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10.8 The Department initially focussed its efforts on energy conservation, which encouraged behavioural and lifestyle changes to reduce the consumption of energy. For example, people were encouraged to turn down their thermostats and to turn off unnecessary lighting. Today's focus is on improving energy efficiency by promoting a wiser use of energy without sacrificing its benefits or requiring major lifestyle changes. For example, people are encouraged to buy more energy-efficient furnaces and to buy light bulbs that produce about the same light using less energy. Exhibit 10.1 illustrates the changes in the departmental financial commitment to these types of programs over the last 20 years; the following paragraphs describe the changes that have occurred.
10.9 During the early 1970s, the Department was mainly involved in the provision of advice to ministers on energy issues, with few programs being delivered. In the mid- to late 1970s, in response to the oil crises of 1973 and 1979, steps were taken to promote energy conservation. These early initiatives were seen as a strategic response to the threat of supply disruptions, which raised concerns about energy security. The concerns were primarily about security of oil supply, in terms of both price and availability.
10.10 Under the National Energy Program of the early 1980s, the departmental expenditures on energy efficiency programs grew significantly, as shown in Exhibit 10.1 . Grant programs were used to convince energy users to become more energy-efficient.
10.11 By the mid-1980s, however, energy prices had fallen and energy supplies were increasing. Security of supply was now seen as less urgent by the federal government and the Department. Consequently, the energy policy was changed, departmental financial resources devoted to energy conservation and alternative energy activities began to decline and the Department reduced or eliminated many of its related activities. It redirected its focus toward promoting energy efficiency through research and development, market-based research, demonstration projects and information transfer activities.
10.12 Canada's Green Plan. In the late 1980s, serious concerns began to arise about the impact on the atmosphere of certain human activities. These activities relate primarily to the use of energy that involves the combustion of fossil fuels such as oil, natural gas and coal. In particular, there was a growing worldwide concern about the burning of fossil fuels and the associated greenhouse gas emissions and their implications for global climate change. As a result of this concern and other environmental concerns, the federal government announced, in December 1990, Canada's Green Plan for a healthy environment . The Green Plan reported Canada's commitment to stabilize greenhouse gas emissions at 1990 levels by the year 2000, commonly referred to as Canada's stabilization goal.
10.13 With respect to limiting greenhouse gas emissions, the Green Plan stated that the immediate emphasis must be on improving energy efficiency across a broad spectrum of uses. The Green Plan committed the federal Minister of Energy, among other things, to tabling a National Energy Efficiency and Alternative Energy Act and to improving energy efficiency in buildings, equipment, industry and transportation.
10.14 Revised efficiency and alternative energy program. In May 1991, the federal government confirmed that its initial approach to achieving the stabilization goal under the Green Plan was to focus on improving energy efficiency and to promote selected alternative energy sources. In June 1991, the Department received approval from the Treasury Board to implement a revised Efficiency and Alternative Energy (EAE) Program. The objective of the new Program was to support the Green Plan and the National Action Strategy on Global Warming, which was an approach to limiting greenhouse gas emissions.
10.15 This new EAE Program includes a set of energy efficiency initiatives that collectively deal with all end-use sectors (residential, commercial, industrial and transportation) and all major fuel types. The EAE Program was expected to be carried out in co-operation with other departments and agencies of the Government of Canada, and with the provinces, municipalities, energy utilities and the private sector.
10.16 Consistent with a commitment in the Green Plan, the Energy Efficiency Act was tabled in Parliament in 1991, received royal assent in June 1992 and came into full force on 1 January 1993. This Act gives the Department the authority to make and enforce regulations concerning the energy efficiency of energy-using products and to promote energy efficiency and alternative energy sources.
