Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 9 - Evidence, February 27, 2003
OTTAWA, Thursday, February 27, 2002
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 8:30 a.m. to examine and report on emerging issues related to its mandate (implementation of the Kyoto Protocol).
Senator Tommy Banks (Chairman) in the Chair.
[English]
The Chairman: This morning, in our continuing study of the matters that have been referred to it by the Senate, this committee will be hearing from witnesses from Natural Resources Canada. We welcome back Mr. Neil MacLeod, Director General of the Office of Energy Efficiency, who was with us earlier this week. We hope that the information we get from you this morning will be as useful to us as the information we got from you on Tuesday. We also have Ms. Colleen Paton, Director of Outreach and Communications Services, the Office of Energy Efficiency. I am assuming, Mr. MacLeod, that you have an opening statement.
Mr. Neil MacLeod, Director General, Office of Energy Efficiency, Natural Resources Canada: Mr. Chairman, what we intend to do this morning is give a brief outline of what the Office of Energy Efficiency does. We touched on it the other night, but I did mention I would be coming back before you. Specifically, toward the end we will be focusing on the one-ton challenge and how the Office of Energy Efficiency can contribute toward that initiative.
I will give the first part of the presentation and then my colleague, Ms Paton, will give the rest.
I presume we all have a slide deck in front of us. Slide two simply gives the outline, which basically repeats what I just said. Slide three puts in context where our greenhouse gas emissions are by sector. Often, we see this broken down by sector in different ways. Sometimes we see only carbon dioxide; sometimes we see all emissions, which this is; sometimes, oil and gas is put in with industry. There are different ways you can look at this pie.
Often, the electricity emissions manifest themselves in some of the other sectors — for example, in the housing sector or industry when they use that electricity — but we have pulled it out so you can see electricity by itself.
The Chairman: Is that electricity generation?
Mr. MacLeod: Yes.
Senator Christensen: Could it be coal?
Mr. MacLeod: Coal or natural gas, yes.
Slide four summarizes the five ways you can reduce greenhouse gas emissions. Starting at the top, you can become more energy efficient. If I can use the analogy of a home, it perhaps helps explain this. To be more energy efficient in your home, you could replace your furnace with one that is more energy efficient. You could keep it at the same temperature but use less energy because your furnace is more efficient.
If you go to energy conservation on the chart, you could keep the same furnace but turn it down a few degrees. That way, you use less energy and produce fewer emissions. You can use the same analogy for fuel-switching. If you switched your furnace from oil to natural gas, it would result in fewer emissions.
Another way to reduce greenhouse gas emissions is sequestration, where you actually sequester the carbon, either in soils or through having more forests for sinks. The last one, non-energy, is a catch-all that includes emissions from the use of fertilizers or emissions from landfill gas.
These are all the ways you reduce emissions. We primarily are involved in energy efficiency, but also in some conservation initiatives and fuel-switching.
In the Office of Energy Efficiency, there are efforts that go back about three decades. They have gone up and down during that period, but there has been a renewed interest in recent years. There has been an increased commitment to energy efficiency because it is an ideal way to reduce greenhouse gas emissions. We target all energy consumers and producers; and we put a big emphasis on partnerships when we do it.
Slide six illustrates the main instruments we have for transforming the market and improving energy efficiency. One is financial incentives. We can give companies or individuals money to do something that is smarter in terms of energy efficiency. We can regulate. Again, as I pointed out the other night, Canada has one of the strictest regulations in the world. We have voluntary programs, particularly our programs with industry. These are not hands-off programs; they are hands-on programs. We run dedicated workshops customized to the industrial sector. We have specific workshops for the rubber industry, for example, that differ from those for the food and beverage industry.
We showed leadership, particular by our House in Order. I know two of my staff — Jim Comtois and Tony Taylor — were here last week to give a presentation on House in Order. We have some public information programs as well, for those who want to know how they can do more.
Slide seven is self-explanatory. I mentioned that we cover all sectors of the economy. That basically lists all sectors of the economy, or most of them.
Slide eight refers to the one-ton challenge. I know the focus today is on the average consumer, so I will touch only briefly on things that hit businesses and industries more. This is our main program for industry. It is called the Canadian Industry Program for Energy Conservation. This shows the results from the many associations and companies — there are now 23 major industrial associations that are part of this large family.
From 1990 to 2001, while GDP was up 35 per cent, energy use was up by only 7 per cent. Energy intensity showed a 2.1 per cent actual annual improvement; namely, it has gone down. Emissions are 3 per cent below 1990 levels for companies and industries involved there. That gives an indication of the savings.
In slide nine, we talk about our new housing. We have an objective in the Kyoto plan that all houses will be built to the R2000 standard by 2010. We support that through training. We certify houses and we develop new technologies because it is an evergreen standard. We improve it over time.
We are embarking on a major homebuyer information program; and we are supplementing this with Energuide label. I know many of you have seen it on appliances over the years. We now have a program for existing houses that we will be starting to put on new houses on a voluntary basis.
We support codes' development and adoption by the provinces. Building codes are the jurisdiction of the provinces, so we really need to work in conjunction with them.
For existing housing, we have an ambitious objective — to have 20 per cent of the existing housing stock retrofitted by 2010. It is great to have a program for new housing; but well over 85 per cent of the houses that will exist in 2010 are already built. That is why we have to supplement our efforts with an initiative for existing housing.
Our major initiative here is called the Energuide for Houses Evaluation Tool. We have many partners in various regions across Canada. Our delivery agents will go to the homeowner and get an audit done. Natural Resources Canada subsidizes that; we pay for one-half, approximately $150, and the homeowner pays the other half.
There is a rather sophisticated software application package that takes all the data in and gives homeowners a list of all the improvements they could make. These are listed in order of priority, in terms of the biggest bang for the buck. They will not be stuck with a general list of what to do; instead, they will find out, perhaps, that the smartest thing they could do is to put more insulation in the attic or install different windows.
They get a label after. Just as we have a label for appliances, there is a label for houses on a scale from zero to 100.
If they choose to get some work done, at no charge after the work is done, we will go back and do a follow-up audit so they can see the consequences of their work on the rating of their home.
We are in the plan. One of the items for consideration for funding out of this budget is that we could actually have an incentives pilot. Right now we are simply not funded to do the work that has been identified in the audit. We would pilot an incentive where the more energy savings work that was done, the greater the incentive would be. That is something that is in the works.
We also have an aggressive target that all new buildings will be 25 per cent better. The acronym in the documents stands for the Model National Energy Code for Buildings, by 2010. There are a few acronyms on that page. CBIP stands for the Commercial Building Incentive Program. I believe I alluded to that the other night. IBIP is the Industrial Building Incentive Program. These incentives encourage the efficient design of new buildings. We base assessments on performance; the better you perform, the more you get. Clearly, we need a cap. These programs integrate different kinds of energy uses.
