Environment Committee on Nov. 25th, 2020

[Daniel Breton]

Yes, exactly.

I was talking about Toyota, but we could say the same thing about Subaru, because Subaru sells their plug-in hybrid vehicle in Quebec and in the Ottawa region, but not elsewhere in Canada because there's a mandate in Quebec.

So it's a real issue because I know that a lot of people outside Quebec and B.C. say that they want to buy an electric car, but they can't get one because there are none on the lot. When you are a dealer, you have to make sales and if someone comes to a dealer—

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Mr. Breton. You gave a good answer to the question. We understood the essential points..

[Peter Schiefke, Liberal, Vaudreuil—Soulanges, QC]

Thank you, Mr. Breton.

[The Chair, Liberal, Francis Scarpaleggia]

Ms. Pauzé, you have the floor for two and a half minutes.

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you, Mr. Chair.

Mr. Wudrick, you say in your brief that taxpayer dollars are valuable. Once again, I'm going to ask you the question I asked at the start.

The Canadian fossil fuel sector received $600 million from the federal government in the 2019-20 fiscal year. Earlier you only discussed subsidies for the Trans Mountain system, but subsidies are also granted for fossil fuels, and they're bigger than the subsidies for electric vehicles..

Don't you see that as a contradiction? On the one hand, electric vehicles will help us achieve our greenhouse gas reduction targets, which will be beneficial for health, and, on the other hand, subsidies are being granted to make people sick.

[Aaron Wudrick]

Let me be clear that we oppose those two. We do not say that you should subsidize fossil fuels and not subsidize EVs. We say that you shouldn't subsidize either of them.

When it comes to EVs the question is the value for the dollar. There are other measures you can take. Is spending this money getting you the greatest reduction for the dollar? I am suggesting that there has been no evidence that this program is getting you the best bang for your buck in terms of reduction.

[Monique Pauzé, Bloc, Repentigny, QC]

I think I gave you some figures earlier. Others have discussed them too, but that doesn't seem to have convinced you. If you have any arguments other than the ones already stated, please send them to us.

Now I'll go to Mr. Pocard. I heard a lot about hydrogen at the Zoom meetings I've attended. It seems it's important to make trucks pollute less.

Do you think all forms of hydrogen are equally good? There's highly polluting hydrogen, but there's also green hydrogen.

[Nicolas Pocard]

You're right. To take action on greenhouse gas emissions, we need decarbonized hydrogen or low-carbon hydrogen. It's produced in two ways. Green hydrogen is produced by electrolysis involving renewable energy: hydroelectric, solar or wind power. Blue hydrogen is produced using natural gas. When you use carbon sequestration, what's released into the atmosphere is low-carbon hydrogen.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

I'm going to try a fourth round of questions.

[Monique Pauzé, Bloc, Repentigny, QC]

Twenty seconds plus the 10 seconds from earlier, that gives me 30 seconds.

[The Chair, Liberal, Francis Scarpaleggia]

I'm doing what I can, Ms. Pauzé.

Mr. Bachrach.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

Mr. Breton, I want to ask you about economies of scale and how they play into this whole picture.

We've heard a lot about the price of electric vehicles. I agree that price is one of the barriers that might prevent people from buying a new electric vehicle, although I think if you look at it from a full-cost accounting perspective and count in the maintenance costs and the low operating costs of using these vehicles, the price is at least a wash, if not in favour, of EVs.

This seems to me like a change that's going to happen inevitably. These vehicles are cheaper to run and they're more fun to drive, especially the light-duty category. Are we simply just talking about priming the pump with these incentives?

To what degree could the incentives actually be temporary once the market size gets big enough to drive down price by itself because we have that economy of scale?

Could you speak to that?

[Daniel Breton]

Yes. I see you know what you're talking about because you have an EV and you drive an EV.

Total cost of ownership is really important. Very often people think about the purchase price, but they forget the energy price, the insurance price, the maintenance price and the resale value. When you start adding these numbers, I'm surprised that Mr. Wudrick would say that people can't afford it.

When you start to add all the calculations, in the end an EV can be just as affordable as a Honda Civic. It's really surprising to hear that.

When we talk about taxpayers, I want to mention one thing because this is very important. If we create jobs with electric vehicles—from light to heavy-duty, from infrastructure, to research, to mining—that's people with good-paying jobs who will pay taxes.

In the end we have to look beyond just the subsidy for the purchase of electric vehicles. It's the whole ecosystem that we're thinking of because we're looking at a new industry altogether. We have to think beyond just the price of the vehicle. We have to look at, as you said, the total cost of ownership. We think that is very important.

