Manitoba Committee Hansard — 11 May 2017 (Legislative Affairs Committee, Sitting 7, 41st Legislature, 2nd Session)

41-2-la7

Manitoba — Debates (Hansard)

Second Session – Forty-First Legislature of the Legislative Assembly of Manitoba Standing Committee on Legislative Affairs Chairperson Mrs. Sarah Guillemard Constituency of Fort Richmond Vol. LXX No. 7 - 6 p.m., Thursday, May 11, 2017 ISSN 1708-668X

MANITOBA LEGISLATIVE ASSEMBLY Forty-First Legislature Member Constituency Political Affiliation ALLUM, James Fort Garry-Riverview NDP ALTEMEYER, Rob Wolseley NDP BINDLE, Kelly Thompson PC CLARKE, Eileen, Hon. Agassiz PC COX, Cathy, Hon. River East PC CULLEN, Cliff, Hon. Spruce Woods PC CURRY, Nic Kildonan PC DRIEDGER, Myrna, Hon. Charleswood PC EICHLER, Ralph, Hon. Lakeside PC EWASKO, Wayne Lac du Bonnet PC FIELDING, Scott, Hon. Kirkfield Park PC FLETCHER, Steven, Hon. Assiniboia PC FONTAINE, Nahanni St. Johns NDP FRIESEN, Cameron, Hon. Morden-Winkler PC GERRARD, Jon, Hon. River Heights Lib.

GOERTZEN, Kelvin, Hon. Steinbach PC GRAYDON, Clifford Emerson PC GUILLEMARD, Sarah Fort Richmond PC HELWER, Reg Brandon West PC ISLEIFSON, Len Brandon East PC JOHNSON, Derek Interlake PC JOHNSTON, Scott St. James PC KINEW, Wab Fort Rouge NDP KLASSEN, Judy Kewatinook Lib. LAGASSÉ, Bob Dawson Trail PC LAGIMODIERE, Alan Selkirk PC LAMOUREUX, Cindy Burrows Lib. LATHLIN, Amanda The Pas NDP LINDSEY, Tom Flin Flon NDP MALOWAY, Jim Elmwood NDP MARCELINO, Flor Logan NDP MARCELINO, Ted Tyndall Park NDP MARTIN, Shannon Morris PC MAYER, Colleen St. Vital PC MICHALESKI, Brad Dauphin PC MICKLEFIELD, Andrew, Hon.

Rossmere PC MORLEY-LECOMTE, Janice Seine River PC NESBITT, Greg Riding Mountain PC PALLISTER, Brian, Hon. Fort Whyte PC PEDERSEN, Blaine, Hon. Midland PC PIWNIUK, Doyle Arthur-Virden PC REYES, Jon St. Norbert PC SARAN, Mohinder The Maples Ind. SCHULER, Ron, Hon. St. Paul PC SELINGER, Greg St. Boniface NDP SMITH, Andrew Southdale PC SMOOK, Dennis La Verendrye PC SQUIRES, Rochelle, Hon. Riel PC STEFANSON, Heather, Hon. Tuxedo PC SWAN, Andrew Minto NDP TEITSMA, James Radisson PC WHARTON, Jeff Gimli PC WIEBE, Matt Concordia NDP WISHART, Ian, Hon.

Portage la Prairie PC WOWCHUK, Rick Swan River PC YAKIMOSKI, Blair Transcona PC Vacant Point Douglas

119 LEGISLATIVE ASSEMBLY OF MANITOBA THE STANDING COMMITTEE ON LEGISLATIVE AFFAIRS Thursday, May 11, 2017 TIME – 6 p.m. LOCATION – Winnipeg, Manitoba CHAIRPERSON – Mrs. Sarah Guillemard (Fort Richmond) VICE-CHAIRPERSON – Mr. Shannon Martin (Morris) ATTENDANCE – 10 QUORUM – 6 Members of the Committee present: Hon. Mrs. Cox, Hon. Messrs. Micklefield, Schuler Mr. Altemeyer, Mrs. Guillemard, Messrs. Marcelino, Martin, Nesbitt, Reyes, Selinger APPEARING: Hon. Steven Fletcher, MLA for Assiniboia Ms. Cindy Lamoureux, MLA for Burrows PUBLIC PRESENTERS: Bill 19–The Efficiency Manitoba Act Mr.

Kevin Rebeck, Manitoba Federation of Labour Mr. Chris Mravinec, Canadian Union of Public Employees, Local 998 Mr. Dan McInnis, private citizen Mr. Evan Thompson, private citizen Mr. Garland Laliberte, Bipole III Coalition Mr. Dennis Woodford, private citizen WRITTEN SUBMISSIONS: Bill 19–The Efficiency Manitoba Act Joe Masi, Association of Manitoba Municipalities Tim Sale, private citizen MATTERS UNDER CONSIDERATION: Bill 19–The Efficiency Manitoba Act Bill 20 –The Crown Corporations Governance and Accountability Act * * * Clerk Assistant (Mr. Andrea Signorelli): Good evening.

Will the Standing Committee on Legislative Affairs please come to order. Before the committee can proceed with the business before it, it must elect a new Chairperson. Are there any nominations for this position? Mr. Shannon Martin (Morris): Yes, I'd like to nominate–oh, I don't know, Mrs. Guillemard. Clerk Assistant: Mrs. Guillemard has been nominated. Are there any other nominations? Hearing no other nominations, Mrs. Guillemard, would you please take the Chair. Madam Chairperson: Our next item of business is the election of a Vice- Chairperson. Are there any nominations? Hon.

Andrew Micklefield (Government House Leader): I wish to nominate Shannon Martin for the position of Vice-Chair, please. Madam Chairperson: Mr. Martin has be en nominated. Are there any other nominations? Hearing no other nominations, Mr. Martin is elected Vice-Chairperson. This meeting has been called to consider the following bills: Bill 19, The Efficiency Manitoba Act; Bill 20, The Crown Corporations Gov ernance and Accountability Act. I would like to inform all in attendance of the provisions in our rules regarding the hour of adjournment.

A standing committee meeting to consider a bill must not sit past midnight to hear public presentations or to consider clause by clause of a bill, except by unanimous consent of the committee. We have a number of presenters registered to speak tonight, as noted on the lists of presenters before you. On the topic of determining the order of public presentations, I will note that we have out-of-town presenters in attendance, marked with an asterisk on the list.

120 LEGISLATIVE ASSEMBLY OF MANITOBA May 11, 2017 With this consideration in mind, in what order does the committee wish to hear the presentations? Mr. Martin: I suggest we listen to those individuals who travelled from out of town to present first. Madam Chairperson: Is this agreed by the committee? [Agreed] Written submissions on Bill 19 from the following persons have been received and distributed to the committee members: Joe Masi, Association of Manitoba Municipalities, and Tim Sale.

Does the committee agree to receive these documents and have them appear in the Hansard transcript of this meeting? [Agreed] Before we proceed with presentations, we do have a number of other items and points of information to consider. First of all, if there is anyone else in the audience who would like to make a presentation this evening, please register with staff at the entrance of the room. Also, for the information of all presenters, while written versions of pre - sentations are not required, if you are going to accompany your presentation with written materials, we ask that you provide 20 copies.

If you need help photocopying, please speak with our staff. As well, in accordance with our rules, a time limit of 10 minu tes has been allotted for pre - sentations, with another five minutes allowed for questions from committee members. If a presenter is not in attendance when their name is called, they will be dropped to the bottom of the list. If the presenter is not in atte ndance when their name is called a second time, they will be removed from the presenters' list.

Prior to proceeding with the public presentations, I would like to advise members of the public regarding the process for speaking in committee. The proceedin gs of our meetings are recorded in order to provide a verbatim transcript. Each time someone wishes to speak, whether it be an MLA or a presenter, I first have to say that person's name. This is the signal for Hansard recorder to turn on the mics and off. Thank you for your patience. We will now proceed with public presentations. An Honourable Member: Point of order, Madam Chair. Point of Order Madam Chairperson: Mr. Fletcher, on a point of order. Hon.

Steven Fletcher (Assiniboia): For the list of MLAs in attendance, I would like to have my name included on the record: Steven Fletcher, Assiniboia. Madam Chairperson: According to the rules, every MLA that is acknowledged tonight for questions or comments will automatically be entered into Hansard, so there is no point of order and we will now proceed with presentations. Bill 19–The Efficiency Manitoba Act Madam Chairperson: I would like to call on Kevin Rebeck, Manitoba Federation of Labour president. Do you have any written materials for distribution to committee? Mr.

Kevin Rebeck (Manitoba Federation of Labour): I do. Madam Chairperson: Please proceed with your presentation. * (18:10) Mr. Rebeck: Thank you. My name is Kevin Rebeck , president for the Manitoba Federation of Labour, or MFL, and on behalf of more than 100,000 unionized workers we represent in Manitoba, including the employees of Manitoba Hydro and the many building trades workers who build our hydro assets, I'd like to thank you for the opportunity to speak to Bill 19, The Efficiency Manitoba Act.

Manitoba Hydro, as a publicly owned Crown corporation, is one of our province's greatest economic, environmental and social assets. The further development of our clean, renewable hydro-electric resources, further investment in demand-side management, and expansion of other renewables such as wind and solar are vital ingredients for Manitoba's long- term economic growth, global efforts to curb climate change, and ongoing energy affordability for families and businesses in Manitoba. There are some very positive aspects to Bill 19, but also some very concerning ones, which we urge the government to reconsider.

In what follows we'll speak to both.

May 11, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 121 The MFL is pleased to see government moving forward with legislated energy -efficiency targets, and we support engagement with those with expertise and experience to help strengthen targets over time. In Manitoba, we already have a strong track record and much to be proud about on the energy-efficiency file. Manitoba Hydro's existing suite of Power Smart programs has already transformed the way Manitobans think and act with regards to energy consumption and conservation.

Using our valuable energy resources ever more wisely will not only save families and businesses money on their energy bills, but will also free up excess power to be sold profitably on the export market, thereby helping to keep Manitoba's hydro rates among the lowest in North America and reduce our carbon footprint.

The MFL believes that Manitoba Hydro should keep moving boldly to strengthen energy -efficiency programming and, at the same time, continue to build our valuable hydro -electric resources, creating good, family-supporting jobs, keeping rates low for Manitobans, stimulating economic growth, and growing North America's renewable energy supply.

We suggest that further consideration be given to how best to expand energy efficiency programs into First Nation communities, where home and community infrastructure coul d be particularly energy inefficient, as well as to lower -income households who need urgent relief on their energy bills. We applaud the steps that Manitoba Hydro has taken in recent years under the framework of the energy savings act to dramatically exp and the reach of programs in support of energy efficiencies and the adoption of geothermal infrastructure in First Nation communities.

We're deeply concerned, however, with the core feature of Bill 19, breaking off energy efficiency programming for Mani toba Hydro, where it's matured, expanded its reach, and become increasingly more effective over the years. While we recognize that Bill 19's proposing the establishment of a stand-alone, publicly owned Crown corporation, Efficiency Manitoba, as opposed to a private entity, which we strongly oppose, we're still concerned about threatening and creating massive uncertainty for more than 100 talented and experienced Manitoba Hydro staff who currently work in this area.

We're concerned about dividing up and segmenting Manitoba Hydro into smaller bits and parts, weakening its foundation with the interfering with the successful branding and customer respect and acceptance already established for Power Smart, with risking the loss of continuity in program and loss of knowledge and expertise of staff, and, perhaps most concerning for the long term, the threat of laying the groundwork for privatization in the future, which would run totally contrary to the interests of all Manitobans.

These concerns add to a great alarm Manitobans are already feeling about the announcement of 900 layoffs at Manitoba Hydro, coming at a time when a number of other large employers–Great West Life, Investors Group, Bell –are also eliminating good jobs in our province. We note also the creation of a new energy - efficiency entity. along with a new board and administration and governing structure, will involve significant additional costs, both transitional and ongoing. Those will need to be borne by Manitoba Hydro ratepayers, residential, commercial and industrial.

