vcr inc.

vcr inc. CANADA’S CLIMATE CHANGE voluntary challenge & registry inc. ANNUAL REPORT 2003

ANNUAL REPORT 2003 RAPPORT ANNUEL 2003 ANNUEL RAPPORT

RAPPORT ANNUEL 2003

C D D ANADIEN ÉFI-CLIMAT U

mesures volontaires et registre inc. registre et volontaires mesures mvr inc. mvr mvr inc. Readers’ Comments and Requests We welcome your comments, questions and requests. Please visit our web site at www.vcr-mvr.ca or contact us at:

Canada’s Climate Change Voluntary Challenge & Registry Inc. (VCR Inc.) 170 Laurier Avenue W, Suite 600, Ottawa, Ontario K1P 5V5 Telephone: (613) 565-5151 • Fax: (613) 565-5743 • E-mail: [email protected]

Other publications available from VCR Inc. include: • VCR Inc. Annual Report 1998, 1999, 2000, 2001, 2002 • VCR Inc. Guide to Entity & Facility-Based Reporting • Champion News

All publications are available for downloading at http://www.vcr-mvr.ca/vcr_pubs_e.cfm

Toutes publications du bureau de MVR inc. sont disponibles en français.

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s r u e t c e l s e d s e d n a m e d t e s e r i a t n e m m o C M ission To provide, through leadership, the means for promoting, assessing and recognizing the effectiveness of the voluntary approach in addressing climate change.

M andates To recruit broad participation from all sectors of the Canadian economy with the support of the Council of Champions and in conjunction with sector organizations.

To record and document participation, action plans, best practices and achievements.

To analyze actions and achievements and consider their potential for further progress, and to provide the related support to participants as their involvement deepens.

To recognize, publicize and promote participants making significant progress towards Canada’s reduction objectives, with the support of the Technical Advisory Committee.

To contribute to the development and implementation of standards and procedures for measuring the impact of reduction activities.

To provide a national registry for initiatives which lead to early voluntary action to reduce GHG emissions.

To prepare progress and annual reports, and identify issues for consideration in the evolution of VCR Inc.

VCR Inc. ¥ 2003 Annual Report i Retrospective 2003

VCR’s primary objective is one of engagement and once again we are pleased to report noteworthy progress. On a national scale, it is significant to recognize that Canada’s GHG emissions in 2001 actually declined for the first time since 1991, thanks in large part to the efforts of all of you who are aggressively implementing your GHG reduction action plans.

One of our most valuable core competencies lies in the development and maintenance of an electronic data collection and dissemination system. This technical platform, together with the knowledge base we have established over the past seven years, should provide the smooth transition that Canadian governments need to implement their approach to Large Final Emitters. At the same time, we can continue to reach out to smaller organizations and the balance of our society, challenging them to do their part to mitigate climate change. Our registries have been developed with these needs in mind.

You are one of 1,165 entities to have collectively submitted 3,249 documents for posting in the Challenge Registry. Together they constitute a wealth of knowledge about the methodology of quantification and tracking your GHG footprint. They provide fertile ground for research, and help to highlight which actions to undertake to achieve the greatest results. The utility of the web site in making this information readily available is illustrated by the impressive year over year growth of user sessions. Our annual survey results reveal that satisfaction with your working relationship with VCR is at an all time high.

265 of you achieved Champion-level reporter status: 139 Gold, 77 Silver, and 49 Bronze. Your “best practice” is forming the platform on which uniform standards are being developed worldwide. Armed with the knowledge gained from your reports, VCR is directly involved in providing support for the development of these standards.

We have continued to play a significant role in the engagement of Small and Medium Sized Enterprises (SMEs) in the task of managing their GHG emissions and energy consumption. With the engagement strategy involved in the Environmental Supply Chain Management Pilot Project, the GHG calculator, and the Individual Action Registry, we have developed more tools to assist smaller organizations in their efforts to document a GHG inventory and prepare a subsequent action plan.

We would like to extend our personal congratulations to those of you who are receiving our 2003 Leadership Awards. You and the many others who have received these awards in the past are the acknowledged leaders in addressing the important environmental issues surrounding global warming. Keep up the good work. Together we are making a difference.

James Burpee Robert A. Flemington, P. Eng. Chair, VCR Inc. Board of Directors President, VCR Inc.

ii VCR Inc. ¥ 2003 Annual Report Table of Contents ANALYSIS OF SECTOR PARTICIPATION WITHIN CANADA’S GHG PROFILE...... 2 1.1 CONTEXT ...... 2 1.2 ESTIMATION METHODOLOGIES ...... 5 1.3 ELECTRICITY GENERATION ...... 6 1.4 FOSSIL FUELS...... 7 1.4.1 Upstream Oil and Gas ...... 7 1.4.2 Downstream Oil and Gas ...... 7 1.4.3 Oil Sands and Heavy Oil Upgrading...... 8 1.4.4 Energy Pipelines ...... 8 1.4.5 Natural Gas Distribution ...... 9 1.4.6 Coal Mining ...... 9 1.5 MANUFACTURING AND MINING...... 9 1.5.1 Cement...... 10 1.5.2 Chemicals ...... 10 1.5.3 Metal Mining ...... 11 1.5.4 Nonferrous Metal Smelting and Refining...... 11 1.5.5 Primary Aluminium...... 12 1.5.6 Pulp and Paper ...... 12 1.5.7 Steel ...... 13 1.5.8 Textiles ...... 13 1.5.9 Transportation Manufacturing ...... 14 1.6 COMMERCIAL TRANSPORTATION ...... 14 1.6.1 Airlines ...... 14 1.6.2 Railways ...... 15 1.6.3 Commercial Trucking ...... 15 1.7 INSTITUTIONAL AND COMMERCIAL ...... 16 1.7.1 Federal Government ...... 16 1.7.2 Provincial and Municipal Governments ...... 16 1.7.2.1 Provincial Governments...... 17 1.7.2.2 Municipal Governments ...... 17 1.7.3 Education ...... 17 1.7.3.1 Community Colleges ...... 17 1.7.3.2 School Boards ...... 17 1.7.3.3 Universities ...... 17 1.7.4 Health Services ...... 18 1.7.5 Accommodation and Food Services ...... 18 1.7.6 Retail Industries ...... 19 1.7.7 Offices ...... 19 1.8 HOUSEHOLDS ...... 20 1.9 AGRICULTURE...... 20

VCR Inc. ¥ 2003 Annual Report iii ENTITY GHG CHALLENGE REGISTRY© ...... 22 2.1 LEADERSHIP AWARDS ...... 24 2.1.1 Selection Criteria ...... 25 2.1.2 Leadership Award Winners and Honourable Mentions (HM) ...... 26 2.2 LINKAGES AND PARTNERSHIPS ...... 29 2.3 CHAMPIONS IN ACTION (CIA) INITIATIVE ...... 31 2.3.1 Background ...... 31 2.3.2 Purpose ...... 31 2.3.3 Objectives ...... 31 2.3.4 Participants ...... 31 2.3.5 Participant Benefits ...... 31 2.3.6 Progress to Date ...... 32 2.3.6.1 Framework Understanding ...... 32 2.3.6.2 Standardized Reporting - Balance Sheet...... 32 2.3.6.3 Summary...... 32 2.3.7 Peer Review Process ...... 32 2.4 ENVIRONMENTAL SUPPLY CHAIN MANAGEMENT (ESCM) PILOT PROJECT ...... 33 2.4.1 Objective ...... 33 2.4.2 Background ...... 33 2.4.3 Timelines ...... 34 2.4.4 Progress to date ...... 34 2.5 INDIVIDUAL GHG ACTION REGISTRY (IAR) ...... 34

CANADIAN GHG REDUCTIONS REGISTRY© ...... 36 3.1 VALIDATION PROTOCOL FOR EMISSION REDUCTIONS PROJECTS ...... 36 3.1.1 Purpose ...... 36 3.1.2 Application and Project Documents ...... 36 3.1.3 Internal VCR Review process...... 36 3.1.4 Notice of Completeness ...... 37 3.1.5 Grace Period ...... 37 3.1.6 Annual Posting of Project RERs...... 37 3.1.7 VCR Inc. Validation and Transaction Fees ...... 37 3.2 REGISTERING PROJECTS AND ASSOCIATED EMISSION REDUCTIONS IN THE CANADIAN GHG REDUCTIONS REGISTRY IS A FIVE-STEP PROCESS...... 37

CANADIAN GHG CREDIT REGISTRY© ...... 40

iv VCR Inc. ¥ 2003 Annual Report COMMUNICATIONS...... 42 5.1 WEBSITE ...... 42 5.2 VCR 2003 STAKEHOLDER SURVEY ...... 43 5.2.1 Familiarity and Perceived Importance ...... 43 5.2.2 Perceptions of Satisfaction and Benefits ...... 43 5.2.3 Communication Issues ...... 44 5.3 REGISTRATION GUIDE TO ENTITY AND FACILITY-BASED REPORTING ...... 45 5.4 OTHER PUBLICATIONS ...... 46 5.4.1 Annual Report ...... 46 5.4.2 Champion News ...... 46 5.4.3 Progress Reports ...... 46

VCR INC. STRUCTURE ...... 48 6.1 2003 COUNCIL OF CHAMPIONS ...... 49 6.2 2003 BOARD OF DIRECTORS...... 50 6.3 VCR’S TECHNICAL ADVISORY COMMITTEE (TAC) ...... 50 6.3.1 Role and Mandate ...... 50 6.3.2 Membership ...... 50 6.3.3 Scope and Responsibilities ...... 51 6.3.4 Relationships ...... 51 6.3.5 Measurements...... 51 6.3.6 Operation ...... 51 6.3.7 List of TAC Members ...... 51 6.4 LIST OF REGISTRANTS BY LEVEL OF REPORTING (AS AT DECEMBER 31, 2003) ...... 52 6.4.1 Champion in Action ...... 52 6.4.2 Gold ...... 52 6.4.3 Silver ...... 52 6.4.4 Bronze ...... 53 6.4.5 Other Registrants...... 53

APPENDICES ...... 59 LIST OF ACRONYMS, GREENHOUSE GASES AND MEASUREMENT UNITS ...... 61

VCR Inc. ¥ 2003 Annual Report v vi VCR Inc. ¥ 2003 Annual Report Beginning to see sustainable results Analysis of Sector Participation within Canada’s GHG Profile

1.1 CONTEXT

Canada’s Greenhouse Gas Inventory totaled just under 720 million tonnes carbon dioxide equivalent (CO2 e) in 2001. For the first time since 1981 emissions declined year over year, a major step in the right direction.

About 80 % of our national GHG footprint is directly related to energy production and consumption. The balance occurs in changing land use and forestry, farming, industrial processes and waste disposal.

CHART 1: Sources of GHG Emissions in 2001

Industrial Processes Source: Olsen, K., et al., Canada’s Greenhouse Gas Inventory 1990- 6.8% 2001, Environment Canada, August 2003. Solvent and Other Product Use 0.1% Energy Other 81.1% 18.9% Agriculture 8.3% Land-Use Change and Forestry 0.3% Waste 3.4% Note: Due to rounding, individual values may not add up to totals

In our 2000 Annual Report, we began tracking the relationship between Canada’s Gross Domestic Product (GDP), a measure of the strength and size of our economy, and the GHG emissions generated as a result of this economic activity. It was noted that 1997 marked the first year that Canada successfully de-coupled the generation of GHG emissions from our economic growth. Chart 2 illustrates not only that the trend has continued, but also that it has accelerated, providing clear evidence that the efforts to reduce GHG emissions made by all sectors of our economy are having a positive and significant effect.

2 VCR Inc. ¥ 2003 Annual Report Sources: Olsen, K. et al. Canada’s Greenhouse Gas Inventory CHART 2: Canadian GDP and GHG Emissions 1990-2001, Environment Canada, August 2003. 1.6 Statistics Canada, Table 380-0002: Gross Domestic Product 1.4 (GDP), expenditure-based, January 2004.

1.2

1.0

0.8

0.6 1990=1.0 0.4

0.2

0.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 YEAR

GDP (Chained 1997 $)

Trend Line GHG Emissions

GHG Emissions

Chart 3 and the supporting detailed information in Table 1 CHART 3: Canada's GHG Emissions 2001 provide a measure of the GHG impact of the primary sectors of our economy. It is estimated that, excluding households and the Agriculture Other Electricity Generation farming community, more than 75% of the ability of the 10.1% 0.9% 18.5% remaining sectors to reduce our national GHG annual inventory is represented by the Action Plans of those companies, governments, Households 17.7% Fossil Fuels and other organizations documented in our Challenge Registry. 18.4% The top three sectors in Table 1 include the Large Final Emitters group expected to be covered within the first phase of a national Institutional and Commercial (including waste) mandatory reporting system. About 90% of the GHG emissions 10.2% Transportation Manufacturing Mining from these companies are represented on the registry. (Commercial) 16.8% 7.2%

Note: Due to rounding, individual values TOTAL = 720 Mt CO2 e Source: VCR Inc. estimates 2003. may not add up to totals

VCR Inc. ¥ 2003 Annual Report 3 TABLE ONE: National 2001 GHG Emissions Inventory Breakdown Estimate of Sector 2001 GHG Portion of GHG Emissions Sector Section Details Emissions National (Mt CO e) Coverage 2 Total within Registry Electricity Includes all generation facilities operated by utility 1.3 133.2 18.5% 100.0%1 Generation companies and steam generation facilities.

Fossil Includes mining, production, transformation and pipeline 1.4 132.4 18.4% 95.0%2 Fuels transportation related to oil, gas and coal.

Manufacturing Includes aluminum, cement, chemical, forest products, and 1.5 general manufacturing, mining, steel, textiles, vehicles 121.1 16.8% 72.0%3 Mining and parts manufacturing.

Large Final Emitters Subtotal 386.7 53.7% 89.5%

Commercial Includes air, marine, rail, off-road and road vehicles 1.6 52.0 7.2% 26.0%4 Transportation (including fleet vehicles).

Includes energy and waste related emissions from federal, Institutional and 5 1.7 provincial and municipal governments, education and health 73.7 10.2% 35.9% Commercial institutions, commercial, service and retail industries.

Includes residential space and water heating (39.6 Mt), and Households 1.8 127.6 17.7% – personal vehicle transportation (88.0 Mt) Includes non-combustion related emissions Agriculture 1.9 72.9 10.1% – (mostly methane and nitrous oxide). Other 6.7 0.9% – Total6 719.6100.0% 75.3%7

1 Canadian Electricity Association 2 Weighted average using oil, gas and coal sector statistics. 3 VCR Inc. estimation, 2003. 4 VCR Inc. estimation, 2003. 5 Assume 100 per cent of government emissions, in addition to 10 per cent of other buildings. 6 Due to rounding, individual totals may not add up to exact totals. 7 VCR Inc. registrants represent 75.3% of the GHG emissions from all sectors except Households, Agriculture and Other.

4 VCR Inc. ¥ 2003 Annual Report The following sector profiles contain performance indicators that measure progress. Included is an estimate of the quantity of avoided annual emissions achieved as a result of energy management and other reduction activities undertaken within the sector since 1990. The term ‘unavoided annual emissions’ is used when the GHG emission intensity has increased since 1990. The methodologies used for this analysis are described below. 1.2 ESTIMATION METHODOLOGIES Within this chapter, direct energy relation emissions were derived from VCR analysis8 , end-use energy publications9 , Challenge Registry reporting, and the national inventory. Virtually all sources (including the national inventory, all end-use energy publications, and most internal emissions estimates) base their emissions estimates on energy consumption data from Statistics Canada’s Quarterly Report on Energy Supply- Demand in Canada (QRESD). This publication tracks energy flows through the entire economy, from imports and production through exports and end-use consumption.

Direct non-energy emissions estimates were based primarily on data reported by Environment Canada through the national inventory.10 A select few were derived from CIEEDAC11 , Challenge Registry reporting and VCR analysis.

In the case of indirect emissions a few estimates were based on the same end-use energy publications described above, but these sources did not always reflect regional emissions intensity. Estimates for most sector profiles were based on VCR analysis. These estimates used average provincial and territorial electricity emission factors based on energy consumption and electricity generation reported in the QRESD. In order of preference, VCR used regional average emission factors, Challenge Registry reporting, end-use energy publications, and national average emission factors. Where no reasonable estimate of indirect GHG emissions was possible, they were not included in the sector profile.

‘Avoided annual emissions’ and ‘Unavoided annual emissions’ represent the difference between actual emissions in 2001 and those that would have occurred had no reduction initiatives been undertaken since 1990. Unavoided annual emissions are reported when emissions intensity has increased. The preferred methodology for avoided annual emissions is:

(1990 emissions intensity – 2001 emissions intensity) x 2001 production

Other similar calculations are used if the emissions intensity or production data is not available. If no reasonable method of estimating avoided emissions is available, it is not included in the sector profile. It should be noted that ‘Avoided annual emissions’ represents the net impact of all actions across the sector, including both voluntary and policy initiatives, and those initiated by both registered and non-registered entities.

8 VCR Inc. internal emissions estimates were calculated using emission factors published by Environment Canada in the latest national inventory. 9 Natural Resources Canada, End-Use Energy Data Handbook 1990 and 1995 to 2001, June 2003. Natural Resources Canada, Energy Efficiency Trends in Canada 1990 to 2001, June 2003. Nyboer, J. and Bennet M., Development of Greenhouse Gas Intensity Indicators For Canadian Industry 1990 to 2001, Prepared for Environment Canada and Natural Resources Canada, Canadian Industrial Energy End-use Database and Analysis Centre, Simon Fraser University, April 2003. Nyboer, J. et al, Development of Energy Intensity Indicators For Canadian Industry 1990 to 2001, Prepared for Canadian Industry Program for Energy Conservation and Natural Resources Canada, Canadian Industrial Energy End- use Database and Analysis Centre, Simon Fraser University, May 2003. Nyboer, J., A Review of Energy Consumption in Canadian Oil Sands Operations, Heavy Oil Upgrading 1990, 1994 to 2001, Prepared for Regional Infrastructure Working Group and Canadian Industry Program for Energy Conservation, Canadian Industrial Energy End-use Database and Analysis Centre, Simon Fraser University, March 2003. Nyboer, J. and Rivers, N., A Review of Energy Consumption in Canadian Oil Refineries 1990, 1994 to 2001, Prepared for Canadian Petroleum Products Institute and Canadian Industry Program for Energy Conservation, Canadian Industrial Energy End-use Data and Analysis Centre, Simon Fraser University, January 2003. 10 Olsen, K., et al. Canada’s Greenhouse Gas Inventory 1990-2001, Environment Canada, August 2003. 11 Nyboer, J. and Bennet M., Development of Greenhouse Gas Intensity Indicators For Canadian Industry 1990 to 2001, Prepared for Environment Canada and Natural Resources Canada, Canadian Industrial Energy End-use Database and Analysis Centre, Simon Fraser University, April 2003.

