Thank you very much, Mr. Chair.
Good afternoon, everyone.
My name is Carolyne Blain and I am the Director General of the Strategic Policy Sector in the Acquisitions Program at Public Services and Procurement Canada, or PSPC.
Accompanying me today is my colleague David Schwartz, Director General of the Commercial and Alternative Acquisitions Management Sector, also of the Acquisitions Program at PSPC. Also joining me are colleagues from the Treasury Board Secretariat, Nick Xenos and Jessica Sultan, whom you met at the last meeting on this study.
Thank you very much for giving us the opportunity to appear and speak about the greening government strategy. I am happy to share with you the important work we are undertaking at Public Services and Procurement Canada regarding green procurement.
If we, as a country, government, and people are serious about moving towards a greener future, procurement is a lever toward advancing and achieving sustainability goals and driving positive change in the supply chain and the Canadian economy. To fulfill this goal, we have made, and will continue to make, fundamental changes to the goods and services we use and the way in which we procure them.
As the largest public buyer in Canada, PSPC is in a unique position to both influence and have a direct impact on the range of environmentally preferable products and services that are sought, as well as what is offered by industry.
To maximize the environmental benefits in procurement, we have given priority to shared and national procurement instruments to optimize the impact of sourcing decisions. This allows various government departments, including federal, provincial and territorial governments, to access environmentally preferable goods and services. By collaborating with the provinces and territories, we increase our influence well beyond the federal public procurement. Additionally, environmental considerations have been included in procurement instruments for more than 35 commodity groupings.
Implementing environmental considerations into procurement requires an understanding of the complete life cycle of purchased goods or services, from extraction of material to disposal. This knowledge allows us to integrate green criteria where they will have the greatest impact. For example, our national procurement instruments for light-duty passenger vehicles take into consideration the fuel consumption and CO2 emissions in the evaluation. This allows the government to source vehicles that will deliver optimum environmental benefits over the useful life of the vehicle while responding to the operational requirements of the client department.
Another example of how PSPC is looking to promote environmental stewardship is by ensuring that items on mandatory standing offers are green, as is the case in our standing offer for office paper, which requires that the paper supplied contain recycled content. We're continuing to innovate. For example, PSPC has added agricultural waste fibre paper to the standing offer, which is essentially tree-free paper. Additionally, only paper manufactured in conditions that meet or exceed requirements based on recognized and certified standards is available through the standing offer. This means that the paper provided comes from mills that have demonstrated they have reduced their impact on the environment.
We are also focusing our efforts on reducing the government's environmental footprint as it relates to the emission of greenhouse gases from the heating and cooling of federal facilities. In January 2017, PSPC awarded a $131-million contract for the purchase of clean energy for the Department of National Defence and Environment and Climate Change Canada in Alberta. With this contract, 90% of the Department of National Defence's energy requirement in that province will come from clean energy sources.
Engaging stakeholders and building on business opportunities is an important part of PSPC's business model. Supplier engagement and mobilization play a key role in meeting our green procurement objectives. One example is the recent consultations with suppliers of office supplies to better understand the range and availability of environmentally preferable solutions with particular emphasis on reducing plastics and greenhouse gas emissions.
This engagement with the industry will contribute to a review of over 4,800 high volume items to identify products that meet specific environmental criteria for the 2019 edition of the standing offer.
PSPC also engages with external stakeholders such as the Espace québécois de concertation sur les pratiques d'approvisionnement responsable. This organization helps PSPC accelerate green procurement implementation by working collectively with other organizations on similar challenges and creating science-based-evidence tools for procurement.
As you are aware, the G7 Summit was held in Charlevoix in June 2018. As there was a strong appetite to make the G7 Summit an eco-responsible event, it became essential to apply the principles of green procurement to the many purchases required to host the event. Approaches were crafted to efficiently and quickly implement environmental considerations into the development of procurement requirements and evaluation approaches. This included an innovative bid evaluation methodology for contracts for accommodation, transportation and food services in order to give preference to environmental products and services.
The process for this summit made a difference for several elements, including the responsible management of waste materials and the limited use of plastics. These actions helped ensure that the summit achieved a level 3 certification of the eco-responsible event management standard of the Conseil québécois des événements écoresponsables. This generated positive reactions and incentivized industry to adapt to more sustainable waste management practices.
The G7 provided PSPC with lessons learned and new approaches such as reducing single-use plastics, using composting to offset greenhouse gas emissions, giving incentives to supply environmental products. These lessons learned are now being considered for projects and will have positive effects on the implementation of green procurement across PSPC in the future.