This seems like a move in the wrong direction, especially when there's no guarantee that a new entity will deliver better results. In fact, it seems that the creation of a new entity threatens to produce inefficiencies, additio nal costs, disruption, both personal and commercial, and risks degrading Manitoba Hydro's reputation, not only at home but at our export markets. It also threatens to disrupt existing positive relationships with energy -efficiency partners which have supported the success of Power Smart. Thanks for the opportunity to share our views.

We urge the government to reconsider the Bill 19 model, retain th e framework for legislating and strengthening energy-efficiency targets, but build on the successful Power Smart foundation within Manitoba Hydro rather than gambling on an expensive new offshoot to do the work that Manitoba Hydro workers have shown they c an already efficiently and effectively. Thank you. Madam Chairperson: Thank you for your presentation. Do members of the committee have questions for the presenter?

122 LEGISLATIVE ASSEMBLY OF MANITOBA May 11, 2017 Hon. Ron Schuler (Minister of Crown Services): Well, thank you very much, Kevin, for being out tonight. I think it's going to be another busy evening for you–two committees running again, and I always appreciate you coming and representing your con- stituents and appreciate your comments that you put on the record. Hon. Steven Fletcher (Assiniboia): Thank you for your presentation. In your remarks, you expressed some concerns.

In regard to the –I have a report here from the Canadian centre for public –of public policy alternatives that discusses demand -side management and expresses a concern that increases in hydro prices or rates would affect the lower income people. I have other reports that say that, you know, because Manitoba has the lowest rates and the alternatives are much higher, that, overall, the rates will increase, thereby putti ng a –more of a burden on the lower income Manitobans.

Moreover, they –it would also cause Manitobans to deal with–pardon me, Madam Chair, I just lost my page here–but the gist is wealthy people can afford solar panels; renters and other people cannot, in ge neral terms. So many of these programs are essentially subsidizing relatively wealthy people compared to relatively disadvantaged people. Would you like to make a comment? Mr. Rebeck: Sure, well I think whatever model is moved forward, I think it makes sense to keep things within Power Smart, which is a model that's known.

I think whatever model goes forward, your statement's true that some of the alternatives that are in place are more easily accessible to those who have the means in finding ways to make sure that we have additional supports like some of the work that's been done on First Nation communities and others is something we need to do a lot more of. Mr. Ted Marcelino (Tyndall Park): Thank you, Kevin, for being here, and, as usual, your comments have been very helpful. You touched on some of the concerns that we have regarding this bill, and we will take that into account every time that we ask any questions. Thank you.

Ms. Cindy Lamoureux (Burrows): Thank you for coming out and presenting to the committee. In your notes –in your presentation, you mentioned that this bill also threats to disrupt existing positive relationships with energy efficient partners. Could you expand which part ners those are? Mr. Rebeck: You know what?

I don't have the listing in front of us, but the brand and the relationships that Power Smart has established in the community are deep ones that are in place with people and staff as well, and creating a new ent ity kind of resets some of that for them to renew those relationships and see if they can establish them and move them forward. So why the disruption? I'm not sure I understand the need to make that change or what they hope to accomplish by breaking it off to create a new separate entity that would require a lot of resources to set up and have in place and, ironically, title it efficiency. Mr.

Schuler : Mr. Rebeck, are you aware that the brand Power Smart is owned by the Province of British Columbia and tha t as of 2018 they are going to take the brand back, so Manitoba is no longer going to be entitled to use the term Power Smart? Are you aware of that? Mr. Rebeck: I was not aware of that, no. Mr. Fletcher: Mr. Rebeck, would you have any problems if the program was called smart power? * (18:20) Mr. Rebeck: I know to wait. You know, I think what it's called is important and people having that relationship or c onnection, and that might work–well, that might work well.

I think the principal objection that I'm raising, though, is not seeing the need to break off and create a whole new entity, a whole new Crown corporation when we have one that manages it. I think setting targets was a very good piece of this bill and something that we need to do, and I appre ciate that, but I'm not sure I see the value in a different entity than being in charge of it. Madam Chairperson: Thank you very much. I will now call upon C hris Mravinec, CUPE , Local 998. And do you have any written materials for distribution to the committee? Mr.

Chris Mravinec (Canadian Union of Public Employees, Local 998): I do. Madam Chairperson: Please proceed with your presentation. Mr. Mravinec: Good evening. My name is Chris Mravinec, and I'm here today representing over

May 11, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 123 1,100 members of CUPE , Local 998 who work at Manitoba Hydro as clerical and technical staff. I thank the committee for the opportunity to share our concerns about the legislation being proposed, Bill 19, The Ef ficiency Manitoba Act. While we agree with setting targets in legislation and supporting–and support strengthening these targets over time, we have serious concerns about removing Power Smart from Manitoba Hydro.

One of the main reasons cited for this mo ve centres on a conflict of interest, and I don't believe a– there is a conflict of interest for Manitoba Hydro to deliver both energy and energy savings programs. Whether or not this is true, the conflict of interest, fixing targets in legislation will rem ove any real or perceived conflict. Manitoba Hydro currently delivers about 1.2 per cent in savings annually, and I have full faith that the 1.5 per cent target called out in legislation can be met without creation of a separate entity.

I do, however, question this government's long- term vision for Manitoba Hydro when it moves to carve out the successful energy-efficiency programs. Creation of a separate Crown corporation to provide demand-side management services and pro - grams will add an unnecessary layer of bureaucracy to DSM activities and will force Manitoba Hydro, and hence ratepayers, to pay for that bureaucracy. Enacting this legislation will create additional transitional and ongoing costs without adding benefit for ratepayers. Manitoba Hydro has administered demand-side management activities for over 25 years.

This tremendously successful history has saved Manitobans money on energy bills and reduced domestic consumption with attendant greenhouse gas emission reductions. Polling conducted in March 2017 by Probe Research on behalf of CUPE 998 demonstrates very strong public support for Power Smart programming, and for keeping it in Manitoba Hydro. Sixty -eight per cent of respondents wanted Power Smart to stay in Hydro instead of it being moved to a Crown corporation. The removal of Power Smart from Manitoba Hydro puts at risk the livelihoods of over 100 workers and will result in a loss of knowledge and expertise.

This will be difficult to recover from, given that the staff currently employed in Power Smart activities are well trained, experienced and very committed to the value of their work. Moving the work will certainly create casualties in terms of careers and expertise. Uprooting these established, experienced programs will result in loss of continuity in the programs and services, and that would be a disservice to those employees and to the Manitobans who rely on those services. With so little to gain, it is difficult to understand why there continues to be such aggressive pursuit of this questionable goal.

There is far more risk than reward in this endeavour. There's a wide variation in provincial approaches to demand-side management in Canada, with models ranging from successful utility delivery models to top-down regulation through ov ersight agencies to hands-off approaches. Similar provinces have moved demand-side management activities back in -house after experimenting with separate agency models. In my written presentation, I expand on the different models used in other provinces, as well as their experiences.

It's too lengthy for the purposes of this committee hearing, but it is important to have it on record, and I urge you to read it thoroughly when you receive it. There appears to be no single best approach model, and the external agency model is more suited for jurisdictions where there are multiple utilities and distribution companies to deal with. In Manitoba's case, having a single public energy provider delivering DSM, demand- side management, simplifies many of the challenge s that would make an agency model preferable. The current approach in Manitoba is a balanced one.

It allows for government and PUB regulatory involvement through The Manitoba Hydro Act. It includes sound environmental and social con- siderations through T he Energy Savings Act, and it allows the Public Utility with the most knowledge of its customers and business to plan for, design and implement DSM programs. CUPE 998 is not the only group raising concerns over this bill. Garland Laliberte and others, th e Manitoba Industrial Power Users Group, they both share our concerns with this bill.

They feel removing DSM from Hydro will have a disruptive effect and carries risk that Manitoba Hydro's demand -side management expertise may not survive the transition. Objections raised by the Green Action Centre at the Public Utilities Board needs for an alternatives to hearings and since then have shown to be very relevant and include social -value implications. The Manitoba Industrial Power Users Group feels that Hydro should retain control of demand -side

124 LEGISLATIVE ASSEMBLY OF MANITOBA May 11, 2017 management versus creating a new entity. They have stated that the utility has the in -depth knowledge and long-standing relationships with industry required for these programs. Let's not risk losing this expertise by creating a separate entity. Let's work with what we have now, because it's shown it can work and it can improve, and it will continue to succeed with the right oversight and feedback. The Province definitely has a role to play, but it should be cautious a bout aggressive changes like removing Power Smart from Manitoba Hydro.

This can upset livelihoods in the existing balance of a series of very complex programs that work very well right now, and these are programs Manitobans have come to rely on. Partnership with Manitoba Hydro on exploring and developing opportunities is required to move Manitoba forward in being an energy efficiency leader and can provide many spinoff benefits to the Manitoba economy. Keeping Power Smart in Manitoba Hydro makes sense, and is the best way to get where we need to be. Thank you. Madam Chairperson: Thank you for your presentation. And could I just have you pronounce your name for my benefit? Mr.

Mravinec: Certainly. Mravinec. Madam Chairperson: Mravinec. Excellent, thank you. Mr. Schuler: Well, thank you very much, Chris Mravinec. Appreciate that you came out tonight and made your presentation and, you know, we've got a great system here at the Manitoba Legislature where each piece of legislation goes in front of the public and actually anybody can come forward and give a presentation. And I've sat here for a lot of evenings and it's always very enjoyable. And appreciate the input you put into this and I know the committee appreciates it. Thank you. Mr.

Fletcher: Would you agree that the operating of Power Smart, or –is a–that it's difficult to do energy conservation on one hand, sell power on the other, and then to do so in conjunction with a –within one utility that can co -ordinate perhaps efforts to synchronize high and low power surges to maximize the effectiveness of DSM? And would you agree or disagree that Manitoba Hydro actually produces almost no greenhouse gases? It's virtually zero, and compared to almost any other form of electricity is the cleanest, most –and the cheapest in the world.

And moving to a different model could potentially cost a lot of money. And where, s ir, what Crown would the money come from? What effect would that have on the Manitoba Hydro and the rates here in Manitoba? * (18:30) Mr. Mravinec: Thank you for the question. I don't believe it's a conflict of interest for Manitoba Hydro to be a seller and saver of electricity. I think the history, historical performance, is an indicator of a great model, great delivery. From memory, I believe over 364 gigawatt -hours of electricity have been saved. That's an incremental amount to date.

The programs continue to meet targets in electricity savings, and I think it's a good model and I don't see the conflict of interest, personally. With respect t o rates, I might –it would be conjecture for me to speculate. I'm not a rate setter at Manitoba Hydro. I don't have the in- depth knowledge to truly speak to rate setting, but I do know that the current rates contain the Power Smart services already. So, if the current rates are an indication of what it takes to deliver good Power Smart, then I think we're in good hands, and I don't think rates would increase by maintaining the current model. Mr.

Marcelino : Thank you for being here, Chris, and the committee usually hears from those who are concerned, most especially when there is such a change where there appears to be no reason except a perceived conflict of interest between Hydro doing the generation of power and, at the same time, selling the idea that power could be saved. From your perspective and from your conversation with members of the CUPE, Local 998, was there anything wrong with the Power Smart division of Manitoba Hydro? Mr. Mravinec: I have had no indication of anything wrong from the members that I represent in Power Smart.

There are about 50 of them. I've gotten to know many of them through this exercise. We've worked with management in adjusting to some of the challenges through the vacancy management. Services were able to be maintained, and I'm not aware of any problems with the program.

May 11, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 125 I can tell you that those members, those employees, are deeply proud of the services they perform. I've seen one sister we work with come to tears when she wondered about the future of her work and how those services would be offered to the public, so I know there's a deep commitment, tremendous expertise and experience, and I don't think I'd call that a problem. I think I'd call that something we want on our side. Madam Chairperson: Thank you for your presentation. The time for questions has expired. I will now call upon Dan McInnis.

