years answering that question to a certain degree, and perhaps changing the answer to that question.

We are also increasingly oriented towards addressing greenhouse gas emission issues through energy efficiency and renewable energy, alternative energy sources, and clearly community energy systems align very well with that objective.

We also recognize that communities represent a very major market for improving energy efficiency in Canada.

Enough for the introductory comments. I'm now going to turn you over to Mike Wiggin. Mike has been the heart and soul of community energy systems work at NRCan for that ten-year period.

Mr. Michael Wiggin (Manager, Community Energy Technologies, Department of Natural Resources): Thank you very much for the introduction, Frank.

Honourable members, ladies and gentlemen, it's a great pleasure to be here today. What you see, the growing enthusiasm for this area, reflects a lot of hard work by many people and we're very proud of the results.

First I'd like to talk about district energy. What is it? In the past we've seen district heating that depends on central fossil fuel boilers distributing energy, but increasingly district energy is becoming an energy network. In fact, I like the words in French better than “district energy” in some ways. They are réseaux thermiques, which is “energy networks”.

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The emphasis now is on the way to buy and sell energy within a community, not just send it from one place. Some communities in Europe, for example, may have as many as fourteen sources of energy, rather than just one. So it's diverse, robust, and the community can achieve new levels of efficiency it couldn't otherwise achieve.

Technology-wise, it's relatively simple. Typically it's a network of two pipes carrying hot water from the energy sources taken to the buildings or customers and then returning them to be reheated and used over again. In a sense, these systems, these energy networks, are just like the electrical system, where you can move energy around, buy and sell energy around the province or the nation or the continent. In gas, it is similar. You can buy and sell energy from various sources.

We want to see that happen, too, in the low-grade thermal energy. I think, as Yves and John were saying earlier, to heat air to 20 degrees in your house you don't need to use fossil fuels; we have many other alternatives.

Why district energy? In a community, we often have to convert heat to produce power, and then when you do that, heat is rejected. Also, in industries, you're achieving many processes, but you're rejecting a lot of heat. For example, we're working in Hamilton. We can heat almost the downtown of Hamilton by using waste heat. That is being studied by the city now.

District energy allows you to take those sources of heat that are being thrown away in the environment and recuperate them and redirect them to displace fossil fuel in space heating and also domestic hot water.

Also, we should not forget the use of renewable energy. Often it requires capital-intensive equipment for biomass boilers, landfill gas collection use. You can't get access to these sources of energy cost-effectively on an individual building or customer basis; however, district energy allows you to achieve the economies of scale like Chief Bosum has achieved in Oujé-Bougoumou. So you can use biomass locally and use things that would otherwise be wasted and cause other pollution problems.

To summarize, district energy is a very, very important technology in our attempt to address climate change and address reduction in greenhouse gases.

First of all, within a community, we're able to use waste heat that is thrown away by industries' power production. We're also able to use waste energies that appear in landfill sites, waste-wood dumps, and so forth, that would otherwise generate pollutants, methane, and so forth. This can be redirected. So you get a double bang for the buck: not only are you helping to clean up a pollution problem, but you're also displacing fossil fuels, for example, using landfill gas when landfill gas methane has about 20 to 25 times the impact of regular carbon dioxide releases. Any way we can resolve some of these problems has a very high impact.

Also, we can use new renewable energy. In some areas of the country, some surprising ones like P.E.I., they've been able to heat a large part of Charlottetown using wood from local wood lots and have created a whole new business for the chipping of wood, giving revenue to farmers for the wood lots and displacing fuel purchases that used to be from Venezuela. Now they're creating local business opportunities to use renewable energy.

Last, but very important, if you are going to use fossil fuel, if you do it in a combined heat and power plant or a cogeneration plant, you not only produce electricity but capture all the energy that is being rejected. You can get enormous increases. I think in the Bruntland report they suggested that cogeneration combined with district heating would revolutionize the opportunities for efficiency in communities.

From the community perspective, I think it's important when looking at the economy and how to make things happen that we make decisions as individuals, as companies, but also as communities. Each one of these groups has its own criteria for how to make decisions. District energy responds very well to community interest, as you've heard.

First of all, you can use local resources. You can host cogeneration so that the electrical generation done on behalf of your community is done locally, and you can capture the energy that is released from it instead of generating somewhere else and having it thrown away. You also have flexibility in the choices of energy sources, because from what we've seen the prices and availability of energy are always changing. So if we can always opt for whatever is most cost-effective and most environmentally sound by changes at central heating plants, then we can achieve much greater effect than changing all the individual buildings.

I attach a graph from Metro Toronto in their pursuit of greenhouse gas reduction, in which they've been very successful. Toronto looked at many options that have been traditional ones—building efficiency, reducing trip times, more people in vehicles, and so forth—but was surprised to find out that the use of landfill gas, the landfill gas with district energy, and district energy with cogeneration were in fact the largest contributions to its greenhouse gas reduction targets by far. The major study that John Stephenson alluded to showed that Toronto could get to as much as 120% of its greenhouse gas reduction target from district energy alone by taking in some parts of the city.

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To reinforce what is possible, I should also mention that I have an energy diagram here for Helsinki. What you'll see is that in Helsinki, where the primary energy for making power is from coal, they're able to capture almost all of the heat that is thrown away from power generation within the city and put it into space heating. So the overall efficiency achieved in the city for the energy used is about 72%. In Toronto, the number is about 52%.

Furthermore, with all the other energy efficiency measures they have, their energy demand is lower. So the next result of energy efficiency, wise use of energy, and cogeneration in district heating has led them to have a carbon dioxide output that is about half that of Toronto, and in Toronto you have nuclear power, natural gas, and hydro-electricity available. They've been able to achieve great things. So that shows us what is technically possible. Canada, however, is different. Our price is different, our sensitivity to imports of fuels is different.

So what are the barriers? As has been alluded to today, the return on investment is marginal for these projects for the private sector. So sometimes, considering the risk for constructing, laying out the capital, getting the customers, they are cautious before entering into this type of investment. Also, as was mentioned, the tax treatment is not particularly favourable for district energy. We have provisions for cogeneration, but not for the district energy systems.