I don't know if you know this, but in 2012, Barack Obama, when he was President of the United States, said that there have been subsidies in the U.S. for oil and gas companies for a hundred years. If we can get subsidies for just 10 years, I think we'll be okay because by then the price will be at par, at least.

[The Chair, Liberal, Francis Scarpaleggia]

You have 15 seconds.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you for your comments, Mr. Breton.

I was just thinking that we're on the brink of this massive technological shift and we're probably going to look back on this debate in 50 years and laugh a bit to ourselves. I certainly hope we do. I think we're going to get to that point very soon where these incentives are no longer needed.

[The Chair, Liberal, Francis Scarpaleggia]

Go ahead, Mr. Godin.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

It's Mr. Redekopp's turn.

[The Chair, Liberal, Francis Scarpaleggia]

All right. Thank you, Mr. Godin.

Go ahead, Mr. Redekopp.

[Brad Redekopp, Conservative, Saskatoon West, SK]

Thank you.

Mr. Breton, I think I saw it in your notes that half a million jobs will be created from this. Are you saying those are new incremental jobs, plus 500,000? It seems to me that we'll be losing jobs on the production of ICE vehicles, and they will be in a sense replaced with the production of EVs.

Is it truly plus 500,000 or is there some netting go on there?

[Daniel Breton]

Well, there are net new jobs in electric vehicles. From my point of view and many people's point of view, if we don't make the switch towards electric vehicle production in Canada, whether light or heavy-duty, well, I doubt there will be an automotive sector 15 to 20 years from now in Canada, whether light or heavy-duty, because we are going toward electric vehicles anyway.

We're thinking about saving jobs and creating new jobs, whether it's for infrastructure providers, whether it's for utilities or whether it's for research and development and mining. I mean, there were some mines that were closed, and they're opening back up again because of electric vehicles. There are a lot of new jobs.

[Brad Redekopp, Conservative, Saskatoon West, SK]

Okay. Thank you for that. I think the important point there is that this is not necessarily incremental tax revenue, as you said, though, because we're just saving jobs, which means we're keeping those jobs in Canada. There may be some incremental too, but I think it's important to note that.

I want to go to you, Mr. Adams, to talk about non-tariff trade barriers. In October I asked Environment Canada if the regulations they do are being checked against our international treaties. The answer I got back was, no, it's not their responsibility; ask Global Affairs.

It just makes me wonder if Environment Canada's creating regulations and they're not considering our trade treaties. That's a concern, I believe. You represent automakers from across the globe. They have maybe not head offices in Canada but they have operations here. They're covered by different trade treaties that we have, such as CETA, TPP, etc. Does it concern you that Environment Canada is putting in regulations without concern for the non-tariff trade barriers that might be created because of that?

[David Adams]

Trade is an interesting subject. I think oftentimes what's been raised in front of this committee is the number of EV models available in Canada, for instance. There are so many other models that are available elsewhere around the world.

I think Canada, for a long time, has subscribed to harmonizing or aligning its safety standards and its emissions standards with those of the United States. To the extent that we're tied with the United States, then the chances are that we're only going to get product offerings that meet both the safety standards and the emissions standards of the United States. That makes sense, because the automotive industry is a regional industry. There's a North American industry, there's a European industry and there's an Asian industry.

But to your point, because there are different standards—not necessarily better or worse, but different—that does preclude some models from coming into the Canadian marketplace.

[Brad Redekopp, Conservative, Saskatoon West, SK]

Is it true that if there's a regulation in Canada that causes you to have to...? Let's throw something out: There needs to be a certain Canadian content in a battery, let's say, and that car is currently produced in Japan or somewhere. That's now imported. It creates increased costs for Canadians, does it not? If those regulations aren't standardized properly, Canadians just end up paying more. Is that a fair statement?

[David Adams]

I think it's a fair statement if you look at the recent USMCA trade agreement, which basically was looking at trying to bring more manufacturing into the North American region. I think the reality of doing so is that products, especially automobiles that are made in the North American region, will cost more because of the supply chain realignment that had to take place to accommodate the content provisions of the new USMCA agreement.

[Brad Redekopp, Conservative, Saskatoon West, SK]

Turning to my next question, Mr. Breton said that “a ZEV mandate is unavoidable”, and that “OEMs are not responding to consumer demand”. I worked in the manufacturing industry for quite a number of years. I know what's involved in designing and bringing a new vehicle to market. Could you maybe comment a little bit on OEMs not responding to consumer demand?