Proceedings of the Standing Senate Committee on
Energy, the
Environment and Natural Resources
Issue 4 - Report of the Committee
THURSDAY, June 13, 1996
The Standing Senate Committee on Energy, the Environment and Natural Resources has the honour to present its
THIRD REPORT
Your Committee, which was authorized by the Senate on Wednesday, March 27, 1996, to monitor all matters related to the implementation and application of the Act to accelerate the use of alternative fuels for motor vehicles (previously S-7), now presents its report.
Respectfully submitted,
RON GHITTER
Chairman
PROGRESS ON THE IMPLEMENTATION OF BILL S-7
Senate Standing Committee on Energy, the Environment and Natural Resources
Bill S-7 received Royal Assent on June 22, 1995. The Alternative Fuels Act directs the President of the Treasury Board to ensure that, beginning in April 1997, 50 per cent of all new vehicles purchased by government departments and Crown Corporations are alternatively fueled, where it is cost effective and operationally feasible to do so. The percentage of alternatively-fueled vehicles in the government fleets is then to be increased gradually until it reaches 75 per cent by fiscal year 2004. After the 2004 goal is met, AFVs must make up at least 75 per cent of new vehicle purchases in subsequent years.
The Treasury Board is also charged with developing the regulations which will govern the implementation of the legislation. Of particular importance will be the definitions of "cost effectiveness" and "operational feasibility" as set out in the legislation. We are anxious to get this information. A very narrow definition could open loop-holes in the legislation which would frustrate the spirit of Bill S-7, while the broadest possible definition will result in greater use of AFVs.
The Treasury Board has addressed some of these concerns by gathering more information, which seems to be holding up the fleet conversion process, especially when there are already numerous studies and a great deal of practical experience with AFVs, outlining their economic and environmental benefits. Nonetheless, the Committee is pleased to note the spirit of Bill S-7 appears to have been incorporated in the Board's updated federal fleet policy and guidelines (FleetWise: A Manager's Guide to Greening the Fleet). The effective implementation of Bill S-7 requires that fleet managers look at full life-cycle costing of proposed vehicle purchases, since AFVs have a higher up-front cost, with the savings only being realized over the operating life of the vehicle. Existing practices, which consider only capital cost in determining the most cost-effective purchase, obviously favour gasoline powered vehicles. The above noted guidelines remedy this disparity by recommending the use of life-cycle costing practices.
Even though the new guidelines have been published, their adoption and implementation has been far too slow, as has the progress on the regulations. Until these regulations are finalized, fleet managers are reluctant to move towards the greater use of AFVs.
The Committee is of the opinion that for departments to reach the 50 per cent target on time, an increase in the number of alternatively-fueled vehicles must be achieved each year, and plans must be made now as to how each department expects to comply with the legislation. Since the passage of Bill S-7, the Committee has held a number of hearings to review the progress of its implementation. The Committee has also sought details from each department as to the progress which has been made. The next fiscal year, in which 50 per cent of new vehicle purchases must be AFVs, begins on April 1, 1997 and unless a good start has already been made, it will require a Herculean effort to meet the target.
Table 1 is a compilation of the responses received to date from the departments. It is clear from the Table that not all departments have yet responded to the request for information, even though they have had several months to reply. As a result, we are very concerned by the lack of action by so many departments.
Departments have noted that they are buying fewer cars than in the past as they attempt to better manage their fleets, allowing less opportunity for the purchase of alternatively-fueled vehicles. The Committee applauds the efforts to improve the management of the federal fleet and feels that the discussions which accompanied the passage of Bill S-7 helped bring this important issue to the fore. The reduction in the number of cars in operation is the surest way to reduce atmospheric pollution and to save the taxpayer's money. However, it is still important that, of those vehicles which are being purchased, the proportion of alternatively fueled vehicles increase at least as rapidly as specified in Bill S-7.
It is particularly distressing to see the difficulties that the Royal Canadian Mounted Police (RCMP) is having in switching to alternatively-fueled vehicles, since this agency, with some 7,500 cars and small to medium sized trucks, operates the largest fleet in the federal government. They represent about 20 per cent of the total federal fleet. Representatives of the RCMP appeared before the Committee and their testimony was disturbing.