Also, the risk is perceived as high. Most of the projects we've seen go ahead have involved leadership by the community, and we don't have a lot of experience in crafting new public-private partnerships. This is important. Also, in engineering, marketing and so forth, we are just growing in our experience in Canada, but we have a ways to go. Marketing and service to a large number of individual customers is also something that is tricky and causes the private sector to think hard before it moves ahead.

So NRCan has been doing a lot in trying to address these things. We have been working with municipalities and utilities to develop projects and to inject know-how from other systems into every new project to make things happen, providing technology information and promotion, systems analysis, marketing, business advice. We are also doing research and development to address the technical needs that are emerging as we try to adapt this technology to Canada.

As you'll see on the list, we have many partners, such as those around the table, including municipalities, communities. The Federation of Canadian Municipalities has been particularly important, as it has gone with us to Scandinavia and so forth to see what is possible over there and to see how it can be adapted to Canada.

There have been a number of measures—which I've tabled—here that have been seen as possible for accelerating district energy. The thing is that it will happen, but it won't happen fast enough to make a significant contribution to Canada. There are some measures that various stakeholders you heard from today have suggested would be useful. So in Canada there is a growing awareness; the capability is growing. We have been effective in making projects happen. District energy has certainly been shown to be an effective and cost-effective means of carbon dioxide reduction. So projects are in place and more are developing, but we think more can be done.

Lastly, I had a list of projects that have already been built, along with the carbon dioxide contributions of those as compared to what they were producing before. It's quite significant, but if you look at the projects under development, much larger projects are possible. These are close to going ahead, and I think we could increase these numbers with other measures.

I'll just mention one other thing. We haven't talked about cooling much, but there's an extremely innovative project in Toronto that is looking at taking renewable cool water from the bottom of Lake Ontario to cool the whole of downtown Toronto. That could perhaps have an impact of as much as 200,000 tonnes per year in terms of carbon dioxide reduction.

So with that, ladies and gentlemen, I would like to thank you very much for your attention. It's been a pleasure talking to you.

The Vice-Chairman (Mr. Gar Knutson): Thank you very much, Mr. Wiggin.

We'll now go to questions, beginning with Mr. Bigras.

[Translation]

Mr. Bernard Bigras (Rosemont, BQ): This afternoon, I'm speaking both as environment critic and as the Member for Rosemont.

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When I learned a few days ago that we would be dealing with this very important issue, I was absolutely delighted. Let me tell you why. The Des Carrières incinerator is located in my riding. The incinerator burns waste, and for many years was supplied through underground tunnels from Montreal buildings and several industries located in the vicinity.

So I was very happy to hear we would be discussing this issue. Yesterday I asked my assistants to do a little bit of research on the positive impact of this technology. To my surprise, I learned this morning that the incinerator, which belongs to the city of Montreal, is continuing to burn waste, but no longer supplies heat to the buildings and companies involved.

Heat is no longer supplied for a number of reasons, including the outdated system infrastructure and potential environmental impacts. I would like to see whether you agree with those reasons.

First, could you give me some details on the condition of the Montreal system? It is important for us to know what state the system is in today.

Secondly, regardless of the system's condition, could you assure us that your systems have no environmental impact whatsoever, especially on the health of Canadians?

Those are my two questions.

Mr. Yves Blanc: As far as I know, it wasn't the system as such that was outdated, but rather the incinerator. I am not speaking officially, but in view of the investment required to bring the Des Carrières incinerator up to modern standards, the city of Montreal felt it would be better off using the landfill site in the old Miron quarry, rather than keeping the incinerator going. So there was no problem with the system itself. The problem was one of waste management; the city had to make political and financial choices as to how it would use available technology to process its waste.

The difficulty in choosing between a downtown incinerator and a landfill site is a common one in Canada. For communities, for Canada as a whole, and for society in general, I believe that waste incineration is the best way of protecting the environment. First, waste is burnt under controlled conditions. Second, all the outputs of the incineration process can be used and controlled, including thermal energy.

In a landfill, however, waste decomposes, sometimes over periods as long as 2,000 years. We know that landfill sites dating back to the Roman Empire are still discharging gases. Two thousand years later, we still do not have them under control. They exude leachates. The thermal energy that could be discharged and that could be used—methane gas, as Michael Wiggin said earlier—simply dissipates into the atmosphere, or is incompletely recovered, as at Miron. You know that they have a cogeneration plant that recovers as much methane gas as possible, and transforms it into thermal energy used to generate electricity. But much of the gas is lost, dissipating into the atmosphere.

So, incineration certainly has a lesser social and community impact and is a better way of using waste.

However, the difficulty everywhere is to gain public acceptance for the operation of an incinerator in the area.

There are some that function well. For example, there is an incinerator in the Quebec Urban Community that treats all the city's waste and provides thermal energy to the Daishowa pulp and paper mill.

In my opinion, this approach provides the best balance between the problem of waste disposal and the use of the resulting emissions and the protection of the environment.

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As for the state of the network, the Des Carrières incinerator network was old and probably would have needed renovations over time. This brings us back to the problem that was mentioned earlier. We have to invest in networks that amortize over 20 to 40 years, while we sign five to ten-year thermal energy delivery contracts with our plants. The difficulty arises from the difference between these two timeframes, and this is why we suggest accelerated amortizement systems such as Class 43 status or other refundable grant or loan programs to promote partnerships so that communities, municipalities, urban communities and the private sector will invest and develop such facilities. This is the objective of the very preliminary discussions that we are having with the City of Quebec in this regard.

I hope I have answered your question.

Mr. Bernard Bigras: Yes.

[English]

The Vice-Chairman (Mr. Gar Knutson): We have a vote in about 10 minutes. I think we'll adjourn the meeting until after the vote. We won't start again until probably 5:15.

Mr. David Pratt (Nepean—Carleton, Lib.): Mr. Chair, do you think we could squeeze in another five minutes' worth of questions?

The Vice-Chairman (Mr. Gar Knutson): From?

Mr. David Pratt: Either side.

The Vice-Chairman (Mr. Gar Knutson): Well, yes, we could, but does somebody have to leave, or can someone not come back?