VCR Inc. ¥ 2003 Annual Report 5 ‘Action Plans’ refers to the number of organizations in the sector that have an action plan registered in the VCR Challenge Registry. There are three minimum criteria for registering an action plan: senior management commitment, commitment to regular reporting, and a base year quantification.

‘Champion level’ refers to the top level of reporters within the Challenge Registry, who have earned Bronze, Silver or Gold Champion-level Reporter status. Champion-level Reporter status is earned by registering rigorous reports, as described in the VCR Challenge Registry Guide to Entity & Facility-Based Reporting. Gold status also requires demonstrated reduction actions that have reduced total GHG emissions, and/or GHG emissions intensity or energy intensity between the registrant’s current reporting year and base year.

‘% of sector emissions’ refers to the portion of the sector’s total GHG represented by entities registered in our Challenge Registry. This ratio is estimated based on the ratios of registered and unregistered production, energy consumption, and/or direct input from a representative sector trade organization based on their detailed knowledge of the sector participants.

1.3 ELECTRICITY GENERATION

CHART 4: Electric Utility Emissions Direct 2001 Emissions: 133.2 Mt CO e Emission Offsets and Credits 2

Net Emissions Avoided Emissions: 8.1 Mt CO2 e 140 Gross Emissions Sector Engagement: 20 Action Plans 120 15 Champion level e)

2 12 100 Virtually 100% of sector emissions

80

60

EMISSIONS (Mt CO 40

20 Source: Canadian Electricity Association, 2002 ECR 0 Annual Report, Canadian Electricity and the 1997 1998 1999 2000 2001 2002 Environment, p. 20.

12 Not all Canadian electricity-generating companies report to VCR Inc.

6 VCR Inc. ¥ 2003 Annual Report 1.4 FOSSIL FUELS CHART 5: Upstream Oil and Gas Emissions Intensity Trends Total Direct 2001 Emissions: 132.4 Mt CO e 2 0.40 Total Indirect Emissions: 33.4 Mt CO2 e 0.35 Total Emissions: 165.8 Mt CO2 e 0.30 1.4.1 Upstream Oil and Gas 0.25 Oil Equivalent) Direct 2001 Emissions: 52.7 Mt CO2 e 3 0.20 Indirect Emissions: 18.7 Mt CO e 2 0.15 e per m Total Emissions: 71.4 Mt CO2 e 2

EMISSIONS INTENSITY 0.10 (t CO 13 0.05 Avoided annual emissions: 3.9 Mt CO2 e 0.00 Sector engagement: 84 Action Plans 1999 2000 2001 61 Champion level YEAR 93% of sector emissions

Source: Canadian Association of Petroleum Producers, 2002 Stewardship Progress Report, Changing Behaviour, December 2002.

1.4.2 Downstream Oil and Gas CHART 6: Energy Intensity Index Trends for CPPI Member Refineries 14 Direct 2001 Emissions: 18.7 Mt CO2 e 120 1.2 Indirect Emissions: 2.0 Mt CO2 e Total Emissions: 20.7 Mt CO2 e 100 1.0

80 0.8

Avoided annual emissions: 1.9 Mt CO e Production, 2 3 60 0.6 Intensity Index per m Indexed to 1990 Solomon Energy Sector engagement: 9 Action Plans 40 0.4 2 Emissions Intensity

6 Champion level CO 20 0.2 100% of sector emissions 0 0.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Solomon Energy Intensity Index Emissions Intensity

Source: Nyboer, J. and Rivers, N., A Review of Energy Consumption in Canadian Oil Refineries 1990, 1994 to 2001, Prepared for Canadian Petroleum Products Institute and Canadian Industry Program for Energy Conservation, Canadian Industrial Energy End-use Data and Analysis Centre, Simon Fraser University, January 2003.

13 This avoided emission calculation is based on survey data from a Canadian Association of Petroleum Producers publication, 2002 Stewardship Progress Report Changing Behavior (December 2002). VCR Inc. estimated avoided emissions by multiplying the change in emissions intensity 1999 to 2001 (expressed as a percentage) by 2001 emissions (all data from CAPP’s stewardship report). Actual avoided emissions, taking into account all emission reductions over 10+ years rather than two, are likely to be much more significant. 14 Nyboer, J and Bennett, M, Development of Greenhouse Gas Intensity Indicators for Canadian Industry, 1990 to 2001, Prepared for Environment Canada and Natural Resources Canada, Canadian Industrial Energy End-use Database and Analysis Centre, Simon Fraser University, April 2003, Appendix, SIC Code 3611.

VCR Inc. ¥ 2003 Annual Report 7 CHART 7: Emissions Intensity Trends in the Oil Sands and 1.4.3 Oil Sands and Heavy Oil Heavy Oil Upgrading Sector Upgrading15 16 Direct 2001 Emissions: 15.2 Mt CO2 e 1000 Indirect Emissions: 4.4 Mt CO e17 900 2 800 Total Emissions: 19.6 Mt CO2 e 700 production 3 600 18 Avoided annual direct emissions: 4.2 Mt CO2 e 500 Avoided annual total emissions: 1.2 Mt CO e19 400 2 300 Emissions Intensity e per 1000 m

2 200 Sector engagement: 5 Action Plans 100

t CO 5 Champion level 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 100% of sector emissions

Total Emissions Intensity Direct Emissions Intensity Indirect Emissions Intensity Source: Nyboer, J. and Bennet, M., A Review of Energy Consumption In Canadian Oil Sands Operations, Heavy Oil Upgrading 1990, 1994 to 2001, Prepared for Regional Infrastructure Working Group and Canadian Industry Program for Energy Conservation, Canadian Industrial Energy End-use Database and Analysis Centre, Simon Fraser University, April 2003.

1.4.4 Energy Pipelines

Direct 2001 Emissions: 11.9 Mt CO2 e Indirect Emissions: 1.7 Mt CO2 e CHART 8: Energy Pipeline GHG Emissions Total Emissions: 13.6 Mt CO2 e

Sector engagement: 15 Action plans 25 Total Emissions Direct Emissions 9 Champion level 20 Indirect Emissions 100% of sector emissions 15 Equivalent

2 10 5 Mt CO 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Source: Canadian Energy Pipeline Association, Eighth Report to the Climate Change Voluntary Challenge and Registry, February 2003.

15 Emissions estimates for this sector are also included in Upstream Oil and Gas. 16 Nyboer, J., A Review of Energy Consumption in Canadian Oil Sands Operations, Heavy Oil Upgrading 1990, 1994-2001, Prepared for Regional Infrastructure Working Group and Canadian Industry Program for Energy Conservation,

Canadian Institute for Energy End-use Data and Analysis Centre, Simon Fraser University, March 2003, Appendix A, Table 4: CO2 Emissions by Source Type 1990, 1994 to 2001, Environment Canada Coefficients. 17 Nyboer, J., A Review of Energy Consumption in Canadian Oil Sands Operations, Heavy Oil Upgrading 1990, 1994-2001, Prepared for Regional Infrastructure Working Group and Canadian Industry Program for Energy Conservation, Canadian Institute for Energy End-use Data and Analysis Centre, Simon Fraser University, March 2003, Appendix A, Table 3b: Consumption of Energy by Fuel type 1995 to 2001 (Excluding Fuels Used to Generate Electricity). The purchased electricity figure was multiplied by VCR Inc.’s average Alberta electricity emissions factor. 18 Both avoided direct emissions and avoided total emissions are derived from production and emissions intensity reported in A Review of Energy Consumption in Canadian Oil Sands Operations, Heavy Oil Upgrading 1990, 1994- 2001, Appendix A, Tables 5, 7a and 7b. 19 Ibid.

8 VCR Inc. ¥ 2003 Annual Report 1.4.5 Natural Gas Distribution Direct 2001 Emissions: 2.4 Mt CO e20 2 CHART 9: Primary Canadian Coal Industry GHG Emissions Trends Indirect Emissions: 0.3 Mt CO2 e Total Emissions: 2.7 Mt CO2 e 1.6 0.04 Sector Engagement: 12 Action Plans Net Emissions 10 Champion level 1.2 0.03 Net Emissions 100% of sector emissions Per Unit Production 0.8 0.02 equivalent) 1.4.6 Coal Mining 2 eqivalent per raw coal) NET EMISSIONS NET EMISSIONS 2

(Mt CO 0.4 0.01 Direct 2001 Emissions: 2.2 Mt CO2 e

Indirect Emissions: 0.4 Mt CO e (t CO 2 PER UNIT OF PRODUCTION Total Impact: 2.6 Mt CO2 e 0.0 0.00 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Avoided annual emissions: 0.3 Mt CO2 e Source: VCR Inc. estimates based on Challenge Registry reporting. Sector Engagement: 3 Action Plans 3 Champion level 98% of sector emissions

1.5 MANUFACTURING AND MINING

Total Direct 2001 Emissions: 121.1 Mt CO2 e Total Indirect Emission: 31.3 Mt CO2 e Total Emissions: 152.4 Mt CO2 e

249 Action Plans 74 Champion level 75% of sector emissions21

22 Total annual emissions increases from energy consumption (including increased emissions from purchased electricity): 10.7 Mt CO2 e 23 Total annual emissions reductions from energy conservation (not including electricity): 2.3 Mt CO2 e 24 Total annual emissions reductions from N2O abasement at DuPont Canada Inc.’s Maitland site: 11.07 Mt CO2 e

20 Direct and indirect emissions estimates for the Natural Gas Distribution sector are based on the difference between emissions derived from energy consumption data reported in Statistics Canada’s Quarterly Report on Energy Supply-Demand in Canada (combined distribution and transmission into one sector) and direct emissions data reported by the Canadian Energy Pipeline Association on behalf of its members, who represent virtually all energy pipeline transmission in Canada. 21 According to Natural Resources Canada, “75% of industrial energy is represented by CIPEC members.” (http://oee.nrcan.gc.ca/cipec/ieep/cipec/achievements/achievements.cfm, October 12, 2001.) The VCR Inc. Challenge Registry is closely tied to CIPEC and virtually all CIPEC participants are also registered in the VCR Inc. Challenge Registry. Energy use is assumed to be directly related to GHG emissions. 22 Natural Resources Canada, Energy Efficiency Trends in Canada 1990 to 2001, June 2003, p. 26 23 Natural Resources Canada, Energy Efficiency Trends in Canada 1990 to 2001, June 2003, p. 26 24 DuPont Canada Inc., Action Plan, September 2003, p. 9.

VCR Inc. ¥ 2003 Annual Report 9 CHART 10: Cement Manufacturing Emissions Intensity Trend 1.5.1 Cement Direct 2001 Emissions: 9.7 Mt CO2 e 1.0 Indirect Emissions: 0.5 Mt CO2 e Total Emissions Intensity 0.9 Total Emissions: 10.2 Mt CO2 e 0.8 0.7 Avoided annual emissions reduction: 0.3 Mt CO2 e 0.6 Process Emissions Intensity 0.5 Sector engagement: 7 Action Plans 0.4 2 Champion level e per t production)

2 0.3 75% of sector emissions Total Energy Emissions Intensity Emissions Intensity 0.2 (t CO 0.1 Source: Nyboer, J. and Bennet, M., Development of Greenhouse Gas 0.0 Intensity Indicators for Canadian Industry 1990 to 2001, Prepared 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 for Environment Canada and Natural Resources Canada, Canadian Year Industrial Energy End-use Database and Analysis Centre, Simon Fraser University, April 2003.

CHART 11: Global Warming Potential vs. 1.5.2 Chemicals Product Output from CCPA Member Operations Direct 2002 Emissions: 14.0 Mt CO2 e

25 125% Avoided annual emissions: 9.3 Mt CO2 e e) 2 Sector Engagement: 68 Action Plans 20 100% 13 Champion level 100% of sector emissions 15 75%

10 50% e per Unit Output, Indexed to 1992 2

5 Greenhouse Gas Emissions Intensity Greenhouse Gas Emissions (Mt CO

25% t CO

Source: Canadian Chemical Producers’ Association, Reducing Emissions 11, 2002 Emissions Inventory and 0 0% Five Year Projections, 2003, p. 29, Figure 5.4 Global 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Warming Potential vs. Product Output of Emissions from CCPA Member Operations. GHG Emissions Intensity GHG Emissions

10 VCR Inc. ¥ 2003 Annual Report 1.5.3 Metal Mining CHART 12: Metal Mining Direct Emissions Intensity Trends Direct 2001 Emissions: 3.1 Mt CO2 e Indirect Emissions: 1.1 Mt CO2 e Total Emissions: 4.2 Mt CO e 2 1.4 Nickel-Copper-Zinc Mines 1.2 Avoided annual emissions: 0.5 Mt CO2 e 1.0 Lead-Zinc Mines Sector Engagement: 15 Action Plans 0.8 4 Champion Level 0.6 +90% of sector emissions Gold Mines 0.4 e per t ore mined, Indexed to 1990 Source: Nyboer, J. and Bennet, M., Development of 2 0.2 Greenhouse Gas Intensity Indicators for Canadian Industry t CO 0.0 1990 to 2001, Prepared for Environment Canada and Direct Greenhouse Gas Emissions Intensity 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Natural Resources Canada, Canadian Industrial Energy End-use Database and Analysis Centre, Simon Fraser University, April 2003.

1.5.4 Nonferrous Metal Smelting and Refining

Direct 2001 Emissions: 4.5 Mt CO2 e 25 CHART 13: Nonferrous Metal Smelting and Refining Indirect Emissions: 2.3 Mt CO2 e Total Emissions: 6.8 Mt CO2 e 8 Total Emissions Avoided annual emissions: 2.5 Mt CO2 e 7 Direct Emissions 6 Sector Engagement: 6 Action Plans 2 Champion level 5 e) 2 +90% of sector emissions 4

(Mt CO 3

Direct Emissions Source: Nyboer, J. and Bennet, M., Development 2 of Greenhouse Gas Intensity Indicators for Canadian Industry 1990 Indirect Emissions GREENHOUSE GAS EMISSIONS 1 to 2001, Prepared for Environment Canada and Natural Resources Canada, Canadian Industrial Program for Energy End-use 0 Database and Analysis Centre, Simon Fraser University, April 2003. 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Indirect Emissions Source: Natural Resources Canada, Energy End- Use Data Handbook 1990 and 1995 to 2001, June 2003.

25 This sector profile does not include Aluminium.

VCR Inc. ¥ 2003 Annual Report 11 CHART 14: Primary Aluminium Emissions Trends 1.5.5 Primary Aluminium Energy Emissions Direct 2001 Emissions: 11.9 Mt CO2 e Process CO 14,000 2 Indirect Emissions: Negligible Process PFCs Total Emissions: 11.9 Mt CO2 e 12,000 Avoided annual emissions: 3.6 Mt CO e 10,000 2

Sector Engagement: 6 Action Plans

e 8,000 2 6 Champion level

kt CO 6,000 100% of sector emissions

4,000 Sources: Nyboer, J. and Bennet, M., Development of Greenhouse Gas GREENHOUSE GAS EMISSIONS Intensity Indicators for Canadian Industry 1990 to 2001, Prepared 2,000 for Environment Canada and Natural Resources Canada, Canadian Industrial Energy End-use Database and Analysis Centre, Simon 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Fraser University, April 2003. Olsen, K, et al., Canada’s Greenhouse Gas Inventory 1990-2001, Environment Canada, August 2003.

CHART 15: Pulp and Paper Direct Emissions and Direct Emissions Intensity Trends 1.5.6 Pulp and Paper 14,000 700 Direct 2001 Emissions: 10.2 Mt CO2 e Indirect Emissions: 9.3 Mt CO2 e 12,000 600 Total Emissions: 19.5 Mt CO2 e

10,000 500 26 Avoided annual emissions : 7.1 Mt CO2 e e 2 8,000 400 Sector engagement: 29 Action Plans

kt CO 19 Champion level e per kt production) 6,000 300 2 +75% of sector emissions

Direct Emissions EMISSIONS INTENSITY (t CO Direct Emissions Intensity Source: Nyboer, J. and Bennet, M., Development of GREENHOUSE GAS EMISSIONS 4,000 200 Greenhouse Gas Intensity Indicators for Canadian Industry 1990 to 2001, Prepared for Environment 2,000 100 Canada and Natural Resources Canada, Canadian Institute for Energy End-use Data and Analysis 0 0 Centre, Simon Fraser University, April 2003. 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

26 Complete 2001 production information was unavailable, so the avoided annual emissions calculation is based on 2000 results. The Direct, Indirect and Total Emissions above are based on 2001 data.

12 VCR Inc. ¥ 2003 Annual Report 1.5.7 Steel CHART 16: Steel Industry Energy Intensity Trends Direct 2001 Emissions: 13.9 Mt CO2 e 25 Indirect Emissions: 2.1 Mt CO2 e Total Emissions: 16.0 Mt CO2 e 20

Avoided annual emissions: 3.9 Mt CO2 e 15 Sector Engagement: 13 Action Plans 2 Champion level 10 +90% of emissions ENERGY INTENSITY GJ per t steel shipped 5

Source: Nyboer, J. et al., Development of Energy Intensity Indicators for 0 Canadian Industry 1990 to 2001, Prepared for Canadian Industry

Program for Energy Conservation and Natural Resources Canada, 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Canadian Industry End-use Database and Analysis Centre, Simon Fraser University, May 2003. Energy Intensity Target Emissions Intensity (1990-2000) Target Emissions Intensity (2000-2010)

1.5.8 Textiles

Direct 2001 Emissions: 0.5 Mt CO2 e Indirect Emissions: 0.4 Mt CO2 e CHART 17: Textiles Industry Direct Emissions Intensity Total Emissions: 0.9 Mt CO2 e and Energy Intensity Trends

Avoided annual emissions: 0.6 Mt CO2 e 1,000 20

Sector Engagement: 23 Action Plans 800 16 4 Champion level reporters 60% of sector emissions 600 12 Energy Intensity 400 8 Direct Emissions Intensity e per million $ GDP (1997) ENERGY INTENSITY 2 200 4 Sources: Nyboer, J. et al., Development of Energy Intensity TJ per million $ GDP (1997) t CO Indicators for Canadian Industry 1990 to 2001, Prepared for DIRECT EMISSIONS INTENSITY 0 0 Canadian Industry Program for Energy Conservation and Natural 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Resources Canada, Canadian Industrial Energy End-use Database and Analysis Centre, Simon Fraser University, May 2003. Nyboer, J. and Bennet, M., Development of Greenhouse Gas Intensity Indicators for Canadian Industry 1990 to 2001, Prepared for Environment Canada and Natural Resources Canada, Canadian Industrial Energy End-use Database and Analysis Centre, Simon Fraser University, April 2003.