10.17 There are 38 initiatives that make up NRCan's current EAE Program, as illustrated in Exhibit 10.2 . These include initiatives related to energy efficiency, alternative transportation fuels (such as propane, natural gas, methanol and ethanol) and renewable energy sources (such as hydro, solar and wind). For 1995-96, approximately $65 million was spent on the EAE Program. The Appendix to this chapter provides additional information on NRCan's energy efficiency initiatives, which were the focus of the audit.
10.18 United Nations Framework Convention on Climate Change. In 1992, Canada signed and ratified the United Nations Framework Convention on Climate Change, in which Canada reconfirmed its prior commitment by agreeing to aim to stabilize its greenhouse gas emissions at 1990 levels by the year 2000. In response to this international commitment, federal, provincial and territorial ministers of energy and the environment approved Canada's National Action Program on Climate Change (NAPCC) in February 1995. The NAPCC sets out the strategic directions Canada will follow, a key element of which is promoting greater energy efficiency in all sectors of the economy.
10.19 The Voluntary Challenge and Registry Program. One of the initiatives originally envisaged under the 1991 EAE Program was the Energy Efficiency Challenge initiative. The Climate Change Voluntary Challenge and Registry (VCR) Program, launched in early 1995 by federal, provincial and territorial energy and environment ministers, builds upon this proposed initiative as well as on federal-provincial and multi-stakeholder consultation relating to climate change. The federal government considers the VCR Program to be another key element of Canada's National Action Program on Climate Change, as do the provinces.
10.20 The Minister of Natural Resources, acting as the champion of the VCR Program, has issued a challenge to Canadian companies and organizations, including all levels of government, to develop action plans to voluntarily limit or reduce their greenhouse gas emissions. A registry currently maintained by NRCan records commitments, plans and progress.
10.21 A common goal of NRCan's energy efficiency initiatives and the VCR Program is to limit greenhouse gas emissions. Within the action plans developed for the VCR Program, the participants can use NRCan's energy efficiency initiatives and provincial and company-specific programs to reduce their energy use and their emissions of greenhouse gases. For example, the VCR Program provides opportunities for participants to apply NRCan's Industrial Energy Efficiency Initiative and the Energy Innovators Initiative as part of their involvement in the VCR Program. The federal government's own action plan, submitted to the VCR Program in November 1995 and updated in November 1996, includes the use of two of NRCan's energy efficiency initiatives: the Federal Buildings Initiative and the Fleet Energy Program (FleetWise).
10.22 The federal role and participation in the VCR Program will be examined as part of a future audit of climate change.
10.24 NRCan monitors energy use in Canada, both for the country as a whole and by sector (residential, commercial, industrial, transportation and agricultural), and identifies and analyzes the trends over time. NRCan reports that, in the absence of any improvements in energy efficiency between 1990 and 1994, energy use would have grown by a total of 7.1 percent in all identified sectors. However, largely as a result of improvements in energy efficiency, energy use increased by only about 5.5 percent during that period. Therefore, while actual energy use continues to grow, it is growing at a lower rate.
10.25 NRCan's data show that, over the years, energy efficiency improvements have been realized in the residential, commercial, industrial and transportation sectors. Contributing factors could include the energy efficiency initiatives of the federal and provincial governments, energy utilities and municipalities; improvements in production processes; and global competition. Nevertheless, while improvements in energy efficiency have helped to offset the increase in energy use, they have not been sufficient to halt its growth overall. Moreover, the Department expects that energy use will continue to respond to the growth in energy-using equipment and in the Canadian population and the economy.
10.27 Objectives of federal energy policy. The main objectives of the current federal energy policy are to ensure that:
10.29 Objectives of NRCan's Efficiency and Alternative Energy Program. The main objective of the current EAE Program is to ensure environmental responsibility through limiting greenhouse gas emissions and helping to deal with air pollution issues. Two secondary objectives of the program are related to economic and industrial development and to strengthening Canada's science and technology base.