Mr. David Pratt: No. It's just to get in as many questions as possible before the vote so that we can use the time efficiently.

The Vice-Chairman (Mr. Gar Knutson): And not waste any energy.

Mr. David Pratt: Exactly.

The Vice-Chairman (Mr. Gar Knutson): Mr. Grey.

Mr. John Grey: I would like to comment. I'm a professional chemist registered with the Province of Ontario. What concerns me, really, is that we in the municipalities seem to look at waste fill as an easy way to rid ourselves of all our garbage. Yes, it's true that we can pick up the methane, if we're smart enough to do that, but what we forget is that when we put that garbage in the ground, we also have that garbage decaying. We are very concerned about where that garbage goes. If it gets into our underground water system, the contaminants can cause serious problems—not necessarily today, but looking down the road at generations to follow. What happens then?

It reminds me very much of an English phrase we have, that an ostrich puts his head in the sand and says “You can't see me now”. With the technology we have developed for burning waste effluence—particularly in the States, but there's no difference in Canada—we can take out all the impurities excellently, quite frankly. We can take well over 99.9% out of the garbage and save all that energy and eliminate any future contaminations for Canadians.

That's what I feel very strongly about. I'm not saying everbody agrees with me, but as professional chemist and as a Canadian, as a person who has a family here, I'm saying that's what I would do. There's no question about it. But you must have the infrastructure and the equipment to remove that. If you don't have it, as you said...yes, I'm not happy about it, but we can do that.

In the city of Baltimore, where they burn the garbage not only for Baltimore but also for Washington, D.C., they have a plant that's 99.99%. There's no smell, there's nothing. It's very efficient.

I can see no reason why in Canada we don't do that. When I hear comments about taking our garbage in Toronto up to some mine 500 miles north I figure our bells must be not ringing up ahead. Our lights don't go on and the wheels don't go on. I mean, really, it's not good chemistry.

Thank you.

The Vice-Chairman (Mr. Gar Knutson): Ms. Kraft Sloan, you're next on the list.

Mrs. Karen Kraft Sloan (York North, Lib.): Thank you.

First of all, I want to compliment and congratulate everyone on what they've been doing.

Chief, you've constructed a new village, so it's fairly easy to put a system like this in place. I live in a village of about 1,700 people, and I'd love to see something like this happen.

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How difficult is it to retrofit residential buildings and commercial buildings and apply it to the wider community, like you've done, when you're dealing with heating systems and things like that? How do you retrofit?

Mr. Michael Wiggin: We worked very closely with Chief Bosum in developing the system there. And certainly in some ways it was simpler to put pipes in new roads or new right-of-ways and put new systems in buildings. But we found that many existing buildings could be converted quite well, and we found that you can develop systems in built-up areas economically.

In fact, even though some of the costs of converting buildings and putting pipes down the length of the streets are more in an existing community, they're often denser, so the revenue per metre of pipe is higher. We found that it's very hard to make generalizations about it being cheaper in a greenfield or new community versus a built-up one. But our capabilities are getting better and better in that regard. The cost is not prohibitive.

Mr. Yves Blanc: May I add to Michael's answer?

[Translation]

If you have no objection, I will speak in French. You are correct to say that the problem is different in the case of an existing community, be it a small centre or a large municipality; the situation is different when a new development is being constructed, be it small, remote, or in the city. The difficulty is that the streets have been constructed in an existing community and it will inevitably be expensive to add an underground network. Secondly, the buildings are already equipped. Some of the equipment may already be worn out and in need of replacement and the owners might welcome an outside service that provides steam or hot water heating. However, to service those buildings a system would have to bypass other buildings that we would want to serve in order to make the network profitable, but those buildings are not ready because they have equipment that is new or may be five or six years old. In that case, a potential client would have to continue amortizing its existing equipment that has already been purchased and pay a fee for our equipment.

The problem is one of timing. You have to approach the client at the right time. This is the risk that I referred to earlier in the development of the network. We in the private sector are in a difficult position. We have to have the customers to find financial backers for the construction of a network, and, at the same time, we have to have the network to be able to interest the client.

We are asking for some type of financial assistance to help us assume this risk so that the private sector can work in this area in the community where decisions are taken in the free market and nobody can be compelled to do anything and you need the right timing. In a developing community, things are much more simple and we have far less need for assistance.

[English]

The Vice-Chairman (Mr. Gar Knutson): We'll cut our discussion off there and come back in twenty minutes or so.

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The Vice-Chairman (Mr. Gar Knutson): Thank you very much for coming back. We were gone longer than half an hour, and I appreciate your sticking around. Just before we begin, is there anyone who has to leave to catch a plane, train, boat, or wind-generated balloon? No? Fine.

Mr. Pratt, do you have some questions?

Mr. David Pratt: Yes, I do, Mr. Chair.

The Vice-Chairman (Mr. Gar Knutson): Mr. Stoffer, do you have some questions as well?

Mr. Peter Stoffer: Yes.

Mr. David Pratt: I have a question for Mr. Wiggin.

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The issue of Canada's commitments with respect to the Climate Change Convention is obviously very important to the government. From a technical standpoint, if we pursued an aggressive policy with respect to district energy in terms of let's say a favourable tax regime and other federal and even provincial policies that aggressively promoted district energy, how far could we go down the road to meeting our carbon dioxide reduction targets, in your opinion?

Mr. Michael Wiggin: This has been studied by a number of groups. I think I mentioned earlier that if you developed all of Metro Toronto, which would be a similar undertaking to what they've done in Helsinki, Copenhagen, Stockholm, and others, that alone would give you in the order of 17% or 18% of our national carbon dioxide reduction target. Given the other large cities in the country, we think something like double that number would be reasonable. So it's at least technically possible to shoot for something in the 30 megatons area. Something like 30% of our target could be technically possible, but there are a lot of conditions in there.

Mr. David Pratt: In terms of the time line, could we hit that target by 2012?