VCR Inc. ¥ 2003 Annual Report 13 CHART 18: Canadian Auto Manufacturing Trends 1.5.9 Transportation Manufacturing Direct 2001 Emissions: 0.9 Mt CO2 e 3,000,000 0.90 Indirect Emissions: 0.5 Mt CO2 e Total Emissions: 1.4 Mt CO2 e 2,500,000 0.75

e) Avoided annual emissions: 0.15 Mt CO e 2 2

2,000,000 0.60 (t CO (Vehicles) Sector engagement: 8 Action Plans 4 Champion level 1,500,000 0.45 e per vehicle) 2 100% of sector emissions (t CO EMISSIONS INTENSITY PRODUCTION 0.30 and EMISSIONS 1,000,000 Sources: Nyboer, J. and Bennet, M., Development of Greenhouse 500,000 0.15 Gas Intensity Indicators for Canadian Industry 1990 to 2001, Prepared for Environment Canada and Natural Resources

0 0.00 Canada, Canadian Industrial Energy End-use Database and 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Analysis Centre, Simon Fraser University, April 2003. Nyboer, J. et al., Development of Energy Intensity Indicators for Total Emissions Emissions Intensity Canadian Industry 1990 to 2001, Prepared for Canadian Industry Production Direct Emissions Intensity Program for Energy Conservation and Natural Resources Canada, Indirect Emissions Intensity Canadian Industrial Energy End-use Database and Analysis Centre, Simon Fraser University, May 2003. VCR Inc., 2003.

CHART 19: Airlines Emissions Intensity Trends 1.6 COMMERCIAL

0.25 TRANSPORTATION 1.6.1 Airlines

0.20 Direct 2001 Emissions: 15.4 Mt CO2 e

Avoided emissions: 3.0 Mt CO2 e 0.15 Sector engagement: 1 Action Plan

0.10 No champion level reporters 65% of sector emissions e per passenger-kilometre 2 EMISSIONS INTENSITY

t CO 0.05 Source: VCR Inc. calculation based on Natural Resources Canada, End-Use Energy Data Handbook - 1990 and 1995 to 0.00 2001, June 2003. 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

14 VCR Inc. ¥ 2003 Annual Report 1.6.2 Railways CHART 20: Railway Emissions Intensity Trends Freight 2001 Emissions: 6.3 Mt CO2 e Passenger 2001 Emissions: 0.2 Mt CO e Freight Emissions Intensity Index 2 1.0 Total Direct 2001 Emissions: 6.5 Mt CO2 e Passenger Emissions Intensity Index 0.9

Avoided Freight Emissions: 1.8 Mt CO2 e 0.8 Avoided Passenger Emissions: 0.1 Mt CO2 e 0.7 Total avoided emissions: 1.9 Mt CO2 e 0.6

Sector engagement: 56 Action Plans 0.5

1 Champion level reporter 0.4 100% of sector emissions 0.3 e per tonne-kilometre, 1990=1.0 or 2 EMISSIONS INTENSITY INDEX 0.2

Source: VCR Inc. calculations based on Natural Resources t CO

emissions per passenger-kilometre, 1990=1.0 0.1 Canada, End-Use Energy Data Handbook - 1990 and 1995 to 2001, June 2003. 0.0 1995 1996 1997 1998 1999 2000 2001

CHART 21: Commercial Trucking Emissions Intensity Trends 1.6.3 Commercial Trucking Direct 2001 Emissions: 24.6 Mt CO e 2 1.0

0.9 Avoided annual emissions: 5.6 Mt CO2 e 0.8

Sector engagement: 5 Action Plans 0.7 2 Champion level reporters 0.6

0.5

0.4

0.3 EMISSIONS INTENSITY e per tonne-kilometre, 1990=1.0 2 0.2 t CO Source: VCR Inc. calculation based on Natural Resources 0.1 Canada, End-Use Energy Data Handbook, 1990 0.0 and 1995 to 2001, June 2003. 1995 1996 1997 1998 1999 2000 2001

VCR Inc. ¥ 2003 Annual Report 15 1.7 INSTITUTIONAL AND COMMERCIAL

Direct 2001 Emissions: 73.7 Mt CO2 CHART 22: Trends in Institutional and Commercial Buildings Indirect Emissions: 31.8 Mt CO2 e Total Emissions: 105.5 Mt CO2 e

1.3 27 Unavoided annual emissions (buildings): 2.7 Mt CO2 e Unavoided annual emissions (waste disposal): 2.4 Mt CO e28 1.2 2

1.1 Sector Engagement: 727 Action Plans , indexed to 1990

2 111 Champion level 1.0 35.9% of sector emissions indexed to 1990 or 2 INTENSITY INDEX e per m m 2 0.9 t CO FLOOR SPACE AND EMISSIONS 0.8 1995 1996 1997 1998 1999 2000 2001

Emissions Intensity Index (excluding electricity) Emissions Intensity Index (including electricity) Source: VCR Inc. calculations based on Natural Resources Canada, Facility Area Index End-Use Energy Data Handbook, 1990 and 1995 to 2001, June 2003.

1.7.1 Federal Government

Direct 2001 Emissions: 1.6 Mt CO2 e 29 Indirect Emissions: 1.4 Mt CO2 e Total Emissions: 3.0 Mt CO2 e

30 Avoided annual emissions: 0.82 Mt CO2 e 1.7.2 Provincial and Municipal Governments 31 Direct 2001 Emissions: 27.7 Mt CO2 e Indirect Emissions: 1.6 Mt CO2 e Total Emissions: 29.3 Mt CO2 e

Sector Engagement: 72 Action Plans 11 Champion level

27 Emissions for Institutional and Commercial buildings grew faster than energy consumption and faster than facility area. In Energy Efficiency Trends in Canada 1990 to 2001, Natural Resources Canada attributes this trend to fuel switching from electricity to heavy fuel oil as well as increasing emissions intensity for electricity supply (p. 19). 28 According to Canada’s Greenhouse Gas Inventory 1990-2001, “Per capita emissions from (waste) increased 10% from 1990 to 2001.” p. 31. (K. Olsen et al.) 29 The indirect emission estimate shown here is the federal government’s estimate, which assumes that all purchased electricity (except green electricity contracts) is based on a marginal emission. Their published marginal emission

factor of 150.5 t CO2 e per TJ assumes simple-cycle natural gas generation meets the marginal load. Using a national average emission factor of 233 t CO2 e per GWh, the federal government’s indirect emissions footprint would be only 0.4 Mt CO2 e. 30 Natural Resources Canada, Federal House In Order Annual Report on Emissions Reductions from Federal Operations, October 2003, p. 10. 31 This includes 24.3 Mt CO2 e attributed to emissions from waste (landfills and sewage).

16 VCR Inc. ¥ 2003 Annual Report 1.7.2.1 Provincial Governments Sector Engagement: 11 Action Plans 4 Champion level 100% of sector emissions 1.7.2.2 Municipal Governments

Direct 2001 Emissions (landfills and sewage treatment): 24.3 Mt CO2 e Sector Engagement: 61 Action Plans 7 Champion level 58% of sector emissions

1.7.3 Education

Direct 2001 emissions (buildings): 3.7 Mt CO2 e Direct emissions (school buses): 1.1 Mt CO2 e Indirect emissions (buildings): 1.4 Mt CO2 e Total 2001 emissions: 6.2 Mt CO2 e

Avoided annual emissions (buildings): 0.24 Mt CO2 e CHART 23: Emissions Trends in Schools Avoided annual emissions (school buses): 0.02 Mt CO2 e Total avoided annual emissions: 0.26 Mt CO2 e 0.07 Total 0.06 Sector engagement: 35% of sector emissions (Education and Health combined) 0.05 Direct

floor space 0.04 2 0.03

e per m 0.02 Indirect 2 Source: VCR Inc. calculations based on Natural Resources Canada,

EMISSIONS INTENSITY 0.01 t CO End-Use Energy Data Handbook, 1990 and 1995 to 2001, June 0.00 2003. 1995 1996 1997 1998 1999 2000 2001 2001 1.7.3.1 Community Colleges Sector engagement: 75 Action Plans 27 Champion level

1.7.3.2 School Boards Sector engagement: 116 Action Plans 18 Champion level

1.7.3.3 Universities Sector engagement: 43 Action Plans 9 Champion level

VCR Inc. ¥ 2003 Annual Report 17 CHART 24: Emissions Intensity Trends in Health Services 1.7.4 Health Services Direct 2001 Emissions: 3.7 Mt CO2 e Indirect Emissions: 2.3 Mt CO2 e 0.16 Total Total Emissions: 6.0 Mt CO2 e 0.14 0.12 Avoided annual emissions: 0.13 Mt CO2 e 0.10 Direct floor space 2 0.08 Sector engagement: 121 Action Plans 0.06

e per m 18 Champion level

2 Indirect 0.04 35% of sector emissions (Education and Health EMISSIONS INTENSITY t CO 0.02 combined) 0.00 1995 1996 1997 1998 1999 2000 2001

Source: VCR Inc. calculations based on Natural Resources Canada, End-Use Energy Data Handbook, 1990 and 1995 to 2001, June 2003.

CHART 25: Emissions Intensity Trends in Accommodation 1.7.5 Accommodation and Food Services and Food Services Direct 2001 Emissions: 2.1 Mt CO2 e Indirect Emissions: 2.9 Mt CO2 e 0.20 Total Emissions: 5.0 Mt CO e 2 Total 0.15 32 Unavoided annual emissions: 0.3 Mt CO2 e floor space

2 Indirect 0.10 Sector engagement: 82 Action Plans e per m 6 Champion level 2 0.05 Direct EMISSIONS INTENSITY

33% of sector emissions (all service and retail sectors t CO

combined) 0.00 1995 1996 1997 1998 1999 2000 2001

Source: VCR Inc. calculation based on Natural Resources Canada, End-Use Energy Data Handbook, 1990 and 1995 to 2001, June 2003.

32 While the energy efficiency of this sector has improved by 3.4% over the last decade, significant increases in heavy fuel oil consumption overwhelmed the original savings. As well, natural gas consumption growth slightly outpaced sector growth.

18 VCR Inc. ¥ 2003 Annual Report 1.7.6 Retail Industries CHART 26: Emissions Intensity Trends in Retail Direct 2001 Emissions: 5.5 Mt CO2 e Indirect Emissions: 7.9 Mt CO2 e 0.12 Total Total Emissions: 13.4 Mt CO2 e 0.10

Unavoided annual emissions: 0.8 Mt CO2 e 0.08

floor space Indirect 2 Sector engagement: 39 Action Plans 0.06 0.04 7 Champion level e per m

2 Direct 33% of sector emissions (all service and retail sectors EMISSIONS INTENSITY 0.02 combined) t CO 0.00 1995 1996 1997 1998 1999 2000 2001

Source: VCR Inc. calculations based on Natural Resources Canada, End-Use Energy Data Handbook, 1990 and 1995 to 2001, June 2003.

1.7.7 Offices33 CHART 27: Emissions Intensity Trends in Offices

Direct Emissions: 10.9 Mt CO2 e 0.14 Indirect Emissions: 7.2 Mt CO2 e Total 0.12 Total Emissions: 19.7 Mt CO2 e 0.10

Unavoided annual emissions: 0.4 Mt CO e floor space 0.08 2 2 Direct 0.06

e per m 0.04 Indirect 2 EMISSIONS INTENSITY

t CO 0.02 0.00 1995 1996 1997 1998 1999 2000 2001

Source: VCR Inc. calculations based on Natural Resources Canada, End-Use Energy Data Handbook, 1990 and 1995 to 2001, June 2003.

33 Offices is not a sector in itself. Office emissions documented here could be attributed to a broad range of sectors such as commercial services, commercial transportation, education, fossil fuels, governments, non-government organizations and retail. Offices have similar energy and emissions profiles, despite different sectors served. Offices are included in this section for information purposes only.

VCR Inc. ¥ 2003 Annual Report 19 CHART 28: Household Greenhouse Gas Emissions 1.8 HOUSEHOLDS

180 Direct 2001 Emissions (residences): 39.6 Mt CO2 Direct Emissions (personal transportation): 88.0 Mt CO2 160 Indirect Emissions: 26.9 Mt CO e Residential Indirect 2 140 Emissions Total Emissions: 154.5 Mt CO2 e

120 34 Avoided annual emissions (residences): 9.9 Mt CO2 e

e Residential Direct 2 Unavoided annual emissions (personal transportation): 3.4 Mt CO e35 100 Emissions 2 Total annual avoided emissions: 6.5 Mt CO e

Mt CO 2

EMISSIONS 80

60 Personal Transportation 40 Emissions

20

0 Source: VCR Inc. calculations based on Natural Resources Canada, End-Use 1990 2001 Energy Data Handbook, 1990 and 1995 to 2001, June 2003.

CHART 29: Energy Emissions Trends in Canadian Agriculture

18 1.8 1.9 AGRICULTURE 36 16 1.6 Direct 2001 Emissions: 72.9 Mt CO2 e Indirect Emissions: 3.6 Mt CO2 e 14 1.4 Total Emissions: 76.5 Mt CO2 e 12 1.2

e Unavoided emissions (energy consumption): 1.2 Mt

2 1.0 10 37 CO2 e

Mt CO 8 0.8 Avoided emissions (livestock management including e per GDP ($1997) 2 6 0.6 feed and manure): potentially several Mt CO2 e t CO EMISSIONS INTENSITY Avoided emissions (soil management including 4 0.4 fertilizer application and sequestration): potentially

2 0.2 several Mt CO2 e EMISSIONS FROM ENERGY CONSUMPTION

0 0.0 1995 1996 1997 1998 1999 2000 2001 Source: Calculated by VCR Inc. based on Natural Resources

Emissions intensity Direct Emissions Canada, End-Use Energy Data Handbook, 1990 and 1995 to Total Emissions Indirect Emissions 2001, June 2003.

34 2 This estimate is based on change in emissions per m residential area. It would be slightly lower (6.1 Mt CO2 e) on a per household basis. Heating systems are becoming more efficient, however, many more households have air conditioning, and despite a cooler summer than in 1990, indirect emissions associated with space cooling were 25% higher in 2000. Major appliances (refrigerator, freezer, stove, washer, dryer, dishwasher) surged ahead with energy efficiency improvements of more than 20%, but growing use and electrical consumption from of small appliances (24%), including home entertainment systems, computers and small kitchen appliances, has sapped much of the gain. 35 This calculation was based on a passenger-kilometre basis. While energy efficiency for each vehicle class improved, the impact of increased use of light trucks (including SUVs) compared to cars caused this significant increase in emissions. 36 This includes 60.3 Mt CO2 e from non-energy sources. Livestock and fertilizer are large sources of N2O and CH4. 37 This figure is based on emissions per agriculture GDP. The significant increases in diesel, natural gas and electricity consumption have not led to similar increase in farm income.

20 VCR Inc. ¥ 2003 Annual Report E ntity GHG Challenge Registry© challenge.vcr-mvr.ca Entity GHG Challenge Registry©

The Entity GHG Challenge Registry© is Canada’s only publicly accessible national registry of greenhouse gas baselines, targets, and reductions based on individual entities and/or facilities. As a public forum for sharing GHG emissions reduction information, it is at the heart of VCR’s core function.

Our Challenge Registration Guide to Entity and Facility-Based Reporting contains all the links and information to assist you in the development of a current Action Plan for registration submission. Our overriding objective is to Challenge both current and potential registrants from all economic sectors and geographic regions to undertake actions that will contribute towards the reduction of Canada’s GHG emissions.

Any entity with operations in Canada can register an Action Plan and maintain an on-going public file. Hundreds of organizations have registered reports annually (see Section 6.5), each describing GHG emissions, reduction projections, target setting, measures to achieve targets, and/or results, as well as education, training and awareness activities related to GHG emissions reductions. This is an ideal vehicle to record and track corporate performance with respect to covenants by posting an annual GHG Balance Sheet (see section 2.4.6.2)

All registered reports are scrutinized and the most CHART 30: VCR Inc. Champion Level Reporters 1999-2003 rigorous reporters are assigned Bronze, Silver or Gold Champion-level Reporter status. As at December 31, 300 Gold 2003 there were 49 Bronze, 77 Silver and 139 Gold Champion level Reporters. An independent multi- 250 Silver stakeholder judging panel also considers all publicly 200 Bronze registered reports for a VCR Leadership Award. 150 Total

100

50

0 1999 2000 2001 2002 2003

22 VCR Inc. ¥ 2003 Annual Report At year-end 2003, there were 1,152 CHART 31: Number of Registered Organizations and Posted Documents 1997-2003 registrants with 3,249 documents posted in the Entity GHG Challenge Registry. These reports can be viewed in their 3,500 entirety by accessing the Challenge Registered 3,000 Registry within the VCR web site (http:// Organizations challenge.vcr-mvr.ca/cha_lists_e.cfm) and Posted 2,500 documents can be sorted or browsed by entity name, by headquarters location, by sector, and 2,000 by report type. In addition, VCR has internal search engines that allow the 1,500 organization, on a fee for service basis, to undertake more detailed analysis of the 1,000 information contained in these documents. 500

© 0 The Entity GHG Challenge Registry is 1997 1998 1999 2000 20012002 2003 also home to our Champions In Action (CIA) Initiative (see section 2.3), a level of participation and reporting beyond Champion-level reporting, as well as our Environmental Supply Chain Management (ESCM) Project (see section 2.4). The ESCM Project is aimed at raising awareness of ESCM as a potential means to identify and reduce greenhouse gas emissions within small and medium sized enterprises (SMEs) and to showcase success stories based on lessons learned.