Do you have any written materials for distribution? Mr. Dan McInnis (Private Citizen): I don't. Madam Chairperson: Okay. Please proceed with your presentation. Mr. McInnis: Thank you, Madam Chair, committee members, staffers and other presenters. I really want to thank you all for this opportunity to present my views on this topic. First of all, a little bit about me. I know it's not about me; it's about Bill 19, but very quickly here. I retired in 2013 after 32 years in the public sector. I had experience in both municipal and provincial government.

My last position was actually an assistant deputy minister here at the Province responsible for energy, climate change and green strategy initiatives. Three times, I represented Manitoba on Canada's climate-change team at the United Nations COP, as well as I represented Manitoba at the United Nations Rio+20 summit. I'm fairly well versed in energy efficiency, energy sup ply, public policy, program delivery and surviving. I call myself a practical environmentalist. I'm a lifelong Manitoban. I'm also a proud member and donor to the PC Party of Manitoba.

I believe in small, efficient government, including utilities, and that people will make the right decisions, provided the government doesn't interfere. However, I also believe that there's a segment of society that also needs help in order to achieve a reasonable standard of living. So me, you know, if I was categorizing myself, I'd probably say I'm a red Tory. So that's – sorry, sorry. But I think it's also important here to realize how we got here. How did Bill 19–it's not a new thing.

Bill 19 and Efficiency Manitoba was hatched in about 2005 by minister Sale –then-minister Sale, and Shaun Loney, who went to Vermont to visit an energy efficiency agency there called Efficiency Vermont, coincidentally. And through the various political maturations that happened, you know –it got stopped, it got amended, it converted into Green Manitoba for a while, and kudos to the government of the day for actually shutting down Green Manitoba as of April 1st of this year. You know, that's–Green Manitoba was actually one of the maturations of Efficiency Manitoba at the time.

So–but because of kind of political partisanship– and I'm sorry to say this, but, you know, this thing has come up again–you know, at the NFAT hearings, we had –at the end of the NFAT hearings, no less – you know, certain parties came forward and said, yes, take Power Smart ou t of Manitoba Hydro because they're not delivering the services in our community. It really wasn't even part of the terms of reference for the NFAT hearing.

But the government of the day –and every government, I believe, does it, so I'm not blaming anyone –when they appoint a panel to study an issue and the panel makes recom - mendations, government always wants to accept all the recommendations, whether they're good or bad, because what happens is you appointed the panel, so if you don't accept the recommendations, it looks bad on you. And I'm not saying–but every government does that. And this is how this thing got re - invigorated again. So the government of the day said, yes, we accept the recommendations.

They realized after a bit that, you know, a stand- alone Crown c orp or separate agency wasn't the right thing to do. A proposal was made to make it a subsidiary of Manitoba Hydro. That was around November of 2015. And, at that time, the opposition of the day said, well, if you can't get the job done, we will . They made an election promise to do it. And we bring ourselves here today. Here's my request of you. Defer the third reading of Bill 19. Hire an outside consultant to lead a team of government and Manitoba Hydro folks to develop a five -year business pla n. Send it to the PUB for consultation.

Review it and have the PUB make recommendations to government on the next steps. So I'm not saying do this or do that with Bill 19, shut it down or let 'er go, I'm saying I don't think that you guys, you folks, you c ommittee members, elected

126 LEGISLATIVE ASSEMBLY OF MANITOBA May 11, 2017 officials, have enough information to make an informed decision on it. So here is the background to that. As other people have already noted, it's going to increase costs. So, if you're going to have additional admin- istration and governance, you'll have a nine -member board office space, customer service, technology, et cetera. Those costs got to be paid for by someone. You lose the connection with Manitoba Hydro's integrated resource planning process, and I believe other people are going to talk about that. It's extremely important to maintain that.

And it also goes to the issue that I've heard here raised earlier about this conflict of interest topic about how can you be a saver and a seller of a commodity. Well, the integrated resource management –or integrated resource planning process takes care of that. * (18:40) I really love Bill 20. I've read it. I think it's bang on. You know, if I was here to stay a little bit longer, I'd love to make a presentation on it. But what I 'm finding is that Bill 19 conflicts with Bill 20. So , by setting up this Crown corp, it's not transparent.

The plan is to have Manitoba Hydro pay for the costs of Efficiency Manitoba. These costs will be buried in the rates, and they're not going to be tr ansparent on the bill. So, as a ratepayer, as a utility payer, I should know that DSM Efficiency Manitoba costs 1.5 cents a kilowatt hour, or whatever the number is, so that I can make an informed decision whether I'm willing to just keep paying that, or I'm going to do something about my demand. Let Manitoba Hydro do its job and keep government out of the day -to-day operation. And that's exactly what Bill 20's doing. This bill conflicts with that, though.

And let me explain. So Efficiency Manitoba's going to submit their annual plan to the PUB for review and consultation, which is all good, but any other utility or Crown corporation of this nature, the PUB would say: okay, your rate of 1.5 cents; good to go; away you go–just like they do with Manitoba Hydro. But yet, for some reason, and, I think, I know why, Bill 19 is set up so that the PUB just makes recommendations to government, and then government makes the decision. Stay out of that business.

I've already mentioned there's no business case prepared or implementation plan, or, if there's been one prepared, it certainly isn't public. I've asked for it, and I've been told no. Another aspect to this whole thing is we don't need more electricity energy -efficiency pro - gramming in Manitoba. Manitoba right now has surplus electricity to at least 2036. If the Energy East pipeline doesn't go, we will have surplus electricity to at least 2040. Let's talk about a business model.

So let's say I own a hypothetical printing shop on Kenaston Boulevard and, you know, I'm trying to grow my business bigger and bigger. So, you know, other than things like –sorry–you know, other than things like, you know, protecting my brand, providing good customer service, there's two basic things you need to do: you need to grow revenue and reduce costs. So each year, Manitoba Hydro sells 35 billion kilowatt hours of electricity each year, at an average cost – average revenue of 5.5 cents. Just to let you know, residential customers pay almost 8 cents.

Now, marginal costs –well, it's–the average cost is 5.5, so the cost to produce the 35th billion and one kilowatt hour of electricity is a really small number and, without the sake of argument, let's say it's less than a cent. It's probably less than a 10th of a cent, because you have all the infrastructure in place, right. And, you know, all the lines are in place; the dams are in place. So it's a marginal demand. Power Smart is marginal savings.

So, currently, Manitoba Hydro spends 1.8 cents per kilowatt hour in Power Smart and–so why would a business pay a customer 1.8 cents to not buy their product when they manufacture the product for less than one cent and sell it at 5.5? If you were a business student at Asper School of Business and you wrote that in a paper, you would get an F. A nd this is what's happening here. Just quickly, here. One of the –and I'll just skip over the natural gas stuff, but, you know, there's three stated goals of Efficiency Manitoba.

One is to 'mitigrate'–mitigate rate increases, and my position is that the costs will go up and the sales will go down– the opposite; defer new generation–and, as I've already mentioned, we have excess generation to at least 2036; and reduce greenhouse gas emissions. But, in fact, you're putting on a carbon price next year, so, like, you're conflicting it, right. You've got two agencies kind of working– Madam Chairperson: Mr. McInnis, your time has expired for your presentation. We're going to move on to questions.

May 11, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 127 Mr. Schuler : Well, Dan, thank you very much for coming to committee. I love this about spending evenings here, and we get presentations from all different kinds of viewpoints, and yours gave us some of the background. I would love to sit for the rest of the evening and debate you on a lot of the points. Alas, we don't have time for that. But absolutely appreciate what you brought to the table today and, I think, for the rest of the committee, you know, you put stuff into context.

And, you know, perhaps some other time over a latte, we could have a debate on some of the finer points, but I do want to thank you very much for coming out today. Mr. Marcelino: Yes, and I echo the gratitude of the committee and the minister about your presence here and your presentation. I have but one quick question that might interes t you. Knowing that Manitoba Hydro will be financing this particular sub -corporation, how does that –can you say something about that? Mr.

McInnis: Well, I did touch on the transparency part because even though Manitoba Hydro's going to financing this organization, though the cost of that is going to be buried in the utility rates and not visible on the utility bill, and that's definitely a concern of mine and probably most utility consumers. Mr. Fletcher: I'd like to thank the presenter for his question. As I –MBA graduate of the Asper School of Business, I hope I don't get this wrong.

What, if I understand, in layman's terms, what you're saying is, essentially, everything that we save through demand- side management, from Hydro's perspective, is a loss to Hydro. In addition, the–any power that is exported is a gain because the variable–the fixed costs are there; variable costs basically don't change. Or is it just money down the river or water down the river. You're saying that there's no transparency because of the–costs are buried in rates and so on.

You've provided an alternative so that we can get it right if this is what we just want to do, and when you have excess supply and you want to reduce demand, rates go up. Is there any other situation where that happens, any other company that can manage to pull that off? Supply up, demand goes down or stays level, and the prices go through the roof. I also wonder if you would comment on the double monopoly that seems to exist on Energy Manitoba between Cen tra Gas and Manitoba Hydro and, finally, if you could make a comment about the– that interesting point that you made about Bill 20.

There's a clause in this bill that excludes Bill 19 from Bill 20. I wonder if you could elaborate on that. Mr. McInnis: So m y–I believe the first question was, do I know of a company that's ever been managed where they reduced demand, increased rates and are successful with supply? I watch BNN every day, so, but I'm not a –I'm an engineer; I'm not a business analyst, but I can't imagine that model working anywhere. I don't know if I exactly got the second question or the third question. [interjection] Madam Chairperson: Sorry, we're going to move on to Ms. Lamoureux. Ms. Lamoureux: It's–I'll keep it very quick.

It's more of a comment than anything. I, really, for one, I appreciate your bluntness, especially towards the beginning there; it's very frank. I think sometimes the committee needs to be reminded of that. The background that you offered on the bill, I know I learned a lot from hearing you speak on that, and then you offered potential solutions. Really appreciated that. Mr. McInnis: You're welcome. * (18:50) I thought it was important to provide that background about myself just because, you know, I was an ADM under the NDP government. I consider Greg Selinger and Rob Altemeyer friends and good acquaintances.

You know, we worked well together as I worked with many other opposition members at the time. So I just thought it was important to kind of lay that out, you know, where I am. Madam Chairperson: The time for questioning has now ended, and we are going to move on to our next presenter. Thank you very much. I will now call on Evan Thompson, private citizen, and do you have any written materials for distribution for the committee? Mr. Evan Thompson (Private Citizen): I do not. Madam Chairperson: Please proceed with your presentation. Mr. Thompson: Can I grab some water here? Madam Chairperson: Absolutely.

128 LEGISLATIVE ASSEMBLY OF MANITOBA May 11, 2017 Mr. Thompson: There's no water rental fee on the water, right? Okay. Thank you very much, Madam Chairperson, and the committee for, well, I guess thanking the system, too, for giving me the opportunity here to speak. Originally, when I came to–or when I registered to speak for Bill 19, The Efficiency Manitoba Act, more just because I wanted to come in front of a group of elected officials and give a small math lesson on one particular part of the bill.

In, you know, preparing something here for a committee, I did, you know, come up with a few more points that I wanted to touch on, but it appears as though some of the people that have preceded me have made those comments already. So I won't bore you with repeating most of the discussion on having a second corporation that has to interface with now a Manitoba Hydro and the additional bureaucracy that that would create and sort of the restriction of information flow between the two entities that might, overall when you're looking at the big picture, increase costs.

So, instead of boring you with that, I'll just bore you with the math lesson. So just looking at the targets, and this has been sort of a bone I like to pick, not just with elected officials, but, you know, in my professional roles as well, in prescribing very strict limits on things, especially when you're doing it in legislation or sort of more in the private sector in contracts where it's very difficult to make a change.

The speci fic issue that I'm pointing out here is one that –I mean, if you run into it, it's probably a good thing on one end but necessarily you'll end up penalizing Efficiency Manitoba on the other end. The act has specific targets for an annual decrease, and I'll pick on electricity because it's a little bit more prominent than the natural gas targets, but there's the 1 and a half per cent decrease every year that's expected, and there's not much discussion about what happens if there is a really big decrease one y ear.