Mr. Michael Wiggin: Boy, that's a tough one. What I can tell you from a technical standpoint is that if you look at cities like Copenhagen and Stockholm, they had very little district heating in the 1960s, so a lot of this has really developed since the oil crisis in the 1970s. Most of these cities have gone from very little district heating to as much as 98% within a 20-year timeframe. I think it's possible if the will, the right price signals and so forth exist. They have been able to achieve massive penetration in, for example, a 20-year timeframe.

Mr. David Pratt: Looking at one of our recent experiences here in eastern Ontario and western Quebec with the ice storm, one of the problems was our obvious reliance on hydroelectric power. If, for instance, we had—and perhaps other people want to respond to this—district energy systems in place, let's say in Ottawa and Montreal, would the effects of the ice storm have been mitigated to a certain extent?

Obviously if you've reduced your dependence on hydroelectric power and have a range of energy sources available to you, then it would seem, to me at least, to be evident that the ice storm would not have had the same impact as it did on the lives of so many people in these areas.

Mr. Michael Wiggin: I think Yves can answer this much better from his personal perspective, but I think mother nature is pretty rough. We can try to build things, be they harbours or electricity lines, as robust as we want, but we always get surprised by nature. So I think it's worthwhile to look at diversity. If you can diversify your system so you have more alternatives then you become robust in that way.

Again alluding to some of the systems in Europe, some cities have as many as 14 sources of energy, with everything from waste heat to waste incinerators at the race track to garbage incinerators and cogeneration plants. So if any one source or part of the network goes down, they have back-up. I think it's worthwhile looking at the message to diversify rather than just trying to build things stronger.

Perhaps Yves can comment personally from his experience there.

Mr. Yves Blanc: I will express myself in French.

[Translation]

Urban heating systems can provide the answer to your question for a number of reasons.

The first is the safety of the transformation of primary energy into the thermal energy that is necessary to heat buildings for air conditioning and even for industrial procedures.

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Because we are larger and are specialists, in times of crisis we have access to means that individual buildings or plants are lacking.

The president of Place Bonaventure, whom I met the other day, told me how much he valued our ability to handle the crisis, whereas his staff might not have had the same technical ability or access to equipment. Therefore, the fact of centralizing the transformation of primary energy into thermal energy made it possible to meet the need for thermal energy.

There is a second important element. This is not the case at the CCUM, but in Ottawa, where TransAlta has added cogeneration to its thermal network. I believe that a number of my colleagues said this was a good way to produce electricity from a thermal base or gas, etc. Cogeneration with urban heating is carried out in city centres, at the site of consumption. So this is a second answer.

What in fact was the problem during the ice storm? It was not the production of hydroelectricity; the production continued. It was the transmission. The production sites were far from the site of consumption and therefore the transmission was vulnerable.

So, we have a choice. We can invest in strengthening the transmission lines or add transmission lines. This is one way of dealing with the issue. We can put several hundred million dollars into that, or we can invest the same money for cogeneration at the consumption sites and produce electricity on the spot, and efficiently through cogeneration or trigeneration. This will make the system more reliable.

However, in Canada we face economic problems that do not exist in the United States or in Europe. The problem is the comparative cost of energy production. At the present time, for a variety of historical reasons including taxation, cogeneration is not always as competitive in Canada as the production of hydroelectricity or nuclear energy. If we are willing to pay a premium...

Currently, our group is negotiating with municipal organizations because cogeneration would be possible, not to meet all the needs of a town or neighbourhood, but to service the most important places.

For example, you know that in Montreal there was a water shortage because the water distribution and purification plants lost the capacity to produce their own electricity; their diesels stopped working. They are not specialists. So we are examining the possibility of cogeneration. Would the city be willing to pay a little more for electrical back-up, to make the system more reliable? Water distribution is an essential service, we could cite others.

Therefore, we could say that, yes, urban heating will help because by adding local cogeneration capacity, urban heating will provide greater thermal and environmental efficiency as well as an emergency power source in those sites. I will leave my answer at that.

Other arguments could be made. Yes, urban heating systems are a solution in emergency situations, for the reasons I have just set out.

[English]

Mr. David Pratt: Do I still have some time, Mr. Chair?

The Vice-Chairman (Mr. Gar Knutson): Well, we can come back to you, if you don't mind.

Mr. David Pratt: Sure.

The Vice-Chairman (Mr. Gar Knutson): Mr. Stoffer.

Mr. Peter Stoffer (Sackville—Eastern Shore, NDP): Thank you very much, Mr. Chair.

I have five very quick questions. The first one is for John.

You had mentioned $6 billion for the infrastructure costs, or you estimated what it would cost in, and then you would save about $600 million a year in energy savings. Did you include in your presentation—I know not here—retrofitting government buildings, for example, in that regard?

Mr. John Stephenson: Yes, the $6 billion capital cost includes production facilities, distribution facilities, and the retrofitting of all the buildings, what we call the building interface.

Mr. Peter Stoffer: Okay, great. My next question is for Frank or Michael.

When I look at this, I try to play the devil's advocate and ask who would be against this. I'm thinking it would probably be competing industries, such as the petroleum industry and the nuclear industry. I notice you gentlemen are from the Department of Natural Resources, also responsible for nuclear energy in Canada and the export of CANDU reactors.

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Do you find yourselves sometimes in a bit of a conflict when we export old technology and in our own country we're trying to develop new technologies in terms of energy savings? How does that play in when you're trying to promote this, especially when the group here are really asking for infrastructure resources and the go-ahead and the tax incentives in order to get this development going right across the country?

Mr. Michael Wiggin: First of all, as the technology part of Natural Resources Canada, we're trying to provide technical options so that our policy people can consider these and see how they can be adopted and implemented.

It doesn't really turn out to be a conflict in the industry, because more and more utilities are moving from electric utilities or gas utilities to energy utilities, looking to provide total service. We find there really isn't a lot of opposition from the utilities; they're trying to explore how they can become involved in it. In all the provinces we work in, we work closely with both electric and gas utilities. So that's not a problem.

From a departmental standpoint, greenhouse gas reduction is central to our work. This is the main thrust, the only reason we do the district energy program. It fits right in, so we find it very compatible with the departmental objectives and by and large compatible with most of the utilities we work with.