VCR Inc. ¥ 2003 Annual Report 23 2.1 LEADERSHIP AWARDS

Acknowledged leaders

VCR’s annual Leadership Awards are granted based on the results achieved and reported in an Action Plan by registrants, with the intention of recognizing them for their outstanding contributions toward meeting Canada’s commitment to reduce GHG emissions. The independent judging panel is drawn from the membership of VCR’s Technical Advisory Committee.

The members of VCR’s Council of Champions, special guests, media, all Leadership Award winners from previous years, current award winners, and those receiving Honourable Mention, are invited to VCR’s annual Council of Champions Meeting and Leadership Awards Ceremony held in March of every year. Self-financed through table sponsorships and ticket sales, it is a gala celebration held, since its inception, at the Canadian Museum of Civilization in Gatineau, Québec.

It has become customary for the Ministers of Natural Resources Canada and of Environment Canada to present the awards to the recipients. Invitations are mailed out in January. Those selected to receive an Award or Honourable Mention are contacted directly in advance of the event.

24 VCR Inc. ¥ 2003 Annual Report 2.1.1 Selection Criteria VCR’s Technical Advisory Committee has developed the following selection criteria for the awards as guidance for its judging panel:

Minimum Selection Criteria •Registered with VCR; and •Have submitted an Action Plan between October 31st of the current year and November 1st of the previous year.

Other Considerations •Representation of different sectors in selecting award candidates; and •Best submission from a new registrant.

Specific Selection Criteria Depth of commitment to GHG emission reduction as expressed in: a) Senior management support, and the development of corporate actions and policies (i.e. Does the organization operate other environmental programs in concert with those described in the VCR Action Plan? Does the organization have a good history of energy management? Has the organization implemented purchasing policies that promote environmental awareness? Has the organization reported thoroughly?). b) Education, training and awareness programs for employees. c) Indication of successful results related to the reduction of GHG emissions. d) Quality of results reported regularly, achievement of targets, and overall impact on the organization’s GHG emissions. e) Innovation in addressing GHG emission reduction.

Leadership within the organization’s sector as expressed in: a) Cooperation and participation with related government (federal, provincial, territorial and municipal) and/or industry programs. b) Promotion of the climate change challenge to peers, through trade associations, and/or to the general public. c) Assisting peers in planning actions to address GHG emission reductions. d) The organization’s efforts result in an increased number of participants (at all levels of engagement) in VCR or in a related energy efficiency program addressing the climate change challenge.

Throughout the judging process, special emphasis is placed on finding organizations that have demonstrated commitment, action and leadership within their economic sector. Recognition for commitment and action is granted to eligible registrants based on their Action Plans and/or Progress Reports. In this case, VCR’s judging panel members pay close attention to the Results Achieved section of the reports under review.

Those recipients in the category of Association and Individual Leadership are drawn from a list of nominees chosen because of their dedicated activity as advocates for the climate change challenge.

VCR Inc. ¥ 2003 Annual Report 25 2.1.2 Leadership Award Winners and Honourable Mentions (HM) Best New Submission Electric Utilities 2003 Hydro One Remote Communities Inc. 2003 Yukon Development Corporation 2002 Famz Foods Northwest Territories Power Corporation (HM) 2001 Honda of Canada Mfg. 2002 Manitoba Hydro 1999 Northwest Territories Power Corporation 2001 Northwest Territories Power Corporation 1998 Encal Energy Limited 2000 BC Hydro Individual Leadership Award 1999 EPCOR 2003 Ken Plourde, Alberta-Pacific Forest Industries Inc. Northwest Territories Power Corporation (HM) 2002 Peter Chantraine, DuPont Canada Inc. 1998 TransAlta 2001 Bob Page, TransAlta Cement Manufacturing 2000 Sadettin Yilmaz, Natural Resources Canada 2003 St. Lawrence Cement Inc Ken Ogilvie, Pollution Probe 2002 St. Lawrence Cement Inc. (HM) 1999 Rahumatula Marikkar, Interface Flooring Commercial John Donner, Government of Alberta 2003 Hudson’s Bay Company (HBC) 1998 The Honourable Anne McLellan, role as Minister of Natural 2000 Van City Savings Credit Union Resources Canada (November 1993 to June 1997) Novotel Canada Inc. (HM) Association Leadership Award Chemicals 2003 Mining Association of Canada 2003 Petresa Canada Inc. 2002 Aluminium Association of Canada NOVA Chemicals (HM) 2001 Mining Association of Canada 2002 DuPont Canada Inc. 2000 Canadian Chemical Producers’ Association 2001 Dow Chemical Canada Inc. 1999 Canadian Industry Program for Energy Conservation 2000 NOVA Chemicals 1998 Canadian Association of Petroleum Producers DuPont Canada Inc. Sector Leadership Awards 1999 Dow Chemical Canada Inc. Accommodation NOVA Chemicals (HM) 2003 CHIP Hospitality (HM) 1998 DuPont Canada Inc. Automotive Manufacturing Educational Institutions — Colleges and Universities 2003 Ford Motor Company of Canada, Limited 2003 Langara College 2002 Honda of Canada Mfg. 2002 Kwantlen University College 2001 General Motors of Canada Ltd. 2001 University of Lethbridge 2000 DaimlerChrysler Canada Ltd. 2000 New Brunswick Community Colleges General Motors of Canada Ltd. (HM) 1999 Langara College (HM) 1999 Ford Motor Company of Canada, Ltd. 1998 Southern Alberta Institute of Technology General Motors of Canada Ltd. (HM) Educational Institutions — School Boards 2003 School District No. 34 (Abbotsford) School District No. 63 (Saanich) (HM) 2002 School District 43 (Coquitlam) BC 2000 School District 43 (Coquitlam) BC 1999 Rocky View District School Division No. 41

26 VCR Inc. ¥ 2003 Annual Report Forestry, Pulp and Paper Governments 2003 Bowater Canadian Forest Products Inc. 2003 Government of Canada Stora Enso Port Hawkesbury (HM) 2000 Alberta Government 2002 Alberta-Pacific Forest Industries Inc. Government of (HM) 2001 Tembec – Spruce Falls Operations 1999 Government of Canada (HM) Alberta-Pacific Forest Industries Inc. (HM) City of Regina (HM) 2000 Abitibi-Consolidated Inc. 1998 Alberta Government 1999 Spruce Falls Inc. City of Ottawa Stora Enso Port Hawkesbury Limited (HM) Metal Mining 1998 MacMillan Bloedel Limited 2003 Noranda Inc. – Falconbridge Limited (HM) General Manufacturing 2002 INCO Limited 2002 Husky Injection Molding Systems Ltd. Luscar Ltd. (HM) 2001 Consoltex Inc. 2000 INCO Limited 2000 IBM Canada Ltd. Luscar Limited (HM) Orenda Aerospace Corporation (HM) Falconbridge Limited (HM) 1999 Husky Injection Molding Systems Ltd. 1999 Cominco Ltd. Kodak Canada Inc. (HM) INCO Limited (HM) IBM Canada (HM) Luscar Limited (HM) Metroland Printing, Ltd. (HM) Falconbridge Limited (HM) Greenhouse Gas Reduction Technology 1998 Dofasco Inc. 2002 Prince Edward Island Energy Corporation — North Cape Nuclear Technology Wind Farm 2000 Atomic Energy of Canada Ltd. Health Services Oil and Gas – Refiners and Upgraders 2003 Brandon Regional Health Authority 2000 Syncrude Canada Ltd. 2002 The Scarborough Hospital Irving Oil (HM) 2001 Brandon Regional Health Authority Petro-Canada (HM) 2000 University of Alberta Hospital Oil and Gas – Downstream 1999 Glenrose Rehabilitation Hospital and Energy Centre (HM) 2000 Syncrude Canada Ltd. Integrated Oil and Gas Corporations Irving Oil Limited (HM) 2003 Suncor Energy Inc. 1999 Irving Oil Limited - Refining Division (HM) Petro-Canada (HM) 1998 Petro-Canada 2002 Shell Canada Limited Husky Oil Operations Limited Petro-Canada (HM) Oil and Gas – Upstream 2001 Suncor Energy Inc. 2003 BP Canada Energy Company 1999 Suncor Energy Inc. 2002 ConocoPhillips Canada Imperial Oil (HM) BP Canada Energy Company (HM) Shell Canada Limited (HM) 2001 ExxonMobil Canada Ltd. 2000 Startech Energy Inc. (ARC Resources Ltd.) Burlington Resources Canada Energy Ltd. 1999 Mobil Canada Ltd. Koch Oil Co. Ltd. (HM) 1998 Syncrude Canada Ltd.

VCR Inc. ¥ 2003 Annual Report 27 Oil and Gas – Pipelines and Natural Gas Distribution Primary Metals Manufacturing 2003 Terasen Gas Inc. 2003 Stelco Inc. ATCO Gas (HM) Alcoa Canada Première Fusion (HM) 2002 Gaz Métropolitain 2002 Dofasco Inc. 2001 BC Gas Utility Ltd. 2001 Stelco Inc. 2000 SaskEnergy and TransGas 2000 Dofasco Inc. 1999 TransCanada Pipelines Limited Small and Medium Sized Enterprise (SME) SaskEnergy Incorporated and TransGas Limited (HM) 2003 Petresa Canada Inc. 1998 Enbridge Consumers Gas 2002 NRI Industries Inc. 2001 Yukon Development Corporation 2000 Enviros RIS Canada Transportation 1999 Canadian National Railway Company (HM)

28 VCR Inc. ¥ 2003 Annual Report 2.2 LINKAGES AND PARTNERSHIPS Chart 32 Percentage of Sector GHG Emissions Represented at VCR illustrates the degree of engagement for major sectors of our economy and is consistent with our continuing effort to engage new sectors and to link with new GHG reduction programs across Canada.

The 63 Associations and programs listed in TABLE TWO: Linkages and Partnerships Table 2 were active during 2003 in the 1. Action By Canadians (ABC) 32. Cement Association of Canada process of helping to engage their 2. Air Transport Association of Canada (ATAC) 33. Clean Air Canada Inc. (CACI) constituents in the climate change 3. Alberta Food Processors Association (AFPA) 34. Clean Development Mechanism & Joint Implementation challenge. 4. Aluminium Association of Canada (AAC) Office (CDM/JI) 5. Association of Canadian Community Colleges (ACCC) 35. Clean Nova Scotia – Climate Change Centre 6. Atomic Energy of Canada Limited (AECL) 36. Climate Change Calculator 7. Automotive Parts Manufacturers’ Association (APMA) 37. Climate Change Central – Alberta 8. Baseline Protection Initiative 38. Climate Change Secretariat 9. Better Buildings Partnership 39. Coal Association of Canada (CAC) 10. California Climate Action Registry 40. Department of Foreign Affairs and International Trade (DFAIT) 11. Canadian Association of Oilwell Drilling 41. ÉcoGESte Contractors (CAODC) 42. Electro-Federation of Canada 12. Canadian Association of Petroleum Producers (CAPP) 43. Environment Canada 13. Canadian Chamber of Commerce 44. Federation of Canadian Municipalities (FCM/PCP) 14. Canadian Chemical Producers’ Association (CCPA) 45. FleetSmart 15. Canadian College of Health Service Executives (CCHSE) 46. Forest Industry Suppliers and Logging Association (FISLA) 16. Canadian Electricity Association (CEA) 47. Forest Products Association of Canada (FPAC) 17. Canadian Energy Pipeline Association (CEPA) 48. GHG Verification Centre 18. Canadian Fertilizer Institute (CFI) 49. Greenhouse Gas Emissions Reduction Trading (GERT) Pilot 19. Canadian Foundry Association (CFA) 50. Hamilton Chamber of Commerce 20. Canadian Gas Association (CGA) 51. Industry Canada 21. Canadian Home Builders’ Association (CHBA) 52. Mining Association of Canada (MAC) 22. Canadian Industry Program for Energy 53. National Pollutant Release Inventory (NPRI) Conservation (CIPEC) 54. Natural Resources Canada - Office of Energy Efficiency (OEE) 23. Canadian Lime Institute (CLI) 55. New Directions Group (NDG) 24. Canadian Petroleum Products Institute (CPPI) 56. Ontario Centre for Environmental Technology Advancement (OCETA) 25. Canadian Public Health Association (CPHA) 57. Pembina Institute for Appropriate Development 26. Canadian School Boards Association (CSBA) 58. Petroleum Services Association of Canada (PSAC) 27. Canadian Standards Association (CSA) 59. Pollution Probe 28. Canadian Steel Producers Association (CSPA) 60. Public Works and Government Services (PWGSC) 29. Canadian Textiles Institute (CTI) 61. Railway Association of Canada (RAC) 30. Canadian Trucking Alliance (CTA) 62. Technology Early Action Measures (TEAM) 31. Canadian Vehicle Manufacturers Association (CVMA) 63. World Energy Council (WEC)

VCR Inc. ¥ 2003 Annual Report 29 TABLE THREE: Linkages and Partnerships

1997 1998 1999 2000 2001 2002 2003

21 25 34 45 53 59 63

CHART 32: Percentage of Sector GHG Emissions Represented at VCR Inc. (December 2003)

Agriculture 0% Auto Manufacturing 100% Cement 95% Chemicals 100% Coal 100% Dowstream Petroleum 100% Education and Health Institutions 35% Electric Utilities 100% Energy Pipelines 100% Federal Government 100% Food and Consumer Goods 0% Households 0% Lime 45% Metal Mining and Processing 90% Municipal Governments 58% Natural Gas Distribution 100% Primary Alumimium 100% Provincial Governments 100% Pulp and Paper 75% Railways 100% Service and Retail Industry 24% Steel 100% Textiles 60% Upstream Oil and Gas 93% 020406080100

Source: VCR Inc. 2003.

30 VCR Inc. ¥ 2003 Annual Report 2.3 CHAMPIONS IN ACTION (CIA) INITIATIVE

2.3.1 Background In October 2000, the VCR Board of Directors approved the next step in continuously improving the impact of voluntary activities on GHG emissions reductions through the creation of a level of participation and reporting beyond Champion-level reporting, called the Champions in Action (CIA) Initiative.

2.3.2 Purpose The purpose of this initiative is to improve the impact of VCR registrants’ activities on greenhouse gas (GHG) emission reductions, and to provide Canadian organizations and governments with the ability to test the design and implementation of enhanced approaches that are intended to accelerate early action to reduce GHG emissions.

Each participating company, government or other responsible entity will enter into an understanding with VCR involving performance targets for Canadian entity-wide ‘net’ GHG emission reductions, which may include the use of offsets. VCR will then review, validate, track, and report over time, the achievement of these agreements.

It is anticipated that the Peer Review process involved in the Champions in Action initiative will result in the release of a series of discussion papers dealing with specific GHG inventory measurement issues, and the best practice options to deal with them.

2.3.3 Objectives •To lead by example. •To encourage accelerated early action to reduce GHG emissions. •To demonstrate leadership in the development and implementation of corporate commitments and strategies to address climate change. •To communicate the experience from this initiative to appropriate audiences.

2.3.4 Participants Participation in the initiative is voluntary, and is intended to include any and all organizations having an interest in promoting accelerated action by providing leadership. The following conditions apply: •Participants must join the VCR Council of Champions with a commitment to maintain membership for a minimum of three years. (The current annual membership fee is $5,000.) •Participants agree to enter into negotiations leading to an understanding to enhance climate change action. •Participants must achieve Champion-level reporting status prior to the Peer Review process.

2.3.5 Participant Benefits •The CIA will provide experience in the implementation of this agreement and the offset registry process. •The initiative will provide key findings for input into government decision-making. •Credibility for climate change efforts will be enhanced through affiliation with a formal collaborative having defined obligations and enhanced quality assurance. • Leadership identity for participants will be enhanced.

VCR Inc. ¥ 2003 Annual Report 31 2.3.6 Progress to Date 2.3.6.1 Framework Understanding CIA members have created a formal document, called the Framework Understanding, and it is available as a template for signed agreements.

2.3.6.2 Standardized Reporting - Balance Sheet As part of the Framework Understanding, a standard reporting template called the Balance Sheet has been developed. It captures the base year and annual GHG emissions, intensities and targets in a simple format. This information is updated annually as organizations implement their GHG management plans. The format is consistent with the need for public accounting of the results of covenants.

2.3.6.3 Summary Based on analysis of the Action Plans submitted by 17 CIA members by October 2002, and the results of a survey of members, the following results have emerged:

•The total emissions of these organizations represented about 20.6% of Canada’s total GHG inventory in their respective base years (usually 1990). •The total emissions of these organizations represented about 18.1% of Canada’s total GHG inventory in 2001. •The total emissions of these organizations represented about 27.8% of the total sector emissions in 2001 (Electrical Generation, Fossil Fuels, Manufacturing & Mining and Institutional & Commercial).

•Including purchased offsets, the absolute total GHG emissions were reduced by about 12,590,000 tonnes CO2 e, which represents a reduction of 10.1% compared to the base year.

•Including purchased offsets; the GHG emissions were reduced by 46,590,000 tonnes CO2e compared to the Business as Usual Projection for 2001, a reduction of some 37.2%.

2.3.7 Peer Review Process A peer review process to evaluate CIA Action Plans has been developed. It is a two-stage process:

First Stage: Internal VCR Review process VCR staff review the Action Plan of the CIA participant against the WRI/WSBCD GHG Protocol, the principles of which have been adopted by the CIA members and are listed in section 3.1.3.

The outcome of the VCR internal review, in communication with the CIA member, is a review document that describes the completeness of the Action Plan and how well it adheres to the principles described above. It also describes any issues arising out of the review that need to be discussed in the CIA peer review, and which could form the basis for the release of a paper on best practices.

Second Stage: CIA Peer Review process The CIA Coordinating Committee then discusses the review document and deals specifically with the options available to resolve any issues.

Once complete, Chart 8 of the Balance Sheet and other Participant information are posted on the VCR website in the CIA section.