There's some discussion on what happens if you miss the target or you have an increase in terms of a cumulative effect, but there's no real big discussion about what happens if Efficiency Manitoba ends up being quite efficient. And so the concern he re is, and I'll kind of inflate the numbers a little bit just to kind of get a feel for the problem here, and maybe, even though I really shouldn't be using props, you know I have this glass of water here.

If I drink 50 per cent of the water, so I've somehow reduced the amount of water in this cup by 50 per cent, and I drink another 50 per cent, I've actually consumed 75 per cent of the water, not 100 per cent of the water. Unfortunately, the bill makes the same mistake on the cumulative target point in tha t it takes the 1 and a half per cent over 15 years and multiplies it out to get 22 and a half per cent.

Now, I mean I'm splitting hairs here on when–if you actually do the math on that, you end up with more of a 20 per cent reduction as the cumulative effect, but if you end up with one good year where Efficiency Manitoba reduces things by –reduces energy consumption by 10 per cent, now they don't really get the benefit of using that 10 per cent in future years because they'd still have to do 1 and a half every year. So there's a problem there.

The other issue, too, that comes up with this particular bill, and I'll just quickly consult my note here, is–and it was sort of touched on by some of the other presenters, too, is how do we measure what is an actual Efficiency Manitoba savings and what's just a savings because of things that they don't control. The big example would be when–if rates go up or if there is a carbon tax imposed, that would–the carbon tax would probably more be on the natural gas side, the rates being more along the electricity side here.

People will just naturally, when they're –over time, look for ways to reduce their consumption without necessarily availing themselves to the programs that energy –or, sorry –that Efficiency Manitoba would offer. And so, does Efficiency Manitoba get to count that towards their target, or is there some way that credit is allocated between external effects and the new agency?

And so, really, what I'm getting at here is –and, you know, I might want to even tag onto my predecessor's suggestion of sort of taking a look again at what's written in the legislation and perhaps just think of some of the scenarios that can exist there, and does it necessarily have to be legislated so that if situations change, whic h, likely is going to happen in the next 15 years, perhaps something that's less difficult to change but still important, like, let's say regulation, might be a better way to encode those targets, you know, still getting what you're looking for in the act generally, but not necessarily tying it to targets that can be sort of difficult to achieve or perhaps manipulated.

You can sort of save away

May 11, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 129 some efficiency one year and then bring it back the next year. And, too, if that is–if that game is something that could be going on, that's another argument for the whole increased bureaucracy because now you're going to have more people doing more –essentially, their job is going to be to make sure that you meet the targets, even though they're not actually doing any efficiency activities; they're just playing with the numbers. So just some points that I wanted to point out to the committee here. Thank you. Madam Chairperson: Thank you for your presentation.

Do members of the committee have questions for the presenter? Mr. Schuler: Evan, thank you very much for coming to committee, great to have you here. I'm going to run through a couple of points. We have a very short time to ask questions, so, quickly, to Dan McInnis, Power Smart currently does not show up on a bill, so I don't know why it would be an issue if it didn't show up on this bill. Guess he wants something for Efficiency Manitoba which we don't do for Power Smart.

Insofar as prescribed, strict targets, if you look at the legislation, know there is room, for instance, if it was felt that the target was too onerous, the Public Utilities Board can look at that. But more importantly, it is over 15 years, so that–it is the target over all those years. Also, when we look at 1.5, it is also factoring in the growth of consumption. So, every year, you do have growth of consumption, so you have to work on top of that as well.

And by the way, if you see anything else and you'd like to bring it to my attention, there's a gentleman –I was going to say in the blue jacket, but that wouldn't help you out any. It would have to be the gentleman in the tan pants. Call him up and I would love to hear your comments if you'd want to come by and take an hour or so and, you know, we can talk a little bit about some of your concerns. Really appreciate that you're here. Thanks. Mr. Marcelino : Thank you Evan, for –Mr. Thompson, for your analysis of what's –what could be wrong with this bill.

And I heard– you said the numbers could be manipulated so that even if there's no activity being done by this corporation, it would– it could still show that they are doing their job. Is that what I heard? Mr. Thompson: Didn't necessarily put it that way, but essentially–and I do believe the bill does address, a little bit, on how the targets ar e measured. So, I mean, there will be a set of rules to be put in place there. But it's always easy to–especially if you've got something at the end of the year –to push it over to the next year.

And, you know, we're not –we don't have professional energy accountants out there, you know, that are held to certain rules and, you know, well defined over time to avoid those sorts of issues. * (19:00) At the same time, I'm not saying that any one person would do something like–you know, like that, but even just m iscalculating something, a spreadsheet error, could get you on the good side or the bad side of a year. Now, saying that, you do have–as a minister mentioned, you do have the 15-year window as well, so it kind of works out.

But now, look, I'm waving my hands here and you've got this nice, firm thing written in legislation. It's sort of– it's always a problem when you do that, when you have a hard number in legislation where, you know, you're essentially going to create a bureaucracy to administer that number , and that's, perhaps, a concern, especially given that the current trend is to try and reduce bureaucracy. It's sort of counter to that. Mr. Fletcher: I thank you for the presentation. You raise a interesting point, and I think it goes to what is the p oint of the legislation.

If rates are going up, if you leave anyone on the political spectrum–right, left, centre –any economist–rates go up, demand may go down. How much? It's up to– we'll see, but it'll go down. So who takes credit for that? And why do we want rates to go down in Manitoba when we already have–or, demand to go down in Manitoba? We already have a huge supply surplus. We already have the cheapest power and we want to reduce demand. We want to try and grow the economy. I'm not aware of any economy that grows and tries to reduce its electricity demand.

And you have suggested the time -honoured, reasonable, small -c Canadian approach: legislate when you have to, regulate when you can. Regulation is a much better solution; has the same impact, but it's much easier to change than the law. That is an excellent suggestion, sir.

130 LEGISLATIVE ASSEMBLY OF MANITOBA May 11, 2017 Madam Chairperson: Okay, so our time for questions and answers has expired. I do want to thank you for your presentation. We are going to move on to our next presenter. Mr. Fl etcher: Can the witness respond to my comments? Madam Chairperson: Does the committee give permission for the presenter to finish –or, just answer that last question? [Agreed] Mr. Thompson: So, yes, I think Mr. Fletcher did summarize–sort of the point of my somewhat rambling speech that I gave is, essentially, the idea of only legislate when you have to and regulate when you can.

And that's, essentially, the point I was getting at in a roundabout way is that –and I'm really only focusing on the targets. I'm not qualified to speak to whether it should be a separate corporation or not, but the targets being enshrined in legislation is, perhaps, too heavy-handed for what's trying to be done here. Madam Chairperson: Thank you very much. I will now call on Dr. Garland Laliberte, Bipole III Coalition. And do you have written materials for distribution to the committee? Mr. Garland Laliberte (Bipole III Coalition): Yes, I do.

I have written copies for the committee and, in hoping there was going to be throngs of media here, I brought another 20 for them. But since they're not here, my colleague is going to distribute it to the galley–gallery. Madam Chairperson: Please proceed with your presentation. Mr. Laliberte: Good evening, my name is Garland Laliberte. I'm presenting tonight on behalf of the Bipole III Coalition . We're a volunteer organization loosely held together by a board of directors that includes mostly r etired engineers.

Among them is a former CEO of Manitoba Hydro, a couple of vice-presidents of Manitoba Hydro, a number of retired academics from engineering the University of Manitoba, and I'm a former dean of engineering there. And we have some people that –some engineers that spent their career consulting in northern Manitoba. So we bring that background to the table. We and the Bipole III Coalition, we've been thinking about this initiative of government for more than 16 months.

In fact, ever since it was introduced as a plank in the then -oppositions' election campaign and prior to that, and to a lesser degree when the concept was proposed by the PUB and endorsed by the then government. In fact, our following of this goes back into a number of years whe re it was considered by the PUB but no action was taken. So we've been following it one way or another for a while. We did advise the then opposition back in January of 2016 against this initiative, and we advised them again in March 2016. We're not starting from scratch here.

We already have a functioning delivery vehicle for DSM in Manitoba Hydro. However, to base our concern entirely on an argument against change would be foolish. We know that things can be done better sometimes by doing them differently than they've been done in the past. Our concerns are more deeply rooted than that; we believe that the model is unworkable. That's our first concern and, in fact, we see that the model is so unworkable that we were tempted to sit back and just let it happen, and then wait for it to implode.

But, as some of you in this room may have noticed, that's not the way we do things in the Bipole III Coalition, so here we are tonight. The budgeting model proposed by Bill 19 with authority resting in one entity , Efficiency Manitoba, but financial responsibility in another, Manitoba Hydro, is to say it kindly strange. No amount of legislative framework can compensate for the strange reality upon which this initiative is founded. I want to talk a little bit about unwise use of limited resources. With a divided jurisdiction for this effort, the total staff resource required will predictably increase.

It adds new responsibilities to existing agencies. For example, the PUB, which is expected to act as an arbitrator when the inevitable disputes arise between Manitoba Hydro and Efficiency Manitoba, there's –it's predictable that other costs besides staff will increase, because staff requires support and when you split your staff between two bodies, you have not just the co- ordination requirement between them, but they all have to be supported.

This is –in fact, this is counterproductive, we believe, to the government's stated policy of controlling costs and of guiding a managed reduction in the size of the public sector and staff complement. It's also a bad fit with Manitoba Hydro's recent

May 11, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 131 action to reduce staffing by 15 per cent for 15–where 900 employees are involved. Manitoba currently has responsibility for both demand-side management and supply -side management, if you will, management of the –of electricity on both sides of the meter. Bill 19 would transfer DSM to Efficiency Manitoba so that would separate these two functions, but they're symbiotic, and they, to some extent, rely on similar talents. Bill 219 tears this symmetry apart. The timing is off on this initiative.

The needs for an–alternatives to review conducted by the PUB concluded in 9–in 2014 that, even given a number of uncertainties, new generation will likely be required no later than 2024, that's now.

It was 10 years when they reported it seven years from now. they recommended proceeding with Keeyask; however, since then, the Manitoba Hydro -Electric Board, leaning heavily on the report of the Boston Consulting Group, took another look at it and they reported that the shortfall in 2024 is only temporary in nature and depending on a number –how a number of uncertainties play out, the year of need could be anywhere from 2027 to 2034.

I heard somebody–one of the other presenters –say 2036, there's softness in the number. * (19:10) We don't know yet what the model runs that underpin the recently filed general rate application will reveal about the year of need. But we may find that it may be later. Basically, what we do know is that we are overbilled. We just don't yet by how much. Manitoba Hydro needs time to expand its markets. In an overbill situation you need to expand your markets.

The US is a tough market given the expanding availability there of fracked gas that began about seven years ago and the arrival of a new America-first administration in Washington that thinks it can revive coal. I was at the Multiple Pathways to Clean Energy for Canada 's Western Provinces conference hosted by the Energy Council of Canada in Regina earlier this week. Preceded by a workshop organized by Natural Resources Canada, the conference was attended and addressed by about 150 of Canada's energy planning leaders. I was probably the only one there that didn't have an expense account.

I bring this up because there was consi derable dialogue and, I believe, consensus that it's high time we get on with planning and, yes, even starting to build a national transmission grid. Manitoba's neigh- bouring provinces, both fossil -fuelled Saskatchewan and nuclear-powered Ontario, represent an attractive market for Manitoba's renewable and green hydroelectricity. Our approach to efficiency and conservation would change if we found a welcoming home for our surplus, but that has to happen.

We need to –we need time to advance the concept of a transnational grid all the way across the country before we start tinkering with how we deliver DSM in Manitoba. Another opportunity explored at the workshop was electrified transportation. Electrified trans - portation could be a game changer in Manitoba. W e have some talent and expertise here. But it needs a little more time. Electrified transportation could – would hasten the day when we could engage in a full-court press on conservation and efficiency. Well, look at unintended consequences for a minute.