In other testimony, the Committee heard from the London Police and the Niagara Regional Police, both of whom operate large fleets of propane-powered patrol vehicles. These two forces have been using propane-powered patrol cars since the early 1980s and report that the acceleration rates are more than adequate, fuel supply is not a problem and that they save significant sums of money every year by operating their patrol vehicles on propane. The Niagara Regional Police report savings of up to $200,000 annually due to the operation of 80 propane powered patrol cars. In London, the police estimate that, over the 160,000 km life-time of one of their propane powered patrol cars, they can save nearly $9,000 per car. With 92 cars using propane, the London Police estimate that they have saved taxpayers nearly $2 million in the last decade, with no reduction in effectiveness of their policing efforts.
It is hard for the Committee to understand why the RCMP feels it is necessary to "reinvent the wheel" by carrying out their own lengthy studies, when such data are already available from other police forces. While the Committee is pleased to note that the RCMP has belatedly begun to develop plans for implementing the provisions of the Alternative Fuels Act, we intend to recall them again in the future to ensure that they continue, and accelerate, their progress.
The Committee feels that one of the barriers to more rapid expansion of the alternatively-fueled fleet is that members of the federal Cabinet do not seem to be promoting the initiative. Cabinet ministers should be leading by example and having their vehicles converted to alternative fuels. In fact, all Ministers have received offers from both natural gas and propane suppliers to convert their vehicles. To date, only three ministers have converted their vehicles to operate using alternative fuels. The Committee urges that others follow their example, to underscore the government's commitment to the legislation.
As the first Alternative Fuels Act target date of April 1, 1997 approaches, this Committee will again be calling departments and agencies to appear before us and discuss their plans and their progress in achieving the 50 per cent goal. We urge the Treasury Board to finalize the regulations and to speed up the implementation of its new fleet management regime. We hope that when the Committee next reports on this subject, we will be able to discuss the remarkable progress which has been made.
RON GHITTER
Chairman
| DEPARTMENT/AGENCY
|
# OF VEHICLES IN OPERATION
|
# OF ALT. FUELLED VEHICLES
|
# OF VEHICLES PURCHASED IN 1995-1996
|
# OF ALT. FUELLED VEHICLES
|
# OF VEHICLES TO BE PURCHASED IN 1996-1997
|
# OF ALT. FUELLED VEHICLES
|
|
| Agriculture and Agri-Food
|
2196
|
10
|
104
|
2
|
186
|
TBD(3)
|
|
| Atlantic Canada
Opportunities Agency
|
NR(4)
|
NR(4)
|
2
|
0
|
0
|
0
|
|
| Citizenship and Immigration
|
185
|
0
|
13
|
0
|
8
|
TBD
|
|
| Finance
|
3
|
0
|
1
|
0
|
0
|
0
|
|
| Fisheries & Oceans
|
1751
|
7
|
164
|
0
|
TBD
|
TBD
|
|
| Foreign Affairs & International Trade
|
NR(4)
|
NR(4)
|
125
|
125(1)
|
125
|
125
|
|
| Human Resources Development
|
474
|
0
|
48
|
0
|
8
|
some
|
|
| Indian Affairs & Northern Development
|
NR(4)
|
NR(4)
|
33
|
1
|
20
|
some
|
|
| Industry
|
NR(4)
|
NR(4)
|
47
|
0
|
29
|
6
|
|
| Privy Council Office
|
2
|
0
|
1
|
0
|
0
|
0
|
|
| Labour
|
21
|
0
|
4
|
0
|
1
|
0
|
|
| National Revenue
|
NR(4)
|
NR(4)
|
38
|
0
|
36
|
min. 6 up to 15
|
|
| Natural Resources
|
617
|
63
|
20
|
4 OEM(2) 7 converted 6 to be converted
|
10
|
10
|
|
| Public Works Government Services
|
NR(4)
|
NR(4)
|
9
|
0 (14 older cars converted)
|
19
|
TBD
|
|
| Transport
|
1918
|
27
|
167
|
0
|
100
|
some
|
|
| Treasury Board
|
2
|
0
|
0
|
0
|
1
|
TBD
|
|
| Veterans' Affairs
|
38
|
0
|
6
|
0
|
3
|
TBD
|
|
| Western Economic Diversification
|
NR(4)
|
NR(4)
|
0
|
0
|
2
|
2
|
|