For 2003, Champions in Action Participants are: DuPont Canada Inc. (Champion in Action Member Status – to view DuPont Canada Inc. registration profile go to http://challenge.vcr-mvr.ca/ cha_client_e.cfm?No=650)

32 VCR Inc. ¥ 2003 Annual Report The other 16 Champion in Action Participants are: 1. Alberta-Pacific Forest Industries Inc. 2. Alcan Inc. 3. EnCana Corporation 4. EPCOR Utilities Inc. 5. Falconbridge Limited 6. General Motors of Canada Ltd. 7. Government of Alberta 8. Government of Canada 9. Irving Oil Limited 10. Ontario Power Generation Inc. (OPG) 11. Petro-Canada 12. Shell Canada Limited 13. Suncor Energy Inc. 14. Syncrude Inc. 15. TransAlta Corporation 16. TransCanada

More detailed information and a summary of Issues, Targets, Measurement Practices and Actions to Reduce Emissions, can be found in the CIA Summary Report, downloadable from http://challenge.vcr-mvr.ca/assets/pdf/CIA_Summary_Report_E.pdf.

2.4 ENVIRONMENTAL SUPPLY CHAIN MANAGEMENT (ESCM) PILOT PROJECT

2.4.1 Objective Managed by VCR with funding from Industry Canada, Alberta’s Climate Change Central and host corporations, the ESCM Pilot Project is aimed at raising awareness of ESCM as a potential means to identify and reduce greenhouse gas emissions in small and medium sized enterprises (SMEs) and to showcase success stories based on lessons learned.

2.4.2 Background SMEs collectively contribute 43.7% of the Canadian manufacturing industry’s GHG emissions and, as a result, represent a significant opportunity to contribute towards national GHG emissions reductions. The diverse nature of SMEs and their limited resources make it difficult to raise their awareness of environmental issues as well as to provide them with the technical and financial tools they need to act. Considering that SMEs typically are suppliers to larger organizations, use of supply chain management was recommended by the Climate Change Industry Issues Table as one way to reach and engage SMEs in GHG emission reduction activity.

VCR Inc. ¥ 2003 Annual Report 33 2.4.3 Timelines This five-year pilot program began in May 2001, exploring and developing the capacity for supply chain projects to reduce GHG emissions. It is a small-scale pilot aimed at raising awareness of the potential role of environmental supply chain management in a climate change context. The pilot host industries will explore methods for influencing suppliers to measure, report, and track and reduce their GHG emissions.

2.4.4 Progress to date Year 2003 was active in contacting and gaining the interest of several new potential host companies.

The January workshop to be hosted by an Alberta based oil and gas company will be a key indicator on how to get more momentum behind this pilot.

Host Companies: [3] Alberta-Pacific Forest Industries Inc. Shell Canada Limited Suncor Energy Inc.

Number of SMEs contacted by Host Companies: [12] Number of SMEs attending workshop: [5]

SMEs submitting Action Plans to VCR: [2] Waiward Steel Fabricators Ltd. PowerComm Inc.

2.5 INDIVIDUAL GHG ACTION REGISTRY (IAR) At the smallest end of the SME spectrum are individual households. The Individual GHG Action Registry [IAR] is being developed to give individuals access to the tools and resources that will help them maintain and manage their energy usage and lower their GHG Footprint.

34 VCR Inc. ¥ 2003 Annual Report C anadian GHG Reductions Registry© r eductions.vcr-mvr.ca Canadian GHG Reductions Registry© The Canadian GHG Reductions Registry© has been developed to provide a service for organizations that wish to have GHG Reduction projects validated. The annual emission reductions from these projects and subsequent transactions (ownership transfer, retirement) are also tracked in this registry. The [RERs] acronym refers to these “Registered Emission Reductions” that are the result of project activities. 3.1 VALIDATION PROTOCOL FOR EMISSION REDUCTIONS PROJECTS 3.1.1 Purpose To provide a service for entities wishing to have GHG Reductions Projects validated and registered in the Canadian GHG Reductions Registry.

3.1.2 Application and Project Documents The applicant must complete a standardized application form and submit supporting documents describing the project and its emission reductions quantification methodology.

3.1.3 Internal VCR Review process VCR staff will review the project documents for compliance with the following principles:

a) Relevance: Define boundaries that appropriately reflect the greenhouse gas emissions and reductions of the project and the decision-making needs of users. b) Completeness: Account for all greenhouse gas emission sources and activities within the project boundaries. Any specific sources excluded should be identified and justified. c) Consistency: Allow meaningful comparison of emissions performance over time. Any changes to the basis of reporting should be clearly stated to facilitate continued valid comparison. d) Transparency: Address all relevant issues in a factual and coherent manner, based on a clear audit trail. Important assumptions should be disclosed and appropriate references made to the calculation methodologies used. e) Accuracy: Exercise due diligence to ensure that greenhouse gas calculations have the precision needed for their intended use, and provide reasonable assurance of the integrity of the reported greenhouse gas information. f) To be eligible for registration, projects must result in emission reductions that are real, measurable and verifiable:

Real: An emission reduction is real if it is a reduction in actual emissions, resulting from a specific and identifiable action or undertaking, net of any leakage of emissions to a third party or jurisdiction. Measurable: An emission reduction is measurable if the actual level of GHG emissions with the project in place, and the level of GHG emissions in the Reference Case, can be quantified. Verifiable: An emission reduction is verifiable if the calculation methodology is acceptable, transparent and replicable and the raw data required to verify/audit the calculations is available.

36 VCR Inc. ¥ 2003 Annual Report 3.1.4 Notice of Completeness Written notice will be provided to the applicant if there are any deficiencies. If there are no deficiencies, VCR will provide notice of intent to register the project by posting the project information in the Canadian GHG Reductions Registry© for public comment.

3.1.5 Grace Period Thirty days after the project information has been posted and no legitimate challenge to the posted documentation having been received, VCR will issue a registration number for the project and begin tracking the ownership of its registered emission reductions (RERs).

3.1.6 Annual Posting of Project RERs Annually, upon receiving an application and an acceptable proponent-funded GHG emissions reduction verification report, a set of RERs of identified vintage will be registered without the requirement of a grace period.

3.1.7 VCR Inc. Validation and Transaction Fees The pre-arranged cost (based on billable hours) of the validation process will be to the account of the proponent and payable in advance. In addition, the owner of the emission reductions will pay a $200 (plus GST) transaction fee when the initial project is registered, when ownership of the RERs is transferred, and each time RERs are modified or new ones are created.

3.2 REGISTERING PROJECTS AND ASSOCIATED EMISSION REDUCTIONS IN THE CANADIAN GHG REDUCTIONS REGISTRY IS A FIVE-STEP PROCESS Step 1. Gathering Data – done once Before emission reductions can be registered, the project that creates the emission reductions (or removals) must be validated. Tw o documents need to be sent to VCR Inc. by the project proponent.

They are available for download at http://reductions.vcr-mvr.ca/rer_howto_e.cfm.

One) An RTF version of the Emission Reduction Project Application Form. Two) The project document: a written description of the project and the method whereby emissions reductions will be measured.

Step 2. Validation of the Project – done once The Registered Emissions Reduction (RER) Project Validation Process follows a predefined protocol and may be undertaken by VCR on a fee- for-service basis. The project is validated against the following criteria: relevance, completeness, consistency, transparency, and accuracy. The Validation Process may require that we contact various technical and business experts for more information. There may be changes necessary to the project document before being posted for public review.

For details on the Project Validation Protocol please go to the Project Validation Protocol Page. Validation fees are based on a rate of $80 per hour to a maximum of $1000 (plus GST).

Once the project is validated, it is posted for a 30-day public review period.

VCR Inc. ¥ 2003 Annual Report 37 Some projects may qualify to be exempted from the VCR RER Validation Process. Projects that have undergone a successful evaluation and validation within the GERT (Greenhouse gas Emission Reduction Trading ) pilot program or by the PERT/CACI (Pilot Emission Reduction Trading program/) managed by Clean Air Canada Inc. qualify for this exemption.

Step 3. Public Review of the Project – done once The project document is now posted for a 30-day public review period.

During this time, the project document can be downloaded from the web site and the public is able to make comments via an online email form.

The project proponents will be notified of any comments received for their consideration. This may result in a revision to the project document before final posting in our registry. The Board of VCR Inc. reserves the right to provide final ruling on any disputes that might arise from this process.

Having successfully completed this process, and provided all related fees have been received, the Project will be assigned a registration number and posted in the Canadian GHG Reductions Registry.

Step 4. Registering Verified Emission Reductions – done annually The calendar year’s total tonnes of verified emissions reductions associated with a project may be registered annually. A flat fee of $200.00 (plus GST) is charged for this transaction without regard for the volume of RERs being registered. Each tonne of reduction is given a separate registration number and is posted in the Canadian GHG Reductions Registry.

Verification Report Guidelines and Template forms are available on-line and can be downloaded from http://reductions.vcr-mvr.ca/rer_howto_e.cfm.

Step 5. Registering Transactions – as received Change of ownership and other related transactions may be registered by submitting the completed RER Transaction Form and a $200 (plus GST) transaction fee.

A downloadable RER Transaction Form to change ownership or transfer RERs is available from http://reductions.vcr-mvr.ca/rer_howto_e.cfm.

38 VCR Inc. ¥ 2003 Annual Report C anadian GHG Credit Registry© credit.vcr-mvr.ca CANADIAN GHG CREDIT REGISTRY©

VCRs Canadian GHG Credit Registry© was designed to post and track government sanctioned Registered GHG Emission Reductions (RERs). Rules for the creation of domestic credits have not yet been set; hence, there are no organizations with registered emissions reductions certified as credits by a government authority.

International negotiations concerning the ground rules under which useable credits might be created are continuing. It is anticipated that the resulting Clean Development Mechanism and Joint Implementation (CDM/JI) projects will generate credits, which will be registered here.

In the meantime, entities that have posted RERs in our Reductions Registry and wish to transfer ownership to VCR for permanent retirement may do so through our Credit Registry. There are currently three organizations with registered emissions reductions retired to the environment: 1. Environment Canada 2. Ontario Power Generation Inc. (OPG) 3. VCR

40 VCR Inc. ¥ 2003 Annual Report Communications: A wealth of knowledge to share COMMUNICATIONS

5.1 WEBSITE 2003 was a big year for updates and modifications to the website. Many of the features and much of the content of the VCR web site that you have come to know have been moved or changed to reflect current needs and opportunity. If you go to section 5.2 VCR 2003 Stakeholder Survey you will be able to review the feedback related to the communication vehicles we use with our client base.

Browse the fresh new website interface at www.vcr-mvr.ca. All our corporate information and the ‘who, what, when, where, CHART 33: Average Monthly User Sessions and why’ of VCR can be located from the main site www.vcr- mvr.ca/index_e.cfm. Review the list of Gold, Silver & 35 30.1 Bronze-level reporters, discover who’s ‘In the Spotlight’ as the 30 VCR Inc. Gold-level reporter of the week (rotated each 23.1 25 Monday), learn what’s new and browse a multitude of links to an abundance of useful information. 20 12.7 15 The Entity GHG Challenge Registry©, the Canadian GHG © (thousands) 10 Average Monthly Credit Registry and the Canadian GHG Reductions 4.9 © USER SESSIONS User Sessions Registry now have their own site whereas they were formerly 2.2 5 0.8 part of the VCR main site. 0 1998 1999 2000 2001 2002 2003 Contact us by e-mail via [email protected] or webmaster@vcr- mvr.ca as we are very interested in your feedback and opinions regarding these changes.

The web trends statistic analysis engine that we use tracks detailed operational information including: •General Statistics such as hits, page views, visitor sessions, and visitors; •Resources Accessed broken down by top entry pages, most requested pages, and most downloaded files and file types; •Visitors & Demographics with subcategories of visitors by number of visits, new vs. returning visitors, top visitors, and most active organizations; •Activity Statistics which identifies hits and user sessions, by day of the week and by hour of the day, for the report period defined; •Technical Statistics provides a breakdown of the success to fail ratio of hits; •Referrers & Keywords is a list of the top referring sites, URLs, search engines, search phrases, and search keywords; and, •Browsers & Platforms defines the most used browsers with a breakout of Netscape and Microsoft browsers along with a listing of the most used platforms.

With the separation of the registries from the main site in late 2003, we now track the statistics for each site and then add them together to get the totals. Chart 33 illustrates the continued dramatic growth of our web site as a communication vehicle.

42 VCR Inc. ¥ 2003 Annual Report 5.2 VCR 2003 STAKEHOLDER SURVEY38 For the year 2003, VCR commissioned Phoenix Strategic Perspectives Inc. to conduct a survey to measure stakeholder awareness and satisfaction with our activities. Our baseline study was in the early spring of 1999 with the 2003 being the sixth such annual survey.

The 2003 survey was administered completely in a web-based forum. In total, 948 invitation emails were sent on November 1st, and two reminder emails sent thereafter approximately one week apart. In total, 275 surveys were completed, representing a response rate of 29%. These results can be considered to be accurate within +/- 5.2%, 19 times out of 20 (finite population factor applied).

5.2.1 Familiarity and Perceived Importance • 81% of stakeholders claimed to be at least moderately familiar with our activities. (30% said very familiar). The level of familiarity is virtually identical to what it was last year (82%), but its intensity has decreased noticeably (30% claimed to be very familiar vs. 45% in 2002). This is more in line with results prior to 2002 when 33-35% of stakeholders claimed to be very familiar with our activities. • 85% consider our work to be important in addressing Canada’s climate change: almost equal numbers view the work as moderately (44%) or very important (41%). The proportion that considers our work to be at least moderately important has changed little over the years. That said, it has been decreasing gradually since its high point in 2001 (85% vs. 87% in Fall 02 and 91% in Fall 01). • 80% view participation with us as at least moderately important to their organization (35% say very important). While the overall importance of participation among stakeholders has changed little over time, it is currently at the highest point it has been since tracking began (80% vs. 76-79% in previous waves).

5.2.2 Perceptions of Satisfaction and Benefits • 61% said their expectations have been met with respect to participation in our activities. However, satisfaction tends to be moderate (47%) not strong (14%). An additional 22% think their expectations have been somewhat met. The number of stakeholders indicating that their expectations have been met has increased slightly since last year, re-attaining the high point it was at in 2001. • 76% think their participation with us helps their organization achieve or promote its emission reduction targets. The number of stakeholders indicating this has increased slightly since last year and is now the highest it has been since tracking began. At the same time, the number who think that their participation in our Registry does not assist their organization in achieving and/or promoting its greenhouse gas emission reduction efforts has also increased since last year (21% vs. 18%), reversing the gradual decrease that had been taking place since tracking began. •In terms of benefits associated with their participation with us, stakeholders focused most often on access to information (14%) and public recognition (13%) (multiple responses accepted). The importance attributed to most benefits has changed negligibly or not at all since last year. This includes the importance of access to information, providing structure, focus, and guidance, communication and cooperation, the ability to compare with others, and promoting the voluntary approach. • 77% expressed satisfaction with their working relationship with us (40% were very satisfied). Approximately one in five (18%) were neither satisfied nor dissatisfied, while almost no one (3%) expressed any degree of dissatisfaction. The overall level of satisfaction with the working relationship has increased since last year (77% vs. 71%) and is the highest it has been since tracking began. While the number of stakeholders claiming to be very satisfied is slightly lower than it was last year (40% vs. 43%) it remains noticeably higher than in earlier waves.

38 Stakeholder Survey (December 2003), A Report to Canada’s Climate Change Voluntary Challenge and Registry Inc., Phoenix Strategic Perspectives Inc.

VCR Inc. ¥ 2003 Annual Report 43 CHART 34: Working Relationship Satisfaction Quotient of Stakeholders 39

120

100

80

60

40

20 SATISFACTION QUOTIENT

0 1998 1999 2000 2001 2002 2003

YEAR

5.2.3 Communication Issues •During the past year, 74% received information from us through the newsletter, and 68% through the website. After this, information was obtained most often by means of the annual report (47%), the progress report (36%), personal contact and the registration guide (22% each), or the annual meeting/awards ceremony (12%). Use of all communications vehicles has decreased in the past year, though the size of the decrease varies. Moreover, the relative importance of the vehicles (i.e. their importance vis-à-vis each other) has not changed over the past year. The newsletter remains the main vehicle through which communications with us takes place, though the number of stakeholders who identified it is the lowest it has been since tracking began (74% vs. 82-86% in previous waves). Use of the website has decreased noticeably over the past year (68% vs. 82%) after increasing in use since 2000. Use of the Annual Report has decreased slightly since last year (47% vs. 51%), as has personal contact (22% vs. 27%), use of the Registration Guide (22% vs. 26%), and use of the Annual Meeting/ Awards Ceremony (12% vs. 13%). • 81% said they would prefer to receive information by email from us. Conversely, 14% would prefer to receive information by mail. While the number who said they prefer email has increased since last year (81% vs. 77%), so too has the number who prefer mail (14% vs. 12%), though the difference is slight. • 84% said that they have visited our Website and Registry. The frequency of visits, however, varied considerably. Well over one-third (42%) visited it a few times a year or less, while almost as many (38%) visited it at least every 2-3 months. The number of stakeholders who have visited the website has decreased since last year but is still higher than in previous years (84% vs. 93% in fall 2002). The decrease is most visible among those who say they visited the site a few times a month. There was also an increase in the number who said they did not visit the website at all (16% vs. 6% in fall 2002). •Visitors to the website were most often seeking information about what other firms are doing (22%), followed at a distance by guidelines or requirements for reporting (9%), verification of company information (7%), general information (6%), and news updates (5%) (multiple responses accepted). Other types of information were looked for very infrequently (4% or less).

39 Data taken from VCR Inc. stakeholder surveys. Calculations are VCR Inc. defined.

44 VCR Inc. ¥ 2003 Annual Report •Two-thirds of those who visited the website described it as good (47%) or excellent (18%) in terms of ease of navigation. Approximately one in five were lukewarm, viewing it as satisfactory. Very few were critical (2% said it needs improvement). Impressions have changed little since fall 2001, the first time this question was asked. •Nearly two-thirds of those who visited the website described the new design and basic layout as good (47%) or excellent (17%). Most of the rest were lukewarm, describing it as satisfactory, with almost no one critical. Impressions have improved since last year and are similar to what they were in 2001 when the question was first asked. •Website visitors found the most useful section to be on-line reports (8%), followed by the registries/registry section (6%). A few cited the list of participating organizations or said that all sections were useful. Nearly two-thirds of those eligible to answer this question did not provide a response, a rate of non-response almost identical to last year.