PSPC also continues to optimize internal processes to better environmental outcomes such as adopting electronic bid submission, increasing use of electronic signatures, electronic archiving and the new electronic procurement solution, which was announced in budget 2018.
Green procurement is not just about the bottom line of using fewer products and services. It includes socio-economic benefits and long-term effects on the health of our environment, beyond the immediate measurable reductions in energy costs, water usage and GHG emissions. Changing purchasing behaviours at PSPC by incorporating the life cycle of products and services will have a positive impact at each phase of acquisition. How we plan, purchase, use and maintain and ultimately dispose of our purchases will also have a wider influence on suppliers, manufacturers and Canadians. What we do will set the standard and influence change on a broader scale. We need to move away from looking at the upfront cost of an item and instead consider the goods or service in the circular economy that focuses on keeping goods, including plastics, in the economy and out of landfills and the environment, providing long-term benefits and best value to Canadians and the community.
We'll continue to work with our colleagues at Treasury Board Secretariat's centre for greening government to advance green procurement practices. PSPC is committed to working in collaboration with other government departments, leading the implementation of the greening government strategy to effectively contribute to low-carbon environmentally responsible growth.
Thank you very much for your time.
Welcome, and to some of you, welcome back.
I want to follow up on your comment about the G7. When we were here last time we discussed the purchase of the cars. I realize it wasn't the PSPC that bought the cars, but how do we ensure, moving forward, that we're actually working toward greening, so that we don't have departments going off on their own—not violating government policy, but going off in the wrong direction, as they did buying the gas cars?
This goes back to the conversation we had at the last meeting. I read through the departmental plans. There doesn't seem to be any one in charge, so to speak. I've just done some more reading, and now I realize that Natural Resources Canada is supposed to be partnering with TBS on greening government. That didn't come up at all in the last meeting. I look at their departmental plan, and see they have nothing about greening government, apart from the number of times stakeholders acknowledge using NRCan products in making decisions.
We hear all this great rhetoric, and we are doing some stuff, but a lot of things are slipping through the cracks, and there doesn't really seem to be anyone setting proper goals and in charge to make sure we're not buying cars or ensure that we're actually doing proper green procurement, etc.
I'll start with the cars. How do we go forward and not have a repeat of that?
Thank you very much, Mr. Chair.
Ladies and gentlemen, welcome to your House of Commons.
Ms. Blain, I would like to come back to the G7 Summit. I am a member from the Quebec City region, not too far from the event's location. We are very happy that order and discipline were maintained during the event. Of course, there was a lot of security, which is understandable. But security means executive vehicles. I'm raising this issue because you said earlier that you asked that, as of last April 1, every government expenditure respect a green philosophy or, at the very least, be considered from an environmental perspective.
As my colleague Mr. McCauley explained at a previous meeting, a lot of vehicles were purchased—about 600 of them, 157 of which were Chevrolet Suburbans, according to the figures I have seen. Those vehicles consume 16 litres of fuel per 100 kilometres and they have a large 5.3-litre V8 engine. We may wonder about that, but that is not my comment, although it is very tempting. However, the corollary follows.
How come that new measure was implemented on April 1—we obviously know that the decision was not made on April 1 at 8:29 a.m.—but in the three months leading up to the G7 Summit in June, the government purchased a number of gas guzzlers, which are the antithesis of its own philosophy and directly contradict measures it had implemented three months earlier that expressly prohibited those types of expenditures?
I think in several ways.
For example, I co-chair a community practice with the B.C. government, with all of the provinces and territories. We're learning from each other as well. Different jurisdictions are doing different things and we can learn from each other. Again, that sends a signal more broadly than just the federal government, but it's working with provincial governments and we're sharing and accelerating.
At our last community practice meeting we had the folks from the City of Vancouver present some of the things they're doing. Of course, with any federal facilities in Vancouver we want to partner with the city and the province.
There is industry, as well. We're talking to industry associations about the cases in which the federal government's asking for something, for example, the Canada Green Building Council, which is the LEED certification guys. We're working with them. They now have a zero carbon standard so you can be LEED gold in your building, but you can also be following their zero carbon standard.
They're interested, of course, in working with the federal government and understanding where we want to go and how we can work together, etc.
What I've seen in a lot of conferences and meetings is that industry is quite innovative and doing a lot of neat stuff. Really it's just us being clear on what we're requiring.
Good afternoon, members of the committee. I'm pleased to join you. Thank you for letting me appear remotely today.
My name is Sarah Petrevan. I'm a senior policy adviser for Clean Energy Canada. We are a climate and energy think tank based out of the Morris J Wosk Centre for Dialogue at Simon Fraser University, but I am based in Ontario.