DSM will at best be neutral to cost and, if anything, slightly counterproductive, the result of not being taken up uniformly by consumers. DSM is a good thing, but in the Manitoba context it will be a long time before it decreases the cost of electricity to Manitoba consumers. It's misleading at best and 'disingenius' at worst to claim that conservation and efficiency will save Manitobans money both now and in the future, because as volume goes down, prices go up, and others have said that.

Manitoba will shift the cost of –I'm sorry–targets mandated by Efficiency Manitoba will shift the cost of electricity from those Manitobans who can afford to take advantage of DSM programming to those who cannot. It will negatively impact those living below or near the pove rty line. It will be hardest on those in remote communities and rural areas who have no alternative to electricity or space and water heating. In particular, it will negatively impact northern Manitobans and our indigenous brothers and sisters.

We take t ime for thorough public and expert input into decisions about a new generation plant – one minute –likewise, we take time to listen to thorough public and expert opinion on decisions about new transmission, although Bipole III stands out as a notable exception to that. We even take time for public input on such things as rate increases. Why would we try to move so quickly on this significant move?

132 LEGISLATIVE ASSEMBLY OF MANITOBA May 11, 2017 The Bipole III Coalition respectfully asks the government to delay the passing of Bill 19 until the concept advances has been thoroughly vetted. I love this province. I was born here. I was born in a house that was made of logs and chinked clay. We had no electricity. If somebody forgot to empty the wash basin at night, the water was frozen in it in the morning. I was there when– Madam Chairperson: Mr. Laliberte, your time has expired for presentation. We are going to move on to questions at this point. Mr. Schuler: Thank you very much, Garland.

Always great to see you and great to be in the same room as you–appreciate your presentation. Quickly to Evan: Evan, if you go to page 18,

section 16(1), it lays out very quickly to make sure the numbers are not manipulated. It states very clearly the results will be independently audited or evaluated, and that's for the critic as well. Thank you, Garland. First of all, you say, what's the rush? Actually, this started under the former premier, the member for St. Boniface (Mr. Selinger), some four years ago. It went through the PUB NFAT. In fact, the former government was looking into it, and then they had an internal issue and it was put by the wayside.

It was in our platform, in our election commitment, in the minister's mandate letter, in the Throne Speech. I think we've neither rushed this –I don't think four years i s necessarily rushing it–nor was it a secret. I also want to just talk very quickly about the organization itself. Power Smart right now eats up 44 per cent of its budget on overhead, and we are going to look at a model that it should be 20 per cent or less, and I wanted to also indicate that DSM is like a long-term insurance policy.

I loved how you made our case for DSM by saying electric cars and going west and having all these markets to supply energy to, and then somehow saving electricity to be able to supply those markets was a mistake. And far be it from me to criticize you, but there seemed to be a bit of an inherent conflict in your argument there. Always a pleasure being at committee with you. Thanks for the presentation. Mr. Laliberte: Right, all right, I can respond. Good. All right, four years ago, things were entirely different in this province than they are today. Four years ago, we didn't know how much we were overbuilt.

We hadn't approved Keeyask four years ago. Today, we've built Keeyas k and we're overbuilt into the future –as far into the future as 2024. What would we be doing trying to reduce the consumption, thereby reducing the revenue that we need to pay for Bipole III, we need to pay for Keeyask? Why would we decrease that revenue? We can't get it from the international market because that's an external market. So that's comment on one part of it. There was another part. Oh, electrified transportation, we need that.

Yes, we need that because we need to use the excess electricity that we have, so we need electrified transportation. We need anything that we can do. That's why we need a transnational grid. We got to move this product that we have, and if we're going to try to deal with this by reducing the amount of consumption within–domestically, then we're counterproductive. So that's my response. Mr. Chairperson: Thank you. Mr. Marcelino: Thank you, Doctor, for being here, and of course, your opinions and your expert advice are always well taken. We will take them into account.

And I just wanted to ask you about a term that you used: overbuilt until 2024 when Keeyask was proceeded with. That's only seven years from now. Your terminology about being overbuilt is a concern, but I think it's erroneous to say that we are overbuilt if it's only for seven years; meaning, Keeyask is still being built right now. [interjection] Madam Chairperson: Mr. Laliberte. Mr. Laliberte: Sorry. Seven years is old information. That was 2014, but in 2016, the Hydro- Electric Board engaged Boston Consulting Group, and they took a look at it and they said, no, you're overbuilt further into the future.

You're overbuilt somewhere between 2027 and 2034. And I think it was Mr. McInnis –maybe not, maybe it was somebody else–said that the actual year of need, the year of new –need of new energy is 2037, so that's not seven years; that's 20 years into the future. * (19:20) Mr. Fletcher: I think this is the same Dean Laliberte that was the dean of engineering when I went

May 11, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 133 through a million years ago. I will always remember, he said, to the look–you know, at the beginning, look to your left, look to your right, because in four years, those people won't be there. It's kind of like politics. Anyway, in regard to the presentation, what is the point of this? Madam Chairperson: Mr.–sorry, the Honourable Mr. Fletcher. Mr. Fletcher: Sorry. Two more quick questions. What is the point? There seems to be no advantage– Madam Chairperson: Actually, we actually have surpassed the time for questions and answers, so if you would like Mr.

Laliberte to answer the first one, we will allow that one answer to go forth. An Honourable Member: A point of order, then. Point of Order Mr. Chairperson: Mr.–Honourable Mr. Fletcher, on a point of order. Mr. Fletcher: I wonder if I could just finish my next two questions. Madam Chairperson: Is there leave of the committee to have Mr. Fletcher finish his questioning? [Agreed] * * * Madam Chairperson: Mr. Fletcher. Mr. Fletcher: Supply far exceeds demand. Rates are going up; presumably demand will go down.

We need demand for hydro to pay for whatever has happened in the past –Bipole III, Keeyask and whatever else came before that. There's a lot of debt. We need the demand. We need to sell whatever we can, whenever we can . How can we do this in the context of what the government is, with all due respect, suggesting with all the issues that you've raised with this and with your presentation. It just is incredible to me. Mr. Laliberte: Okay, if I can try and put an answer together out of that.

The –first of all, this –it's not unrelated to the fact that we are looking at 7.9 per cent increases over the next five years. That by itself –that by itself –will have an effect on demand. So you have that effect, and then you want to in troduce a demand -side management program that adds to that.

That just drives the year of need further out into the future, leaves you vulnerable to the US market where they know that we're oversupplied here, and that's why you get a –you've got an increasin g percentage of your revenue from the US; it's coming from the surplus market because it–that surplus energy is just about as solid as the contractual stuff. So we just set ourselves up as a sitting duck with this program. Madam Chairperson: Thank you for your presentation. I will now call on Dennis Woodford, private citizen. Do you have any written materials for distribution to the committee? Mr.

Dennis Woodford (Private Citizen): Yes I do. Madam Chairperson: Please proceed with your presentation. Mr. Woodford: Thank you, Madam Chairman and members, Legislature and staff. It's an opportunity for me to be here and express my concerns on act – Bill 19. I cherish the democratic right I have to stand before you and express my concerns, and these are, first of all, I see a lack of consultation beforehand. And I look at Alberta, and I mention here that in June 2016, Alberta government released a discussion document, energy efficiency in a –and community energy in Alberta.

It is prefaced by the minister responsible, climate change, Shannon Phillips, and she states: "This discussion document is meant to help guide the engagement process. Throughout the document a number of questions will provide a starting point for conversations. These conversations will provide the information the panel needs to develop its recommended approach, programming options and general advice to government.

We invite you to share your perspective." Why wasn't there an invitation sent out to Manitobans to provide how energy needs to be developed in this province, particularly when we have an oversupply as been mentioned? We must export at a loss to be made up by increased electricity rates, so –which will increase the way Bill 19 is heading. This has been mentioned. This advisory group, established in Alberta, was chaired by a prominent gentleman by the name of Dr. David Wheeler.

He states they need to enthuse Albertans with the possibilities for transformation of the provincial economy, for the creation of opportunity for indigenous communities and other key sectors of Alberta's municipal and civil society sectors, for reductions in energy costs for all

134 LEGISLATIVE ASSEMBLY OF MANITOBA May 11, 2017 consumers and for social and environmental leadership in Canada. I do not see too many Manitobans enthused with Manitoba Hydro in these recent years, and what our governments have done. Bill 19, E fficiency Manitoba is certainly not something to get excited about. People, experts and First Nations do not seem to be liste ning–listened to, and when will government truly open and actually listen? As Mr.

Mravinec from CUPE stated, that a poll was conducted by Probe Research last year and found that only 12 per cent of Manitobans favoured the creation of a new energy efficiency agency to take responsibility for energy savings programs, while 78 per cent said that Manitoba –said Manitoba Hydro should continue to run Power Smart. Another 10 per cent of respondents said they were unsure. This poll was funded by CUPE. It was to Manitobans, it wasn't out just to union members. By moving forward with Bill 19, does the government really want to represent the people if this is the case?

So what is missing in this bill, and I think, is the economy. How can Manitoba grow the economy of Bill 19–with Bill 19? The act states, on page 9: the annual savings targets that Efficiency Manitoba is responsible for meeting in the 15- year period following the commencement –as it says, and has been said before today –1.5 per cent of consumption of elec trical engineer must be reduced from the preceding year. And that goes on for 15 years. In other words, the act requires savings targets of electrical consumption over 15 years.

Now, from the PUB's NFAT to review of Manitoba Hydro's development plan in the 2014 final report, June the 20th, 2014, Manitoba's questionable energy load growth was stated by Manitoba Hydro to be 1.5 per cent per annum. Does this not imply that this will effectively right–result in zero load growth? And, as such, there is no need for Keeyask for the domestic load. The Efficiency Manitoba Act is misdirected, as it appears to do nothing for the province's economy and Manitoba Hydro's severe debt crisis.

If these factors had been the basis upon which Bill 19 was directed towards, t hen there would have been more public support. One development that has been mentioned that needs to be promoted for the economy is the electrification of transportation. Electrification of transportation will increase the use of electricity, not reduce it, as Manitoba's mandate requires. If aggressively well done, as in Quebec, greenhouse gas emissions will be reduced through less internal combustion engines in the province and less 'impoil'– oil imported into the province, as proposed recently by NDP MLA Rob Altemeyer.

Furthermore, electric energy generated from Keeyask would be more profitable as more of it will be used within the province at a higher rate than it is achieved through electricity export sales–and I follow these every day, and I can tell you that when we export to the US on a daily basis on the surplus market, it's lucky if you can get over 3 cents US a kilowatt -hour. And don't– and I know darn well, excuse the language, that Keeyask, the way it's going, is going to be generating pretty close to 10 cents a kilowatt-hour Canadian. * (19:30) We have an electric car and it is parked out front here.

When I go home, I will plug it into a 110 -volt outlet, and it will charge overnight. Every kilowatt - hour it takes to charge at nearly 10 cents is a kilowatt-hour that Manitoba Hydro will not have to sell into the export opportunity market at 3 cents a kilowatt hour. Now, increased electricity bill, as a result of this car, was $250 in the year,

whereas the Ford Taurus that we had before, we ran on an annual gasoline cost of about $1,300, about five times more, not including the extra maintenance required for the Ford. However, the cost of the Nissan electric LEAF –it– the–was about $10,000 more than an equiv alent car running on gasoline. Can we take a lesson from Quebec on this? You are probably aware in November, 2015, the City and the Province assembled a joint task force to investigate the viability of electric transit system in Winnipeg. We've got full buses; those are electric.

We eagerly await the release of this report in anticipation that it will show that electrification of our transit system will be profitable. I sure hope so. This would increase markets for New Flyer and contribute to the provincial economy. The infrastructure needed for electric transportation will contribute towards the growth in the economy and help keep electricity rates from rising as much–fast as much. So, in conclusion, I would like to state that Bill 19 should be scrapped and redone with consultation from the publ ic, First Nations, businesses and experts as Alberta has done –is doing.

