Tamara Vrooman, President and CEO of Vancity Credit Union, was co-chair of the federal Advisory Council on Climate Action. In an exclusive interview with The Energy Mix, she talked about the next steps the federal government could take down the road toward decarbonization, after getting at the short-term wins that she and co-chair Steven Guilbeault of Montreal were mandated to look into.
The Mix: Out of your deep dive into the immediate, what do you see as the next steps and wins that will come right after the time frame you were asked to report on?
Vrooman: It was a very short mandate, six months in total, and focusing specifically on actions in two sectors, buildings and transport.
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We focused on the zero-emissions vehicle (ZEV) mandate and really building that incentive to lower the barriers to purchase. Certainly, that will require the transportation side to be more aggressive and comprehensive on electrification and charging infrastructure. We hear all the time that price is one of the first barriers to ZEVs, both for light vehicle fleets and independent, single-family vehicles. But the second one is, where do I charge and how does it work? The federal government has put some dollars aside for electrification, but the jurisdictions that have really had deep adoption—in Norway, Vermont, Quebec, and more recently here in British Columbia—have also had strategies around charging infrastructure.
The first push was electrification of the Trans-Canada Highway and public infrastructure. But most of what we see is a need in what I call privately-owned but public spaces: shopping malls, apartment buildings, places of work. Here at our head office building, we’ve added a half-dozen charging stations every six months for the last 18. They’re always full, and we’ve already had to think about ways to charge people and limit their time in the spot.
Charging ties back to financing and affordable housing, like the LEED Gold building up the street from our office. It’s a sustainable design with lower operating costs that will keep it affordable over a 10- to 20-year time frame. It will also include surface parking for the community and merchants—the city is asking for 220 stalls in a three-storey parkade, and they all need to be plugged for electric vehicles. The city’s parking authority thinks parkades in the future will be less about parking and more like gas stations.
There are also some very interesting things going on around intermodal models of transportation. CN is taking trucks off the road, putting them on railway lines, then connecting them with distribution networks. We’re seeing ports where there’s charging infrastructure in place while a freighter or a tanker is in port and unloading, so they can plug in rather than pumping diesel, and there’s also more attention to rechargeable batteries for ports. It’s the shipping equivalent of auto-free zones, and an industrial opportunity for our coastal areas to think about electrification when ships are in port.
The Mix: You also saw a lot of opportunities in new construction and existing buildings.
Vrooman: When we spoke to building owners and property managers, they said they’d had no idea the built environment contributes 12% of our greenhouse gas emissions. When we talked about it, they said it made sense, given the energy they consume and the fact that they’re everywhere.
Buildings are long-term investments. We build them to last 20, 30, 40, even 50 years. That’s all the more reason to be thinking long-term about the built environment from an energy point of view, because the things we do today—particularly the core infrastructure—will have to endure for 50 years.
So who’s really thinking that we’re not going to need more charging infrastructure in residential, office, shopping, commercial buildings five years from now, let alone 15 or 20 or 25? It’s also about when you do the retrofits: when you’re working on the building anyway, why wouldn’t upgrade the electrical panel and the capacity?
For the built environment, our report focused on the need for better data. We’re making investments over a very long period of time, so it’s essential to know what works and what doesn’t, what saves energy at what cost over what period of time, and what really reduces greenhouse gas emissions at what rate. That data is a key to making those long-term investment decisions about financing and allocation of capital.
Our report talks about the importance of data, but we really can’t emphasize it enough. People don’t know what works and what doesn’t, how we label and identify those things.
The second thing we need is for large, institutional owners to think long-term about their asset base. The federal government is the largest owner of buildings and land in the country, so their planning needs to factor in long-term energy and emissions targets, not just demographics and building uses. So how do they use their own retrofits and new construction to source some of these technologies and changes, then share information on the results?
The next question is how to create that stimulus and incentive for investments that have to be made now to bear fruit in the built environment over time. With all the planning we’ve been doing around transportation, the imperative to do that is threefold in the built environment, because the assets are at least three to five times as enduring. We should also see some real savings, not only in energy and GHGs but in actual operating costs over time, because the lifetime of the building is so much longer than a car. Speaking as a banker, those savings really make sense if we have the data.
The Mix: So that’s what it will take to get investors interested in this work.
Vrooman: Knowing that an extraordinary investment is required up front, how do we show a 20 or 25% reduction in energy consumption? If we could measure that performance and see that it actually took place in the first year after a retrofit or new build, we should allow the owner of that building to depreciate the investment in a single year for tax purposes, which would be a significant benefit. We think that would be a balanced view from a taxpayer standpoint—it’s not a huge subsidy, but it would be significant for the owner. And it would really let the innovation be where it best resides, in the hands of the private sector and the supply chain. You wouldn’t have the federal government picking winners and losers for HVAC or window systems.
The Mix: Can this line of thinking take us beyond the LEED green buildings standard?
Vrooman: Absolutely. We don’t give a threshold percentage for savings. And in fact, we don’t know what’s achievable yet, because we lack so much data. In our business we finance building energy retrofits. Some people say there’s a market failure because there’s not enough financing available, but that’s not our experience. When I talk to my colleagues in banks and other financial institutions, it’s not the case. It’s that the way we finance things is based on performance and risk against collateral on the loan. So if we don’t have performance data, we can’t know what works and what doesn’t. If there were an objective place to publish that data, and government would be perfect, we could apply it to a building with a set of retrofits and have confidence that we could finance it.
It’s not as if investors aren’t seeing that if we’re working with 10-, 20-, 30-year money, that it needs to be deployed in this general direction. We just can’t tell which investments will out-perform the others. It’s getting better in new builds, but for the much bigger opportunity around existing building retrofits, we don’t have the same level of data.
There’s a lot of keen interest in building labelling. Every building owners, property manager, especially in multi-unit commercial, industrial, or residential, said ‘make it easy for us’. Once we do have the data, they can proceed with confidence.
The Mix: How do we get from here to there…or, actually, from there to here? If you situate yourself in 2030 and look back on how we met the IPCC’s 45% decarbonization challenge, what did we do in 2019 and 2020 that got us on the road to success?
Vrooman: It’s not one big step forward in one way. There are a few key, significant steps to take at once: the switch not only on the EV side but in light trucks and fleets, the electrification of infrastructure, the data and labelling, and not only on new construction but with performance standards for existing building retrofits. That’s what would start to stimulate the supply chain and trigger the innovation that will be needed to build an industry in our country that sustains the transition.
This story received light editing for length and context.