10.30 NRCan believes that energy efficiency has potential for making a contribution to Canada's short-term stabilization goal. According to the Department, renewable energy sources are not likely to play a significant role in reducing greenhouse gas emissions until after the year 2000. The Department also believes that there is limited short-term prospect for substituting fossil fuels with alternative fuels. Therefore, in the short term, NRCan's primary approach to limiting emissions resulting from the consumption of fossil fuels has been to reduce the use of energy and to improve energy efficiency.
10.32 The objectives of our audit were to assess how NRCan determines the continued relevance of its energy efficiency initiatives, to determine whether NRCan is measuring and reporting the performance of these initiatives, and to assess the extent to which NRCan has adopted and implemented energy efficiency measures within its own operations. Further details can be found at the end of the chapter in the section About the Audit .
10.33 We expect to audit NRCan's initiatives related to alternative transportation fuels and renewable energy sources at a later date. A future audit of climate change will address other federal efforts directed toward meeting Canada's stabilization goal.
10.36 In this context, NRCan has used its regulatory powers very selectively, in conjunction with a limited number of policy instruments promoting energy efficiency. The Department views its role as that of serving as a catalyst and providing leadership to others to implement energy efficiency improvements. It attempts to leverage its resources through emphasis on targeted information programs, persuasion and working with others in partnerships to promote voluntary action. The current energy efficiency initiatives are expected to encourage the identification and adoption of measures that are economical and worthwhile in their own right.
10.37 NRCan has developed partnerships with provincial and territorial governments, municipalities, energy utilities, goods-producing industries, the commercial sector, and non-government organizations. For example, energy efficiency improvements are being encouraged through voluntary industrial programs. The Canadian Industry Program for Energy Conservation (CIPEC), established in 1975, sets voluntary energy efficiency targets in a range of industries. The program includes 33 trade and/or company associations and over 3,000 firms that account for about 90 percent of Canada's industrial energy use (or about 20 percent of Canada's consumption of energy).
10.38 Challenges also exist in getting consumers to implement energy efficiency improvements. Factors that impact on the adoption of energy efficiency measures include low consumer energy prices, incomplete data on how energy is used in Canada, lack of consumer knowledge about what can be done to use energy more efficiently, and the low priority that energy users sometimes place on energy efficiency. Although some of these factors can be addressed entirely by the Department or the federal government through the choice of policy instruments, others cannot.
10.39 The Department's current focus is on encouraging a wiser use of energy, without sacrificing the benefits provided in terms of service or comfort.
10.41 Of the 16 current energy efficiency initiatives, five predate the 1991 revision of the Efficiency and Alternative Energy (EAE) Program. These five initiatives are National Energy Codes for Buildings and Houses, the R-2000 Home Program, EnerGuide, Consumer Information and Motor Vehicle Fuel Efficiency Program. Exhibits 10.3 and 10.4 illustrate the evolution of two of these five initiatives.
10.42 Of the 11 remaining energy efficiency initiatives, some are in fact spinoffs of other initiatives. For example, since 1978 NRCan has been involved in administering an EnerGuide labelling program for energy-using equipment as required by the regulatory authority of another federal department. Under the 1992 Energy Efficiency Act , the statutory authority for the EnerGuide labelling initiative was transferred to NRCan. The current EnerGuide initiative is a mandatory program that requires manufacturers to affix labels to eight types of major household appliances to provide information to consumers about the products' energy consumption. The 1994 Window Labelling initiative and the 1996 Heating, Ventilating and Air Conditioning (HVAC) Energy Efficiency Rating System initiative are both voluntary labelling initiatives. They have built upon the concepts of the EnerGuide initiative and expanded them to other products.
10.43 The Home Energy Retrofit initiative, which started in 1993, promotes the use of technologies and building products developed under the R-2000 Home Program. While the R-2000 Program focusses on making energy improvements in the construction of new houses certified to the R-2000 standard, Home Energy Retrofit focusses on improving the energy efficiency of the more than seven million existing houses and other low-rise residences in Canada. The Department estimates that the owners of many older homes could save up to 25 percent of their heating costs if they made certain affordable upgrades.