We have design tools that we develop. We train the architectural community. That is a big part of this. We are not just giving out incentives to those who build these buildings. It is important to train the architectural community, which is where these initiatives are started.
We support energy code development and adoption by the provinces. We do this federally in conjunction with our colleagues at the National Research Council.
The subject of existing buildings is also important. I mentioned that with houses. With buildings that is even more dramatic. About 90 per cent of the buildings that will be standing in 2010 are already built. It is important that we make some inroads with existing buildings as well.
We have over 30 per cent of the sector based on floor space, in the program at present. Our services to them are financial incentives. We encourage energy efficient retrofits. Once again, the more they do, the more they get. We try to provide a strategic kind of incentive.
We also have technical information. We plan these things as well. This is a hands-on activity. We have some results thus far. We know we will see $30 million a year in savings. We measure all our results. We know that that represents an average savings of 20 per cent. There has been a big investment on the part of the private sector. We get good leverage. We know we have already saved half a megaton, approximately.
The other night I touched on what we do with our regulations. We do have equipment standards. We have minimum energy efficiency standards. We improve these over time. Currently, we will have 31 regulated products in all sectors of the economy. That represents more prescribed products than any other country in the world.
The graph in the documents uses a light bulb as an example to give you an indication of the impact of our regulations on the industry. This is the energy used by a refrigerator. The watts are on the vertical axis. Honourable senators will see that, in the 1970s, the wattage figure was almost 200. It has come down on average, because of our regulations in 2002, to 66. That is a dramatic difference. That is the average in 2002. However, if we look at best in 2002, a product that would get our energy star rating is even lower, down around 50 watts.
With regard to equipment labelling, it is mandatory for some, voluntary for a few other areas. We cover all major housing appliances in heating and cooling and some industrial equipment as well.
This label has good recognition. However, we have discovered, as have other countries, that when we put an Energuide label on all appliances that is useful, but what is even more useful is if we also use the energy star label. That is great to look at all these Energuide labels with all the numbers but they can see right away, what is the best in the class?
We have recently introduced the energy star label. We have been involved in the last year and a half, as part of our action plan 2000, in marketing and promotion. We have piloted a few subsidy programs in the Yukon. We have piloted a few incentive programs. We have undertaken some major advertising campaigns as well.
On the next slide we touch briefly on what we are doing in transportation in regard to vehicle fuel efficiency. We have standards that match the U.S. levels, but basically they have not changed since 1980s.
The other night I noted that, in terms of our target, we do want to look at what is going on in the United States. I mentioned that there is a proposal there for about a 7 per cent improvement in the standard for light trucks. There is a possibility that that will be spread to passenger cars. Those discussions are ongoing within the U.S. Congress.
In terms of fuel efficiency, there are many factors that contribute. We would be 15 per cent lower if the vehicle weight and performance had stayed at 1988 levels. However, because there are heavier cars now, that has not happened. There are new technologies that promise greater efficiency gains. I touched on a few that had been announced by major automobile manufacturers. There is one called ``displacement on demand'' where the cylinders use the fuel only if they need it. According to one major company, that will show an improvement of up to 20 per cent alone.
Based on what has been achieved so far, which is about an 8 per cent improvement, based on what likely will happen in the United States, and based on what the new technologies really show promise of achieving, we have a target of 25 per cent for 2010.
We have further initiatives with personal vehicles. The Energuide label of which I spoke in regard to appliances and housing, we now also put on new cars. That goes on the back label of a new car. We have added a little extra in that we not only put the consumption levels, but also, based on the typical gasoline price, we display the typical number of kilometres driven during the year and what that will mean during the year as to how much it will cost to fill up that car with gas. When the consumer is comparing two cars, they can see that one will cost them $1,100, while another will cost them $700 over the year. They get a much more direct idea of the different impact of fuel consumption.
We also have a major training program. We provide training modules for driving schools across the country. There are 125,000 new drivers who are trained and that training includes our energy-efficient driving module.
With regard to fleets, because this does not pertain so much to the average consumer, we are working in partnership not only with the trucking association, but also with major fleets. We do this because the trucking association covers only about 40 per cent of trucks on the road. We also work with major fleets in terms of setting up training programs for them. Much of their interest is to reduce fuel costs, which is fine, because if we can get a win-win situation, that is ideal.
In terms of alternative fuels, we continue our support for natural gas. We have an ambitious target for ethanol increase in this country. In terms of fuel cells, these cars are coming. The only question is how soon and when? Given that the auto industry is putting major investments into the fuel cell within the vehicle, one area that has received less attention is how the fuelling infrastructure will operate. Through Action Plan 2000, we will set up four demonstrations with the industry to show that it is all well and good to have this fuel cell vehicle, but if there is no way of getting the fuel into it and distributing it, we will not be too far ahead. The emission reductions here are enormous. Most companies acknowledge that it is only a question of when this goal will be met.
Lastly, we have a major outreach initiative that touches on the one-ton challenge. I will stop here and ask Ms. Paton to continue.
Ms. Colleen Paton, Director, Outreach and Communications Services, Office of Energy Efficiency, Natural Resources Canada: Honourable senators, our outreach program in the Office of Energy Efficiency, is centred on getting information out to a broad Canadian audience. We distribute about 2 million publications each year to Canadians about all aspects of energy efficiency. We have brought some of those publications with us this morning; we have left them with the clerk. In these documents, honourable senators will see examples of the kind of materials available.
Mr. MacLeod mentioned the fuel consumption guide that helps consumers compare the fuel consumption ratings for vehicles across the full spectrum of vehicles available in the Canadian market. We have a similar guide for appliances. We also have guides on how to caulk and weather strip windows and doors, what to know and be concerned about with regard to your furnace and your cooling systems, et cetera. There is a fair range of subjects. These are popular publications that are distributed directly to the Canadian public through a 1-800 service and through partnerships. We participate in about 100 different exhibit venues throughout the year. We are at home shows and regional fairs to promote the concept of energy efficiency and to provide information. About a half million visitors come to our Web site for these publications that are available on line as well and for other information on energy efficiency.
Through Canada's Energy Efficiency Awards, we recognize innovation in energy efficiency across all sectors. In fact, we are in the process of finalizing the announcements for the 2003 award winners, showcasing or featuring about 17 different companies across the country that have taken action on energy efficiency and climate change with real and substantial results.
We work through promotional partnerships with retail chains, electricity utilities and others to promote energy efficiency and to ensure that information gets out to the Canadian public.
We also invest in youth and education initiatives, youth as ambassadors for the future and also to lay a foundation of knowledge and understanding about climate change and energy efficiency. Our Energy Ambassadors Program selects 20 energy ambassadors from post-secondary campuses across the country, from both colleges and universities, who are studying in related fields and who have taken action to put energy efficiency and climate change initiatives together on campus. These students act as ambassadors for us. They take part in regional events. They tend to work in the field. They work with our stakeholders, our partners and with us.
