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Standing Committee on Finance and Economic Affairs
March 13, 2013
Speaking Notes for Steve Morrissey, Vice President
Mr. Chair, members of the Committee - good morning. Thank you for this opportunity to present to you the concerns and recommendations by cement manufacturers in Ontario.
My name is Steve Morrissey and I am the Vice President of the Cement Association of Canada. We represent the cement manufacturers in Ontario and throughout the country. Many of you are familiar with our Ontario manufacturers - Lafarge North America, St. Marys Cement, Holcim Canada, Essroc Italcementi and Federal White Cement.
The cement and concrete industries employ over 16,000 Ontarians and generate over $6 billion of direct economic activity in the Province. Cement, concrete and aggregates - located in every area across Ontario - are important industries supporting a $37 billion construction industry.
Given the critical importance of our province’s infrastructure in maintaining jobs and promoting economic growth, and given the growing importance of sustainable construction, cement and concrete are arguably one of Canada’s most important and strategic commodities. In fact, concrete is the second most used material on earth, after water, with over 3,000 tonnes per year being produced for every woman, man and child. I don’t think I need to remind this group that governments are the largest single customer for concrete.
Today I’d like to talk about sustainable infrastructure and how we are seeking to meet society’s and government’s sustainability objectives. Concrete is literally the foundation upon which modern societies and economies are built. We believe it will be the foundation of the sustainable societies and economies of the future.
As an industry, we have come a long way when it comes to sustainability and reducing our environmental footprint.
We have invested significantly to become more efficient, cleaner, more transparent, and increasingly focused on product-based solutions to sustainability challenges.
We have invested heavily in research and we’re proud of our innovations, which range from Contempra, a new brand of cement that reduces CO2 emissions by 10%, products like pervious concrete pavement; ultra-high performance concrete; and air purifying concrete panels - which are currently being tested here in Ontario.
The cement industry is partnering with a wide range of stakeholders, including governments and environmental groups, to examine every aspect of our industry, to find ways to reduce our footprint and provide innovative solutions to our sustainability challenges.
I’d like to speak to how cement and concrete contribute to sustainable infrastructure and how these benefits can be increased in Ontario through the use of alternative fuels in the cement manufacturing process.
We applaud the Government of Ontario’s investment in infrastructure. We need to encourage governments, at all levels, to maintain these investments.
As noted in the recent Speech from the Throne, “…infrastructure is the underpinning of our economy that if we continue to lag behind then we will never leap forward”.
We also agree that Ontarians are ready to talk about how to get better value and quality for local infrastructure needs in their communities, whether it is their roads or transit, their bridges, or their underpasses.
To accomplish this we ask the governments to use full life-cycle approach to inform your decision making. A full cradle-to-grave life cycle approach considers all phases of an infrastructure project to provide a true perspective of its cumulative economic and environmental impacts. It allows you to measure the long-term value of infrastructure investments as it quantifies and assess these impacts over the infrastructure’s total service life.
You may have heard us say this before, our motto is “build it once, build it right, build it to last”.
To give you an example specific to road and highway construction, here in Ontario, all of the last 10 MTO alternative bid tenders were awarded to concrete road designs, and by implementing life cycle tools it has shown that this decision will save MTO over $45 million for these projects. We believe that by choosing concrete roads, Ontario municipalities could save up to 26% on a pavement’s total cost of ownership when considering its full life-cycle.
We also believe that construction materials should contribute to achieving Ontario’s sustainable development objectives which includes reducing Greenhouse Gas emissions.
The cement and concrete industries are committed to finding solutions to reduce their GHG emissions. This includes the use of alternative fuels in our industry.
Using low-carbon alternative and fully renewable energy sources will have the largest impact with respect to reducing dependence on imported fossil fuels, reducing greenhouse gases emissions, redirecting waste and staying competitive.
Ontario is behind the rest of the world and other provinces and U.S. jurisdictions in terms of permitting alternative fuel use. Our industry has been striving to increase use of alternative and renewable energy sources for many years.
The use of these fuels would be a “win” for government, the environment and health of the province, and a “win” for our industry. Alternative fuel use would enhance the industry’s sustainability both environmentally, where we can reduce GHG and other air pollutants, and economically, where fuels account for a substantial portion of our manufacturing costs.
For example, based on Ontario’s 2010 kiln energy consumption data by weight, a 45% substitution of coal and petrol coke with carbon neutral fuels would allow us to eliminate up to 637,823 tonnes of CO2. This is the equivalent of removing 122,658 passenger cars off the road.
Alternative fuels would reduce waste to landfill, reduce GHGs and fossil fuel consumption, and increase competitiveness. That is a win-win for everyone.
GHGs collectively comprise the single largest environmental issue currently facing our industry. Our members are actively researching new opportunities to reduce our GHG emissions and we are proactively working with MOE to allow the use of alternative and renewable fuels – our only unexplored opportunity to significantly reduce GHGs.
On climate policy - as an energy intense and trade exposed industry, Ontario’s cement manufacturers risk being placed at a competitive disadvantage both in our domestic market here in Ontario, and in our primary export market in the northern U.S. if climate policy does not adequately take into consideration regulatory imbalances between regions.
For business to remain competitive, it needs some sort of certainty. We recommend that the government continue a sector-by-sector consultative, regulatory approach in designing GHG regulations.
Energy (Electricity) Costs
And finally, I want to raise the issue of electricity costs for our industry.
Cement manufacturing is a highly energy-intensive process. Cement producers are large purchasers of electricity, and this cost has been rising sharply in Ontario, with no end in sight. The increasing uncertainty over medium and long-term electricity costs is diminishing the desire of business to invest in the Province.
While the government has made changes to the allocation of the Global Adjustment that are beneficial to manufacturers, our members are still facing massive increases in electricity costs, as much as 7-12% year over year. This is at a time when they have already implemented significant energy efficiency programs.
The electricity-cost crisis in Ontario is not just a residential customer political issue; it is a crisis that will play a significant part in the business decision to expand and create jobs in more competitive jurisdictions.
In closing, we believe that focusing on sustainable infrastructure and taking a long-term view for infrastructure investment will help the Province of Ontario and the industry achieve our common sustainability objectives in terms of the environment and the economy, and of course, from a social perspective as well.
The government must take action to ensure that the overall business environment is favourable and sufficiently competitive to retain and grow manufacturing investment in Ontario.
Once again, I would like to thank you for allowing us to share our views with the Committee. I would be pleased to answer any questions you may have.
President & Chief Executive Officer
Cement Association of Canada
613-236-9471 ext. 206
Cement Association of Canada
613-236-9471 ext. 202