Environment Committee on Nov. 25th, 2020

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you, Mr. Breton. I was going to ask you that question. These businesses are losing money. I had the impression they were making big profits. Thank you for answering that question.

Your brief states that you have a long version of it. I'd ask you please to send it to the members of the committee.

My question concerns the quite impressive figure that appears in your brief. Sales for the electric ecosystem are expected to rise to $190 billion between 2021—that's very soon—and 2030. That includes buses, trucks, infrastructure and charging stations for electric vehicles.

Can you provide details on your forecast?

[Daniel Breton]

It's quite simple. When you look at electric vehicle sales, you tend to focus on cars, but they also include trucks, transit buses and school buses. There are various types of vehicles, including electric and hydrogen vehicles.

The Quebec government has announced that it wants to have 1.5 million electric vehicles on the market by 2030. Quebec represents roughly 50% of the electric vehicle market in Canada and 23% of the market for light vehicles sold in 2019. We should multiply that figure by 4, but I've multiplied it by 2.5 to be more conservative. I have assumed that the rest of Canada will catch up to Quebec, but not necessarily reach the same level as Quebec or British Columbia. We multiply 1.5 million vehicles by 2.5 in Canada, which takes into account light vehicle and bus sales. The Canada Infrastructure Bank has a program for bus, school bus and charging infrastructure acquisition.

Then there are electricity sales. We did the calculation with Hydro-Québec on the weekend. We're talking about nearly $3.8 billion by 2030 in Quebec alone. If you add electricity sales across Canada, that amounts to approximately $9 billion.

All these costs and sales together represent roughly $190 billion by 2030. That's a lot of money, investment and employees.

[Monique Pauzé, Bloc, Repentigny, QC]

I haven't done all those calculations, Mr. Breton, but, from what I see, your figures are sound, and they aren't just pulled out of thin air.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you, Ms. Pauzé.

[Monique Pauzé, Bloc, Repentigny, QC]

Are the two and a half minutes up?

[The Chair, Liberal, Francis Scarpaleggia]

Yes, we'll add 10 seconds to your next round.

Mr. Bachrach.

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

Thank you, Mr. Chair.

I have a question for Mr. Adams.

We have the ZEV mandate, which is on the supply side, and we have the ZEV incentives on the demand side, and those are driving sales. I think that's something you recognized in your remarks.

At the same time, we know that 80% of electric vehicles are produced in the jurisdictions where they're sold. Right now, there's $300 billion being invested in EV manufacturing. Why wouldn't Canada want a piece of that? Why wouldn't we want the jobs, the prosperity and the community well-being that comes with those excellent jobs?

Following back, don't these policies contribute to that goal of getting that economic development in our country?

[David Adams]

I have to say that you're wise to look for those jobs and for that economic activity. I guess I would just counter what you said. Your statistics may be right, but in Canada, 85% of what we build goes somewhere else, and that somewhere else is the United States. Really, only about 15% of what the five companies that manufacture in Canada produce stays in Canada.

For the recent announcements, for instance, that Ford and DaimlerChrysler made about electric vehicles, they're counting on those vehicles being able to be sold in the United States. I think it might have been a different story under the previous administration, and we'll see what happens under this administration.

I would say to your first point that what has been driving sales in Canada to date has been incentives, not mandates. People will say, well, B.C. has a mandate. Well, that regulation was just passed in July, as you know from where you live, so the mandate has had no effect yet. It's all been incentives that have been driving demand to date.

[The Chair, Liberal, Francis Scarpaleggia]

You have 40 seconds.

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

Okay.

I wanted to ask a question of Mr. Pocard about Ballard, because I feel that he's been left out of this exchange.

It's a wonderful B.C. company, and I wanted to ask you, Mr. Pocard, about the niche with hydrogen sales. Is it a competing technology with battery electric vehicles, or is there a unique niche in transportation?

[The Chair, Liberal, Francis Scarpaleggia]

Be brief, please.

[Nicolas Pocard]

I think it complements. We see hydrogen as a complement to electric vehicles, especially for heavy-duty applications for bus coaches and trucks. That is really where hydrogen will add value to the users. We see that as not complementing, but adding.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Mr. Jeneroux, please, for five minutes

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Thank you, Mr. Chair, and thank you to the witnesses for joining us here today.

Before I get to my questions here, just to make a counterpoint to the Liberal member who said that taxpayers are the people who are receiving these incentives, look at who the taxpayers are who are receiving these incentives, and particularly at the ones who are not spending $50,000 for a car. I think that's essentially what we're trying to get at with this study. There are some of these cars, such as the Tesla Model 3, as was indicated by Mr. Wudrick, that are just completely out of the price range of many families, at least in my riding here in Edmonton, Alberta. It's a challenge to be able to afford those cars.

Again, I think this is well intentioned. To echo the comments of the Canadian Taxpayers Federation, this is a well-intentioned program. I do believe that having more electric vehicles on the road is a good intention. However, what we're seeing is that with the way this was set up.... Then it was amended, and it was even more ridiculous to get those models that are out of the price range of the average family.