The slide mentions the energy and environment calendar, which is a Grade 4 to 6 initiative. In the pan-Canadian science curriculum, there is an opportunity to teach students at that age group about energy efficiency. The calendar contest is a way to engage those students, have them draw pictures and submit them on a provincial level. The provincial and territorial winners are featured in a national calendar.
The one-ton challenge was proposed in the climate change plan in response to what we are hearing from Canadians. We see through all our research that Canadians support action on climate change: 80 per cent of Canadians are very much aware of climate change, and 75 per cent of Canadians support ratification. That is a polling result from just before Christmas.
However, they have also told us they need and want information on how to do their part, and they want to know that everyone else is doing their part as well. They are particularly interested in what government, business and industry are doing, as a foundation for their own actions.
As we talked to stakeholders, business and industry through the year last year, it became clear that business and industry wanted to see in the climate change plan a call to action on the part of consumers. They want consumers to share a part of the burden and for some of the government effort to be directed directly to the Canadian consumer to try to engage them in concrete action.
Provinces and territories have repeatedly identified outreach as an important component of their own efforts on climate change as they begin the process of developing their own plans.
We are still in the planning stages for the one-ton challenge. It is intended to build on existing programs and public education and outreach activities. The strategic approach that is outlined on the slide is a values-driven, social marketing approach that will promote climate-friendly living as the right thing to do.
There are four integrated components. We are looking at a high-profile advertising and promotional campaign to engage Canadians everywhere in the country, and at a high level. To supplement or to build on that broad awareness, we will be looking at promotional initiatives and partnerships with our stakeholders and clients across the country, and certainly across governments. We want to present a unified campaign to the Canadian public and to lead them to the programs such as those that Mr. MacLeod has noted this morning where there is assistance for Canadians to take action.
Regional outreach projects will build on some of the outreach activities we now have in place. We have invested in over 200 community-based outreach projects on climate change. We will be using those partnerships to further outreach to Canadians and try to engage them in this issue. We will be investing in youth. We have begun looking at the information materials available across all grade levels in the school system to try to develop materials that will help young Canadians understand climate change, the need to act and the opportunities to act, as they leave school and enter the marketplace.
Our target for the one-ton challenge is all Canadians. We have 11.7 million Canadian households with 2.6 people in each household on average, and an average of 13 tons of greenhouse gas emissions from that household. We have actually about five tons of emissions produced as a result of each person's daily activities: 50 per cent from our transportation use, 29 per cent from space heating, and then from there the other amounts are really caught up in water heating, lighting, and appliances.
The opportunities to reduce are many and varied. The opportunity exists across the country, but the results are somewhat different depending on the energy source and province. I have included examples here.
For example, if a mid-size car reduces idling by five minutes a day, you could see 0.2 of a ton and about $47 in savings as a result of that activity. If it is a larger car, the result is higher. If it is a smaller car, the result is lower. There are those variables to consider.
In a province like Nova Scotia where the electricity source is coal, if someone were to dispose of the basement fridge, the beer fridge, you would see a saving of 0.4 tons and over $100 in savings, but that would vary. In Quebec, where hydro is the source for electricity, the results are different.
It will require some thinking on the part of Canadians to see what kinds of activities will help reduce the greenhouse gas emissions. As a third example, if you replace a natural gas furnace with a high efficiency unit, you can see substantial savings, 2.3 tons, a good return on investment and a reasonable payback on the furnace.
We are analyzing each of the measures that Canadians could take and also developing the tools that will help them see what the results could be. That will include things such as on-line calculators or some paper version checklists, depending on the preference of individuals. They can see what the result will be should they take certain actions.
Finally, we have tested the concept of the one-ton challenge with Canadians recently. We held some focus groups across the country. We did 12 focus groups in six cities to see whether there was support for the idea and to get their advice on how we might go forward. There was clear support — in fact, almost unanimous support in all focus groups. Very few people said this was not a good thing to do. Canadians are willing to share the burden. They definitely want us to show them and tell them that government is taking action, business and industry are taking action, and there are some results there. With that as a base, they are interested in our helping them and telling them what they can do. In fact, we heard repeatedly, ``Tell me what I can do. Give me some practical suggestions. Give me the tools that will make it happen.''
They also provided some advice, telling us to work through partners, to provide lots of information materials, and to ensure that there is some high-profile, visible effort that shows them that everyone is working on this cause. Many pointed us to television and other media to ensure that the message gets out and reaches them, as well as having a strong Internet presence.
Partnerships will be key to the success of the initiative. That is certainly what we heard in the focus groups. We have many of those already in place through our programs. We are now talking across the federal government with other departments to see how we might use existing partnerships as a basis for a cohesive and integrated effort to reach out to Canadians on climate change.
We are also talking with provincial and territorial governments. We have existing partnerships in the outreach area with many of them. Our plans at this point will be to continue to work closely with them to further the results of this sort of effort. We will be partnering with associations, business, industry and interest groups to deliver clear, consistent messages to Canadians and to help them take action.
Mr. MacLeod: Mr. Chairman, we are open to questions, but perhaps before we start I could make a comment on the beer fridge issue. It has been pointed out to us that one of the paradoxes of what we do is that as we promote the acquisition of energy efficient refrigerators. Sometimes the consumer will buy one, but then take that old electricity- guzzling refrigerator and, instead of throwing it out, put it in the basement and keep it plugged in seven days a weeks, 24 hours a day, to keep six bottles of beer cold.
Paradoxically, therefore, we have actually increased emissions because at least before they only had one and now they have two. We decided to get a pilot going with our colleagues in the Yukon, where when a consumer buys an Energy Star refrigerator, we pay a small incentive supplement to remove the old refrigerator. In fact, we are working with environmental groups so that when that old one is removed it is taken apart and any parts that can be recycled are. We are keeping our eye on that pilot and we will see what happens there.
The Chairman: Recycled but one hopes not put together to make another old fridge.
Senator Cochrane: When will all this take place, or has it already begun?
Mr. MacLeod: Most of what I talked about has already begun. The Energuide program for houses is in place and the incentive programs for both new and existing buildings are in place. Most of this has started. In a few cases I have indicated it is prospective, but much of what you heard about is in place now.
Senator Cochrane: Since when?
Mr. MacLeod: One of them, the voluntary program with industry, has been around for 25 years, but it slowed down a lot during the 1980s and we picked up again in the early 1990s. About three-quarters of what is here is less than five years old. About half of what is here is only about a year old. Half of what is here came through the government's Action Plan 2000, which was passed about two years ago.
Senator Cochrane: What about the R2000 homes?
Mr. MacLeod: The R2000 home is next to the industry program. It has been the longest, since the early 1980s. Throughout the 1980s, one of the difficulties was, and customers reported, that maybe you were saving energy but it was not good to have an airtight house. We added a major ventilation component around 1990. It has been around since the early 1980s, but there have been significant improvements since.
Senator Cochrane: Can you give us a sense of how many R2000 homes are built each year in Canada?
