Feds select consortium to upgrade Ottawa-area heating and cooling plants
Public Services and Procurement Canada (PSPC) has selected a consortium to manage the $1.1-billion overhaul of five heating and cooling plants in the National Capital Region that has drawn the ire of the country’s largest federal public service union.
The department Tuesday announced that Innovate Energy has been awarded the 30-year contract to design, retrofit, maintain and operate the plants, beating a rival bid from a group that included SNC-Lavalin.
Environment Minister Catherine McKenna said the federal government was “leading by example” in its bid to reduce greenhouse gas emissions across the country by supporting a project to make heating and cooling infrastructure more environmentally friendly.
“We’re very proud that our government is working with partners like Innovate Energy to modernize this critical infrastructure,” she said during Tuesday’s announcement at the Cliff Heating and Cooling Plant in downtown Ottawa, one of the facilities that will be upgraded.
Known as a district energy system, the five plants heat 80 buildings in the area with steam and cools 67 of them with chilled water through more than 14 kilometres of underground pipes.
Under the Energy Services Acquisition Program, PSPC will modernize the outdated technology in the plants in hopes of lowering emissions and supporting growth in the clean technology sector.
The first stage of the overhaul will convert the system from steam to low temperature hot water and switch from steam to electric chillers, which is expected to be completed by 2025. PSPC says this will reduce emissions by 63 per cent, the equivalent of taking 14,000 cars off the road.
From there, the natural gas powering the plant will be replaced by carbon neutral fuel sources, which is estimated to reduce emissions by a further 28 per cent. It’s estimated the renovation project will save more than $750 million in heating and cooling costs in the next 40 years.
As part of the overhaul, a section of the Cliff Plant — located next to the Supreme Court of Canada — will be transformed into a publicly accessible green space area that overlooks the Ottawa River at no additional cost, the department revealed Tuesday.
In October, the Public Service Alliance of Canada (PSAC), which represents employees of the plants, launched a campaign against the government’s decision to use a public-private partnership (P3) for the retrofitting project, raising concerns about costs and safety. The union alleges that outside employees won’t be held to the same health and safety standards of government workers and that P3 projects routinely cost more than traditional public financing deals.
It wants the government to scrap the proposed project and meet PSAC members and experts to collaborate on a new path forward that would ensure federal employees continue to operate and maintain the plants.
Steve MacKinnon, parliamentary secretary to the public services and procurement minister, told iPolitics that union officials have expressed concerns with him over the planned retrofit that he shared with department staff. But after conducting a rigorous analysis, the P3 route was determined the most appropriate, he said, especially as it comes with no job losses.
“We didn’t have (to) sacrifice on safety or health — we didn’t have to sacrifice on job security,” he said, adding that PSAC opposes the project “more or less on an ideological level,” hinting at the union’s historic criticism of P3s.
Department officials say they were prompted to seek out private sector partners, in part, to address long-term staffing issues, compounded by a steadily greying workforce at the plants. They argue that department developed apprenticeship programs largely struggled to hold on to talent lured by more lucrative salaries in the private sector.
However, the union is accusing the federal government of failing to offer sufficient internal training, make needed investments in staffing or aggressively recruit new talent. And while department management says they’ve met with staff to discuss the proposed retrofit and prepare new roles for them within government, the union says employees have been left in the dark on these major operational changes.
When asked if anyone in government reached out to PSAC members to inform them that a consortium had been chosen, MacKinnon said he didn’t know but all that information is released publicly once finalized.
McKenna told iPolitics that she has also met with PSAC officials about the project and raised the concerns she heard to the department, though maintained that it was a “great investment” that would lead to significant emission reductions.
In a joint statement released Wednesday, PSAC’s national president Chris Aylward and Randy Howard, national president of the Government Services Union, said their opposition to the project and P3s in general is based on “information, research and global evidence” that these sorts of financial arrangements “do not save money, do not provide better service, and regularly fail,” citing, as example, repeated delays and problems with Ottawa’s ongoing light-rail transit project.
Aylward and Howard said while MacKinnon and McKenna have met with members, they “did not provide fact-based answers” to the complaints raised, referring to their citing of documents like value for money studies and a business case that were not shared with them.
“For months our access to this information has been blocked. What little information we have received was either in draft form or has been so severely redacted that it’s useless,” reads the statement from the union heads.
“The body of evidence from Canada, the United States, the United Kingdom and elsewhere indicates that P3s do not work and are a poor and reckless investments for governments. Why is the government not prepared to share information that would back up its claim that this particular privatization is a good deal for Canadians, and a safe project for those who work and live in Ottawa?”
Aylward and Howard added that they’ve filed “several complaints” with the Information Commissioner regarding the rejection of their requests for documents relating to the project under the Access to Information Act.
*This story has been updated with reaction from PSAC and the Government Services Union.