10.44 The Fleet Energy Program currently consists of two components: FleetSmart and FleetWise. A previous component, Pro-Trucker, launched in 1985 and phased out in March 1996, promoted energy-efficient driving practices to professional truckers. The two current components build upon the experience gained from Pro-Trucker in developing information products and training modules and in recruiting fleet managers to participate in the program. FleetSmart, to be formally launched in early 1997, is expected to encourage public and private sector vehicle fleet managers to adopt energy-efficient practices and to use alternative fuels. FleetWise, started in 1995, is similar to FleetSmart but directed specifically at federal vehicle fleets.
10.45 As a further example of ongoing adjustments to its energy efficiency initiatives, the Department recently announced improvements to some of its existing initiatives. For example, NRCan plans to make new regulations that will cover electric motors, air conditioners, heat pumps, transformers and other products. It also plans to release a Canadian Home Energy Efficiency Rating System and develop related audit software to help home owners and others identify cost-effective opportunities for energy efficiency retrofits.
10.47 It is important for the Department, as well as Parliament, to know what these initiatives have achieved over time with the available resources. We therefore expected the Department to have performance information on its Efficiency and Alternative Energy Program and its energy efficiency initiatives to ensure transparency and accountability. We use the term performance information to include both performance expectations and performance achievements. Performance expectations refer to information outlining the performance that is targeted or is expected to occur in the future; performance achievements refer to information on the performance that was actually achieved. These achievements, when compared with stated expectations, allow performance to be assessed. For a given initiative, the performance achievements can be viewed in terms of its outputs and outcomes, as shown in Exhibit 10.5 .
10.48 In the Appendix to this chapter, we have summarized for each of the 16 energy efficiency initiatives the date started, purpose/objective and the departmental expenditures and major achievements over four years. These achievements are expressed primarily in terms of major products and services (outputs) delivered and, where known, outcomes from 1992-93 to 1995-96.
10.50 As shown in the Appendix , we found that the Department reports an objective for each of its initiatives. These objectives are consistent with the overall objective of the Efficiency and Alternative Energy Program. Each objective is clearly linked to improving energy efficiency by various means in such areas as buildings, homes, equipment and vehicles. However, while each is stated in general terms such as "to encourage" and "to increase", these terms do not provide a clear and concrete expectation of achievement. We found that, for many of the initiatives, there is a lack of reported targets in terms of outcomes against which the Department can assess its progress and report to Parliament.
10.51 As previously noted, the different energy efficiency initiatives use various policy instruments to achieve their objectives. By their nature, some initiatives lend themselves more easily to setting clear and concrete performance expectations or targets in terms of outcomes. For the regulatory initiatives, for instance, the Department does prepare estimates of expected outcomes. For example, NRCan expects the energy efficiency standards for the first 20 products under the Energy Efficiency Act to save, by the year 2020, the equivalent of the annual space-heating requirements of 1.5 million houses.
10.52 Only two of the non-regulatory initiatives - the Industrial Energy Efficiency Initiative and the Federal Buildings Initiative - have information on expected outcomes. For example, the Industrial Energy Efficiency Initiative has set a target of an overall average of one percent annual improvement in energy efficiency per unit of output by the year 2000. However, for most non-regulatory initiatives, it is not clear what the Department's expectations are or how it intends to demonstrate the achievement of its objectives.
10.53 Natural Resources Canada should develop performance expectations in terms of clear and concrete outcomes for all its energy efficiency initiatives.
Department's response: NRCan has performance expectations for a number of its energy efficiency initiatives. For example, the Industrial Energy Innovators Initiative established and achieved performance targets for: recruiting individual companies and task forces; obtaining Innovator action plans; and meeting carbon dioxide (CO 2 ) reduction targets for the Canadian Industry Program for Energy Conservation. The Department will continue the further development of performance expectations for its energy efficiency initiatives. Where feasible and cost-effective, these performance expectations will comprise program outcomes and market effects as well as program outputs.