Mr. MacLeod: Currently we are running at about 600.
Senator Cochrane: Now?
Mr. MacLeod: Right.
Senator Cochrane: Can you go back? What about the 1980s, because that is what I remember?
Mr. MacLeod: I do not have the historical numbers now. We can certainly get them for you.
Senator Cochrane: Have they increased very much?
Mr. MacLeod: No, they have not. What is happening with the R2000 program is there is an element of having the homes built and certified, which we do, but we also provide on a cost recovery basis training to builders to become able to build these more energy-efficient houses. We have seen, as the R2000 program became more and more known and we trained more builders — looking not just at those houses but the average new house built — there was a major step up in the efficiency of all new houses about six or seven years after the R2000 program started. The builders learned a lot of stuff in how to build an R2000 house. They did not always build them but they put a lot of those attributes into other houses.
Senator Cochrane: It is common with new technology to keep improving. Since R2000 homes are so energy efficient, what can we do to inspire people to build more energy-efficient homes?
Mr. MacLeod: Some things I went through are in place but others we are proposing. One of the proposals that will be considered in the new money from the recent budget is an actual incentive program. There are two things. We are embarking on a major marketing program for the consumer showing them why this is a valuable thing and trying to correct some stereotypes. Of those who know about R2000, there is still a sense that this is the old original R2000 that was not so healthy, but the R2000 home is not only more energy efficient, it is also a healthier home because there is regulated ventilation. There will be a major marketing program aimed at the consumer, and also we are proposing, from money out of the new budget, that there be an incentive program so we can give a financial incentive to consumers who buy these houses. That will have to be decided among all the possibilities for the new money.
Senator Cochrane: Will that sort of information be the same marketing strategy that Ms. Paton was alluding to for the R2000 homes?
Mr. MacLeod: Those two things would fit hand in glove together.
Senator Cochrane: You discuss policy instruments for market transformation and there are financial incentives. This is on slide 6. Would you elaborate on the financial incentives?
Mr. MacLeod: They take place currently in three forms: one in the housing sector and two in the building sector. In the housing sector, the Energuide-for-houses program that I mentioned, if we had no incentive this would cost the homeowner $300 but we initiated an incentive by paying 50 per cent of the cost, so instead of the $300 the homeowner pays only $150. As well, in some cases our delivery agent will discount it further.
Two, in the building areas, for builders of new houses, if the building is sufficiently better than our model code we give a financial incentive that equals double the average annual savings. If you will save $20,000 a year by having designed this better, we will pay an incentive of $40,000.
Senator Cochrane: Is that going to the contractor who is building the home?
Mr. MacLeod: It is going to the architect, who passes it on to the person who will own the building.
We have officers with this job. We have an officer working with the hotel association, with the hospital association, education, and retail association, so that we can get at existing buildings. We target building owners who could make retrofits and try to encourage them to make the building more energy efficient. If they do we pay them a financial incentive again and once again we base it on the energy savings. The more they save, the more they will get. Of course we cap it; not only per building but also on a company level so we do not wind up giving all the money to just one company. For new and existing buildings we have direct financial incentives to those that make energy efficiency improvements.
Senator Cochrane: How are people informed about this program? How do they know about this financial incentive that the department is about the give them?
Mr. MacLeod: They know about it through our marketing activities. This is one program that is less than five years old. Although we spend money on marketing, we mix the amount we spend on marketing with the amount we can spend on the incentives so we can actually afford to get some of these things done. We do awareness surveys of the program and we have found that it is definitely increasing over time, but there is still a way to go.
Many of these things take time. As I am sure you know, when the blue box program first came out there was little take-up and often confusion. Now, however, for many householders it is a natural part of their way of life.
We are encouraged that the amount is increasing over time and we will be continuing our marketing programs on that point.
Ms. Paton: The Energuide for houses program is delivered with partners across the country as well. Those partners do direct marketing within the geographic area. For example, the delivery agents for the evaluations in any given city will do local advertising, go to local events, and work with local media to ensure the public is aware. In fact, this past week someone mentioned that they tried to book an Energuide-for-houses evaluation here in Ottawa and they are on the waiting list because the local agents have been quite successful in attracting attention to that. Their efforts as well are a large part of the success of the program.
Senator Buchanan: I know some people who tried the program. Is the $300 a pre-determined price set by the government and the inspector?
Mr. MacLeod: No, it is a typical average price that it would cost if there were no subsidy. As it has turned out, since the program has taken off, it has turned out to be on the high end, so if anything we are subsidizing more than half. We have cases where a delivery agent, instead of having a nominal price of $300, which is then only $150 because we have paid them $150, have decided to discount it because their business is booming. Therefore, they are sometimes offering it at a net cost of only $50 or $75 to the homeowner. That is up to the individual agent.
Senator Buchanan: Are these private inspectors licensed by the department throughout the whole country?
Mr. MacLeod: They are.
The Chairman: I will later ask why they will discount if business is booming? That is backwards from the normal business practice.
Senator Eyton: I should declare my colours. I oppose the ratification of Kyoto, and spoke against it. I am sceptical of the surveys that you referred to confidently. In general, I think those surveys pose soft questions and do not put it in the context of cost or personal effort.
I use one example, and that is the hybrid or efficient small cars that are available now. They simply do not sell, either in Canada or the U.S. Those are consumers that are making their own choices, recognizing the benefits but saying, it is not for me. I think the surveys are suspect, let us say.
At the same time, I support the programs you are talking about. Obviously, they are good and beneficial, and I would like to see them progress. However, there is a bewildering array of initiatives in your presentation, and I will ask you to speak to a couple of elements of it.
First, what kind of budget are you working with, what kind of personnel do you have to put it in place, and where do you think that is going in terms of achieving success with these various programs? Second, how are you working with the provinces, municipalities and industry — all your correspondents on the other side? Are you having good co- operation there? Do they have the right budgets and personnel to interact and implement?
All these initiatives leap over constitutional lines. The federal government has certain responsibilities. However, most of what you are talking about has to do with the provinces and their regulation, and the municipalities and their area of jurisdiction.
How are you going to do all this, and how are you working with the other jurisdictions so that these programs are effective?
Mr. MacLeod: You prefaced that with asking questions about our budget and personnel. Our current annual budget is $65 million and we have 250 staff.
Many of these programs are popular with Canadians and with companies for a variety of reasons. Whether or not greenhouse gas emission reductions are number one on their list, there are other advantages as well. With energy efficiency, you cut your energy costs and that helps the bottom line for many.
How are we working with the provinces? We have partnership agreements now with many provinces — in some cases, with the government departments themselves and in others, with the utilities. I could give you a few examples.
B.C. Hydro thinks the program that the previous senator asked me about — retrofitting existing buildings to make them more energy efficient — is such a good one that they have agreed to pay 50 per cent of the cost of that incentive within British Columbia. We can effectively double our reach in British Columbia because each retrofit now is costing us only half as much. As a result of that agreement, B.C. Hydro has set up an office and asked one of our officers to spend one week out of every month there to ensure the partnership works.