I've been asked to speak with you this afternoon about the policies and programs the Government of Canada is bringing to bear via the greening government strategy.
Canada has made tackling climate change a policy priority most prominently through its pan-Canadian framework on clean growth and climate change. Through this, the federal government has committed to modernizing procurement practices, adopting clean energy and technologies and prioritizing opportunities to help Canadian businesses grow, demonstrate new technologies and create jobs. While seemingly a tall order, it's vital for government to play a leadership role in the transition to a low-carbon economy and to do so in such a way that not only reduces pollution, but also increases our country's global economic competitiveness.
As you are well aware, the federal government has committed to a 40% cut in greenhouse gas emissions in its operations by 2030, an 80% cut by 2050 and to using 100% clean electricity by 2025. These goals are to be realized through the greening government strategy, which was released close to this time last year.
Clean Energy Canada was proud to play a leadership role in convening a broad group of stakeholders including academia, business, industry and innovators to provide the government with collaborative solutions to complex problems, and we believe that ultimately helped to inform the strategy. I would be pleased to share our experiences and any written material we've produced with members of the committee.
The government should be applauded for their work and the successful launch of the strategy. We look forward to its continued implementation and would welcome its prioritization within government. The sooner we do it, the sooner we'll begin to enjoy the results.
While there is an abundance of components within the strategy that I could dive deeply into, I will use the remainder of my time to highlight how and why the greening government strategy should be seen as an economic driver for Canada, as well as the broader opportunities contained within it.
Simply put, tackling climate change requires cleaner, smarter, less wasteful technologies throughout the economy. Clean technology, or clean tech, is commonly understood to encompass new technology and related business models offering competitive returns for investors and customers while providing solutions to global challenges. Climate change is one of those global challenges that have motivated and inspired a boom in clean tech, with the development of clean energy solutions ranging from solar panels to smart grids to electric vehicles and more. Canada has many strengths in this arena. This year a record-breaking 13 businesses were named to the prestigious Global Cleantech 100 list.
With the global market estimated to be worth $1 trillion U.S. and expected to surpass $2.5 trillion U.S. by 2020, and close to 30% of Canada's GDP derived from exports, there is much to be gained by seizing a spot in this global marketplace. Therefore, it is imperative the greening government strategy leverage clean tech adoption to help meet its goals. To accomplish this, the strategy contains one of the most important policy tools recognized around the world to help reduce emissions, increase market share, mitigate risk and deliver cost-competitive solutions. That tool is procurement.
Procurement is a means for Canada to get results. To put it more bluntly, the only way we are going to do anything differently is by buying things differently. Governments across Canada spend about 33% of their money on the purchase of goods and services. That's equal to close to 13% of Canada's gross domestic product. The federal government, therefore, has economic heft as a major purchaser within its own economy, and it can and should use this power to stimulate and lead markets. By doing so, Canada will join the ranks of at least 56 other national governments and many local governments that have recognized the power of procurement in supporting their environmental and economic policy goals.
Canada will also be following the advice of world-leading economic institutions, including the OECD, the World Bank, the United Nations and the World Trade Organization.
Traditionally, Canada and its provincial and municipal governments have relied on grant programs and tax credits to support innovative sectors—everything from communications to pharmaceuticals to clean tech. These financial incentives help entrepreneurs enter the market with new or improved goods and services to meet latent or unmet demand. While there are many benefits to this approach, it also comes with inherent challenges.
Funding levels can fluctuate because of budgeting or a shift in government priorities. Program dollars are often spread across many priority areas in small amounts that are insufficient to give promising companies the boost they need to succeed in commercialization. Finally, programs that aren’t linked to the needs of the marketplace also suffer because there is not enough demand to support the increased supply.
In recent years, countries such as Finland, the United States and the United Kingdom, alongside emerging economies, including China and Brazil, have adopted more targeted policies, such as procurement, to support innovation. Procurement works because it links government support for innovation to the needs of the marketplace. It also provides a stable source of demand, which is a key attractor for private investment. Therefore, procurement should be seen as a vital piece of the greening government strategy, much more than just greening what government purchases for its own use, like paper, pens, computer servers, etc. Rather, deploying modern procurement practices can provide value for money, while reducing emissions and spurring technology in government buildings, energy supply, fleet vehicles, and even in areas deemed by government as special purpose.
Modern procurement practices used around the world built the world's first electric ferry in Norway, which is powered by Canadian technology. It's creating electric buses for public transit that can be charged in five minutes and building a low-carbon passenger train through Germany. Both examples, again, use Canadian clean technology. Procurement can buy you an electric school bus or build you a net zero carbon building. The possibilities are truly endless.
