Environment Committee on Nov. 23rd, 2020

[Faisal Kazi]

From the German perspective, the penetration of electric vehicles already started a couple of years ago. The one thing we learned there, which I also mentioned, was the infrastructure to charge these vehicles and the electric supply. Just to give you an idea, if on a given street, everybody had an electric car and charged it at the same time, the transformer would not be enough.

We want to make this charging infrastructure for buses intelligent. The answer is laying there. How can we optimize, and how can we ensure we are not charging at peak times, which is already a stress factor for the grid?

You mentioned vehicle-to-grid charging back into the system. What is required is the optimization of the overall system. We are running pilots in Germany where we are looking into these optimizations and how to do that. In fact, we are also piloting in Atlantic Canada together with Nova Scotia Power and New Brunswick Power. That is work that is still ahead of us, and we need regulatory reforms to make that happen. Without that, it would be challenging.

[Lloyd Longfield, Liberal, Guelph, ON]

That's where I was going with that question on regulatory reforms. The pilots are pretty well confirmed now in the Maritime provinces. How do you scale out across Canada? You need regulations, and you need provincial and federal investment.

[Faisal Kazi]

We need a regulatory change, for example, in the way that all the transactions are happening. For example, today the utilities are paid or the revenue model is asset-based. The more assets you put in, that goes in the rate base. Going forward, we will need a fundamental shift, because we believe we will need to have platforms that will allow everyone to trade energy, like charging back, etc., but at the moment there's no regulation around it. This is where we need to work to ensure that we allow new business models that, on one side, reduce the cost of electrification, which will be a key element, but on the other hand, also motivate investment in the private sector rather than only.... They should do the investment to invest in business models that will really facilitate the integration of electric vehicles.

[Lloyd Longfield, Liberal, Guelph, ON]

Is federal regulatory looking at Natural Resources Canada being the owner of that regulation?

[Faisal Kazi]

I think it will be a partnership between the different federal agencies and also the provincial agencies. We need to sit together as the private sector, even the universities, and look at the innovation that we have in the country, and then define the regulatory environment.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

I'm sorry, Ms. O'Connell. I've gone up to my limit. I apologize for that.

[The Chair, Liberal, Francis Scarpaleggia]

She's on the list further down, so Ms. O'Connell will get a chance.

Madam Pauzé.

[Monique Pauzé, Bloc, Repentigny, QC]

Good afternoon, everyone.

I want to thank the witnesses for joining us.

My first question is for Mr. Charron from LeadingAhead Energy.

Mr. Charron, do you think that the government must play a role in promoting electric vehicles?

I'm thinking of some type of awareness campaign for the general public. In your document, you said that people are more dependent on gas-powered vehicles because that's what they see.

[Maxime Charron]

You're talking about raising public awareness regarding electric vehicles. However, I want to point out that we're seeing a great deal of misinformation on social media or in the advertising campaigns of certain companies or groups.

We really need to inform not only the purchasers or consumers of electric vehicles, but also the dealerships, which have a high turnover of salespeople. These salespeople aren't always aware of market developments. Electric vehicle technology is changing very quickly and in many ways: new vehicle designs, different types of batteries, improved charging speed or the ability to cover a certain distance in winter, for example.

[Monique Pauzé, Bloc, Repentigny, QC]

In the document, you said that most people look at the price listed and don't take into account all the possible savings. The government can certainly promote electric vehicles. That's my understanding.

I'll now turn to Mr. Cedric Smith from the Pembina Institute.

Mr. Smith, you spoke earlier about 4,500 charging stations and 12,000 gas stations. Given the significant benefit of having refuelling sites across Canada, shouldn't the oil companies be partners in this transition and be required, by appropriate regulations, to install fast chargers at every point of service?

[Cedric Smith]

Absolutely. We would be strongly in support of such a regulation. I would note that your comment about the DC fast chargers is especially accurate. In terms of charging speed and charging time for vehicles that are going to a gas station, those fast charging times would be especially convenient and especially comparable to the effect of gasoline for traditional internal combustion engine vehicles.

[Monique Pauzé, Bloc, Repentigny, QC]

Can you give us an idea of the forecast for greenhouse gas emissions growth if we maintain the status quo and if nothing changes?

[Cedric Smith]

In terms of our forecast on GHG emissions right now, transportation emissions are at about 186 megatonnes CO2 equivalent in 2018 for the transportation sector. We do actually see that declining somewhat out to 2030, largely due to the impact of the passenger automotive greenhouse gas emissions standard. Nevertheless, it's still quite significant even out to 2030, which does indicate that there's more work to be done.

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you.

Last week, we learned that, in Quebec, the regulations will prohibit the sale of gas-powered vehicles starting in 2035. This will also be the case in California. In Great Britain, the ban will come sooner, in 2030. In other European countries, these regulations will be in effect as of 2025.

Do you think that it would be possible to implement these regulations across Canada?

[Cedric Smith]

It definitely is possible when you look at the accelerating pace of climate change awareness and climate change knowledge and these accelerating investments that are happening in Canada and around the world.

On our side at Pembina, California has the intention to ban gas vehicles, which caught us somewhat by surprise, on very strong regulation. Things are very much accelerating. In British Columbia as well, they have a similar proposed ban on gas-powered vehicles as of 2040.