For an average Dodge Caravan, a simple Google search puts you at $30,000. Are we getting these vehicles off the road? Are we getting the F-150s—the vehicles that may be the high emitters—off the road with this incentive? I would argue likely not. It's looking at those taxpayers who can afford those higher-model vehicles. I think this program has completely missed the mark in that regard.

Mr. Wudrick, we had somebody before our committee—I think from the Pembina Institute—who actually said that more incentives would be the answer to this particular program, to make it more attractive to Canadians. Could you perhaps comment on their comments that providing more money for this program would be the answer?

[Aaron Wudrick]

Well, I think, first of all, under the current program, certainly not. I already gave you the statistics. For the low-end vehicle, of the base model, the specific model that Tesla introduced to trigger the subsidy for the higher version, they sold only 126. They sold 12,000 of the $55,000 model. Therefore, with all due respect to Ms. O'Connell, if you can buy a $50,000 vehicle, I'm not sure that the average Canadian would say you're the one who needs the $5,000 subsidy. You can make the case for cheaper vehicles, but of course, there aren't that many vehicles that are ZEVs at that price point, and that is the whole reason for the subsidy in the first place.

Look. If you are going to look at ways to increase incentives, you have to target them at the people who could really use the help and where it will actually make the difference between, do I want to buy a vehicle at $20,000 that has a combustion engine, or do I want to spend the same amount on something that's cleaner?

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Again, we both feel that it's well-intentioned, but getting to the point of where this is actually making a difference on the roads, there are moves to getting to 100% electric vehicles by, I believe it was 2040 that the government was looking at. To get there, how do we make that average for the middle-class Canadian to be able to afford them?

If they go into the dealership and see there's a $30,000 minivan there, or maybe that Tesla over there looks pretty attractive to the family, you know what, probably they're going to make the decision to go with the minivan and hope that the price comes down at some point in their lifetime. Therefore, is now the right time for these incentives, or is it waiting for that supply and demand to really equal out?

[Aaron Wudrick]

Yes, that is the big question that the committee and government need to ask themselves. How much will it move the needle? The challenge right now is that we're just not quite there yet.

When I think of myself looking for a new vehicle, the main barrier to buying a ZEV is the price. That is the only barrier, and it is nowhere near the price range. Even the $5,000 doesn't move the needle that much. I wish that we had more price-competitive ZEVs right now, but we don't, and I don't know that the $5,000 incentive is going to move the needle so much as to justify the cost.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

We'll go to Mr. Saini.

Mr. Jeneroux, I'll give you an extra 10 seconds if you're up again.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

I'm okay. Thanks, Mr. Chair.

[The Chair, Liberal, Francis Scarpaleggia]

That's my treat to you. I'll bank it.

[Raj Saini, Liberal, Kitchener Centre, ON]

I'll take his 10 seconds.

Thank you, Chair; and thank you, everyone, for coming today.

Mr. Breton, I want to follow up with you, because it seems that Mr. Adams has a different opinion on ZEV mandates, and your organization has a different opinion on ZEV mandates.

Whatever reading I've done, the jurisdictions that have ZEV mandates tend to have more sales, and where the cars are made or deployed, the uptake is higher in that jurisdiction. We see China with mandates, and that's why the investment there has been growing, companies are going there because they know that they will have a market. If you look at the European Union, they're thinking of having mandates; they're voluntary right now, but they're thinking of going in a more concerted direction.

We heard Mr. Adams' opinion. I just want to hear why you think ZEV mandates work.

[Daniel Breton]

It's because manufacturers send the vehicles where there are mandates. It's as simple as that.

I can give you two examples. Right now, if you want to purchase a Toyota RAV4 Prime, you'll be able to get it in Quebec because there's a ZEV mandate. You won't be able to get it elsewhere in Canada.

I can give you an even better example than that. In 2011, the federal government and the Ontario government financed the assembly of the Toyota RAV4 EV. It was built in Woodstock, Ontario. Because there was no mandate in Canada but there was a mandate in California, all these vehicles were shipped to California and no one in Canada had access to these vehicles.

I think it's really interesting now that the Governments of Canada and Ontario are investing in the assembly of electric vehicles, but as Mr. Adams said, these are made to be shipped to the U.S. With a Biden government that intends to be more and more aggressive regarding EVs, I think there's a chance that if we don't have a mandate at the federal level, these vehicles will be sent to the U.S., Quebec or B.C., and the dealers in Ontario, Manitoba, Saskatchewan or Alberta won't be able to get these vehicles, and it's a real issue.

[Raj Saini, Liberal, Kitchener Centre, ON]

You're suggesting, then, that with the mandate and with incentives, you would probably see an uptick in the market.

[Daniel Breton]

Absolutely. That's what we've seen elsewhere.

[Raj Saini, Liberal, Kitchener Centre, ON]

The other question I have for you, Mr. Breton, is on mining, which you mentioned in part of your opening remarks. Right now, as you know, as ZEV production starts increasing, cobalt and lithium and other precious minerals will also be mined more heavily. Eventually, we're going to reach a point where either you will have ZEV vehicles that are retiring off the road, or where you are at a critical mass.

How do you think the recycling part of that will work?