The only issue is for the industries: they have to meet the bottom line. If we have long-term capital investments and a lot of upfront costs running 8% to 12% returns on investment, no matter how much carbon dioxide they reduce and everything else, they have to look at the bottom line. That's the challenge right now, to see how we can provide enough information and other means to get them to move ahead in the circumstance.

Mr. Peter Stoffer: Thank you.

Ann, when it comes to cogeneration of burning waste, for example, in our garbage, and also you mentioned that in Prince Edward Island they're burning wood chips from tree-cutting from the farmers' woodlots.... I'm just trying to play the devil's advocate here. The perception is that a lot of municipalities and provinces now are trying to introduce recycling programs, waste reduction programs, and everything of that nature. By burning the waste, wouldn't that lead to defeating the provincial efforts of trying to reduce waste, when on one side we're burning the waste? They could say, “Well, if we're going to burn it, then we don't have to spend all this money trying to recycle, reduce, and reuse it.”

As well, there's the pressure on our forests and our trees. If we're burning wood chips, for example, wouldn't that put added pressure onto our forests and our natural areas?

Ms. Ann MacLean: I can't speak to the specifics of those particular locations, but I can say that very often it's waste wood. Very often they are wood chips that are not used for production but would be discarded. That's what I see, certainly in looking at an assessment in our own area. For example, a pulp mill would be using the premier product, but there are also some discards there, and that is what would be used. It's renewable, as opposed to using premier products to do it.

Mr. Peter Stoffer: Okay. My very last question is for Yves.

The ability to attract business to an area where they have a district energy system, is it easier to do it that way, or do companies actually look at that when they are looking to relocate their offices or their buildings or their place of business, for example?

I'll repeat it, if you wish.

Mr. Yves Blanc: Yes, please.

Mr. Peter Stoffer: Sorry.

You're from Montreal and you have a central heating system there for the buildings in Montreal. Do you find that businesses from outside Montreal or in other places in Quebec would move to that area because of the heating system you have in place?

[Translation]

Mr. Yves Blanc: I do not think that an urban heating system would cause activities to shift to Montreal merely because it exists. On the other hand, we know a German company was looking for a place to set up activities in North America where the public utilities can provide steam. This is common in Germany, although we don't do it in Canada. The utilities in municipalities are not obliged to provide steam. We are obliged to provide electricity, water and gas but not steam. Therefore this company decided not to set up facilities in Montreal, because it could not succeed in finding a source of steam.

• 1745

I don't think that industries will be moved, but I do think that opportunities may be lost in the long run.

However, there are plants or operations, for example in the downtown area of Trois-Rivières, where there are paper plants, which naturally produce thermal gases, and the heat in question is neither recovered nor reused. At the same time, in the town next to Trois-Rivières, there are hospitals and laundries which use thermal energy, gas, oil, and do not have available to them this energy produced by the paper mill which they could have used.

If adequate funding could be found to set up a network so as to recover thermal energy from the paper mill, something we can do, and then distribute it to the town, we would save on oil. Everyone would become more competitive. There might perhaps be some movement because we would be more competitive but, first and foremost, our industries would be able to survive.

I'll give you an example by coming back to what I said about Göteborg. As a result of selling to the city of Göteborg this energy which would otherwise be lost, the Shell refinery in Göteborg obtained revenue equivalent to its manpower costs, and the manager of the Göteborg refinery has said that the situation is like having a refinery without manpower. Consequently, it is more competitive. And when Shell has to close down a refinery, that one remains open because it is more competitive since it uses all of its resources, including energy, more efficiently.

Will anyone suffer as a result of this? I don't think so. I believe that strengthening or establishing district energy systems will benefit the community as a whole. If it is to the detriment of anyone or anything, it will be to that of those countries competing with us.

I don't know if that answers your question.

Mr. Peter Stoffer: Thank you.

[English]

The Vice-Chairman (Mr. Gar Knutson): Mr. Wiggin, do you want to add something?

Mr. Michael Wiggin: One brief point. The experience in subsystem Charlottetown is a good one. From the operators there, we found out there were some buildings that they had intended to build in a strip mall or somewhere out in the suburbs, and they actually changed their plans to building in the downtown, where they could get access to the system.

The reason for this was that they didn't have to include a boiler in their heating plant. So it was a direct saving in capital. Also, there has been a requirement to change all the buried oil tanks from steel to fibreglass and so forth. So you had this issue they could avoid.

So, basically, businesses find that if they have an option they can focus on their business rather than on the mechanical systems related to meeting their fuel needs.

Also, we were recently looking at buildings in Sudbury, and some of the buildings have major capital replacements. So if you can come along in that time, you can find that it's an asset as well. So, once it becomes established in the community, all these other benefits that aren't obvious become more known and usually the popularity increases in the community as time goes on.

The Vice-Chairman (Mr. Gar Knutson): Is there anybody here that knows the situation in London, Ontario, with the energy-from-waste plant?

Mr. John Stephenson: There was an energy-from-waste plant at Victoria Hospital in London, where I know they ran into rough times, because the contract they signed for the tipping fee committed them to a tipping fee that was too low to make the operation economic. That information is several years old. I confess I'm not sure of what's happened since then.

The Vice-Chairman (Mr. Gar Knutson): The ash that was being produced after they burnt it was considered a hazardous waste. So they couldn't just take it to the regular dump. They had to take it to a special dump. It turned out to be a bit of a disaster.

Having lived there at the time, from a community point of view people were putting their newspapers out thinking they were being recycled, and then they'd find out, no.... Not that anyone lied, but the average person who wasn't paying a lot of attention, like I wasn't at the time, thought they were putting these out to be recycled but found out they were being burned. That's why they wanted the newspapers.

You mentioned it as sort of a success story, but I don't know that it was unmitigated. I think it was more of a disaster.

[Translation]

Mr. Yves Blanc: If I may, I would suggest that the question be put another way. We have to get rid of and dispose of waste, regardless of the type or danger involved. Therefore, the question is not whether burning waste is dangerous, but rather whether it is the best method of getting rid of it.