You are right that many of these activities are within provincial jurisdictions, and building codes is one. However, the province of Nova Scotia has asked us to set up a federal-provincial group to look at improving the building codes, because they think it is a smart idea. They have overtly supported the move towards more energy-efficient building codes in that province.
We have heard similar things from other provinces. Even when the provinces have not moved on all buildings, all three governments in the Prairie Provinces, including Alberta, have agreed that any new buildings they build within their provincial operations will be built to the standard for our new energy efficient incentive program. It is called the Commercial Building Incentive Program, or CBIP; and those provinces actually now use that acronym in stating their intention to build their new programs to CBIP standards.
Senator Eyton: It seems that you have certain targets. To reach those targets, the important provinces — and I do not mean to belittle anyone — are Ontario, Quebec, Alberta and, perhaps, British Columbia. The first three are the leaders, so I am interested particularly in dealing with Quebec, Ontario and Alberta.
Mr. MacLeod: Let me address those three, then. The province of Quebec has a ``nouveau climat'' program to encourage their new homebuyers. They have asked to put the R2000 program as part of that, so they can show new homebuyers that this is the smart thing to do. We have agreed.
Gaz Metropolitain in Quebec has said, we want to be involved in the Commercial Building Incentive Program. You give them the money; we want to top it up when they reduce the use of natural gas. Therefore, we have the Quebec utility, Gaz Metropolitain, using a federal program as a decision tool as to what to subsidize in the province of Quebec. They are doing that actively now. Our incentive program for institutional buildings is actually done through l'Agence d'efficacité énergétique in the province of Quebec.
In Ontario, in late November, the Ontario government decided it would incent the purchase of more energy-efficient appliances in the home. The yardstick that the Ontario government will use is the federal government's Energy Star Program. When consumers in Ontario buy something that we have certified federally as Energy Star, they get the incentive from the province.
In Alberta, an organization named Climate Change Central is a joint public-private organization funded by the Alberta government and private sector interests. I have had a number of meetings with Climate Change Central. They have indicated a variety of areas where they also want to partner with us and those discussions are ongoing.
Senator Eyton: You are tackling, and apparently achieving, a lot with $65 million and a few hundred people.
Mr. MacLeod: Over half came from the recent Action Plan 2000. The new Treasury Board requirements for accountability for what you achieve for that were put in place just before. Our Treasury Board submission details all of the accountability for the results, lined up with the amount spent. It is a 1,500-page-long, detailed, intricate document, full of performance measurements that have to be met, and we monitor this all the time. There is a rigorous accountability framework in place to guide the management of those initiatives.
The Chairman: I will put in your mind — and I will come back to this later after we hear from other senators — to pursue Senator Eyton's point. It happens, by accident, that I know a little bit about marketing. I was largely responsible for the fact that, at one point, a certain grocery retailer in Alberta had 75 per cent of the gross business. It was the subject of a law that reduced that by fiat, a thing with which I vehemently disagreed because they were punishing successful business. However, never mind that.
Just to be argumentative and rude, if I had four guys — advertising barracudas — and $65 million a year, I could convince everybody in Canada that if they did not have purple hair a safe would drop on them and they would be social pariahs.
I will be coming back to you on the barracuda nature of the marketing that you are doing. All this will depend on convincing the consumers. You can convince builders, retailers and everyone else, but if the consumer is not absolutely convinced that they must do this or something terrible will happen to them, individually, it will not work.
Senator Spivak: I wish to pursue the question of how you will do this. You might be successful with a small part of the population. For example, I do not know why I have not heard you mention the employer-provided-parking tax benefit. Why is that not translated into employer-provided transit passes? That has been recommended by a number of organizations, but that was not in the budget. I do not know if you are pursuing that at all. What percentage of emissions do cars make up?
Ms. Paton: Transportation is 25 per cent of all overall GHG emissions. On a personal level, it is 50 per cent of the 25.
Senator Spivak: That is a huge portion. My other question is: In the last few months or so, Congress has neglected to place SUVs and light trucks in the reduction-of-emissions category, is that accurate?
Mr. MacLeod: I believe that is true for pickup trucks, but not for SUVs.
Senator Spivak: Are they recommending that at this point? Has that motion passed?
Mr. MacLeod: The procedure in the United States is that Congress instructs the DOT to go through a fairly detailed legalistic process. The end point, in a few years' time would be a 1.5-miles-per-U.S.-gallon improvement in fuel efficiency of light trucks, not counting pickup trucks, but it does pick up SUVs.
Senator Spivak: What about employer-provided transit passes as a tax benefit rather than employer-provided parking?
Mr. MacLeod: A number of companies do that now. Within the federal government, a pilot was initiated last October within four government departments: Natural Resources Canada, Environment Canada, Transport Canada and the Treasury Board Secretariat. The pass is not free, but in conjunction with transit both on the Ottawa and the Gatineau side of the national capital, the pass is available at a reduced rate. It costs less. Also, it is available through payroll deductions. It is much more convenient. People do not have to line up in shopping malls.
This is the beginning of an initiative, but we want to do this on a pilot basis, to see how it works. Ministers have decided that after we have tested it out for a year to eighteen months, they will decide whether to roll this out in departments across Canada.
Senator Spivak: In terms of new standards, the lead-time for car manufacturers is about five or six years, I believe. We are looking at 2012. Look at the years that we are wasting, where we are not doing anything to reduce emissions in cars. Do you have a comment in that regard?
Mr. MacLeod: In terms of the 25-per-cent reduction, for the average sales-weighted figure, we are already 8 per cent below the standard. In a sense, 8 per cent is in the bank. As you pointed out, the United States has the 1.5-miles-per- gallon figure. The thinking was that more could be done in the United States. About a year and a half ago, the Cheney report came out in the United States. The vice-president indicated that they would be looking at the National Academy of Sciences report coming out in August 2001, to see how much more improvement could be done for fuel efficiency. That report came out and it indicated that fuel efficiency improvements were possible up to 30 per cent compared to what existed now, based on no new invention coming out of left field, but rather by making full use of newer lightweight materials available now.
When I look at what has been done, what looks doable and what the major automobile manufacturers in their own press releases are saying will be in place in 2005 and 2006, 25 per cent is doable.
Senator Spivak: Can we have copies of those surveys? That is important in terms of looking at what the consumer may do.
Mr. MacLeod: We will provide those surveys. I might add that in many of these cases, they are not simply surveys where people give their point of view, but they are the bases for analyses that really show, for example, how much the Energuide program has done and the emission reductions. We have concrete results that we can share with you.