10.55 For performance achievements, we would have expected that, as a minimum, the Department would measure what products or services (outputs) it is producing. We found that, for the most part, it is doing this, as illustrated in the Major Achievements column in the Appendix . For example, under the Heating, Ventilating and Air Conditioning (HVAC) Energy Efficiency Rating System Initiative, the Department reports that 17 HVAC manufacturers, 90 percent of all such Canadian manufacturers, have joined this voluntary labelling program. This level of representation provides a good example of the extent to which the Department has been successful in building partnerships with industry to promote energy efficiency.
10.56 However, the Department does not have many outcome measurements for its energy efficiency initiatives. For example, it does not always have information on the use made of its approximately 1.5 million copies of publications distributed annually to consumers. Also missing is information on the use made of the advice provided to approximately 40,000 callers to its 1-800 consumer information lines from October 1994 to December 1996. Such information could help the Department assess the value added by its consumer information products, whether they are adequately reaching the targeted audiences and what improvements, if any, could be made to ensure that consumers are properly informed.
10.57 Ideally, the Department would need to know the extent to which its publications or other advice have influenced consumers' decisions affecting energy use, as well as the energy savings that result. We recognize that measuring these intermediate and long-term outcomes is inherently difficult, and can be costly. The outcomes are also difficult to attribute to the Department's initiatives in view of all the other influences that apply. Although the ideal may not be attainable, we believe that the Department needs to continue to explore cost-effective ways of using existing information or developing new sources of information to improve its understanding of the outcomes of its initiatives.
10.58 We found that NRCan is already taking steps to improve the quality of its performance information. To move along the continuum toward improved performance achievements (Exhibit 10.5) , the Department recognizes that more work must be done to measure and assess the achievements of its energy efficiency initiatives, including:
10.60 Natural Resources Canada should continue its efforts to improve its performance information on the achievement of individual energy efficiency initiatives, where cost-effective and feasible.
Department's response: The Department will continue its efforts to improve the performance information on the achievements of each energy efficiency initiative, where cost-effective and feasible.
10.62 At the time the EAE Program was established in 1991, the Department estimated that the Program as a whole, including alternative transportation fuels and renewable energy sources, would contribute 30 percent or more to Canada's achieving its stabilization goal by the year 2000. This estimate was based on a number of assumptions and was dependent, in part, upon the willing and active co-operation of all sectors of the economy and all levels of government. The estimate also served to indicate that the EAE Program alone would not be sufficient to enable Canada to fully meet its stabilization goal, but that it could contribute about 30 percent of the results needed.
10.63 In March 1992, during the House of Commons Legislative Committee hearings on the bill that ultimately resulted in the Energy Efficiency Act , the then Minister of Energy, Mines and Resources acknowledged that this estimate was only a "ballpark figure". The Minister also stated that he did not want to be held to it. The estimate was offered in response to a question on the overall impact of the EAE Program.
10.64 In September 1993, the Department revised its estimate of the outcome of the EAE Program. The revised estimate indicated that, by the year 2000, the Program would contribute only about 20 percent of the stabilization goal, not 30 percent. The Department stated that this reduced expectation for the Program's outcome was partly a reflection of budget cuts. It also reflected changes in forecast assumptions as well as a clearer understanding of the nature of the EAE initiatives and the likely response from partners and the public. This lower estimate was not disclosed to Parliament by the Department. Moreover, the 20 percent estimate has not been reviewed in light of more recent reductions in energy efficiency programs of provincial governments and energy utilities.
10.65 The Department has not attempted to identify what portion of the projected impact of its EAE Program could be attributed to its set of energy efficiency initiatives, as distinct from its alternative transportation fuels and renewable energy initiatives. However, given the Department's position that increased energy efficiency has the greatest potential for contributing to the short-term stabilization goal, it would be reasonable to assume that a significant portion of the estimate would have to be achieved through the energy efficiency initiatives.