• 1750

I would also like to answer the member's question; we are not saying that we will stop recycling and reducing waste. We will continue to reduce the quantity of waste by urging the public not to produce waste, but there will always remain some we have to get rid of.

To the best of our knowledge, burning waste is an effective and controlled method of getting rid of it. I was the marketing director for Miron. In the Miron quarry we probably have one of the biggest landfill sites in the world. We dispose of dangerous waste there. No one considers whether leachate is dangerous or not. However, when it comes out in the form of ash from an incinerator, people want to know whether the ash is dangerous. In both cases, it is the same dangerous residue. In one case, the danger is ignored. As John Grey pointed out, we bury our heads in the sand, or rather in the sanitary landfill. In the other case, the problem is under control because we obviously take the technical means needed to manage the situation, since we have them.

[English]

The Vice-Chairman (Mr. Gar Knutson): Is this on the London...?

Mr. Michael Wiggin: Yes. About the London thing, in Europe, I just wanted to say that waste incineration, with heat recovery and sale, ranks ahead of landfill gas. There is a very strong environmental ethic there, so they actually rate incineration ahead of landfilling, because of the long-term problems of leachate, groundwater contamination, air emissions, and so forth. They have coupled a very aggressive issue of restricting batteries going into the garbage and things. They have developed environmental consciousness and rules and regulations which increase the safety of the waste sites. This can improve in Canada too, I believe.

The Vice-Chairman (Mr. Gar Knutson): Mr. Pratt.

Mr. David Pratt: To go back to Kyoto for a few moments, one of the arguments that have been brought up in connection with Canada not increasing its commitment to reduce carbon dioxide emissions was the business about it costing Canadian jobs, costing the Canadian economy. Based on what we've heard today from the standpoint of energy efficiency, the retention of energy expenditures in the community, the enhancements to competitiveness and the creation of jobs, it seems as far as district energy is concerned, at least, that hypothesis doesn't apply.

I throw that open to anyone to respond to. Any comments?

Mr. John Stephenson: If you become more efficient, you certainly become more competitive. By developing these more advanced energy systems you also develop your industries and develop skills and craftmanship in your local industries and actually create a lot of jobs not only in construction but in the manufacturing of various items, if you create enough demand for them. You also create expertise among various professionals, consulting engineers, lawyers, accountants, and developers, which can actually earn export dollars.

We actually do this already. One of the premier district energy consulting companies in North America, one that has been responsible for 85% of developments in North America, is a company called FVB District Energy Inc., which is located in Edmonton, Alberta. That's one example. Several smaller companies are growing up and developing expertise.

In fact, I think it's an interesting twist on the greenhouse problem, in that it's a global problem but Canada can actually contribute a lot not only by reducing emissions in Canada but also by exporting this advanced technology to other countries which are not so well developed. Of course our friends in the U.S. have a lot of district energy systems, but most of them are steam systems. We are actually in advance of the U.S. in the sort of technology we use. There's a lot of opportunities for Canadian business in this field, the export field.

• 1755

[Translation]

Mr. Yves Blanc: I think you also have to look at the question from that viewpoint. Those who argue that the decisions taken at Kyoto might lead to job losses in Canada hold that view because if the environmental standards we apply to our plants, steel works or copper-production facilities are more stringent and binding than those applied in the United States or Africa, our industries will be less competitive as a result.

We, in the district energy industry, are here precisely to answer that question. Our answer is not a universal one because it applies only to those districts which need thermal energy in areas where our systems can work effectively.

What we would say to you is that our systems are in fact an effective way of producing thermal energy more economically, by recovering mill residue, by using the biomass, etc. Using the total social cost of producing thermal energy, we are proposing to you a competitive method which will help us to attain the objectives set at Kyoto without losing jobs.

However, we do not argue that our approach can be applied to every industry, heating system or town. We are making one small contribution to the total solution.

However, as this work requires long term investment, we cannot do everything alone. We need both financial and technological assistance from the federal and provincial governments so as to establish the infrastructure required, which is community-based and will help to provide the social benefits which no one can seek to achieve individually, but which in overall terms, produce socially and economically beneficial results.

It is in this spirit that we seek to provide a competitive answer to this problem, since other measures would, by placing restrictions on industries or automobiles, weaken the competitiveness of those sectors.

[English]

Mr. David Pratt: In the spirit of thinking globally and acting locally, I have a question for Mr. Wiggin. It's in connection with a report that was produced by the Canada Centre for Mineral and Energy Technology concerning district energy opportunities in Ottawa. This report was completed last spring. I wonder if you could provide a bit of an update in terms of what has happened since then with respect to making progress.

Mr. Michael Wiggin: Where you have natural gas widely available, it is difficult to compete and construct the infrastructure to build a district system and offer a price advantage or competitive prices with customers. So you need things like cogeneration or waste heat from industry.

At the time the study was done it was not clear there would be a possibility of cogeneration, but that may change with the changes in the utility structure in Ontario. Also, some of the large sources of waste heat, which also can make it cost-effective, like E.B. Eddy, were not particularly interested in cooperating two years ago. Since then there have been a number of changes. The local industry is now very interested in capturing and selling its waste heat. They're very interested in putting a cogeneration plant where they could sell heat both to Public Works facilities and then to the City of Ottawa as a whole.

I think the whole situation has changed around quite a bit. Also, I think both the region and city government staff are becoming increasingly interested in considering this technology.

Mr. David Pratt: Okay.

The Vice-Chairman (Mr. Gar Knutson): Karen.

Mrs. Karen Kraft Sloan: Thank you.

You'll have to forgive me if this question has already been asked or if it is not really applicable. This is a fairly new technology for me, so I'm trying to understand its application.

When I was visiting relatives in Finland, one of my third cousins down the road, so to speak, was showing me his new house. He lives in the country and he wasn't attached to district energy heating—and I wish I had taken a closer look when I was in Helsinki as to what they were actually doing. He had a system that heated his house, essentially water heat with piping through the house, and he had an incredibly efficient wood-burning boiler or stove, or whatever you want to call it. Essentially, he put in one log a night. So it was an incredibly efficient facility.