As well, • 79% of stakeholders believe that our Leadership Awards Program is somewhat (48%) or very valuable (31%). In all, 7% said they were not aware of the program. The number of stakeholders who perceive the Leadership Awards Program as valuable has decreased moderately over the past two years (79% vs. 81% in Fall 02, and 85% in Fall 01), and is identical to what it was in Fall 00 when tracking began. • 63% believe that development of an integrated reporting tool would be somewhat (41%) or very valuable (12%) to their organization and its members. Relatively few view it as not valuable (10%). In all, 28% said they were not aware of the initiative. Compared to last year, stakeholders are much less likely to perceive an integrated reporting tool as valuable. This is due primarily to a significant decrease among stakeholders who perceive the tool as very valuable (12% vs. 26%), and an increase among those who say they are unaware of the initiative (28% vs. 16%). Last year, the question was worded slightly differently. • 46% claimed to be at least moderately familiar with our Champions in Action Initiative. Conversely, approximately half were either not very familiar or not familiar at all with it. This represents a significant decrease in familiarity compared to previous years (46% vs. 66% in Fall 02 and 59% in Fall 01). 5.3 REGISTRATION GUIDE TO ENTITY AND FACILITY-BASED REPORTING Our Registration Guide is a living version available on-line and contains all the links and information to assist you in the development of a current Action Plan for registration submission. Our overriding objective is to Challenge both current and potential registrants from all economic sectors and geographic regions to undertake voluntary actions that will contribute towards the reduction of Canada’s GHG emissions.

We have also posted all the available sector specific protocols and templates for the linkages and programs that we partner with. All are available from the guidelines page at http://www.vcr-mvr.ca/vcr_guides_e.cfm.

There is also an SME CO2 calculation tool available. The CO2 Tool is an Excel spreadsheet that calculates the greenhouse gas emissions from indirect electricity purchases and combustion of fossil fuels. The program allows you to enter the annual consumption of electricity, four different fuels and one miscellaneous GHG emission source. Energy data is entered into all the yellow highlighted cells and the resulting GHG emissions are automatically calculated.

The intent is that by completing the data in the spreadsheet and supplying a covering letter and Action Plan description, an organization will be able to achieve Bronze level in the VCR Inc. Challenge Registry.

VCR Inc. ¥ 2003 Annual Report 45 5.4 OTHER PUBLICATIONS As well as keeping a living version of the Registration Guide posted on-line from www.vcr-mvr.ca/vcr_guides_e.cfm, we also maintain an electronic library of our Annual Reports and Champion News accessible at http://www.vcr-mvr.ca/vcr_pubs_e.cfm. These two publications are aimed at various publics to apprise them of the latest news, success stories and trends within the Climate Change sector as well as at VCR.

5.4.1 Annual Report Issued annually in conjunction with the Annual Council of Champions meeting and Leadership Awards Ceremony, VCR’s Annual Report contains an interesting and revealing synopsis of activities and initiatives undertaken throughout the previous year.

5.4.2 Champion News The Champion News is our corporate newsletter and is distributed, roughly once per quarter, to all VCR registrants and other interested parties by mail or electronically by email. Its purpose is to keep readers apprised of VCR activities with information on a variety of topics from success stories to welcoming new registrants to the announcement of new VCR initiatives.

The current readership of the newsletter is approximately 2,500, and is constantly increasing.

5.4.3 Progress Reports We regularly distribute a VCR Progress Report via email to a select list of stakeholders including Council of Champions/Board of Directors members, association heads, government officials and VCR’s Technical Advisory Committee members. Its purpose is to keep VCR’s closest stakeholders apprised of the Corporation’s progress on a more regular basis. The Progress Report is also a valuable vehicle for on-going communication with the principals behind the ever-growing list of linkages and partnerships.

46 VCR Inc. ¥ 2003 Annual Report V CR Inc. Structure: Partners working in harmony VCR Inc. Structure As a public-private partnership, our Governance structure is instrumental in our success and provides for well-informed dialogue among the different levels of corporate and government support.

Our Council of Champions members are senior leading representatives from both industry and government bodies. Our Board of Directors is drawn from the Council of Champions. (Organizational chart below with a list of members following)

CHART 35: VCR Inc. Organizational Structure

VCR Inc. Council of Champions

VCR Inc. Multi-Stakeholder Technical Board of Directors Advisory Committee

President Robert A. Flemington P.Eng.

Technical Representative Office Manager Evan Jones Patricia Chartrand P.Eng.

Database Administrator Registry Analyst Web Developer Denise Mason Brian Rawson Mike Donofrio

Industry representatives are elected on an annual basis at the Council of Champions Meeting, while the federal minister of Natural Resources Canada appoints government representatives. The Board receives guidance from the following three committees:

•The Governance Committee was established to permit review of the issues related to the election and nomination of board members and to assess the performance of the Technical Advisory Committee. It consists of a Chair and two other board members. •The Audit Committee was created to review the audited year-end financial statements and reports and to meet with the auditors. Much like the Governance Committee, it comprises a Chair and two board members. It is their responsibility to satisfy themselves, on behalf of the Board, that VCR’s financial requirements are met. •The Technical Advisory Committee (TAC) was established to provide, at the request of the Board, recommendations concerning technical issues. It consists of representatives from academia, labour, environmental non-government organizations, the aboriginal community, industry and governments.

The VCR office was created to support the Council of Champions in the development of an engagement strategy to recruit more organizations, more partnerships with associations, and more awareness by all Canadians.

48 VCR Inc. ¥ 2003 Annual Report 6.1 2003 COUNCIL OF CHAMPIONS The Council of Champions encourages participation in, and seeks funding for, VCR Inc. within all sectors of the economy. It is composed of ‘top-of-the-house’ executives from leading industry sectors and government ministries supporting the initiative.

As of December 31, 2003 the 47 council members are:

Ron Aelick David Ferguson Gord Macatee Ken J. Plourde President Canadian and UK Operations Deputy Minister Deputy Minister Director, Forest Strategies Inco Limited Government of New Brunswick Government of British Columbia Alberta-Pacific Forest Industries Inc.

George Anderson Robert A. Flemington, P. Eng. Brian Maynard Don Potter Deputy Minister of Natural Resources President Deputy Minister Deputy Minister Government of Canada VCR Inc. Government of Newfoundland & Labrador Government of Manitoba

Graham Bojé Daniel Gagnier Brian McConaghy Angus Robertson Vice President, Manufacturing Vice-President, General & Environmental Vice President, Health, Safety & Environment Deputy Minister Shell Canada Limited Affairs TransCanada Government of Yukon Alcan Inc. Norman B. Brandson Dan McFayden Larry Spannier Deputy Minister Vaughn Hibbits Deputy Minister Deputy Minister Government of Manitoba Vice President, Administration Government of Nova Scotia Government of Saskatchewan Honda of Canada Mfg. Jim Burpee Bob McLeod Norman J. Stewart Senior Vice President Suzanne Hurtubise Deputy Minister Vice President Ontario Power Generation Inc. (OPG) Deputy Minister of Environment Government of the Northwest Territories Ford Motor Company of Canada, Ltd. Government of Canada Alex Campbell Chris Micek Lily Stonehouse Deputy Minister Arthur Irving Jr. Environmental Manager Canada Deputy Minister Government of Nunavut Irving Oil Limited Agrium Inc. Government of Saskatchewan

John Clarkson Boris Jackman Gwyn Morgan Robert Telewiak Deputy Minister Executive Vice President President & CEO Vice President, Environment, Health & Government of Manitoba Petro-Canada EnCana Corporation Safety Falconbridge Limited Ken Crane Wayne Kenefick Doug W. Muzyka Director of Environmental Services President President & CEO Christian L. Van Houtte Luscar Ltd. Canadian Lime Institute (CLI) DuPont Canada Inc. President Aluminium Association of Canada (AAC) Lewie Creed Ron E. L’Esperance Robert Page Deputy Minister Deputy Minister Vice-President Virginia West Government of Prince Edward Island Government of Nova Scotia TransAlta Corporation Deputy Minister of Environment Government of Ontario Paul Dean Phil Lachambre David Paterson Deputy Minister Executive Vice President and Chief Vice President Steve Williams Government of Newfoundland & Labrador Financial Officer General Motors of Canada Ltd. Executive Vice President & CFO Syncrude Canada Ltd. Suncor Energy Inc. John Donner Normand Pellerin Assistant Deputy Minister David A. Lewin Assistant Vice President, Environment Sheila Wynn Government of Alberta Senior Vice President Canadian National Railway Company (CN) Deputy Minister of Energy and Mines EPCOR Utilities Inc. Government of British Columbia Tim W. Faithfull Arunas Pleckaitis President and Chief Executive Officer J. Norman Lockington President Shell Canada Limited Vice-President Enbridge Gas New Brunswick Dofasco Inc.

VCR Inc. ¥ 2003 Annual Report 49 6.2 2003 BOARD OF DIRECTORS The Board of Directors provides broad corporate direction to the VCR office. Drawn from the Council of Champions, two thirds of its membership consists of industry representatives, while one third is drawn from the federal, provincial and/or territorial governments.

As at December 31, 2003 the 14 board members are:

Ron Aelick Alex Campbell J. Norman Lockington Norman J. Stewart President Canadian and UK Operations Deputy Minister Vice-President Vice President Inco Limited Government of Nunavut Dofasco Inc. Ford Motor Company of Canada, Ltd.

George Anderson John Donner Brian McConaghy Virginia West Deputy Minister of Natural Resources Assistant Deputy Minister Vice President, Health, Safety & Environment Deputy Minister of Environment Government of Canada Government of Alberta TransCanada Government of Ontario

Graham Bojé Robert A. Flemington, P. Eng. Arunas Pleckaitis Steve Williams Vice President, Manufacturing President President Executive Vice President & CFO Shell Canada Limited VCR Inc. Enbridge Gas New Brunswick Suncor Energy Inc.

Jim Burpee Suzanne Hurtubise Senior Vice President Deputy Minister of Environment Ontario Power Generation Inc. (OPG) Government of Canada

6.3 VCR’S TECHNICAL ADVISORY COMMITTEE (TAC)

6.3.1 Role and Mandate The TAC serves as a critical resource, providing the board with essential technical advice. It acts as a key instrument in supplying VCR with a template for technical assessment and review, in contributing significantly to the corporation’s ability to attract and maintain committed registrants, in responding to the community, and in establishing VCR credibility.

The TAC also enables VCR to assemble expertise from among broad interests familiar with, and committed to, a responsible and practical approach to the climate change challenge.

VCR’s commitment to meaningful and realistic initiatives, and its recognition of the importance and value of diverse representation, both real and perceived, is closely tied to the TAC’s individual members, their responsibilities and their activities.

6.3.2 Membership As at December 31, 2003, TAC comprised 25 members, enabling VCR’s board to draw on demonstrated and acknowledged technical expertise from a broad range of interests, including the Council of Champions and their respective associations, environmental non-governmental organizations (ENGOs), academia, all levels of government and business. The terms of individual appointments are staggered (i.e., 2 or 3 years) to maximize continuity within the Committee.

At the first annual Council of Champions Meeting on March 12, 1998, the board elected Dr. David Bell, Director, York Centre for Applied Sustainability, as Chair of the TAC and he has served in this capacity ever since.

50 VCR Inc. ¥ 2003 Annual Report 6.3.3 Scope and Responsibilities The TAC’s three main areas of responsibility are as follows:

1. Provide ongoing advice to the board concerning the technical criteria by which actions and plans undertaken by participants will be evaluated. 2. Develop criteria by which successful action plans will be recognized and celebrated. 3. Recommend initiatives to the board through which VCR’s stature and integrity will be enhanced.

6.3.4 Relationships

The TAC is directly accountable to the board. All projects and activities that involve external or internal working relationships will therefore be undertaken at the board’s request or with the board’s approval.

6.3.5 Measurements The principal criteria by which the effectiveness of the TAC is based on the following: the extent to which the Committee’s criteria-evaluation program contributes to participants’ actions; continuous improvement in participants’ action plans; and the Committee’s role in establishing and maintaining the technical credibility of VCR in general.

It is acknowledged that the TAC’s effectiveness will depend on the breadth of members’ technical expertise, the collective diversity of the Committee, and the ability of the group, under the direction of the Chair, to fulfill its responsibilities with consensus agreement and support.

6.3.6 Operation It is anticipated that computer networking, rather than face-to-face meetings, will accomplish the bulk of the TAC’s work. Whenever face-to-face meetings of the full Committee are required, it is appropriate for ENGO and academic members who have no other financial support for this activity to be reimbursed by VCR for their time at the meeting on a per diem basis and for their travel costs.

6.3.7 List of TAC Members TAC draws its membership from academia, environmental non-government organizations, businesses and governments. At present, TAC comprises 25 members: Les Aalders Keir Brownstone Robert A. Flemington, P. Eng. Lyle Hargrove VP Engineering and Maintenance General Manager President Director of CAW Health and Safety Air Transport Association of Canada (ATAC) Greensaver VCR Inc. Training Fund Canadian Auto Workers (CAW) Tom Baumann Oliver Bussler Paul Gregory Project Verification Officer, ES/CETC/TEAM Sustainable Development Specialist Program Officer Dianne Humphries TEAM Operations Office Planning, Environment & Regulatory Affairs Green Municipal Funds Manager Technology Early Action Measures (TEAM) SaskPower Federation of Canadian Municipalities (FCM) Sustainable Development Suncor Energy Inc. David Bell Peter Chantraine Paul Griss Director Manager, Energy and Environment Consultant, Policy & Management Rick Jennings Yo rk University DuPont Canada Inc. Conservation & Environmental Protection Director Boldon Group Inc. Energy Policy Branch, Energy Division Steve Blight Catherine Cobden Government of Ontario Assistant Director Vice President Paul Hansen Regulatory & Economic Analysis Environment Manager, Environmental Affairs Evan Jones Environment Canada Forest Products Association of Canada DaimlerChrysler Canada Inc. Technical Representative (FPAC) VCR Inc.

VCR Inc. ¥ 2003 Annual Report 51 Peter Love Tom Michelussi Mustapha Ouyed Executive Director CAPP and CPPI representative: VCR TAC Conseiller Canadian Energy Efficiency Alliance (CEEA) Altus Environmental Engineering Limited Environnement Gaz Métro Scott McCoombs Ron O. Nielsen Energy Engineer Manager, Environmental Affairs & Betty Rozendaal Environment, Energy Utilization Sustainability Independent Consultant Government of Nova Scotia Alcan Primary Metal Group Alcan Inc. Kent Waddington Tim McIntosh Coordinator Director, Demand Policy and Analysis Susan E. Olynyk Office of Energy Efficiency Project Natural Resources Canada Senior Energy Specialist Canadian College of Health Service Government of Canada Dofasco Inc. Executives (CCHSE)

6.4 LIST OF REGISTRANTS BY LEVEL OF REPORTING (AS AT DECEMBER 31, 2003)

Enbridge Gas Distribution Inc. New Brunswick Community College - Simon Fraser University 6.4.1 Champion in Action Enbridge Gas New Brunswick Campbellton Campus Sir Sandford Fleming College DUPONT CANADA INC. Enbridge Inc. New Brunswick Community College - Southern Alberta Institute of Technology Enbridge Midcoast Canada Operating Corp. Dieppe (SAIT) 6.4.2 Gold Enbridge Pipelines (Athabasca) Inc. New Brunswick Community College - St. Lawrence Cement Inc. Enbridge Pipelines (NW) Inc. Edmunston Campus St. Marys Cement Co. 45-47 Sheppard Ave. East Inc. Enbridge Pipelines (Saskatchewan) Inc. New Brunswick Community College - Star Oil & Gas Ltd. 964986 Alberta Ltd. Enbridge Pipelines Inc. Miramichi Campus Stelco Inc. Alberta-Pacific Forest Industries Inc. EnCana Corporation New Brunswick Community College - Stora Enso Port Hawkesbury Alliance Pipeline Ltd. EPCOR Utilities Inc. Moncton Campus Suncor Energy Inc. AltaGas Utilities Inc. ExxonMobil Canada Ltd. New Brunswick Community College - Syncrude Canada Ltd. ARC Resources Ltd. Falconbridge Limited Saint John Talisman Energy Inc. ATCO Gas Famz Group of Companies New Brunswick Community College - St. Tembec Paper Group - Pine Falls ATCO Pipelines Ford Motor Company of Canada, Ltd. Andrews Campus Operation ATCO Power Gaz Métro New Brunswick Community College - Tembec Paper Group - Spruce Falls Atomic Energy of Canada Limited (AECL) General Motors of Canada Ltd. Woodstock Operations Bison Transport Glenrose Rehabilitation Hospital and Nexen Canada Ltd. Terasen Gas Inc. Bowater Canadian Forest Products Inc. Energy Centre Noranda Inc. The Scarborough Hospital BP Canada Energy Company Government of Alberta NorQuest College TransAlta Corporation Brandon Regional Health Authority Government of British Columbia Northwest Territories Power Corporation TransCanada Calpine Canada Resources Limited Government of Canada NOVA Chemicals University College of the Fraser Valley Camosun College GWL Realty Advisors Inc. Ontario Power Generation Inc. (OPG) University of Alberta Hospital Canadian Chemical Producers’ Honda of Canada Mfg. Orenda Aerospace Corporation University of British Columbia Association (CCPA) Horizon School Division No. 67 Oxy Vinyls Limited University of Lethbridge Canadian Natural Resources Limited Hudson’s Bay Company (HBC) Pacifica Papers Company University of Ottawa Canadian Petroleum Products Institute (CPPI) Humber College Institute of Technology Panasonic Canada Inc. Unocal Canada Limited Capilano College and Advanced Learning Papiers Stadacona Ltée VanCity Savings Credit Union Cégep de Saint-Jérôme Husky Energy Inc. Pengrowth Corporation VCR Inc. Chevron Canada Resources Husky Injection Molding Systems Ltd. Penn West Petroleum Ltd. Winnipeg Health Sciences Centre Chinook Group Limited (Sombra Plant) Hydro One Remote Communities Inc. Petresa Canada Inc. Yukon Development Corporation City of Calgary IBM Canada Ltd. Petro-Canada City of Edmonton Imperial Oil Limited Pioneer Natural Resources Canada Inc. City of Guelph Inco Limited PrimeWest Energy Inc. City of Ottawa Irving Oil Limited Prince Edward Island Energy Corporation 6.4.3 Silver ConocoPhillips Canada Kwantlen University College Rocky View School Division No. 41 Abitibi-Consolidated Inc. Consoltex Inc. La Cité collégiale Rouge Valley Health System Agrium Inc. DaimlerChrysler Canada Inc. Langara College SaskEnergy Aluminerie Alouette inc. Delta Meadowvale Resort & Conference London Health Sciences Centre SaskPower Atlantic Health Sciences Corporation Centre Luscar Ltd. School District 43 (Coquitlam) BC Hydro Devon Canada Corporation Manitoba Hydro School District No. 33 (Chilliwack) BHP Billiton Diamonds Inc. - Ekati Dofasco Inc. Mikro-Tek Inc. SGT 2000 inc. Diamond Mine Dow Chemical Canada Inc. Mining Association of Canada (MAC) Shell Canada Limited Bowater Mersey Paper Company Limited DuPont Canada Inc. NAL Resources Shiningbank Energy Ltd. British Columbia Institute of Technology EcoSmart Inc. (formerly EEC) (BCIT)