May 11, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 135 In so doing, it must be for the betterment of all and lead toward a growing economy and in better debt reduction for Manitoba Hydro. In conclusion, I wish you well as you reach this objective of making Manitoba a better place to live. Thank you very much for this opportunity. Madam Chairperson: Thank you for your presentation. Do members of the committee have questions for the presenter? The honourable mister–Minister Schuler. Mr. Schuler: Well, thank you very much, Dennis, for coming out and for your presentation.

Quickly, to Garland, Manitoba Hydro indicates that majority of Keeyask electricity is already spoken for. The issue that we have before us is that we have five years before Keeyask will be producing, and the debt and the cost overruns left to us by the former government is what's hurting Manitoba Hydro at the current time. So I do want to quickly address a concern that you raised, mister–[interjection] Point of Order Madam Chairperson: The Honourable Mr. Fletcher, on a point of order. Mr.

Fletcher: Madam Chair, I wonder if we're going to hear a rebuttal of each witness after the witness has stepped aside and unable to respond. I wonder if the committee would allow at least an opportunity for these very learned individuals to respond to the – any member's questions, especially after the state - ments are made during another presenter's Q and A. Madam Chairperson: In my opinion, that is not a point of order.

There is five minutes for questions and answers on the topic at hand and–on the bill, and we are trying to accommodate as many questions and as many answers as possible, so we will continue in the rotation as it has been. * * * Mr. Schuler: Well, and Dennis, I want to just talk to you quickly –or just to the committee about the no consultations. There was a Public Utilities Board NFAT in 2014 where there was a lot of opportunity. Individuals can go and register and have their say, so there was opportunity there to have input in demand-side management.

The former NDP government –former premier's sitting at this table, and he was in support of –at one point in time, of demand -side management. There was an opportunity there. We had a provincial election where, assumingly, t he NDP still supported demand-side management. It was in our platform; it was a party plank, and it became an election platform.

I would point out that it was also in the minister's mandate letter and it was also in the Throne Speech, so it's not like t his came as a surprise, that people didn't know it was coming and didn't have an opportunity to 'indigate' –indicate to government what they would like to see in the legislation. So I think there's been a lot of con- sultation over two governments and a lot of years, and I think we've come to a point where we have a piece of legislation that is workable and is going to serve Manitobans well.

Thank you very much for being here, always a pleasure hearing your presentation, appreciate you taking the time to be here. Thank you. Mr. Woodford: Well, I appeared before NFAT. What I said wasn't listened to, so this is the first opportunity I've got to say something other than op-eds to the Winnipeg Free Press, so I don't think that's enough. Mr. Rob Altemeyer (Wolseley): Yes, I'd like to pick up on that point, Mr. Woodford, and I thank you for your very thoughtful presentation. We've had six presenters tonight.

The mildest of them have raised serious concerns about how this legislation is structured, and many prese nters have said, you know what, this isn't ready to move forward. It needs some deeper thought. A lot of very legitimate points have been raised, yours among them tonight, and the government needs to take a moment and reflect on what they've heard from concerned citizens like yourself and maybe come back with a better proposal.

How will you feel if that doesn't happen, if the government doesn't listen and just uses the majority that it did earn in the election to ram through what they have put on paper so far and not considered the input of the people that took the time out of their lives to come here tonight? [interjection] Madam Chairperson: Mr. Woodford. Mr. Woodford: Sorry, Madam.

136 LEGISLATIVE ASSEMBLY OF MANITOBA May 11, 2017 I'll just have to write more op -eds to the Free Press. Mr. Fletcher: The election commitment made by the Conservatives was to look at creating a third – like, another entity. At no time was there an election commitment to create a Cr own corporation, but that is–so there is surprise. The–in regard to consultation, don't worry about it. This –I actually worry about it, because this is my first opportunity to speak on this, and I am very grateful for that opportunity. So I share the issue about consultation, especially with the engineering community.

One could argue that it was n ot listening to the engineers in the first place that led to the challenges we have today. Your main point in your presentation was growing the economy. That is really it. Like, what is the point if we can't grow the economy? Sir, are you aware of any economy in human history that has grown–as we said we would do in our platform, grow the economy –that has reduced its electricity consumption? Or–and separately, are you aware of any other situation where supply far 'oxceeds' –exceeds demand? Usually, you would expect prices to go down, but the cost is going through the roof.

The – and here we are adding more cost to run, apparently, a Crown corporation that will fund another Crown corporation to compete with the first Crown corporation. Perhaps it is time to reflect on that legislation. What's your thoughts? Mr. Woodford: I don't know any situation that you say, but I do want to say that there's an interesting situation in California where it's getting too much solar and it's causing problems, but that's a different subject and I don't want to discuss it at this stage. * (19:40) Madam Chairperson: Thank you very much for your time and your presentation.

That concludes the list of presenters I have before me. Are there any other persons in attendance who wish to make a presentation? Seeing none, that concludes public presentations. * * * Madam Chairperson: In what order does the committee wish to proceed with clause -by-clause consideration of the bills? Mr. Shannon Martin (Morris): Numerical order. Madam Chairperson: Is that the will of the committee? [Agreed] During the consideration of a bill, the

preamble, the enacting clause and the title are postponed until all other clauses have been considered in their proper order. Also, if there is agreeme nt from the committee, the Chair will call clauses in blocks that conform to pages, with the understanding that we will stop at any particular clause or clauses where members may have comments, questions or amendments to propose. Is that agreed? [Agreed] We will now proceed with Bill 19. Does the minister responsible for Bill 19 have an opening statement? Mr. Schuler: Yes, Madam Chair.

Committee members, ladies and gentlemen, I am pleased to be here to discuss Bill 19, The Efficiency Manitoba Act. I would like to thank the presenters for joining us today to share their perspectives and opinions. Bill 19 will provide the authority to establish a new demand-side management Crown corporation to deliver energy efficiency initiatives in Manitoba.

In June 2014, the Public Utilities Board NFAT, or needs-for-and-alternatives-to panel, recommended that Manitoba Hydro be divested of DSM respon- sibilities and the Government of Manitoba establish an independent, arm's -length entity to deliver government-mandated DSM targets. Adopting these recommendations of the PUB's NFAT panel is part of the mandate provided to me as Minister of Crown Services as outlined in the May 2016 mandate letter from the Premier of Manitoba (Mr. Pallister).

At a very high level, the de w–the new DSM Crown corporation, facilitated through The Efficiency Manitoba Act, will be independent of Manitoba Hydro and at arm's length to government. It will be managed by a board of directors consisting of up to nine directors; it will be required to meet legislated savings targets for both natural gas and electricity, and it will be accountable for per - formance through the Public Utilities Board oversight and would be subject to ongoing financial auditing by the Auditor General.

The focus of Bill 19 is on electricity and natural gas, but contains provisions that allow for the expansion into water and transportation demand-side

May 11, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 137 management, referred to as DSM, if desired in the future. Once in place, a new, more effective and streamlined DSM corporation with the sole purpose of delivering energy savings to Manitobans will help. It will reduce the impact of future rate increases; it will defer the need for expensive, new energy supplies; it will create new employment and business opportunities and will improve the competitiveness of Manitoba businesses.

Bill 19 will ensure that the new DSM Crown corporation will be driven towards a performance - orientated approach and a culture that can deliver more value to 'manidobans' as we invest in clean growth opportunities. I look forward to consideration of this important legislation by this committee. Thank you. Madam Chairperson: We thank the minister. Does the critic from the official opposition have an opening statement? Mr.

Marcelino : This bill, when it was first introduced on first reading, contains some of the concerns that presenters have identified, which is the creation of another layer of bureaucracy, which is, in a way, a very valid point which I wish the minister would take into account when we do the report stage. And my colleague also has some amendments to be introduced later on that would suggest that this bill is not perfect as it is now written. And we will vote against it if there are no amendments that are allowed.

And, of course, the problem that I have is that the majority of the government might force this bill to become law and, of course, that will be a tragedy, because there are some good things that Her Majesty's loyal opposition can propose, and there are some amendments that are reasonable enough that will accommodate the concerns of the general public, as it is, and some of the engineers. And we are now beset by time constraints. And I understand that the minister is, of course, trying to pass this bill so that, well, this will be his first in this Legislature after a long while. Thank you, Madam Chair.

Madam Chairperson: We thank the member. An Honourable Member: Point of order. Point of Order Madam Chairperson: The Honourable Mr. Fletcher, on a point of order. Mr. Fletcher: Madam Speaker, I wonder if all parties could just take a step back and consider what we've been told tonight, and perhaps have some other points of view presented. And, if the government comes back without changes, okay. But at least let the publ ic see the government listening. That is in the government's interest. It's in the –Manitoban's interest. This is not going to –the world isn't going to implode if we don't pass it tonight.

We also have the– Madam Chairperson: I'm going to interrupt at thi s point. The points of order are not to be used to debate or to be used as opening statements. It is simply to notify and signal a breach of protocols or procedures. * * * Madam Chairperson: So, at this point, we are going to move on to the clause by clause. An Honourable Member: Madam Speaker, I have another point of order. Point of Order Madam Chairperson: The Honourable Mr. Fletcher, on another point of order. Mr.

Fletcher: On procedure, could we take a brief recess to consider a consultative way forward that meets everyone's concerns and needs. Madam Chairperson: Is it the will of the committee to take a brief recess? Some Honourable Members: Sure. Some Honourable Members: No. Madam Chairperson: Leave has been denied. * * * Madam Chairperson: We will now proceed with clause by clause. Shall clause 1 pass? Some Honourable Members: Pass. An Honourable Member: No. Madam Chairperson: The Honourable Mr. Fletcher. Mr.

Fletcher: Madam S peaker, I have a concern about the –even the opening statement of the bill in that the–in the opening, the purpose of this bill has not been clearly stated. The establishment of a

138 LEGISLATIVE ASSEMBLY OF MANITOBA May 11, 2017 corporation, as set out in

section 4, is not clearly defined and gives powers that go beyond, potentially, the scope of this bill and it's not clear which bill has more authority than the other bill. For example, the next bill we're going to discuss is Bill 20, the corporation act. Is this bill part of that–subject to that or not? It's not clear. Is this bill something that actually realizes the purpose of the act as outlined in part B–that there would be savings? * (19:50) We have to look at the big picture.

We heard from every single witness tonight –very learned individuals, professional engineers, union leaders, individual citizens–that the stated purpose of this act and the reality of its provisions do not match and that there won't be any savings for Manitobans. The Efficiency Manitoba will just cost ratepayers more money. Efficiency Manitoba, there are no measures to evaluate the success or non -success of Efficiency Manitoba.

We already all agree, I think, I hope, that increases in hydro rates, particularly what has been suggested by Hydro to the Public Utilities Board, nothing to do with the government, already indicates that the price will reduce demand. So why –what is the hurry? The market, my fellow capitalist friends and some frenemies, will take care of it in time. Efficiency will be achieved. We also want to ensure a regulatory framework.

Well, we heard tonight from obviously a well - informed at–citizen, who, by the way, I have no idea who he was, that regulatory oversight, the framework, is flawed because for the simple reason because it's –the targets are fixed and t hey're in the bill. It would be much better for everyone, including the government, to have regulations rather than statutes, as regulations are much easier to amend. Once this bill goes through, that's it. The –you would have to be able to predict what electricity markets or prices will do in the future.

If anyone thinks they can do that, they are not here, they are making billions of dollars on–in New York on Bay Street. Because if that is what is happening, I think it's a real –you just cannot predict, and this is what this bill is doing. The other problem with the purpose of this act is if you just look across Canada and other jurisdictions at their hydro situations –Newfoundland, Ontario, BC, Alberta –like, it's a catastrophe. Manitoba's advantage is its hydro power. That's the advantage. And this bill is the opposite of that.

The bill, Madam Speaker, does not speak at all, and or–and we haven't heard any presentations tonight about other aspects – natural gas, for example. Why does Manitoba, if we want to have a public policy discussion or consultation, why does –why is there a double monopoly in natural–in hydro on energy? They have a monopoly on electricity and they have a monopoly on gas.