10.66 We asked the Department if it is able to assess the outcome of its set of energy efficiency initiatives, and thus to make a rational case for the extent of its contribution to improving energy efficiency in Canada and to achieving the overall expectation for the EAE Program. As previously noted, we found that the Department has information on the trends in energy use and on some of the achievements of the individual energy efficiency initiatives, as illustrated in the Appendix . It estimates the impact of all energy efficiency and alternative energy measures in Canada on reducing energy use and limiting greenhouse gas emissions. The Department states that it has avoided preparing estimates of the outcome of its initiatives separately from the initiatives of others because the assumptions would be arbitrary.
10.67 We recognize that it can be difficult for the Department to link the overall outcome of its energy efficiency initiatives to the overall expectations for the EAE Program in quantitative terms. As previously noted, the cost and feasibility of gathering the data must be considered. Quantification of the outcomes of the various initiatives requires additional information on effectiveness, some of which could be obtained from client and data surveys. The Department is working to improve this type of information.
10.68 Nevertheless, we believe that it is important to provide Parliament with qualitative information on the aggregate contribution of its energy efficiency initiatives to the overall expectations of the EAE Program. Such information could address NRCan's role as a catalyst, the development and maintenance of partnerships, and the maintenance of a presence in all end-use sectors. Additional quantitative information, where cost-effective and feasible to gather, as well as qualitative information would help decision makers in judging whether the energy efficiency initiatives are successful and to what extent these initiatives can be relied upon to contribute to Canada's stabilization goal.
10.69 Natural Resources Canada should expand, where cost-effective and feasible, the information it provides on the nature and extent of the contribution being made by its set of energy efficiency initiatives to Canada's stabilization goal.
Department's response: In 1994 and again in 1996, the Department forecast the combined impact of its efficiency and alternative energy measures and those of other jurisdictions on Canadian greenhouse gas emissions. In 1996, the Department released Energy Efficiency Trends in Canada, which identified and analyzed the factors that caused changes in energy demands and, hence, emissions between 1990 and 1994. The Department will continue to expand its efforts to assess the contribution made by its set of energy efficiency initiatives to Canada's stabilization goal, bearing in mind the difficulties of measuring and attributing the extent of changes in greenhouse gas emissions to individual initiatives.
10.72 The Branch has identified a number of opportunities to improve the management of the initiatives and their effectiveness. In addition, it has identified new initiatives that could be implemented as circumstances change. More recently, in June 1996, NRCan entered into a contract with a consultant to provide the Department with advice on delivery of current energy efficiency initiatives. The contractor submitted a report with findings and recommendations in January 1997. Advice was provided to the Department on the strengths, weaknesses and opportunities for significant changes to or extensions of the delivery of these initiatives, within the existing budget and framework.
10.73 We found that NRCan is taking steps in the right direction to improve internal management of its energy efficiency initiatives through enhanced business planning.
10.75 These reports generally provide performance information on the achievements of an initiative, such as the number of home builders trained in a given period. However, they typically lack performance expectations in terms of outcomes, such as how many home builders the Department expected to train or how many builders could have been trained in that same period. This makes it difficult for the reader to judge the success of the initiative.
10.76 Important information is also missing about the environment in which these initiatives are being delivered, the risks and challenges the Department faces, and the underlying assumptions being made. For example, some key assumptions relate to the world oil price, the growth in the Canadian economy, and the level of funding provided to energy efficiency programs by provincial governments and utilities. Such information would help the reader understand the context associated with delivering these initiatives.
10.77 In addition, all of these reports are silent on the original or revised estimate of the contribution these initiatives could make toward Canada's stabilization goal as well as the contribution actually being made. Moreover, the various reports provide different types of performance information. Depending on the date of the report and the nature of the target audience, the information is expressed using different units of measurement, different baselines and different reporting timeframes. In these circumstances, it is difficult for the reader to consolidate the information to determine exactly what the Department has achieved and its contribution to Canada's stabilization goal.