52 VCR Inc. ¥ 2003 Annual Report Burlington Resources Canada Ltd. Simon Fraser Health Region Unilever Canada (Rexdale Plant) Ashland Canada Corp. Cambridge Memorial Hospital St. Lawrence Corp. Upton Resources Inc. Aspen View Regional Division No. 19 Canadian Electricity Association (CEA) Stanton Regional Health Board Volvo Canada Ltd. Association of Canadian Community Canadian Forest Products Ltd. (Canfor) Teck Cominco Limited Weldwood of Canada Ltd. Colleges (ACCC) Canadian Hunter Exploration Ltd. Tembec Industries Inc. Weyerhaeuser Canada Ltd. Athabasca Northern Railway Ltd. Canadian National Railway Company (CN) Terasen Pipelines Winnipeg School Division No. 1 Athabasca Oil Sands Developers Canlan Ice Sports Corp. The Body Shop Atlantic Shopping Centres Cégep de Lévis-Lauzon Toronto Dominion Centre Leaseholds Atlas Specialty Steels Inc. Cégep Marie-Victorin Limited 6.4.5 Other Registrants Augustana University College Celanese Canada Inc. Town of Banff 1086891 Ontario Inc. Aur Resources Inc. Cement Association of Canada (CAC) University of Calgary 1213763 Ontario Inc. Banff Centre CHIP Hospitality University of Western Ontario 12352-149 Street Inc. Banff Mineral Springs Hospital Corporation City of Regina Vancouver Community College 1254536 Ontario Limited Barrick Gold Corporation Collège François-Xavier-Garneau 1265534 Ontario Inc. Barrie-Collingwood Railway Commission scolaire des Hautes-Rivières 1301489 Ontario Limited Basell Canada Inc. Commission scolaire des Patriotes 1308355 Ontario Ltd. BASF Canada Inc. Dominion Exploration Canada Ltd. 6.4.4 Bronze 1312417 Ontario Limited Baycrest Centre for Geriatric Care Domtar Inc. Acadia University 169159 Canada Inc. Baytex Energy Ltd. Edmonton Regional Airports Authority Alberta Newsprint Company (ANC) 20 Vic Management Inc. BC Cancer Agency EMCO Building Products Corp. Alcan Inc. 3170497 Canada Inc. BC Rail Ltd. Enviros RIS Canada Alcoa - Aluminerie de Baie-Comeau 3551083 Canada Inc. Beachville Lime Limited EOG Resources Canada Inc. Alcoa - Aluminerie de Bécancour inc. 3M Canada Company Beaulieu Canada Inc. Gazifère Alcoa - Aluminerie de Deschambault 4990-92 Avenue Inc. Beaux Properties International Inc. Genesis Exploration Ltd. Alcoa Canada Première fusion 505896 Ontario Inc. Beaver Drilling Ltd. Grand & Toy Limited Anadarko Canada Corporation 5100 Sherbrooke Commercial Trust Beaverlodge Motor Inn/Beaver Inn Hamilton Health Sciences Corporation Archean Energy Ltd. 617613 BC Ltd. Bennett Fleet Howe Sound Pulp and Paper Limited ATCO Electric 702828 Ontario Ltd. Bentall Real Estate Services Partnership ATOFINA Canada Inc. 715 Victoria S.E.C. Bentofix Technologies Inc. Imperial Tobacco Canada Avalon West School Board 965192 Alberta Ltd. Berkley Summit Apartment Corp. Koch Petroleum Canada, L.P. Bayer Inc. - Rubber Division A.I.Z. Realties Ltd Best Western Denham Inn & Suites Kruger Inc. Business Depot Ltd. Accuride Canada Inc. Best Western International, Inc. (Canada) Methanex Corporation Cadillac Fairview Corporation Ltd - Agence Métropolitaine de Transport Best Western Wayside Inn Metroland Printing, Publishing and Ontario Portfolio Agmont Inc. Bishop’s University Distributing - Wolfedale Division Calgary Health Region (CHR) Air Canada Black Gold Regional Division No. 18 Norske Skog Canada Ltd. Collège de l’Outaouais Air Products Canada Inc. Black Knight Inn Northrock Resources Ltd. College of the North Atlantic Airborne Pollution Control Inc. Black Photo Corporation Nova Scotia Power Inc. Fording Coal Limited AirBoss Rubber Compounding Blue Tree Hotels Investment (Canada) Inc. Novotel Canada Inc. Government of Québec Airline Motor Hotels Ltd. Boardwalk Equities Inc. Novotel Ottawa London Life Insurance Company Akita Drilling Ltd. Boehme Filatex Canada Inc. NRI Industries Inc. M & I Air Transfer Products Akzo Nobel Chemicals Ltd. Boeing Toronto Ltd. Paramount Resources Ltd. McLeod Harvest Inc. Albarrie Canada Limited Bombardier Inc. Usine de Valcourt PCS Potash Cory Division Metroland Printing, Publishing and Alberta College of Art & Design Borden Chemical Canada Inc. PCS Potash Patience Lake Division Distributing - Tempo Division Alberta Hospital Edmonton Boundary School Division No. 16 PCS Potash Rocanville Division Moosehead Breweries Ltd. Alberta Prairie Railway Excursions BoxSys Corporation Pembina Pipeline Corporation Norfolk General Hospital Alfa Properties Inc. BP Canada Chemical Company Pope & Talbot Ltd. Harmac Pulp Mill North West Catholic School Division No. 16 Algoma Steel Inc. Brandon School Division No. 40 PowerComm Inc. Ottawa-Carleton District School Board Algoma Water Tower Inn Broan-NuTone Canada Inc. Provident Energy Ltd. PCS Potash Corporation Allan Division Algonquin College of Applied Arts and Brookbank Realty Limited Queen Elizabeth II Health Sciences PCS Potash Lanigan Division Technology Bruce-Grey Catholic District School Board Centre (QE II) PCS Potash New Brunswick Division Algorithmics Inc. Brunswick Hotel Red River College Regina Qu’Appelle Health Authority Aliments Carrière inc. BTC Properties II Ltd. & The Great West Regina Roman Catholic Separate School Sabre Energy Ltd. Alpha Corporate Centre Life Assurance Company Division No. 81 Saint Mary’s University Aluminium Association of Canada (AAC) Buanderie Blanchelle Rife Resources Ltd. School District No. 44 (North Vancouver) AMCO Real Estate Investments Inc. Buanderie centrale de Montréal inc. Riverside Forest Products Limited, School District No. 63 (Saanich) Amtrak Bucci Investment Corporation Armstrong Plywood School District No. 64 (Gulf Islands) Ancast Industries Ltd. Buffalo Trail Regional Division #28 Royal Roads University Seven Oaks General Hospital Annapolis Valley Regional School Board Burin Peninsula School Board School District No. 34 (Abbotsford) Sobeys - A Banner of Sobeys Group Inc. Apache Canada Ltd. Burlington Northern (Manitoba) Ltd. School District No. 37 (Delta) Solutia Canada Inc. Applewood, Chevrolet Oldsmobile Cadillac Burlington Northern Santa Fe Railway School District No. 62 (Sooke) St. Boniface General Hospital Armadale Properties Limited Company Shell Chemicals Canada Ltd. St. James-Assiniboia School Division No. 2 Arnaud Railway Company Burnbrae Farms Signalta Resources Ltd. Town of New Glasgow ASCO Valve Canada Burrowing Owl Investment Corp.

VCR Inc. ¥ 2003 Annual Report 53 Calgary Board of Education Centre de santé de la MRC d’Asbestos CLIC Properties Inc. District of North Vancouver Calgary Co-operative Association Limited Centre Dollard-Cormier CLSC-CHSLD Basse-Ville - Limoilou - Vanier District of Hudson’s Hope Cambior inc. Centre hospitalier de l’Université Laval Coal Association of Canada (CAC) District of Saanich Cambridge Shopping Centre Ltd. Centre hospitalier de Rivière-du-Loup Coast Hotels and Resorts Division Scolaire Franco-Manitobaine No. 49 Cambridge Towel Utilities Centre hospitalier Fleury Coats Bell Division of Coats Canada Inc. Dufferin-Caledon Health Care Corporation Cameus Holdings Inc. Centre hospitalier Jonquière Cognis Canada Corporation Duke Energy Gas Transmission (DEGT) Canad Inns Centre hospitalier régional de Rimouski Collège de Limoilou and Duke Energy North America Canada Hair Cloth Company Centre hospitalier universitaire de Québec Collège de Rosemont (DENA) Canadian American Railroad Co. CH de Beauceville Collège de Shawinigan Dundee Realty Management Corporation Canadian Apartment Properties Real Champion Drilling Inc. Collège Gérald-Godin Durham College of Applied Arts & Technology Estate Investment Trust (CAP REIT) Champion Pet Foods Ltd. Collège Jean-de-Brébeuf DWB Properties Inc. Canadian Association of Oilwell Drilling Company Inc. Collège Lionel-Groulx Dynea Canada Ltd. Contractors (CAODC) Chemical Lime Company of Canada Collège Notre-Dame de l’Assomption Earl’s Restaurants Ltd. Canadian Association of Petroleum Chemin de fer Baie des Chaleurs College of New Caledonia East Central Alberta Catholic Separate Producers (CAPP) Chemin de fer de la Matapédia et du College of the Rockies Schools Regional Division No.16 Canadian Centre for Architecture Golfe Inc. Collins & Aikman Ecole des Hautes Études Commerciales Canadian College of Health Service Children’s & Women’s Health Centre of Commerce Place Building Ecole Polytechnique de Montréal Executives (CCHSE) British Columbia Commission scolaire de la Beauce- Edmonton Catholic Schools Canadian Energy Pipeline Association Children’s Hospital of Eastern Ontario Etchemin Edmonton Public Schools (CEPA) Chinook Health Region Commission scolaire de la Capitale Eka Chemicals Canada Inc. Canadian Fertilizer Institute (CFI) CHSLD Biermans-Triest Commission scolaire de la Région-de- Elk Island Catholic Separate Regional Canadian Forest Oil Ltd. (CFO) CHSLD Champlain-Manoir de Verdun Sherbrooke Division No. 41 Canadian Gas Association (CGA) CHSLD de Lachine, Nazaire-Piché et Commission Scolaire de Laval Elk Island Public Schools Regional Canadian Industry Program for Energy Foyer Dorval Commission scolaire des Affluents Division No. 14 Conservation (CIPEC) CHSLD du Plateau Mont-Royal Commission scolaire des Bois-Francs Empire Financial Group Canadian Memorial Chiropractic College CHSLD Estriade Commission scolaire des Rives-du- Ensyn Technologies Inc. (CPR) CHSLD Lucille-Teasdale Saguenay Envirogard Products Ltd. Canadian Steel Producers Association CHSLD-CLSC Nord de I’Île, Pavillon Commission scolaire Marguerite- Espanola General Hospital (CSPA) Notre-Dame de la Merci Bourgeoys Esquimalt & Nanaimo Railway Canadian Textiles Institute (CTI) CHUM - Hôpital Notre-Dame Commission scolaire Marie-Victorin ESSAG Canada Inc. Canadore College of Applied Arts and CHUM - Hôpital Saint-Luc Complexe Cité du Havre inc. Company Technology CIBA Specialty Chemicals Complexe hospitalier de la Sagamie ESSROC Cape Breton and Central Nova Scotia CIBC Development Corporation Complexes Sportifs Terrebonne inc. Ethyl Canada Inc. Railway City of Abbotsford Compten Management Inc. Eurocan Pulp and Paper Co. Capital City Shopping Centre Limited City of Brantford Concordia Hospital ExelTech Inc. Capital Railway (City of Ottawa) City of Burnaby Concordia University F. F. Soucy Inc. Cargill Animal Nutrition City of Campbell River Condominium Corporation No. 0211811 Fabrene Inc. Carleton Condominium Corporation No. 53 City of Cold Lake (The Renaissance at North Hill) Fairmont Hotels & Resorts Carleton Condominium Corporation No. 68 City of Coquitlam Confederation College Famous Players Inc. Carriage House Inn Ltd. City of Delta Congébec inc. Fanshawe College Company City of Greater Sudbury Cooper-Standard Automotive Federated Co-operatives Limited (FCL) Cascade Lodge Hotel LMS 3230 City of Hamilton Corporation du Soccer de Laval Federation of Canadian Municipalities (FCM) Casco Inc. / Canada Starch Operating City of Country Style Food Services Inc. Feliz Enterprises Ltd. Company Inc. City of Kitchener County of Strathcona Ferroequus Railway Co. Ltd. Casino Rama City of Lachine County of Lambton Fibrex Insulations Inc. Cavalier Textiles City of Langley Coyle & Greer Awards Canada Ltd. Fiducie Alfa Cégep de Chicoutimi City of London Credit Valley Hospital Fiducie Immobilière Éthier Cégep de Matane City of Mississauga Crompton Co. Fielding Chemical Technologies Inc. Cégep de Saint-Hyacinthe City of New Westminster Crown Cork and Seal Canada Inc. Fifth & Fifth Building Cégep de Saint-Laurent City of North Vancouver Crown Group Properties Inc. Fifth Avenue Place (Calgary) Ltd. & Cégep de Sept-Iles City of Port Alberni Crystal Lakes School Division No. 120 735832 Alberta Ltd. Cégep Joliette - De Lanaudière City of Port Moody CSX Transportation Inc. Finer Space Corporation Cégep Vanier College City of Surrey Cullen Gardens and Miniature Village First Real Properties Limited Centennial College City of Thunder Bay Cytec Canada Inc. First Tracks Lodge (Strata BCS-104) Central Care Corporation City of Toronto D.W. Inglis Limited (O/A Canadian Tire FMC of Canada Limited Inc. City of Vancouver Associate Store) Foothills Medical Centre Central Québec School Board City of Victoria Danforth Estates Management Inc Foothills Pipe Lines Ltd. Central Western Railway City of Weyburn Degussa Canada Inc. Forest Products Association of Canada Centre 170 Building Ltd. City of Whitehorse Delmar Chemicals Inc. (FPAC) Centre Commercial Le Boulevard City of Winnipeg Denim Swift Fort Garry School Division No. 5 Centre Communautaire Francophone City of Yellowknife Destaron Property Management Fort McMurray Public School District No. 2833 Windsor-Essex Inc. (Place Concorde) Clearview School Division No. 71 Difco Performance Fabrics Inc. Fortis Properties Corporation