Senator Christensen: I almost feel like crying. I have heard all this before. From 1984 and 1988 I was the manager of the CREO in the Yukon. We managed the R2000 program; we did training for builders and monitoring of the R2000 homes. They were not airtight homes; they were well ventilated with HRVs. There was a five-year contract a person had to sign on to if he was having an R2000 built, so that his home could be monitored on a regular basis to ensure it was healthy. It was certainly recognized that a sealed envelope — if you did not have good ventilation — was not healthy. There were intakes and ventilating systems in the bedroom. Every room had an exchange in it. We did school and public outreach. We used to have a brown bag theatre, twice a week, in our CREO to bring people and the public in. We used to go out to the schools. We partnered with the territorial government. We had an engineering section to the office. We did special demonstrations on portable tapes on agriculture, monitoring and our mini hydros. We did fuel inventories for wood. We looked at new standards for wood stoves so that emissions were low on catalytic combustors. We had a huge library that was printed, of all kinds of stuff like this. I closed down that Conservation Renewable Energy Office in 1988. There were 12 staffed CREOs across Canada.
I used to come down to Ottawa for marketing workshops as the manager and I heard exactly what she was saying. She had enthusiasm and provided all sorts of information. Yet I can remember packing up boxes and shipping carloads back to Ottawa in 1988 when the program was closed down.
R2000 meant that by the year 2000, we would all have houses up to that standard. Those five-year contracts were not honoured. The houses did not get their full monitoring, because the program closed down in 1988-89. The heat recovery ventilating systems were new at that time. They were being modified. New ones were coming out all the time. When there was a problem in an R2000 home, somebody would come in and make the adjustments or put in a new one.
When that program closed down, one of those systems closed down. That is when we started getting unhealthy houses because we did not follow through as a government on our program.
Where is all that material? All the stuff you are talking about, such as caulking windows, putting insulation in, doing a wrap on your house, getting a blow door on your house and testing the tightness, are not new.
We are reinventing the wheel. There already are all kinds of information there. Yet, all this stuff is brand new, and I am sure someone is out there doing research on it, costing us millions of dollars. It is all there. That is my little rant. I have seen it all, and then we have a 10-year or 12-year hiatus and it is all forgotten. All of a sudden we come back with all this brand new stuff and get all excited. We have done it before.
The Chairman: There was an intervening government.
Senator Spivak: Wait a minute. There was also an intervening Liberal government.
Senator Christensen: It was a Conservative government that closed it down.
Senator Spivak: That is right.
Senator Christensen: I do not care which government it was; it was not a good idea. It was a waste.
Where is all that material? Where is all that research? Many excellent people in the program went to private industry. NRCAN and the Canadian Home Builders Association were involved with it. There is so much information out there, and it has been forgotten. It is there, and it can be brought forward. There were wonderful booklets about a house as a system. As long as you knew what a hammer, nail and caulking gun were, you could do a heck of a lot in your house by yourself without having to pay someone, because these books were so explicit.
Programs were designed for the builders as well, because often with people going into contracting there are literacy problems. We recognized that and developed programs for training trainers to meet their needs so they did not feel intimidated coming to these programs. There were lots of visuals so they were comfortable working with it.
What is new? What do you people have as something that is new and different that is coming down the pipe in energy efficiency other than wind, inline hydro and mini-hydro? What can we look for on the horizon that is new?
Ms. Paton: I am actually an alumnus of the CREO.
Senator Christensen: Then you must have a few books somewhere.
Ms. Paton: They are still on the shelves, and we use them extensively. Energy efficiency is not new, and many of the messages are the same. It is about responsible and good energy management. We used the lessons. In fact, we have used the research and messages. Then we balanced that with a changing marketplace, a changing population, literacy levels that are current today, and tried to adapt as much of the material as possible. I spent a number of years in the Halifax CREO, and I too packed those boxes, so I can appreciate your frustration. We have not lost those lessons learned, nor have we shelved the information. It is very much current in terms of the messaging.
The challenge today is that climate change is one of the key drivers, so now we are casting this in a climate change context. We are adding new parameters, like tons, to the terminology. Those are some of the challenges we face. It is a long-term, incremental process. It is one day at a time, one week at a time, trying to move the dial.
Senator Christensen: I am heartened to hear that those books are still there and perhaps being used as patterns for the new stuff, because there was so much.
Mr. MacLeod: We know that many of these things that the homeowners can use are valuable. In some cases, where there have been new developments that we can add, we have taken those publications and updated them. One of our more popular ones among consumers is called, ``Keeping the Heat In.'' This goes out to an awful lot of homeowners every year.
Some of the things we are looking for in making these improvements have changed in terms of the climate change issue. I know how much was geared then toward consumers, but I think there is an accelerated or more intense approach now towards the consumer. Yes, we had the Energuide label that started in the 1980s, but it is a rather passive thing. If we do more marketing and promotion of it and add the Energy Star, which our consumer studies say really helps, then that is certainly a new initiative.
In our transportation area, we have not touched the standard for fuel efficiency. The fuel efficiency standard now was there in the early 1980s. It has not budged. This is the first time we are taking action. In fact, in the transportation sector, we are expanding it. I have talked here today largely about what is available for the consumer, but we are also dealing with freight in terms of intermodal freight where you can have a combination of trucking and rail to reduce emissions.
We have a more aggressive approach to alternative fuels. I know there was some work on that. In the mid-1990s, the Excise Tax was exempted on alternative fuels, and we have a very ambitious approach underway for new ethanol plants.
Related to R2000, before my time there was some talk about would it not be nice if all new houses were R2000 by the year 2000. Correct me if I am wrong, senator, because it was before my time and involvement in this area, but I do not think that was ever an explicit government policy. The fact is that now we have a document, the Kyoto plan, where it has been stated that it is our objective to get there. We hope we can work our way there with funding from budgets to make it happen. We have intensified that. There was never an audit program funded by the government for all homeowners across the country, to my knowledge. As I mentioned, we do that as well.
Is this all brand new? No, it is not. The emphasis has increased, and we are going into new areas that we have never been in before.
Senator Christensen: Perhaps it was not a policy, but it was certainly the goal and intent that by the year 2000, all new construction would be to a R2000 standard and that the Canadian Home Building Association would gradually work into that. It would be the standard to which they would be working.
The Chairman: If all other things are equal and I am a new homebuyer, how much more will an R2000 house cost me than one that is not R2000?
Mr. MacLeod: The current premium is about 3 per cent.
The Chairman: For a $150,000 house, we are talking about $4,500. It is not very significant. You could probably show me that there is some help available in that respect, and that if there were not, I would probably gain that in short order in savings.
Mr. MacLeod: In energy costs, yes.
Senator Mahovlich: If I were buying a new home, should I give you a call and have it checked before I make a purchase, or are builders reputable enough?
Mr. MacLeod: We have a list of certified R2000 builders. There are several things we could do for a new home. You could get one of the R2000 certified builders to build your home to an R2000 specification. Once built, we could have an Energuide audit to confirm that it was done to the specification that you demanded.
Senator Mahovlich: What would that cost?