10.78 In its annual Report to Parliament on the Administration and Enforcement of the Energy Efficiency Act , NRCan reports the achievements of each of its energy efficiency initiatives on a fiscal year basis and provides summary information on energy use in Canada. However, the report does not make any link between achievements of individual initiatives and improvements to energy efficiency in Canada. Without good performance information, we believe Parliament will find it difficult to judge the success of the energy efficiency initiatives in aggregate terms.
10.79 NRCan's report titled Influencing Energy Use in Canada provides more complete information on progress being made by each of the energy efficiency initiatives. In that report, the Department has begun to use a "report card" format that provides a mix of performance information on activities, outputs and, in some cases, outcomes. Exhibit 10.6 provides one example of this type of reporting. In our opinion, this new format represents an improvement over previous reporting formats by showing progress over time and, in some cases, by identifying future expectations. However, where possible, more quantitative information needs to be incorporated in the "report cards".
10.80 The Department has recognized the need to assess how best to incorporate this improved information into its annual Report to Parliament on the Energy Efficiency Act . NRCan is in transition and is beginning to change to results-based management. It acknowledges that, for the energy efficiency initiatives, it is not in a position to compare planned results or achievements with actual achievements to the extent that it would like to.
10.81 Improvements in reporting performance expectations and performance achievements would improve transparency and enhance the Department's accountability to Parliament for its energy efficiency initiatives.
10.82 Natural Resources Canada should enhance its reporting to Parliament by consolidating and incorporating improved performance information and by stating any important challenges and underlying assumptions.
Department's response: Beginning with its 1996-97 Report to Parliament on the Energy Efficiency Act, NRCan will incorporate the type of improved performance information set out in its two new publications (Influencing Energy Use in Canada: Progress Indicators on Initiatives Delivered by Natural Resources Canada; and Energy Efficiency Trends in Canada: Energy Efficiency Indicators). As the Department pursues improvements in measuring program performance, this additional information also will be incorporated into: the annual Report to Parliament on the Energy Efficiency Act; the Main Estimates; and the Department's Annual Performance Report.
10.84 One of the targets that the Department established was to reduce its annual energy bill for its facilities by more than 18 percent over 1993-94 levels by the end of the 1997-98 fiscal year. The Department estimates that this will result in energy savings of $680,000 per year. Under the Federal Buildings Initiative, the Department obtained approval in September 1994 to enter into a contract for the management and implementation of energy efficiency improvements for the Geological Survey of Canada facility located in Calgary. This project, completed in February 1996, is expected to provide average annual energy savings of about $63,000 per year. In June 1996, the Department signed a contract for its more than 300 other buildings and facilities. The Department stated that at 31 December 1996, approximately 60 percent of the Federal Buildings Initiative energy efficiency improvements had been implemented. The Department expects all improvements to be completed by the end of June 1997 and to meet its energy savings target by 31 March 1998.
10.85 While the Department has set a monetary target to reduce its annual energy bill, this target could be achieved without any energy efficiency improvements if energy prices were to decline by an equivalent amount. Alternatively, if energy prices were to rise, the Department could find it more difficult than expected to achieve its target. However, the Department has expressed this target in units of energy and water consumption and has informed us that these latter targets will be disclosed to Parliament in future Part IIIs of the Estimates and in future departmental Performance Reports. We believe that such disclosure, and reporting achievements against targets expressed in units of energy and water consumption, would enable a better assessment of the success of meeting the target through energy efficiency improvements.
10.86 The new Fleet Management Program covers an initial three-year period from 1 April 1995 to 31 March 1998. It intends to address NRCan's commitments through the following actions:
10.88 In April 1996, the Department began a one-year pilot project at its headquarters complex, which consists of pooling 27 vehicles. The Department plans to evaluate the results of this project in March 1997 to decide whether the project will be extended and expanded.