54 VCR Inc. ¥ 2003 Annual Report Four Points Sheraton (Dorval) High Prairie School Division No. 48 La Chambre de commerce et d’industrie MARSULEX Inc. Four Seasons Hotel Toronto Hillsborough Resource Limited de Laval McFadzen Holdings Limited Frank McDonald Property Management Inc. Hockley Highlands Inn & Conference Centre La Commission scolaire des Portages-de- McKesson Canada Fraser Health Authority Hollyburn International l’Outaouais McMaster University Fraternité des policiers et policières de Homestead Land Holdings Limited La Régie régional de Montréal-Centre MDS Nordion Inc. Montréal Honeywell Ltd. Labatt Breweries of Canada Memorial University of Newfoundland Freightliner of Canada Ltd. Hôpital Charles LeMoyne Lafarge Canada Inc. Meridian Co-operative Homes Inc. G. K. York Management Services Hôpital du Haut-Richelieu LaGran Canada Inc. Merit Ford Alpine Limited Partnership George Brown College of Applied Arts Hôpital Général Juif de Montréal Laidlaw Inc. Metcalfe Realty Company Limited and Technology Hôpital Jean-Talon Lakeland & Waterways Railway Metro Toronto Condominium Corp. No. 1235 Georgian College of Applied Arts and Hôpital Laval Lakeshore School Division No. 23 Metro Toronto Condominium Corp. No. 533 Technology Hôpital Saint-François d’Assise Lambton College Metro Toronto Condominium Corp. No. 961 Gestion Baulne Inc. Hôpital Sainte-Croix de Drummondville Landmark Properties Inc. Metropolitan Toronto Condominium Gestion Plaza Côte-Des-Neiges Hôpital Sainte-Justine Landwest School Division No. 123 Corporation No. 1019 GO Transit Hôpital Santa Cabrini Langley School District No. 35 Metropolitan Toronto Condominium Goderich-Exeter Railway Co. Limited Hotel Inter-Continental (Montréal) Larco Hospitality Management Inc. Corporation No. 570 Golden Hills School Division No. 75 Hôtel-Dieu de Québec Lark Hospitality Metropolitan Toronto Condominium Golder Associates Ltd. Hub Meat Packers Ltd. - Sunrise Brand Laurentian University of Sudbury Corporation No. 676 Goldlist Properties Inc. Hudson Bay Mining and Smelting Co. Ltd. Le 4060 St-Laurent Mines Wabush Government of New Brunswick Humber River Regional Hospital Le Château, 1321 Sherbrooke Ouest Inc. MintoUrban Communities Inc. Government of Newfoundland & Labrador Humboldt Rural School Division No. 47 Le Conseil scolaire de district du Centre- Moisson Montréal Government of Nova Scotia Humpty’s Restaurants International Inc. Sud-Ouest Molson Breweries (Ontario) Government of Ontario Hunt Oil Company of Canada, Inc. Leamington District Memorial Hospital Momiji Seniors Residence Government of Saskatchewan Huntsman Chemical Company of Canada Inc. Lebinian Mondo America, Inc. Government of the Northwest Territories Huntsman Corporation Canada Inc. Lee Manor Montréal Children’s Hospital Government of Yukon Inc. Legacy Real Estate Investment Trust Moose Jaw Roman Catholic Separate Grand Erie District School Board ICOM Information & Communications Inc. Lehigh Inland Cement Ltd. School Division No. 22 Grand River Hospital ICR Denro Property Management Ltd. Lehigh Northwest Cement Ltd. Moose Jaw School Division No. 1 Grande Prairie Public School District No. 2357 IMC Potash LePage Morgan Falls Power Company Granite Holdings of Canada Ltd. Imperial Home Decor Group Les Centres d’achats Beauward Ltée Mount Allison University Grant MacEwan Community College Inland Cement Limited Les Fonds de Placement Immobilier Mount Saint Vincent University Graymont (NB) Inc. Innovation Place Alexis Nihon Municipality of Chelsea Graymont (QC) Inc. Institut de Cardiologie de Montréal Les Restaurants L.S. inc. Murphy Oil Company Limited Graymont Western Canada Inc. Institut de Réadaptation de Montréal Les Serres Sylvain Cléroux Musée québécois de culture populaire Great Atlantic & Pacific Company of Institut universitaire de gériatrie de Montréal Lethbridge Community College Nabors Drilling Limited Canada Limited (A&P) Interface Flooring Systems (Canada), Inc. Lewisporte-Gander School District Nacan Products Limited Great Canadian Railtour Company Ltd. International Paper Industries Ltd. Lilklar Holdings Nalco Canada Great West Property Management Inc. Iron Ore Company of Canada Lincoln Fabrics Ltd. National Silicates Ltd. Greater Essex County District School Board Ivaco Rolling Mills Lindsay Rehabilitation Hospital NCE Resources Group Inc. Greater St. Albert Catholic Schools Ivanhoé Cambridge Lloydminster Public School Division Nestlé Canada Inc. Greater Vancouver Associate Stores Limited J.L. de BALL Canada Inc. LMS2364 Blackcomb Springs New Brunswick Community College - Greater Vancouver Regional District (GVRD) Jalbec inc. Loblaws Properties Limited Bathurst Campus Greenarm Corporation JemPak Canada Inc. Lockerbie & Hole Industrial Inc. New Brunswick Community College of Greenwin Property Management Inc. Jesta Capital Corp. Lohnes-Beazley Funeral Service Ltd. Craft and Design Greif Containers Inc. Jewish Eldercare Centre London Hospital Linen Service Inc. New Brunswick East Coast Railway Inc. Grenfell Regional Health Services John Abbott College Loyalist College of Arts & Technology New Brunswick Power Grey Gables, Home for the Aged Kamsack School Division No. 35 M & M Meat Shops New Brunswick Southern Railway Griffin Corporation Katz Group Canada Ltd. Mackenzie Northern Railway Company Limited Groupe Chadel Keewatin-Patricia District School Board Maison Mère des Frères de l’Instruction Newfoundland and Labrador Hydro Groupe Heafey Pacific Railway Ltd. Chrétienne Newfoundland Power H.J. Heinz Company of Canada Ltd. Kimberly-Clark Nova Scotia Maksteel Newmont Canada Limited H.L. Blachford Ltd. Kindred Industries Malaspina University College NewWest Entreprise Property Group Haldimand War Memorial Hospital Kingsley Holdings, L.P. Manoir St-Bruno (Western) Inc. Halifax Regional Municipality Kingston General Hospital Maple Leaf Foods Inc. Nexen Chemicals Canada Ltd. Halton Catholic District School Board Kittling Ridge Winery Inn and Suites Maple Lodge Farms Ltd. Nexfor Inc. Halton Condominium Corporation No. 79 Kiwanis Senior Citizens Homes Ltd. Marathon Canada Limited Nisku Inn & Conference Centre (The Empress) Kodak Canada Inc. Marathon Pulp Inc. Norfolk Southern Corporation Harvard Developments Inc. Kolter Property Management Limited - Marisa Construction Ltd. Norsemen Inn Hawthorn Hotel & Suites Toronto Portfolio Maritime Electric Company, Limited Nortel Networks Health Care Corporation of St. John’s Kraft Canada Inc. Maritime Inns & Resorts North Island College Health Labrador Corporation Kronos Canada Inc. Maritime Paper Products Ltd. North Shore Independent School Society Hercules Canada Inc. La Centrale de chauffage Enr. Marriott Hotels of Canada Northern Gateway Regional Division No.10

VCR Inc. ¥ 2003 Annual Report 55 Northlands Park Quebec North Shore & Labrador Railway Sask Central School Division No. 121 St. George Condominium Association No. Northwest Catholic District School Board Company Saskatchewan Condominium (The Owners: CCC#375 Northwest Inns Quebec Southern Railway Condominium Plan No. 762 1302) St. Joseph’s Auxiliary Hospital Northwoodcare Incorporated Québec-Gatineau Railway Inc. Saskatchewan Minerals St. Lawrence & Atlantic Railroad (Quebec) Inc. Nova Scotia Community College Queen’s University Saskatchewan Valley School Division No. 49 St. Mary’s General Hospital Nova Scotia Textiles, Limited R.J. Burnside International Limited Saskatoon (West) School Division No.42 St. Mary’s Hospital Center Nova Ski Ltd. (Ski Martock) R.R.S.L. Properties Inc. Sawridge Inn and Conference Centre St. Marys Paper Ltd. Novotel Toronto Centre Radisson Admiral Hotel Scapa Tapes North America - Renfrew St. Paul Education Regional Division No. 1 O & Y FPT Inc. Railway Association of Canada (RAC) Scarborough Town Centre Holdings Inc. St. Thomas-Elgin General Hospital University College Rainbow District School Board School District No. 2 (Northern Peninsula/ Starwood Hotels & Resorts Canada OMG Belleville Limited Rainbow Realty Management Inc. Labrador South) Stedfast Inc. ONDEO Nalco Energy Chemicals Ramada Hotel & Conference Centre School District No. 3 (Corner Brook-Deer Stepan Canada Inc. Canada Inc. (Toronto - Donvalley) Lake-St. Barbe) Sterling Pulp Chemicals, Ltd. Ontario Centre for Environmental Ramada Hotel & Convention Centre (Regina) School District No. 36 (Surrey) Stock Exchange Tower Technology Advancement (OCETA) Ramada Hotel & Golf Dome (Saskatoon) School District No. 38 (Richmond) Strata Plan LMS 150 Ontario Northland Transportation Ramada Hotel (Downtown Calgary) School District No. 46 (Sunshine Coast) Strata Plan LMS 2818 Commission Ramada Inn & Water Park School District No. 54 (Bulkley Valley) Strata Plan VR 1858 Ontario Racquet Club (ORC) Raylo Chemicals Inc. School District No. 57 (Prince George) Sudbury Catholic District School Board Ontario Southland Railway Inc. Reagens Canada Limited School District No. 61 (Greater Victoria) Sulco Chemicals Limited OPB Realty Inc. Recochem Inc. School District No. 67 (Okanagan Skaha) Summerside Regional Development Orica Canada Ltd. Red Deer College School District No. 71 (Comox Valley) Corporation Ltd. Orion Bus Industries Regent Resources Ltd. School District No. 73 (Kamloops/ Thompson) Sun Valley Foods Régie régionale de la santé et des School District No. 75 (Mission) Suncurrent Group Ottawa Hospital (Civic Campus) services sociaux de la Montérégie School District No. 79 (Cowichan Valley) Sunrise School Division Ottawa Hospital (Riverside Campus) Regina School Division No.4 of Saskatchewan School District No. 82 (Coast Mountains) Super 8 Motel (Vermilion) Region 7 Hospital Corporation Scott’s Food Services Inc. Superior Propane Inc. Oxford Automotive Regional District of Central Kootenay Sears Canada Inc. Sydney Steel Corporation Oxford Properties Group Inc. Reichhold, Inc. Second Placement Inc. Syndicat des Copropriétaires - Place du Pacific Northern Gas Ltd. Réno-Dépôt inc. Seine River School Division No. 14 Quartier Park Property Management Inc. Résidence La Belle Époque Séminaire de St-Hyacinthe Syndicat Le Neufchâtel Parkland Refining Ltd. Résidence Le Castel Services de Santé de Chapleau Health Syndicat Management Inc. Pavillon Saint-Joseph (Infirmerie des Résidence Mance-Décary Services T&T Supermarkets Soeurs de Sainte Croix) Residential Real Estate Investment Trust Seven Oaks School Division No. 10 T.I.C.C. Limited PCC Properties (Calgary) Ltd. & ARCI Ltd. (ResREIT) SEW-Eurodrive Company of Canada Ltd. Tantalus Management Inc. PCI Chemicals Canada Inc. Resort Municipality of Whistler Sheraton Centre Toronto Teknion Furniture Systems Peace Wapiti School Board No.33 Restaurant et Taverne Magnan Sheraton Suites Calgary Eau Claire Tembec Industries Inc., Smooth Rock Peel Condominium Corporation No. 304 Rhodia Canada Inc. Sherbrooke Geriatric University Institute Falls Division Peel District School Board Richmond Health Services Sheridan Institute of Technology Tennis 13 Inc. Pembina Hills Regional Division No. 7 Rimrock Resort Hotel Sherritt International Textiles Monterey inc. Pembina Trails School Division (East) River East School Division No. 9 Siljub Hospitality Inc. Thames Valley District School Board Pembroke General Hospital Inc. River Grand Estates Condominium Simcoe County District School Board The Atrium on Bay Inc. Peoples Park Tower Inc. Riverside Apartments Corporation Simmons Canada Inc. The Avalon East School Board Petit Séminaire de Québec Roberval and Saguenay Railway Company Slater Steel Inc. The Forzani Group Ltd. - Sport Chek Petroleum Services Association of Rohm and Haas Canada Inc. Sleeman Brewing and Malting Co. Ltd. International 2000 Ltd. Canada (PSAC) RohMax Canada Inc. Smurfit-Stone Container Corporation The Forzani Group Ltd. - Sports Experts Pétromont Inc. Rosetown School Division No. 43 Sobeys Capital Inc. - Sobeys West 2000 Inc. Place de L’Assomption Ltée Royal Alexandra Hospital Sobeys Capital Inc.-Sobeys Ontario The Golf Dome Placer Dome Inc. Royal Bank of Canada Société de transport de la communauté The Hospital for Sick Children Polytainers Inc. Royal Host Corp. urbaine de Montréal The International Hotel of Calgary Polywheels Manufacturing Ltd. Royal Ottawa Health Care Group Soeurs Franciscaines Missionnaires de Marie The Michener Institute PPG Canada Inc. Royal Victoria Hospital Soprema Inc. The Olds Hotel Prairie Land Regional Division No. 25 Ryerson Polytechnic University SORENTEC ltée The Owners: Condominium Plan No. 8310913 Pratt & Whitney Canada Inc. S.C. Johnson & Son, Limited South East Health District The Woodbridge Group Precision Drilling Limited Safety-Kleen Corp. Timmins and District Hospital Prévost Car Inc. Saint Luke’s Place Southern Manitoba Railway Tony Graham Motors Limited PRO-ECO Ltd. Sakai Spice (Canada) Corporation Toronto Catholic District School Board Process Research ORTECH Inc. Sandman Hotel (Downtown Calgary) Southern Railway of British Columbia Ltd. Toronto Community Housing Corporation Procter & Gamble Inc. Sandman Hotel (Grande Prairie) Spinrite Inc. Toronto District School Board ProCura Real Estate Services Limited Sandman Hotel (Lethbridge) St-Jean PhotoChemicals Inc. Toronto East General Hospital and QIT- Fer et Titane inc. Sandman Hotel (Red Deer) St. Albert Inn Orthopaedic Hospital, Inc. Québec Cartier Mining Company Sandman Hotel (West Edmonton) St. Anne-Nackawic Pulp Company Ltd. Toronto Grace Hospital Sandvik Tamrock Loaders Inc. St. Clair College of Applied Arts & Technology Toronto Hydro

56 VCR Inc. ¥ 2003 Annual Report Toronto Terminals Railway Company Limited Université du Québec en Outaouais Canada Inc. Winchester District Memorial Hospital Town of Canmore Université Laval Victoria Park Place (Essex Condominium Windsor & Hantsport Railway Town of Collingwood University College of Cape Breton Corporation No. 35) Windsor-Essex Catholic District School Board Town of Didsbury University Health Network VicWest Steel Winners Apparel Ltd. Town of Fort Smith University of Alberta Village of Anmore Winnipeg Technical College Town of Perth University of Guelph Ville de Boucherville Wisconsin Central Ltd. Town of Port Hope University of Manitoba Ville de Laval Wolf Creek School Division No. 72 Town of Quispamsis University of New Brunswick - Fredericton Ville de Montréal Wood’s Homes Town of Swan River Campus Ville de Montréal-Est Workers’ Compensation Board (Alberta) Town of The Pas University of Northern British Columbia Ville de Québec Wyeth-Ayerst Canada Inc. Township of Scugog University of Prince Edward Island Vision Quest Windelectric Inc. XL Properties Inc. Toyota Motor Manufacturing Canada Inc. University of Regina Wabash Alloys Ontario Yellowknife Education District No. 1 Toys ‘’R’’ Us Canada Ltd University of Saskatchewan Yo rk Catholic District School Board Trans-Northern Pipelines Inc. University of Toronto Waiward Steel Fabricators Ltd. Yo rk Condominium Corporation No. 228 Traveller’s Inn (Banff) University of Victoria Warrington Property Group Incorporated Yo rk Condominium Corporation No. 288 Tree Canada Foundation (TCF) University of Waterloo Waterloo Region District School Board Yo rk Condominium Corporation No. 330 Trent Holdings, L.P. University of Winnipeg (Baif Garden Court) Trianon Properties Inc. UPM-Kymmene Miramichi Inc. West Edmonton Mall Ltd. Yo rk Condominium Corporation No. 382 Co. Ltd Upper Canada College West Fraser Timber Co. Ltd. (Palace Pier) TrueNorth Energy Upper Grand District School Board West Haldimand General Hospital Yo rk Condominium Corporation No. 531 TRW Automotive Vancouver General Hospital West Nipissing General Hospital Yo rk Condominium Corporation No. 56 Tur pin Group Inc. Vancouver Island Health Authority (Central) Westaim Corporation Yo rk Region Condominium Corporation Ultramar Limited Vancouver Island Health Authority (North) Western Gas Tower Building No. 784 Union Gas Limited Vancouver Island Health Authority - South Western Health Care Corporation Yo rk Region Corporation No. 794 Université de Moncton (VIHA-S) Western Québec School Board Yo rk Region Condominium Corporation Université de Montréal Vancouver School Board - School District Westmount Square 9093-8119 Québec Inc. No. 798 Université de Sherbrooke No. 39 Westwind School Division No. 74 Yo rk University Université du Québec - École de Vantage Estates Ltd. Weyburn School Division No. 97 Yo r kdale School Division No. 36 technologie supérieure Variety Village White Pass & Yukon Route Yo r kdale Shopping Centre Holdings Inc. Université du Québec à Chicoutimi Versacold Corporation Wilfrid Laurier University Zellers Inc. Université du Québec à Montréal VFT Inc. Williams Energy (Canada) Inc.

VCR Inc. ¥ 2003 Annual Report 57

A ppendices

List of Acronyms, Greenhouse Gases and Measurement Units

TABLE FOUR: List of Acronyms

Symbol Name

CAPP Canadian Association of Petroleum Producers CCPA Canadian Chemical Producers’ Association CDM Clean Development Mechanism CIA Champions In Action CIEEDAC Canadian Industrial Energy End-use Database and Analysis Centre CPPI Canadian Petroleum Products Institute ESCM Environmental supply-chain management GDP Gross Domestic Product GERT Pilot Greenhouse Gas Emission Trading Pilot GHG Greenhouse gas HM Honourable Mention JI Joint Implementation QRESD Quarterly Report on Energy Supply-Demand in Canada (a Statistics Canada publication summarizing energy imports, exports, production and consumption) RER Registered Emission Reduction SME Small to medium sized enterprises TAC Technical Advisory Committee TEAM Technology Early Action Measures VCR Voluntary Challenge and Registry

VCR Inc. Canada’s Climate Change Voluntary Challenge and Registry Incorporated.

VCR Inc. ¥ 2003 Annual Report 61 TABLE FIVE: Greenhouse Gases40 Symbol Name Global Warming Potential (GWP)

CO2 carbon dioxide 1

CO2 e carbon dioxide equivalent (a standard measure of global warming potential) 1

CH4 methane 21

N2O nitrous oxide 310 varies from CXHYFZ (HFCs) hydrofluorocarbon 140 to 11,700 varies from CXFY (PFCs) perfluorocarbon 6,500 to 9,200

SF6 sulphur hexafluoride 23,900

TABLE SIX: Measurement Units

Symbol Name

EII Energy Intensity Index (or in the context of petroleum products, the Solomon Energy Intensity Index) For more details, please review the global warming g gram potentials published in our Challenge Registry Guide to Entity & Facility-Based GJ gigajoule Reporting, available at kt kilotonne (1,000 tonnes) http://www.vcr-mvr.ca/vcr_guides_e.cfm. kWh kilowatt hour m2 square meter m3 cubic meter m3 OE cubic meter oil equivalent Mt megtonne = 1,000 kilotonnes = 1,000,000 tonnes

MW megawatt

MWh megawatt hour 40 These global warming potentials represent the standards used by Environment Canada for determining GHG emissions in the preparation of Canada’s National GHG Inventory. These were originally published by the IPCC in 1996. While these factors were updated t tonne = 1,000 kilograms = 1,000,000 grams by the IPCC in 2001, the new emission factors have yet to be adopted by Environment Canada. The factors published in 1996 will likely remain the official standard until the end of the first Kyoto budget period (2012).

62 VCR Inc. ¥ 2003 Annual Report