Mr. MacLeod: The building of the house itself would be the premium that the previous senator asked about, and then the audit would cost you $150.
Senator Buchanan: Going back to the private inspectors, are you calling them partners?
Mr. MacLeod: Delivery agents.
Senator Buchanan: Over the years, in my province and in others, we had problems with some service stations that were licensed to inspect cars and put the inspection stickers on. The most blatant ones would say, ``You have this wrong, and this and this and this, but we will fix it for you and put the sticker on.'' We found not that many in Nova Scotia, but there were quite a few in Ontario.
The Chairman: You just cannot let it go by, can you?
Senator Buchanan: There were some problems with home inspectors who would come around and inspect your home, to have mortgages, et cetera. They would say, ``This has to be done, and this has to be done, and I have a subsidiary company that will do it, or I can recommend someone to do it.''
With this program, if I hire an inspector or one of your delivery agents, is he independent? Does he have the opportunity to say, ``This is what has to be done, these windows have to be replaced, et cetera, and of course I have a company that can do it all''? Are they independent?
Mr. MacLeod: They are independent, but there are certain criteria they have to meet before they are licensed. We are introducing an audit program to follow up, to ensure that everything that was done was legitimate.
Senator Buchanan: I do not mean what was done, but if ABC Limited is one of your partners, is ABC Limited also a contractor, or could they be a contractor?
Mr. MacLeod: They can be. We do not have a requirement that they not be. Once again, there are a number of requirements they have to fulfil. If there are any problems with them doing something along the lines that you have suggested, senator, it is written into our contract that we can revoke the licence at any time.
Senator Buchanan: That is what I wanted to know.
The Chairman: When you say, ``licence,'' you mean your good housekeeping seal of approval; you do not mean licence to practise business.
Mr. MacLeod: I mean the licence to use the Energuide label and to go through that process where you give the homeowner the right information. They can no longer do that if something like that happened.
The Chairman: A siding salesman could come along and say to somebody, ``I will fix your house up to R2000,'' not having the right to use your logo, and there would not be anything that anyone could do about it, except in court in a civil case.
Mr. MacLeod: Correct. It is not only they could not use the logo; they could not use the licence test procedures that we have and all the software that we have developed to do that analysis.
Senator Buchanan: Do your offices throughout the country, for example, in Halifax, have a list of the licensed partners?
Mr. MacLeod: Yes.
Senator Finnerty: If I built a new house and was not aware of the R2000 and had already finished building it, how would I find out about this, and how would I go about finding a person to do the check for me to see if it is R2000?
Mr. MacLeod: Our delivery agents do their own local and regional marketing. If you have not been exposed to that, you can get it from us. I am sure you have our coordinates there. We can ensure you know who are the local delivery agents in your area, and they can then come and do the audit I referred to.
Senator Finnerty: How extensively will these pamphlets be distributed to the public? Where will they be distributed?
Mr. MacLeod: Different pamphlets are distributed depending on the event. Ms. Paton mentioned some of the outreach activities we have now to various home shows during the year. That is related to homes. All the dealerships across Canada carry the fuel efficiency guide. We produce 400,000 a year, on demand, because they find their customers want them. It depends on the issue I guess.
Senator Finnerty: Would the CAA have the ones on vehicles?
Ms. Paton: The CAA certainly is an organization that works closely with our transportation program. They do not tend to distribute directly the fuel consumption guide, as an example, but they generally and, as I recall, routinely, note it in their publications. They also write a number of articles on the issue and direct people to us to obtain a copy of the guide. The key source is car dealerships for the fuel consumption guide. We have a direct distribution and promotional set of activities as well.
The Chairman: You mentioned education. Obviously, education is important. If we can turn out people who understand, as a matter of course, that this kind of responsible behaviour is necessary and just a normal part of life, that is terrific. However, education is a provincial responsibility. Have you set targets with respect to the way this will be addressed in education, and at what levels? What responses have you received from the provinces, and do you know it is part of a curriculum everywhere or anywhere?
Ms. Paton: We know that in the Grade 4 to 6 pan-Canadian science curriculum, there are key points that provide a good opportunity for the teaching of climate change, energy and energy efficiency.
The Chairman: In all provinces?
Ms. Paton: It is a pan-Canadian science curriculum, but I cannot tell you if all provinces subscribe to it. As far as I know, it is in most provinces.
We find that the curriculum material made available to teachers often does not have much depth to it in these areas. We often receive requests from teachers for supplementary information.
There is a network of environmental education groups across the country that provides good materials. We partner with those organizations to ensure that their materials are as fulsome as possible, because they, too, reach out to many teachers. Many teachers go directly to these organizations and to us looking for those extra tools and fact sheets and activities that can be used in the classroom.
We also hear from high school teachers in the Grade 10 or 11 science levels. About six months ago, through our climate change outreach program, we requested proposals from across the country in the education area to try to bring teachers together to identify, on a provincial or territorial basis, what is missing in the curriculum. That activity is going on now. It was interesting that many departments of education were partners in that initiative. We have provided funding to those consortia in each province so that they could go through the gap analysis and identify what is needed. From there, we can work with them as a partner to help make it happen.
With all respect to the provinces and territories, understanding that education is a provincial and territorial jurisdiction, in this one instance there seem to be opportunities for us to work together. We will have to see where it takes us over the coming year.
Mr. MacLeod: One interesting area, not at that level but higher up, which is key, where we also have had an impact, is within the architectural schools. McGill University has been working with us and now includes much more material on energy efficiency, which is key, because that is where the architects of tomorrow are being trained.
The Chairman: That is terrific.
My friends have all told me that they hate me when they do this, and my colleagues have told me that they hate me when I do this, and I hate people who do it, so I apologize in advance, but I cannot help but say that ``fulsome'' means grossly overdone. It does not sound like it should, but it does.
I live in northern Alberta. What would I do to access the test on my house? Who do I call, and what do I look for? Where do I look in the Yellow Pages?
Mr. MacLeod: If your local delivery agent has not chosen to market it, so you have not received it, I suggest you call me, and I will ensure you get a list of all the local delivery agents in your area.
The Chairman: Should we somehow tell 11.7 million households to call you, Mr. MacLeod?
Mr. MacLeod: Many do. I mentioned that this program is relatively new. Senator Spivak asked for information on our public opinion surveys. We know that in 1999-2000, the program recognition was down around 12 per cent, and last year we know it was up to 27 per cent. The recognition is increasing. Once again, these things take time. It takes time to get into the public's consciousness.
Senator Spivak: On that point, you probably remember Participaction, which was a program that involved insurance companies, provincial health departments, and the media.
Have you thought about using the Participaction model, which would certainly heighten the awareness?
Ms. Paton: When we first started looking at the climate change file and the outreach opportunities, we did look at Participaction. We worked closely with one of the marketing organizations that played a role in the development and implementation of Participaction. A flavour of that will come through should the one-ton challenge be funded.