So some people may argue, and I'm just giving the other argument, w ithout a gain –and, by the way, I'm not a minister or anything, so I'm speaking as an MLA for my constituents and in the best interests of Assiniboia, and I am pleased to be a part of a party that allows for the opportunity to reflect on these things in open committee. In that, I will reflect that we have heard nothing about the natural gas situation.

So, in effect, we have one corporation that deals with natural gas and, therefore, may or may not make the necessary investments in natural gas or to compete with electricity, particularly in rural and northern Canada. And I know my colleagues will have no problem finding situations where the natural gas supply falls just short of a major electricity user. Perhaps that's because Manitoba Hydro has no financial incentive to extend that natural gas. As we already learned today, every electron used by the public or industry helps the bottom line of Hydro. The purpose of the act is cloudy.

As we hear –I really feel, especially after hearing the presentations, that we can achieve everyone's goals without costing the most vulnerable in our society money, without the ridiculous, counterintuitive situation where people who can afford solar panels end up getting solar panels, reducing their now increased hydro rates, while in the same breath, people who are closer on the margins or don't have equity in their house or other sources of revenue end up paying the bill. That is not how it's supposed to work. We're supposed to keep hydro rates down for everyone.

In fact, that is in the report, the annual report every year, that Hydro's primary function–it's in the legislation–to provide the lowest rates possible to Manitobans and to do so efficiently. We just heard from everyone that that is, in fact, under this legislation, not the case. Now, this government, I think– Madam Chairperson: The honourable member's time is up. Mr. Altemeyer. An Honourable Member: There is no time limit.

May 11, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 139 Madam Chairperson: There is a 10 -minute time limit. Mr. Altemeyer: Well, I think my honourable colleague from Assiniboia is raising some very valid points, just as the presenters here tonight have raised some extremely valid points. I, m yself, had gone through the act and noted many, though not all, of the same concerns that have been articulated by the presenters tonight and the honourable member for Assiniboia (Mr. Fletcher). I had some additional concerns of my own on some aspects of this bill that haven't been mentioned specifically.

And I–our reasoning may or may not be similar. It may or may not be different in terms of the types of concerns that all of us have with this bill, but, I think , it's quite clear that across a very wide political spectrum and for a wide number of reasons , the government should take this back. It is not ready to move forward. * (20:00) And, if the government insists on trying to push it forward tonight, then that's what we will do and the amendments that I have prepared –and perhaps my colleague from Assiniboia has done the same –we will propose these, and we'll give everyone on the committee a heads up.

I have crafted these in the mindset of trying to take a less-than-perfect bill and try to make it a little bit better. And I do sincerely want to thank the staff from the department for bringing this forward. This is not easy stuff. It was very interesting listening to Mr. McInnis'–well, all the presenters tonight, but in his brief history of the DSM interest and issue in Manitoba–those were the years when I first came to this crazy building.

My first job was as the special assistant to our–Manitoba's first-ever climate change minister, the honourable Tim Sale, and this was one of the pieces in that context that we were wrestling with. And so I really appreciate the time that the staff have put into crafting the bill, both in Leg. Counse l and the civil servants here. The faults that people are raising do not lie with them at all. They do lie at the feet of th e government because the government has not properly consulted on a wide range of fronts to the minister's point absolutely. Their party had put this out there.

It was something they intended to do, but that's a different thing than sitting down with the s taff at Manitoba Hydro, many of whom have decades and decades of institutional knowledge on how to help a wide range of people in our society –a wide range of businesses in our society to reduce their costs and conserve energy and water. In a number of special ways I'm very fortunate. I know a couple people who do work over in Power Smart. They haven't been asked anything. They haven't been told anything. They have not been invited to the table to provide their expertise once.

And, unfortunately, I think t he crafting of this bill reflects a lot of lost opportunities on the govern- ment's front, here. And so the amendments that I'm bringing forward, I feel they're reasonable.

I've been told by others who are not members of my caucus or my party that they se em reasonable, and I just want to inform the government members of the committee tonight that, you know, you can view all of these through a partisan lens if you want, you can shoot them all down if you want, you have the numbers to ram this through if you want, but the plain truth of the matter is: I'm not approaching this issue at all with a partisan lens. And I'll give you a heads up. One of the issues that is not properly emphasized in this legislation is climate change.

Here we have a proposal to create a new energy -efficiency entity and the science of climate change, the urgency of climate change, the incredible scale of the challenge of climate change is not reflected in the mandate or the targets or the proposed operations of this new entity, and I think the government, for that reason alone, should take it back for further consideration. Presenters here tonight, and my honourable colleague from Assiniboia, have also raised the very fundamental issue of fairness.

How is it okay for programs under a new entity to be established without any clear language around how low -income people, vulnerable people, people who live in a wide variety of geographic settings in our province? How are they all going to benefit in a fair way under this new entity? The l anguage of this bill does not appropriately address that. And I don't know if the amendments that I'm bringing forward would fully capture it, either.

I've done my best, you know, more or less from the sidelines, working to try and see where there might be some opportunities that would be palatable for the government to include my ideas in their legislation, but on top of climate change, I think the absence of a fairness lens is another reason for the government to take this bill aside and rework it.

140 LEGISLATIVE ASSEMBLY OF MANITOBA May 11, 2017 A t hird reason why this bill should be taken aside and reworked is because of the ongoing, very difficult and unfair situation that the current staff at Manitoba Hydro Power Smart are faced with. On the one hand– and I really want to thank brothers from the labour movement for coming down here tonight, Chris and Mr.

Rebeck, for bringing that valuable perspective here–this is a government who, on a few other occasions, has not been giving appropriate respect to the staff and the workers who are doing a phenomenal job already and who are going to be potentially very negatively impacted by the changes that the government's bringing forward. Now, if the government had actually consulted with those workers in advance, they might feel that they had a little bit more reason to go along with it or a better understanding of the government's rationale.

The government's proposal would undoubtedly have been made stronger if they had done proper consultations with the staff at Power Smart.

But imagine for a moment that you have been working at Manitoba Hydro Power Smart, that you have the opportunity to go out to people's businesses, to go out to people's homes, to work with non- profit groups, to work with even municipal levels of government and their facilities and help the m do a good thing, help them conserve power, help them become more efficient, help them save money, and then all of a sudden, the new government of the day decides that not only is your corporation as a whole going to shed 900 jobs and you don't know if you're going to be one of them, but they've also decided that the specific piece of work that you've been doing is no longer going to be done by Manitoba Hydro, and you as a staff person have received no information on whether you're going to keep your job, you've received no information on what the operational structure of the new entity is going to be, you've received no information on what, if any, transfer is going to happen, you don't know if you're just going to be left to your own, this new entity will be set up and then you just have to apply for a job over there and hope you get it, or maybe there will be negative repercussions for you at Manitoba Hydro just for trying to seek employment elsewhere.

Staff have no information. And even from an operational point of view, imagine all of the different supports –and this speaks to the comment that many presenters here tonight made about the inefficiency of establishing a whole separate Crown entity when we already have a Crown entity and workers doing a good job inside of Manitoba Hydro–you're presumably going to have to move people into this new entity, and not just the folks who do the work. What about payroll? What about HR? What about legal? What about the admin support?

I mean, all of these are questions that it's pretty reasonable as a staff person for you to be able to know in advance if your employer actually cared at all about your livelihood, about your professional status and about the work that you're doing. So– Madam Chairperson: The member's time has expired. Mr. Schuler: It was wonderful to hear the member for Wolseley (Mr. Altemeyer) give a hearty endorsement, ringing endorsement, to the individuals from Power Smart. It's great to see him speak so highly of the various individuals there.

In fact, we had one of the senior Power Smart managers work with us on the development of this legislation, so now that he knows that, I'm sure he will have no difficulty in supporting the legislation. We did make sure that they were part of this, and they helped us with the crafting of this legislation, so now I'm sure I've allayed his fears and he can go back to his original position before this position, when he was a big proponent for demand- side management and Efficiency Manitoba.

So we've helped him get back to his original position. * (20:10) I'd also like to point out to members of the committee that we worked with one of North America's pre-eminent energy efficiency experts, and that's Philippe Dunsky. He was contracted by the former go vernment, by the NTB government, to work on the design of this model and the development of the bill. We understand that, halfway through the process, there was a internal issue within government, and the demand- side management was put aside until internal issues were dealt with.

And we reconnected with Philippe Dunsky to help us with the continuation of the project that is in front of us now, called Efficiency Manitoba. So there alone are two very good reasons why members opposite should now be able to support this bill and go home and sleep comfortably. Thank you, Madam Chair. Madam Chairperson: Thank you. Before we proceed with other questions, I do want to remind all the members that it is parliamentary practice that we are asking questions

May 11, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 141 on the clause before us, which is clause 1 at this point. Surely, you do have time to state your

preamble; I do encourage you to get to a question before your time expires. Are there any further questions on clause 1? An Honourable Member: Yes. Madam Chairpe rson: The Honourable Mr. Fletcher. Mr. Fletcher: The purpose of this act –establish Efficiency Manitoba as a corporation with the mandate set out in

section 4. Madam Chair, this means that we could talk about the mandate right off the bat using the procedures you just described. We can spend a lot of time on the purpose of this act–1(a)–a lot of time. Or we can reflect, consult, discuss and then decide. Otherwise, this is going to be a very long –a long day. I want to–my frenemy from Wolseley, I'd like to r efruit–refute just about everything he just said with the exception of the consultation. Consultation is important. It must be done. I have–Madam Chair, again, relative to the point, I don't enjoy this for one moment.

In fact, this sucks because it could have all been dealt with a long time ago, but here we are. The –this particularly is–affects my sensitivities as a professional engineer, someone who actually learnt this stuff in school, also as an Asper school graduate with an MBA –demand-side management, supply-side management, supply versus demand, common sense versus something else. Madam Chair, I think we are at a point where we can all step away from the table, heads held high, and say, let's reflect, consult and revisit. It'll be the – it's in the government's interest if it'll be stronger.

No one's going to raise objections if they're consulted. The people that we just heard speak –I can't see through my peripheral vision if they're still here or not, but I assume some are. And, if they are, I think all we heard today was they want to be heard –not in 10-minute intervals with five minutes for questions between a dozen MLAs; t hey want to be heard. Maybe it's not done in this format, but there are many better ways of running, you know, the rules of the Le gislature, and some of you will recall a year ago I made some suggestions.

None of them were adhered to, and one of my suggestions was it is ridiculous that any single MLA–on the committee or not–can delay things forever –forever. That is not in the interests of anyone, particularly me. Though I think this is going to be a test–not only for our legislative process, our consultative process, what rhetoric. Are we here for Manitobans or –do we listen to Manitobans? Am I going to lose my head after this evenin g or is my team open to comments, reflection, consultation? In the election we were not –we did not campaign on a new Crown corporation.

We cam - paigned on a better economy, a stronger Manitoba, a stronger–this bill does not do that. It makes the weak citizens weaker, the stronger citizens stronger –and I mean in a financial sense. It makes –there's a huge advantage for urban and suburban individuals and, if you're in a rural or remote area, as is already stated by not me many experts, that their rates will g o up. Now, maybe they're wrong, maybe that is wrong.

But when everyone from the political spectrum –experts in the field, including professional engineers –come forward and put their 'repertation' on the line –as, perhaps, I'm doing right now –there must be something that is going on. It doesn't make sense, the purpose of this act. In Ottawa, these things when–of which I –for–a Cabinet minister and Treasury Board for a million years and worked with Jim Flaherty and John Baird, great environmental ministers, financial –Finance ministers and so on, whenever we saw something that just didn't make sense, it usually came down to sex, money or power.

I don't think there's sex involved. I think I'll be 'suckit' –silent on the money because it just doesn't make any sense from any perspective. And, on the power, at a minimum we're talking about hydro power or gas power. * (20:20) We're also talking about the power of MLAs, the privilege of MLAs to represent their constituents, I don't come from an affluent constituency. Power to effect change. We did that in the last provincial election, but this is not on an accurate reflection of what people want. They want a growing economy. There is no such thing as an economy that grows while electricity demand goes down.