• 1800

I'm wondering if this level of efficiency exists for district heating technology in Canada so that you have this incredibly efficient wood-burning apparatus that helps to heat the homes and buildings involved with district energy.

Chief Abel Bosum: Our community is built on that same concept. In fact, when we were introducing the technology to our people, at first we had a problem trying to explain how this whole thing worked. We found that the simple way to explain it was to tell them to take a wood stove, heat it, and then you have this pipe with water that runs in it and heats your home.

I think what was applied in that single unit is the same thing that's applied in our community, but community-wide.

Mrs. Karen Kraft Sloan: Right. You have a highly efficient wood-burning boiler or whatever it is.

Chief Abel Bosum: Yes. We fuel with biomass, using sawdust, the fine particle that is of no use. That's what we fuel with. We heat a big water tank. The water then is pumped into the community.

Mrs. Karen Kraft Sloan: Is there any possibility of using solar or wind farms or something like that in cooperation with these types of facilities?

Mr. Frank Campbell: With a wind turbine you would be loath to produce just heat with it, because it's a very high-grade energy source. You can turn it directly into electricity.

Mrs. Karen Kraft Sloan: Is cogeneration a possibility?

Mr. Frank Campbell: Cogeneration is one of the options that's been described in many of the projects we've covered today, certainly cogeneration using, even in the biomass case, the high temperature capability of biomass to produce electricity first, then taking the waste heat from that and running it through a district energy system. That's really one of the optimal solutions.

Mrs. Karen Kraft Sloan: Okay.

Chief Abel Bosum: I'd like to point out one thing. We use the sawdust as fuel. We're paying for the sawdust at a price of $6 a tonne, and we use about 3,000 tonnes a year to heat the whole village. That's how efficient it is.

Mrs. Karen Kraft Sloan: You're doing a service to the environment by cleaning up waste as well as producing something that is also going to reduce greenhouse gas emissions.

Mr. John Grey: And not buying fossil fuels.

Mrs. Karen Kraft Sloan: Exactly.

Mr. John Stephenson: Could I perhaps argue with Frank a little bit on the wind? I've never heard of it being done anywhere, but I've seen it proposed in various papers.

Of course one of the most expensive parts of a wind turbine project is the synchronization with the grid. If you could use a wind turbine and simply wire the output terminals to an immersion heater and dump that in a nearby district heating pipe, the cost of that installation would be a lot less because of the lack of the synchronization with the grid. That's one thing.

The other thing is, when you're looking at the far future sustainability of all kinds of activities, many people have theorized that you're ending up burning hydrogen, because when you burn hydrogen you just get water vapour, which is a totally benign substance. One of the ways of producing hydrogen is through electricity, either through solar voltaic or wind or other activities like that. But I wouldn't see hydrogen being piped around to individual buildings to heat individual buildings because of the safety factors.

So there you're looking at hot water district heating as an extremely benign and safe type of technology that you can pipe into all kinds of buildings, produced at a central plant by who knows what technology. It could be a hydrogen-powered fuel cell. The hydrogen could come from Arizona, where it's produced by solar energy.

So that's how we see district energy really fitting into a truly sustainable future.

Mrs. Karen Kraft Sloan: The fuel itself that's powering the production of this warm water can be in a variety of different means.

Mr. John Stephenson: That's correct.

Mrs. Karen Kraft Sloan: I'm really—

The Vice-Chairman (Mr. Gar Knutson): Mr. Wiggin wants to jump in here.

• 1805

Mr. Michael Wiggin: I just want to say that for those who are interested, we have a video on Ouje-Bougoumou and the system there. It's available in French and in English. We also have one on the Cornwall system.

One quick point, if I may interject, is that in Ouje-Bougoumou the houses are all at R-2000 or better than R-2000 standards. They're extremely efficient. They want to use the energy as efficiently as they can at the building level and then after that use waste in the system as a whole. These are very compatible systems.

Mr. John Grey: Also in answer to your question, I think money has to be spent, but if we can put a man on the moon, we can spend that kind of money. We can do something for our maritime provinces and pick up that tremendous energy from the tides. There's no question about it. That's an area I get really excited about, because it spells no environmental problems. It's tremendous energy, and if we can do that, we would change the maritime provinces from what they are right now with the problems they have to very dynamic provinces of Canada. With cheap electrical power there is no question industry would very much go to the Maritimes instead of having the maritime people leave the provinces and go to other provinces to make money.

Mrs. Karen Kraft Sloan: I think it's the whole idea of what kinds of footprints you're leaving on the earth. This concept goes a long way towards reducing that impact, because if you're looking at an area of the country that is depending on getting fossil fuels from the Middle East or somewhere or having it shipped from the west to the east of Canada, there are all kinds of other savings that you get involved with as well: the transportation, the transportation costs, environmental costs and some of the problems with pipelines, etc. When you're undertaking a more bio-regional sort of economic development, this fits very nicely with that concept.

I've been doing some work with the green communities association on a national green communities program. They have received some funding from Environment Canada and they are working with the FCM 20% Club on ten pilot projects. This doesn't have very much to do with district energy, because the project is mostly looking at doing audits within individual homes and then doing residential retrofits. However, a community involved with the green communities program could say it wanted to pursue district energy heating. This would build capacity within local communities for these ideas.

I should talk to the chief about participating in this project. You might be interested in this, Chief, because you're farther down the road than a lot of us are in regard to this.

I'm very interested in green, healthy, smart homes. It seems to me that the internal air quality of our homes should improve. Have any studies been done on the health effects with regard to indoor air quality when using these kinds of systems? I think Canadians are more engaged in environmental issues when they understand how they impact on health, when you can show that link. I don't know if any of the witnesses are aware of any studies.

Mr. Michael Wiggin: In some of the countries, the Netherlands in particular, they're not trying to sell it on price; they're trying to sell it on the environment and the comfort. One of their biggest-selling promotional posters shows a baby in his diaper sitting in a room being very comfortable. They're emphasizing the comfort.

They have done studies on that. Because you're eliminating combustion devices in the building, there have been some studies done on air quality. I might also mention that in some places it's claimed that the insurance rates drop because you don't have combustion devices within the building. There are a number of other advantages apart from price. Because the heat is steady and even, not on and off like our forced air systems, they've found that typically people are more comfortable at a lower temperature setting, and hence they've found that there actually is an efficiency saving because people are comfortable at a different temperature.