That initiative is intended to bring everyone together with a common issue and to engage Canadians with kind of a single mantra, if you will, about a host of activities.
Senator Spivak: Insurance companies have a big stake here. They might be willing to participate again in something that would benefit them.
Senator Christensen: Building suppliers too.
Ms. Paton: They have a big stake. They will be among the targets to which we talk.
The Chairman: I will now do my rant. This is my opinion only. It may be somebody else's, but I do not ascribe it to anyone else.
You have heard from senators who live in different parts of the country and who come from different walks of life and do different things. None of us knows now when we go to where we live, exactly who to phone, how to find somebody or who is the deliverer of these systems. If this were the board of RJR Nabisco discussing how much success we had in changing people's minds about their attitude to a new breakfast cereal, which is exactly what we are talking about here, we would be saying, ``Everything that we have done so far has utterly failed.''
It has been well intended, and it should continue. All those outreach things need to continue. We need to be handing out pamphlets at home shows. We need to be sending those brochures out to people's homes.
However, there is a factor of which we must be aware. When a government sends a brochure to my house, whichever order of government it is, it does not get treated by anybody in my house the same way as a flyer from Sportchek or IBM does.
The mortal fact is that, by dint of what you might want to call propaganda, but is more nicely called marketing and advertising, we can change people's minds. Joseph Goebbels changed people's mind. He proved that you could make people believe anything, if you do it right.
I hate to invoke his hideous name, but he is a terrible example of how effective that can be. We can change people's minds but not, with all due respect, as effectively or as quickly as we otherwise could by the means which governments normally undertake to do.
Fifteen years ago — and I have referred to this before — people sat on the edge of their hospital beds smoking cigarettes. We thought that was okay. We now look at that and say, ``Can you believe we actually used to do that?''
It is not good enough that somebody walks into an appliance dealer and says, ``What does that E Star symbol mean on that refrigerator?'' It is not good enough that a prospective homebuyer walks into a contractor's office and says, ``What is this Energuide thing in this brochure here?''
We have to get to the point that people will not go to an appliance store unless there is a big sign in the window that says, ``We sell E Star products.'' They will not go to a homebuilder who does not proudly display this Energuide thing, and only builds R2000 houses because people would not buy them otherwise. People must reach the point where they do not even want to talk to a builder that does not build R2000 houses.
That is where we have to go with all respect to all those things that we have to keep doing. We have to go to schools and home shows, and mail out brochures, but we also have to get some barracuda to change people's minds so that manufacturers will stop making refrigerators that are not E Star qualified, and home builders will stop building houses that are not R2000. They may build them not because they are good guys or because they have a moral compunction to do so, but because the public will not buy them otherwise. That is what we have to do.
That is what I was getting at when I almost jokingly said, ``You give me four advertising barracudas and $65 million a year.'' In two years, every homebuilder that does not build R2000 houses will be out of business because no one will buy their houses. Every appliance manufacturer who does not manufacture E Star qualified appliances will be out of business, because they will have a warehouse full of stuff that no retailer will put on his floor because no one will buy it. I am sorry to rant.
You already talked about this, and you have already said you are going in that direction. I am ranting to urge you personally — others may think the same way — that that is the direction to go. Advertising and marketing is the answer.
Senator Spivak: In Singapore you cannot chew gum and throw it on the sidewalk because if you do you will be arrested. Regulation is also a very important thing.
Senator Buchanan: I make a motion that our chairman take a leave of absence from the Senate and become the dynamic spokesperson for the department on television.
Mr. MacLeod: Perhaps I could offer a point of clarification. We have talked about some of the information and marketing activities that we have in place, but that is but one of the instruments. Keep in mind that other instruments are the direct financial incentives we give out.
In terms of getting those appliances off the floor, we do have our regulatory framework in place. Once again, we have the strictest energy consumption regulations of any country in the world. We regulate more products with it. It is not just encouragement. We are getting a lot of that stuff off the floor through legal means, as well.
The Chairman: I am sorry to be argumentative. You are right. The regulation, as Senator Spivak said, is important. With respect to all those things, there was not one senator here, and we are not illiterate, who knew about the existence of what you talked about until today.
Mr. MacLeod: I understand that.
The Chairman: You cannot talk to 33 million people.
Mr. MacLeod: We are looking at new ways to ensure that these programs are known. For example, we are partnering with Enbridge Consumers Gas and other utilities because they have a direct monthly conduit into the households. We will be using them as a partner to make many of these things happen, because we know it is important.
I know that $65 million sounds like a lot of money, but keep in mind some of that is for financial incentives. There are other things.
I mentioned that we are partnering with B.C. Hydro, which has a program called Power Smart of which you may have heard. As opposed to all of our activities, which look at reducing energy consumption from all sources in all provinces and territories, Power Smart is a program in British Columbia to reduce energy from one source, electricity, in one province, which has 12 per cent of the population. For that program alone they have an annual budget of $92 million.
The Chairman: The gain they have made on that is exponential.
Mr. MacLeod: You are right. You mentioned that 15 years ago people would be in hospital and smoke cigarettes. That would never happen now.
Another issue is timing. The American Medical Association first alerted people to the problems with smoking in the late 1940s. Some of these things have taken a long time and much money to make happen.
Your question about educational institutions is interesting. Ms. Paton mentioned some new forays we are making. We see that as absolutely critical. If we look at initiatives in the last several decades, one being the blue box program and the other being drinking and driving, there were major attempts to influence both of those things. However, it is my understanding of the analysis that there was a real leap forward when they were able to get on the curricula in high schools. They got the kids to think that recycling was important. That put peer pressure back in the household. Then mom and dad wanted to ensure that they were involved with recycling.
It is the same with drinking and driving. Once they turned that around in the high schools, instead of being cool, drinking and driving was just a dumb thing to do. There has been a real turnaround as a result of that. We see that as a target upon which we must focus.
Senator Buchanan: The chairman and the rest of us talked about getting the message out. The timing is now. I will tell you why. You know why. The cost of fuel oil right now is running around 65 to 66 cents a litre. That is about a 15- cent increase in a little over a year and a half. People are now ready to look at any program that will help them reduce that consumption of fuel oil.
Senator Spivak: Fuel oil just jumped 38 per cent.
Senator Buchanan: In Halifax it is 66 cents a litre right now. A little over a year ago, it was about 51, 52 cents. The timing is now. TV advertising is the way to get people.
Senator Finnerty: If I just finished building a house and was not aware of what I should be building, what number do I look up in the phonebook to check it, Natural Resources Canada? My son just built a brand new house in Barrie and I do not think it is efficient.
Ms. Paton: In most blue pages in the telephone books across the country, the line of energy information leads people to us. We have a 1-800 number. That number is on the publications that you have before you today. That number can be used to not only access publications, but also if there are questions, people are routed to our technical staff.
The Chairman: I wish to thank the witnesses on behalf of all committee members.
The committee adjourned.