By nature, I am ambitious. I have to be. I work in climate and energy policy.
To conclude, I want to leave members of the committee with a slightly bolder idea for government leadership, beyond simply looking at how it tackles the low-carbon economic transition in its own operations.
In addition to leveraging its spending power for its own operational needs, the federal government plays a substantial role in provincial, territorial and municipal procurement, when it provides a share of the funding required for transportation, energy, social services, education and other projects via its infrastructure program. Under the current government, the size of that investment is reported to be $180 billion over the next 12 years.
Canada not only has the ability to be a leader in clean tech, but also in low-carbon cost-effective building materials. While the greening government strategy recognizes this and is currently working on a process to prioritize these products to help them meet goals around reducing carbon in areas such as real property, Canada should consider looking outside this box and deepening its impact by partnering with other levels of government. Aspects of the greening government strategy, including clean-tech adoption and modern procurement practices, can generate a magnified positive impact and create a larger, broader competitive low-carbon benefit to Canada's economy. It's an exciting opportunity.
Once again, I thank the members of the committee for inviting me to speak this afternoon. When appropriate, I would be pleased to take questions.
The expertise of Canadian clean technology firms is very broad. It includes water treatment and management, waste management and reclamation and, as Ms. Petrevan just mentioned, air treatment. So there is a wide range of expertise here, in Canada. Our context is also conducive to the development of those innovations thanks to the availability of numerous natural resources, strong leadership in the fight against climate change, as well as the research and development environment, which is very dynamic.
That fertile ground is an asset, but we could do better. Canada could be a world leader in clean technology. Despite all the assets I just listed, businesses must show the “techno-economic” benefits stemming from their innovations. So they are often searching for testing grounds or demonstration projects, also called storefronts. We are not talking about storefronts in a shopping centre; those are real demonstration projects in concrete operating conditions. Such projects are necessary to help businesses improve their marketing capacity. The government and Crown corporations—we think it is very important to also associate those corporations—have a purchasing power of several billion dollars a year. That is a tremendous tool to develop not only a healthier environment, but also an innovative sector like clean technology.
At CanadaCleantech, we prioritize six initiatives on the use of public markets that aim to stimulate the clean technology sector. Those six priorities are divided into two families.
The first aims to remedy the shortage of testing grounds or demonstration projects to test the benefits of Canadian clean technologies and demonstrate them. The objective is to help businesses market their clean technologies. The first measure is the creation of testing grounds or technological storefronts in departments and Crown corporations. We could talk about that further. The second initiative is about applying the quotas reserved for clean technologies to new public organization investments. The third initiative is the creation of spaces for exchange, referred to as marketplaces, between potential users of those technologies and Canadian innovators. Very often, people are unaware of what they don't know. It is very difficult to request technologies you don't know about. Those are the three priorities of our first family.
The second family, which consists of three initiatives, mainly focuses on the integration of best performance criteria in public tenders, so as to promote local technologies and achieve Canada's economic and environmental objectives. The first initiative is about taking into account the total cost of ownership in the calculation of costs related to the awarding of a government contract. We are talking about the total cost of ownership here, and not the cost of acquisition. The second initiative is the introduction of a premium related to exceeding minimum environmental standards in the scoring of tenders. Finally, the third initiative is about broader use of performance contracts. It's a matter of specifying what needs to be achieved and not how it needs to be achieved.
The application of our recommendations would accelerate the shift to a green economy and lead to much cleaner growth. It would directly benefit many innovative Canadian businesses, stimulate a very promising sector and create high quality jobs. It would also support the government in the achievement of its economic and environmental objectives and, most importantly, its greenhouse gas emission reduction objectives.
It's wonderful to see you. I can't believe it's been this long.
The short answer is yes. There's a couple of different ways you can do it.
Number one, you apportion out a procurement. Rather than giving a giant list of the criteria you have to meet for a $100-million contract, you would say that maybe 10% of this contract you hope will go toward SMEs. That's one way of doing it.
Another way you can do it—and even jurisdictions like India have done this—is to create templates for simplified tenders. Because they're only competing for a smaller portion of the tender, it's much easier for them to complete and fill out.
There are also other jurisdictions like the United Kingdom, and even the United States, that have dedicated offices to help small businesses work through procurement processes.
I would say those three things—apportioning out your procurement, streamlined tender application forms and having a dedicated office—generally are international best practice. Even the Organisation for Economic Co-operation and Development, the OECD, recommends that is how they do it. That is pretty much how every jurisdiction that does SME procurement makes it work.