10.89 The Department informed us that, between 1 April 1995 and 31 January 1997, it converted 35 existing vehicles to alternative fuels and purchased four vehicles that were manufactured with alternative fuel systems. The Department plans to continue converting its existing vehicles and purchasing new vehicles that run on alternative fuel whenever cost-effective and operationally feasible.
10.90 Other actions have begun or are planned on additional energy efficiency aspects of the Fleet Program. A departmental policy on fleet management has been approved and is expected to be distributed in March 1997. A transportation handbook incorporating ``green" (energy-efficient and environmentally friendly) driving practices, currently in draft form, is expected to be distributed to all departmental employees by April 1997. To increase driver education, the Department is exploring the possibility of incorporating ``green" driving practices as part of an existing departmental course on defensive driving, with a start-up date prior to 31 March 1998. Within the context of its vehicle-pooling project, the Department expects to begin implementing its route-planning software in June 1997, to test on-board vehicle computer systems on three vehicles in the summer of 1997 and to test its enhanced vehicle maintenance practices as opportunities arise.
10.91 Although the Department did not have the necessary information system in place prior to the commencement of the Fleet Management Program, it has developed baseline data for the fuel consumption of its fleet for the first year of the Program. These data could provide a basis for measuring the Department's future progress on energy efficiency in the transportation area.
10.92 As a result of federal government downsizing measures, NRCan is in the process of reducing its financial, physical and human resources. For the Federal Buildings Initiative, the Department has included clauses in its contracts to adjust the baseline data to take into account external influences, including reductions due to departmental downsizing. This could assist the Department in considering these reductions when reporting on the achievements of its own energy efficiency efforts for its buildings and facilities. To ensure fair and proper reporting of the achievements of its energy efficiency efforts in the transportation area, as distinct from reductions in energy consumption brought about by downsizing, the Department needs to examine ways to separate the impacts of downsizing from other measures it is taking to reduce energy use.
10.93 In our opinion, NRCan has begun to lay the foundation to improve its own energy efficiency. While additional achievements are required in certain areas, the Department expects to meet its commitments or targets by 1997-98.
10.95 The Department has made a fundamental shift in the way it promotes energy efficiency. Today it places heavy reliance on voluntary measures, with only selective use of regulations. It acts as a catalyst, and attempts to leverage its limited resources by using partnerships to encourage others to use energy more efficiently. For the most part, the departmental role is to provide federal leadership to others to implement energy efficiency improvements in Canada.
10.96 Improving energy efficiency is a key element in enabling the federal government to achieve its commitment to stabilize greenhouse gas emissions at 1990 levels by the year 2000. This is a major commitment to which NRCan is expected to make a significant contribution.
10.97 Information is not available on the contribution that is being made, or that could be made, to Canada's stabilization goal by the set of energy efficiency initiatives. We found that the current performance information is not sufficient to determine the overall success of the initiatives in contributing to this goal. The Department needs to develop appropriate links between the outcome of its energy efficiency initiatives and the stabilization goal.
10.98 Our audit also identified the need for improved performance information pertaining to the individual energy efficiency initiatives, where cost-effective and feasible. In addition, there are opportunities to enhance the transparency of the energy efficiency initiatives and departmental accountability, by better reporting to Parliament on expectations and achievements.
10.99 In November 1994, the Department committed itself to becoming the most energy-efficient department in the federal government. The Department has made progress over the last two years toward improving its energy efficiency and expects to meet its targets by 1997-98.
The quantitative information in this chapter has been drawn from the various government sources indicated in the text. Although this quantitative information has been checked for reasonableness, it has not been audited unless otherwise indicated.
The other initiatives of NRCan's EAE Program related to alternative transportation fuels and renewable energy sources are expected to be covered in separate audits at a later date.
For information, please contact Ellen Shillabeer, the responsible auditor.