Mrs. Karen Kraft Sloan: You probably have a decrease in asthma and things like that because you don't have to deal with forced air and ducts.

The Vice-Chairman (Mr. Gar Knutson): Excuse me. The mayor of New Glasgow was trying to get in on the discussion a couple of minutes ago.

• 1810

Ms. Ann MacLean: I was just going to mention that I think the point that this is incremental is very valid. When we were in Finland, we could see that there was very strong community support, public support. They have a 45% penetration of community energy systems.

Strong support is there not only because of the environmental benefits and the local economic benefits that we heard about around the table this afternoon, but also because they're able to deliver a very reliable and satisfactory service at a very affordable and stable price. From there, they're also seeing some of the other benefits personally from that experience in terms of health-wise benefits. So it is indeed incremental.

Sometimes, if you're trying to sell this to a community.... I was trying to sell this to my council, and the first thing I tried was to explain this technology. It's very difficult to explain it. Of course I'm also a lay person, I'm a policy person, not a technical person. From that point, if we're trying to sell it by advising them, they're certainly concerned about the environment and that would be an issue for them. The local economy issues are of concern. And what did sell it to them was that it does indeed make our province and our community more competitive because of the lower energy costs. I think it will continue to build from there.

We talked about the 20% club at our council, and the first thing asked was how we measure this and so on. The first thing we did was energy audits in our buildings, and that's moving further to district energy and so on.

So those things are incremental, but I think they need leadership. We sometimes have to put in requirements—for example, with respect to taxation if we're talking about carbon dioxide and having it tied in with carbon dioxide emissions. Those kinds of things do take leadership, because sometimes we have to put those standards in there. People are ingenious, and communities can work with the private sector to make win-win situations. It just depends how it's managed.

The Vice-Chairman (Mr. Gar Knutson): Mr. Grey.

Mr. John Grey: I think it becomes rather obvious to our honourable members when we hear about what's happening in Scandinavia and Europe, and why they are so much more advanced than we are in Canada or the States, and we wonder why. The fact is that they do not have the oil and gas reserves that we have. They have nothing. Therefore, whatever they use they have to bring in. Because of that they therefore have to look at every way they possibly can. As an example, they have fourteen different ways of producing energy in Helsinki.

The point I'm making is that here in Canada it's easy to burn our gas or burn our oil, and we feel it's there forever, while it really isn't. I think we have to wake up and realize that if we're going to meet our objectives for the greenhouse and carbon dioxide effect in Canada, we have to stop looking at it as though we have our resources forever. We will not have them for our generations to come. I think it's about time we begin to realize as Canadians that we have to have that in front of us, that we start to look at areas right now that we are not looking at but can look at.

If we're going to be an entrepreneurial type of country—which I think we can be as Canadians—we can take all these issues and can make out of them very effective methods whereby we can be the suppliers of new technology to the world, rather than waiting for new technology from the outside world to come into Canada and then taking them on. In areas where we've already done things, we've already set the example that we can provide the kind of expertise and knowledge that is not only good for Canada, but good for the world. I think we have to wake up and realize that.

The Vice-Chairman (Mr. Gar Knutson): Maybe we'll get just a final comment and then we'll wrap up.

Mr. David Pratt: Yes, I just have a very quick question.

In the brochure that we have here called “The District Energy Option in Canada”, there's a little table on page five called “District Heating Share of Space Heating, 1993”. Canada isn't mentioned in that table. It's provided by UNICHAL, and it's on district heat in Europe in 1995. Do we have any figures with respect to the district heating share of space heating in Canada at this point?

• 1815

Mr. Michael Wiggin: We're trying to accumulate statistics on what's been built. We have some systems that are large, like the Toronto district heating system. It's perhaps about the fourth largest in North America. But when we look at all the new growth and the new systems using renewable energy or highly efficient sources, add it all together and I think we're less than 3%. But we're still trying to gather those statistics. We haven't got them together yet, but right now it's quite small.

Ms. Ann MacLean: It is difficult to get a good appreciation of community energy systems until you see it.

We did study tours where we had mostly technical people. Then we realized that technical people understand it. If our policy people don't understand, or at least have an appreciation, then it is not going to go anywhere. So we've now combined more policy people, and this coming August we will be having a study tour to the Netherlands.

I would be happy to extend an invitation to the members of the standing committee. We can send you the information. Perhaps some of you may be able to participate. There will be a significant component of it on policy, and I think you would find it most enlightening.

The Vice-Chairman (Mr. Gar Knutson): Thank you very much for that.

Chief Abel Bosum: I would extend an invitation to anyone who would be interested to come and see the system. Our system is no bigger than this room. So that invitation is open to anybody who is interested.

Mrs. Karen Kraft Sloan: How long does it take to get there?

Chief Abel Bosum: Fly to Montreal, and then about an hour and fifteen minutes by another flight from Montreal to Chibougamau, and then it's a half-hour drive.

Mrs. Karen Kraft Sloan: If the committee is doing some regional travelling and regional consultations, we should raise this as an issue perhaps, if we have time in our schedule to do a field trip or something. I think it would be really useful.

The Vice-Chairman (Mr. Gar Knutson): Maybe we can make time.

Mrs. Karen Kraft Sloan: Absolutely.

Mr. Peter Stoffer: I have one very quick note.

A voice: Come too.

Mr. Peter Stoffer: I'd love to.

Rick Laliberte, normally the representative on here, wanted to say hello to the chief. He's also a Métis; he's half Cree. I just wanted to make sure I said that before we all left. Thank you. I'm picking up on him. So he just wanted to say hello and extend greetings to him.

Thank you all very much.

The Vice-Chairman (Mr. Gar Knutson): You can tell that the committee has a keen interest in this, and it's something we'll continue to have.

Hopefully we'll see some of you in the future. We'll work together and try to make it a reality. Thanks very much.

Good luck to the department. Get rid of those nuclear reactors.

The meeting is adjourned.