Environment Committee on Nov. 2nd, 2020

[Brian Kingston]

With conventional vehicles, I would just note that dealers are independent businesses. A dealer orders a vehicle on the basis of what's selling on their lot. They're not told by an OEM or a manufacturer what they should be selling in what volumes. A dealer in Medicine Hat is going to have a different mix of vehicles than will a dealer in downtown Toronto, for example.

It's up to that independent business person to determine what the needs are in their community. They would therefore order the vehicles and finance those vehicles, and the intention would be to turn over those vehicles quickly so they would not be carrying a significant financing cost.

It really comes down to an individual dealer's decision on what they carry on their lot.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

I understand that. However, if there were a requirement that a certain percentage of the vehicles sold by manufacturers, and therefore retailers and distributors in Canada, be EVs, would that not result in the businesses—both the manufacturers and distributors and the retailers or dealers—then having to, between them, find a way to make the price one at which consumers would be willing to buy those vehicles? Isn't that Economics 101?

[Brian Kingston]

Sure. That starts to sound to me like supply management. You incent a supply level, and then you force a certain production, whether or not demand is there.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Okay.

Madam Chair, how much time do I have?

[The Chair, Liberal, Yasmin Ratansi]

You have 40 seconds.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Ms. Kyriazis, can you tell us just briefly in those 40 seconds—and I know that's not enough time—in jurisdictions where countries have required that a certain share of the vehicles sold be EVs or meet certain clean standards, whether we have seen the automakers adjust pricing and/or features to make the vehicles more appealing to consumers?

[Joanna Kyriazis]

I think automakers choose a variety of compliance pathways. That could be one. Another is purchasing credits from other automakers. Each automaker chooses what works best for its business model.

I would just like to add, very quickly, that the investment firm UBS announced last week that EVs are going to be as cheap to manufacture as ICE vehicles are by 2024.

[The Chair, Liberal, Yasmin Ratansi]

Thank you very much.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you.

[The Chair, Liberal, Yasmin Ratansi]

We'll now go to Madame Pauzé for two and a half minutes.

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you.

I will begin with Mr. Allan and end with Ms. Kyriazis.

Mr. Allan, given Quebec's experience, would you say Quebec's legislative model could be adapted to the rest of Canada?

[Travis Allan]

I would agree. Quebec has shown extremely useful leadership both in terms of balancing incentives with a strong and predictable ZEV mandate and, at the same time, encouraging investments in education and infrastructure that have really supported not only urban Quebec residents, but also rural Quebec residents in adopting electric vehicles in proportions roughly equal to their share of population. I think it's an excellent example.

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you.

Ms. Kyriazis, in your September brief, you point out that, by adopting a national zero-emission vehicle standard, Canada could achieve its targets without imposing too many requirements on automakers.

I agree that automakers are resistant. Can you talk about the flexibility that would be needed if a standard were adopted and how that would help improve supply?

[Joanna Kyriazis]

Absolutely.

The existing zero-emission vehicle standards that are out there, in B.C. and Quebec, for instance, are designed to be flexible. Carmakers can choose to sell a smaller number of higher range electric vehicles to get a higher number of credits. They could choose to sell a higher number of shorter range electric vehicles. They could choose to purchase credits from other automakers who have sold more than their required amounts. They can bank credits for future use. Under the B.C. system, they can bring in used electric vehicles from another jurisdiction. There are a variety of pathways to comply, to ensure this is a flexible, low-cost option to move towards our zero-emission vehicle sales targets.

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you.

I am going to come back to Mr. Allan quickly.

[The Chair, Liberal, Yasmin Ratansi]

That is all the time you have.

[Monique Pauzé, Bloc, Repentigny, QC]

How many seconds do I have left?

[The Chair, Liberal, Yasmin Ratansi]

You have 10 seconds.

[Monique Pauzé, Bloc, Repentigny, QC]

Do you have any recommendations to speed up the transition?

[The Chair, Liberal, Yasmin Ratansi]

It can be answered later.

Madam Collins, the floor is yours for two and a half minutes.

[Laurel Collins, NDP, Victoria, BC]

Thanks so much.

Mr. Kingston, I was explaining how a constituent on Vancouver Island, without the SCRAP-IT program and the other incentives, wouldn't have been interested, but because of the long wait, they didn't end up buying it. I'm curious. When you're thinking about the policies that the federal government needs to bring in on, say, a scrap-it program, what model you would see as really effective?

[Brian Kingston]

For a scrappage program, I think the best model would be something that's broad-based to try to get at the 35% of vehicles 12 years old and older. If you look at total fleet emissions, it's those older vehicles that are going to be polluting more and putting out more GHGs than new vehicles. While ZEV adoption is critically important, you need to turn over the vehicle fleet at a faster pace. It currently takes about 20 years to fully turn over the fleet.

A scrappage program should aim at vehicles 12 years old and older and it should give consumers an incentive not just to purchase a ZEV vehicle, but also to purchase a new, efficient ICE vehicle. If you do that, you're still going to see a huge gain in terms of emissions.

[Laurel Collins, NDP, Victoria, BC]

Thank you so much, Mr. Kingston. That's great.

The other part of that story is that they really did have a long wait. There was an issue with supply.

Ms. Kyriazis, there seem to be two perspectives here. One is that, really, incentives are the key piece, whereas what I'm hearing from you is really about a broader suite of policies. I'm just curious whether you can respond to some of the things we've heard from Mr. Kingston. Is there anything that you would want to respond to or counteract?

[Joanna Kyriazis]

Thanks, Ms. Collins.

In terms of demand, it's hard to isolate whether we're creating demand or forcing demand, but from the surveys and polls we have seen, it's very clear that Canadians want to drive electric vehicles. A survey by Toyota last year found that 52% Canadians think their next car will be electric. A poll that Abacus Data did for Clean Energy Canada found that two-thirds of Canadians want to see electric vehicles as the majority of vehicles being sold in the future, and 50% of those folks wanted to see that shift in the next five years. The interest is there.

The other part of the story here is Canada's auto sector. The future is electric. Wall Street is telling us that with Tesla's being the highest valued carmaker in the world.

[The Chair, Liberal, Yasmin Ratansi]

Wrap it up, please, Ms. Kyriazis.