It's never happened in human history. There's no such thing as, like, somehow –and we can point fingers at each other all day or we can reflect on what has actually happened. We have a situation where demand is far outstripped by supply. Rates are going up, regardless of where you are. That is made in Manitoba. A lot falls on bad decisions from previous governments, agreed Conawapa cancellation by then-premier of–

142 LEGISLATIVE ASSEMBLY OF MANITOBA May 11, 2017 Madam Chairperson: The honourable member's time is up. And I am just going to re -emphasize the message that I had stated earlier. I really encourage you to pose your questions on the clause that we are discussing at this point, which is clause 1. You may add a

preamble into that, but I'd really encourage members to get to their question to the minister before their time expires. Thank you. Mr. Altemeyer: Thank you, Madam Chair, for the opportunity to, as my honourable colleague from Assiniboia has put it, to reflect some more on his words and on the bill in front of us. It is quite clear to me, and it is quite clear to the MLA for Assiniboia, and probably quite a few other people in the room right now, that the core purpose – that the flaws with this initiative start very early on in the language of this bill.

And, you know, I think, while I have a few thoughts to say, my fundamental question is the same one that I believe my colleague from Assiniboia is driving at, and that is: Is the government ready to acknowledge that this piece of legislation isn't ready to move past committee yet? I know that the us ual process in the building is that as soon as government comes up with a legislative proposal, it's clear sailing from there, right.

You know, you'll have your introduction of the bill; you'll have your first reading; then you have your second reading debate; and then it comes to committee and we get to listen to citizens. And I, you know, Madam Chair, I had the honour of sitting in that chair on more than a few occasions, and the intelligence and the thought and the concern for the welfare of this province that citizens bring forward is one of the few consistent things in this job.

Everything else can change from day to day, but when you hit committee stage people are coming here because they care, and they're not coming here on a lark, and sure, they're going to say different stuff. They're going to have different advice for the government on what to do. They're going to have different proposals to suggest, and a thoughtful government, a government that demonstrates in its actions that it is actually there for the public even when, and perhaps especially when, the government gets it wrong, I mean, that's the way you should be governing.

And I could not tell you, Madam Chairperson, the number of times when amendments to legislation that we had brought forw ard were proposed and accepted. Sometimes those amendments came from members of the opposition parties, the unofficial opposition parties among them, other times we would hear a really good suggestion at the committee stage, and perhaps there wouldn't be t ime to draft a proper amendment at that stage, but –and certainly to have it translated and fully vetted t hrough both official languages, but there's the rep ort stage amendment opportunity.

And so we would be able to take those great ideas that members of the public had given us and incorporate it into the final result. And as much as the member for Assiniboia (Mr. Fletcher) and I may disagree on some of the reasons why we are concerned about this bill, one of the pieces that he has articulated that we agr ee with and which I agree with him in that, is the consultation piece. There was not a single presenter here tonight of the six that we heard who felt that this act was a good idea. And that takes us back to the very start of the bill, right?

You know, the re's some fundamental issues that need to be addressed, and the member from Assiniboia is doing a very brave thing tonight, and I commend him for doing that, just on the principle of it. And for all of us, as MLAs, you always have a hill to die on. There 's always going to be something that brought you to the building, a core belief or a core issue that you feel very, very passionately about.

And when you see a mistake about to be made, in some respect, everyone's going to have to decide when it is time to speak out, whether you're an opposition MLA–it's a little easier for us because that's in our job description; for government MLAs, it's a little different–and the member for Assiniboia is doing the proper thing here. He's asking his colleagues, he's aski ng his government to do some sober reflection on this, listen to what he has to say, listen to what other caucus members have to say and certainly listen to what the public has to say. And I don't understand how that's a problem.

I'm not sure what I'm missing here. As we've heard many times tonight, we're here to serve the public interest. The public has said in no uncertain terms tonight, this piece of legislation is flawed, and I think the government needs to take this back and reconsider it. And just t o close off, as the member for Assiniboia said, under our current rules, one MLA can hold things up forever; two MLAs,

May 11, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 143 even if they have different reasons for doing so, can hold it up for twice as long. Madam Chairperson: Are there any further questions on clause 1? An Honourable Member: Yes. Madam Chairperson: The Honourable Mr. Fletcher. Mr. Fletcher: To your point on the purpose of the legislation, we still don't have a clear idea of what that is. And in the first line, it says, refer to

part 2,

section 4 or clause 4(1). So that's what I am going to do, in the legislation, as that is what it says in the first paragraph. Now, if I was in a different situation, I wouldn't have drafted the legislation like that, in a context like this, because now we can talk about everything because clause 4 is the mandate–the mandate. So everything is on the table. There are questions like clause 3(2), Except otherwise provided in the regulations, The Corporations Act does not apply to Efficiency Manitoba. What is tha t about?

I have no idea, and is that The Corporations Act that we're talking that exists now, or is it the corporations act that is next on this committee's agenda, Bill 20? That is not clear. That's part of the mandate. That's part of the spiel. * (20:30) Madam Speaker –or, Madam Chair, there are other things that need to be reflected on. And last week I introduce d a very comprehensive conflict of interest piece of legislation, because, quite frankly, the current conflict of interest legislation is woefully inadequate. Woefully inadequate.

It would be helpful if Manitobans could have clear and –clear certainty that there aren't other things being done. Now, when I brought forward that legislation, I was thinking of the new marijuana laws and filling pot holes in the current legislation. But I can see, given the mandate of this Crown, that there are many areas where conflict of interest could apply, particularly my bill, which, I hope, will be embraced by all parties.

Having said that, we are where we are, and to say that in the mandate of the Efficiency Manitoba is to implement and support demand- side management initiatives to meet the saving targets and achieve any resulting reductions in the green- house gas emissions of Manitoba –let's just focus on that for a second. What does that mean? And who's bringing this forward? How did this even get drafted? I've seen a lot of legislation in my time. I've reviewed a lot of things, a lot of things. But there are many holes. And, when you look at it in two dimensions, there's a lot of holes.

As soon as you go into the third dimension, legislatively speaking, you see that other acts tie in. Like, The Corporati ons Act ties in –or does not tie in. The Conflict of Interest Act–ties in, nor –maybe it doesn't. We don't know. We don't know. When that happens, there's another time dimension with legislation, and that's the fourth dimension: time. And, over time, this will lead to a great deal of heartache–unnecessary heartache for Manitobans. We've already seen what happens when engineers and others are not listened to and ignored. Everyone around this table knows what I'm talking about. Everyone.

We have a responsibil ity to pass good legislation. This is a learning opportunity for a new government, a new opposition, new members, that without a proper consultation process nothing will ever happen because the process demands consultation. And that's what we're seeing here tonight. There needs to be consultation. The mandate needs to be supported through facts. Every fact that was presented today –every single one of them –did not support the mandate, which means one cannot support the purpose , which is the first clause of this bill. So, procedurally, there's no question that this is a mess.

Let's just not make it a piece of legislation that costs Manitobans money. Let's just let it cost us some time as MLAs. That's all that needs to be done. So, Madam Speaker, I'll ask the committee again: Perhaps we can take a recess and come up with a better way forward. I think that's in the interests of everyone, particularly Manitobans, particularly for people who believe in good public policy, people who believe in consultation, people who believe in conservative principles.

The privilege of an MLA to represent their constituents is above all else, and this is my first opportunity to raise issues –first opportunity. Actually, I've raised issues; I've just never heard back. I have in front of me, just for the record, two 3-inch binders and a whole bunch of other material, all based on what is in front of me, just in clause 4(1) alone, which goes back to the purpose of the bill, which is the very fist clause. It's going to be a long time before we'll achieve the goal that we all want, and that is good legislation that at least nobody can

144 LEGISLATIVE ASSEMBLY OF MANITOBA May 11, 2017 say–or very few can say, I did not know; I was not consulted. That is not the way we do it. And I think First Nation communities will have a very great amount of interest in what this type of bill means for remote communities. People in the North will be very interested in what it means for people in remote areas and rural Manitobans. And people who are not in affluent areas like my riding– Madam Chairperson: The member's time has expired. Are there any other questions? Mr.

Altemeyer: Again, I agree with much of what my colleague, the MLA for Assiniboine, has put on the record, and I support him in his proposed resolution to the situation that all of us find ourselves in here tonight. For a minister to have brought forward legislation that clearly does not have the support of everyone in his caucus, legislation that has inspired me and the member for Assiniboine to dedicate no small amount of time to correcting both the content of this bill and the process that went into it, to this point, speaks volumes for the problems that we are now faced with.

And I have known the member for Assiniboia (Mr. Fletcher) long enough to know that when he says he has multiple three -inch binders full of material that he is fully prepared to entertain us with here tonight, I have no doubt that is what will happen. So I would support the member from Assiniboine and his proposal that committee take a recess. Perhaps the member for Assiniboia and the minister can have a conversation amongst themselves. We can be invited to it as well.

Or else we all get to sit here until rather late at night tonight and perhaps in subsequent nights as well, listening to each other's voices talk about the problems that we have with this legislation. * (20:40) So the standoff is pretty obvious. There is opposition to this bill from a wide range of political perspectives, and the government needs to pull the plug on this tonight. So, minister, I think the question actually is for you to answer. Madam Chairperson: It has been proposed that we take a short recess to consider the bill. Is that the will of the committee? Some Honourable Members: Agreed.

Some Honourable Members: No. Madam Chairperson: Okay, we will continue on with questions on the clause. Any other questions? Mr. Fletcher: Demand-side management in a situation where the supply far outstrips the demand and will do so for a generation. I'm not talking about power generati on, I'm talking about a human generation; at least 20 years –that is a very bad idea. What other company in the world would say, we want to sell less of our product? We want to sell less of our product.

Okay, maybe someone who mines uranium could see society saying, yes, maybe you've had enough uranium for big nuclear, especially in what has occurred in Washington state in the last week. I can see that. That may not be a fuel that is as clean as everyone thinks, nuclear power. Thank goodness we don't have to deal with that issue. But it does highlight the Manitoba Advantage, which includes Manitoba Hydro, which is the cheapest, right now, and cleanest power that there can possibly be. Now, so is it toxic? No. Is there a public policy? Some people talk about GHGs.

We need to reduce electricity consumption to reduce GHGs. Well, here's some facts. According to Manitoba Hydro's only report, hydro accounts for less than 1 per cent of the total Manitoba GHG production; one –less than 1 per cent. So, if your goal, y our public policy goal, is to reduce GHGs, we're looking at the wrong place. In fact, if we look at it, and this is one of the problems with Canada, we don't look at Canada as a unit, too often we look at it as 13 subcomponents.

If we really–if that's what Canadians want to do, reduce GHGs, it's not to tax the carbon, it's not to–demand - side management in Manitoba's case. The best way to reduce GHGs –the best thing Manitoba can do to reduce GHGs is to export its power east or west to Saskatchewan, Alberta and Ontario. Madam Chair, because this falls within the mandate and the purpose, I think it's relevant for the committee to know that I've been writing and advocating on this issue for at least a decade.

And I cannot believe that we want to rehash all th at, because it's so obvious, every unit of power that Manitoba can export is displacing a unit of power that has been created by fossil fuels . That's right. It's

May 11, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 145 not like it's displacing other hydro or even wind or solar. If it's–if there's a demand, that means the coal- fire stations are burning in the United States or in Saskatchewan or Alberta. It means that methane's going into the atmosphere. Or we can use Manitoba power, hydro -generated power, the cleanest power around, to displace those dirty coal -fire plants in Saskatchewan, to displace the gas-fired generation of Alberta and deal with their oil sands PR problem, by the way.

Wouldn't it be great that Manitoba Hydro could send its clean power to the Alberta oil sands? What a boon. Now, it may be of interest to the committee that there is, in fact, huge sums of mon

Document details

Collection	Manitoba — Debates (Hansard)
Citation	41-2-la7
Type	hansard
Volume / chapter	41st 2nd hansardpdf la7.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	427da38fa9836227ea7dce076e8566f9ad3df738

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