We're going to see a lot of this accelerated action happening in those two main provinces and hopefully spread across the rest of Canada after.

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you.

I gather that this would almost tie in with my next question.

In your opinion, should there be a regulated quota for Canadian manufacturing reserved for the Canadian market?

[Cedric Smith]

If I understand your question, you're referring to a quota for electric vehicle manufacturing in Canada, and that being reserved for the Canadian market. It depends on what our goals are here. If our goals are just reduced greenhouse gas emissions in Canada, I would advocate that we just allow all the electric vehicles to come into Canada from wherever they're manufactured and put as few barriers in place as possible for Canadian purchasers.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you. We'll have to move on.

Ms. Collins.

[Laurel Collins, NDP, Victoria, BC]

Thank you so much, Mr. Chair.

My first question is actually for both Mr. Smith and Mr. DiCaro. Specifically, about half of Canadians are living paycheque to paycheque. They're often struggling to cover the increasing cost of rent, child care, medication and other essentials. We recently learned that the government isn't tracking the income of people who are taking advantage of the incentives. Even with the government incentives, we know that the high cost of these vehicles still puts them out of reach for many Canadians.

I have a three-part question. I'm curious as to your thoughts about a means-tested incentive program that would be targeted incentives for low- and middle-income brackets, and then also your thoughts on a used vehicle incentive program and a national scrap-it program.

Maybe the question will go first to Mr. Smith, and then to Mr. DiCaro.

[Cedric Smith]

I think it's always important to consider the impacts of the pandemic and to consider the fact that Canadians are hurting right now, to take that into account when we design our environmental policies, and then to try to ensure that equity is part of those policies as much as possible.

One thing we note from the iZEV program is that it does have an MSRP cap that is quite reasonable. The used vehicle purchase program could help make these cars more in range to the average Canadian consumer, or maybe even to a consumer who isn't normally trying to buy a new car and who might be more inclined to buy a used car instead.

In terms of the scrap-it program, Pembina doesn't necessarily have a position on that as of yet. We would note that a lot of the electric vehicle policy in place right now across Canada is aimed at new vehicle sales. As Canadians are getting rid of their old cars naturally, we want them to adopt an EV. A scrap-it program would probably be a bit more ambitious than that and deal with cars that Canadians aren't necessarily deciding to get rid of yet.

[Laurel Collins, NDP, Victoria, BC]

Thank you so much, Mr. Smith.

Mr. DiCaro.

[Angelo DiCaro]

Thanks very much.

Those are really intriguing ideas. The great part of this study that's being undertaken is that we get to float some of these really creative thoughts forward.

A means-tested approach to vehicle incentives is very intriguing. This is not something on which Unifor has established a particular position, but it makes good sense. These cars are more expensive and that's why incentives are needed, among other things, to bring people to market on those cars. That's important.

On the scrap-it program, there's quite a bit of merit to that. One thing I'm sure this committee knows is that just by virtue of vehicle advances and a lot of stuff happening with internal combustion engine cars, they are becoming more fuel efficient over time. In terms of having a way to not only spur the industry through a really challenging time but also using that to address some of these emissions challenges, other nations have done this. It's something that was certainly discussed in the last economic crisis and hasn't been talked about too much here, but I think there's merit. It's a really intriguing idea about the used car incentive as well.

Across the board, there are good ideas and many more to come for sure.

[Laurel Collins, NDP, Victoria, BC]

Thank you, Mr. DiCaro.

I have a follow-up question for you but not on those issues.

Canada has been lagging behind when it comes to producing ZEVs, and it doesn't seem like we've been making sufficient effort to transform the industry and seize the opportunity that electric vehicles offer to the sector. It's really great to see the recent agreement that Unifor made with Ford and Chrysler. It seems to be a really good step in the right direction. Countries like Germany, France, Spain and the U.K. have made significant investments as part of their pandemic recovery packages. We haven't seen the same scale of investment here.

Do you think Canada is lagging behind in this global shift towards zero-emission vehicles? Can you talk a little bit about the need for a coordinated national industrial strategy to support the sector?

[Angelo DiCaro]

If I were to characterize it, I would say right now we're at a fork in the road, to build on a really bad metaphor for vehicles in this case, and that's certainly what it feels like.

I will tell you that two months ago there was a view that this was going to be the death knell of the Canadian auto industry potentially, where if we were not going to land what was calculated to be somewhere in the ballpark of $300 billion of investments from OEMs and supplier firms siting these projects around the world, mostly in China and Europe, with Canada being left behind.... The last two months have shown us that there is still fight here. We still have an industry and a competitive one at that. Automakers want to build here and for good reason. I would have been more pessimistic two months ago before bargaining, but now I'm much more optimistic.

As I said in my opening remarks, I'm not going to dwell on the last two months because they don't matter anymore. We got good news, but unless we're going to put policies in to practice.... Despite what others are suggesting, we can't simply put bums in seats in EVs and think we've solved our problem. We've only solved half the problem. This is a plum industry that generates incredible wealth for this country with incredibly good jobs. If we don't put those pieces together, the production side, the supply chain side and the incentive side, we'll have missed a huge opportunity for us, and that would be terrible.

[The Chair, Liberal, Francis Scarpaleggia]

There are only 10 seconds left. I could add that to your next round.